Beyond ERP and "Best of Breed"
Rethinking Business Systems for Local Government in the Era of PaaS
For years, local governments have been stuck choosing between two flawed technology options: rely on a single Enterprise Resource Planning (ERP) vendor or piece together functionally specific solutions in a Best of Breed (BoB) approach.
While both methods have had their merits, the unspoken truth is that neither approach is working as well as it should. Single vendor solutions can lock councils into rigid and inflexible process and data management structures, while BoB solutions can lead to fragmented operations and functional silos, especially where ongoing under-investment is the norm.
Councils are finding that neither of these traditional approaches fully reflects or meets the evolving needs of councils today. They can’t deliver the flexibility, cross-functional integration, and future-readiness required - at a price point - that council officers need to thrive.
It’s the sector’s dirty little secret: while ERP and BoB have been the dominant options for decades, they’re quietly leaving councils with systems that are difficult to manage, expensive to maintain, and unprepared for future demands.
There has long been a demand for an approach that combines the best features of both by offering workflow flexibility without the complexity of managing multiple systems, and by delivering the kind of integration that single-vendor ERP promises but often falls short on.
Platform as a Service (PaaS) is part of the answer to the shortcomings of both traditional approaches, and it is already reshaping how local governments function by offering a more effective and scalable way to manage a council’s operational environment.
For councils looking to modernise their business systems and move beyond the old school debate, PaaS offers a way to confront the limitations of closed ecosystems and embrace a modern framework that meets today’s challenges head-on.
The Limitations of Traditional ERP and Best of Breed Approaches
Traditional ERP: A Closed Ecosystem
It is a fact that single-source local government ERP systems usually operate in closed ecosystems, limiting councils to the vendor's own suite of applications and the narrow partner network that provides support and services. For one major player it has been their differentiating go to market for decades.
While the business appeal of an ERP lies in the idea of an all-in-one system that integrates everything from finance to HR to procurement, the reality usually falls short, especially for smaller governments with more specific needs.
Firstly, traditional single-source local government ERP systems can present challenges, but the real issue isn’t long-term relationships with a vendor—it's the lack of flexibility and innovation caused by vendor lock-in and the dependence on an unrealised or restrictive roadmap or release cycle. While being with any software vendor for an extended period isn't inherently negative (it does have many benefits), councils may find their ability to grow and innovate constrained if they are limited by the vendor's offerings or delayed feature development.
Secondly, while many software vendors claim that their systems can integrate with any other, the reality is often much more complex. Initial integrations can be difficult due to proprietary protocols, limited APIs, and a lack of essential tools, leaving councils to navigate complex and costly connections.
Even when successful, maintaining these integrations becomes a major challenge as systems evolve. Upgrades can introduce changes to APIs, data structures, and security protocols, requiring constant updates to the integration. This ongoing maintenance, along with the need to test and adapt custom connectors, makes it difficult for councils to keep systems functioning smoothly. The result is that instead of focusing on innovation and growth, significant resources must be dedicated to managing and troubleshooting the integrations. Over time, this complexity undermines flexibility, slows down the adoption of new technologies, and diminishes the value of the system as a whole.
Thirdly is the issue of partner availability. Many single-source local government ERP vendors have limited support networks that are concentrated in specific regions, which can cause delays in obtaining the necessary assistance or expertise, especially for smaller or geographically dispersed councils.
Not least of all is the way in which the rigidity of customisation presents a major hurdle, especially in cross-functional capability. These systems are often difficult to tailor to meet unique council requirements, and when customisation is needed, it frequently involves costly consulting or vendor intervention, further complicating and increasing the cost of implementation and maintenance.
Best of Breed: A Fragmented Landscape
By comparison, the "best of breed" approach—simply choosing different systems for different functions—was once heralded as the solution to single-source ERP's inflexibility. By selecting specialised solutions for specific business needs, local governments could theoretically optimise their operations. However, the downsides often outweigh the benefits for small to mid-sized governments.
The "best of breed" approach brings its own challenges, especially when it comes to integration. Managing systems from multiple vendors can create significant difficulties in ensuring smooth interoperability, particularly in under-resourced or under-funded organisations. These integration challenges can slow down operations and make it harder to maintain a cohesive technology environment, ultimately resulting in a poor user experience (unhappy employees or customers).
Another drawback is the potential for higher maintenance costs when supporting multiple systems, particularly in organisations with poor application portfolio management. This approach benefits from specialised integration skills and middleware to handle system connectivity, operational efficiencies, and ongoing system management. Ironically, these same capabilities are also essential when using single-source ERP systems, highlighting that integration and management expertise are fundamental to modern enterprises.
In my view the biggest drawback of a poorly managed BoB environment is the potential for a fragmented user experience. Employees may be required to switch between different interfaces, workflows, and processes across multiple platforms, which reduces productivity and creates frustration.
The Case for a New Approach: PaaS-Based Solutions
Platform as a Service (PaaS) is a modern alternative that combines the benefits of both single-source ERP and best of breed systems while mitigating their respective downsides. PaaS allows local governments to build and deploy modular applications within a flexible, scalable cloud infrastructure, offering the best of both worlds: integration and specialisation without the complexity or lock-in.
PaaS offers several key benefits that address many of the challenges found in traditional approaches. First, PaaS operates within an open ecosystem, providing a standards-based environment that easily integrates third-party solutions – even competitive PaaS solutions. This openness eliminates the closed ecosystem problem commonly associated with traditional ERPs, enabling greater flexibility in building a customised technology landscape.
One of the standout advantages of PaaS is its modular flexibility. That just means that local governments can adopt a composable architecture, allowing them to deploy only the functional applications and workflows they need, and expand these systems as their organisational requirements grow.
In addition, for every council that understands its true cost of IT service delivery, PaaS is cost efficient.
It eliminates the need for on-premises infrastructure to run business applications, which includes both the upfront costs and ongoing maintenance expenses, and the DR infrastructure requirements, making it a desirable longitudinal choice for resource-constrained local governments1.
Furthermore, PaaS providers typically have an extensive partner support network, ensuring that even regional governments can access the expertise and assistance they need in a timely manner, regardless of location.
Finally, PaaS environments offer customisation through low-code/no-code solutions that allow councils to more quickly tailor systems to meet their stakeholder requirements. This removes much of the dependency on vendor intervention for customisation.
A New Era of Business Systems for Local Government
Local governments no longer have to choose between an all-encompassing single-source ERP system or a fragmented ecosystem of best of breed solutions. With the rise of PaaS platforms, organisations can take a more agile, modular approach to technology, combining the integration benefits of ERP with the flexibility of specialised systems. By moving beyond the outdated "best of breed" mindset, and adopting fit-for-purpose, composable, or modular ecosystems, small to mid-sized councils can better position themselves for long-term success in an ever-evolving digital landscape.
This isn't just a concept for the future—Platform as a Service (PaaS) is already transforming local governments across Australia, providing tangible benefits and streamlining operations. They are using it to enhance customer experiences, improve cross-departmental collaboration, reduce reliance on manual processes, achieve faster response times for customer, community and employee requests, and improve service delivery through automation. These are all lead indicators for significant cost savings.
PaaS is not an emerging trend. It is a mature solution already disrupting most council functions, and scaling to meet a variety of needs. It also represents the future operational model of local government business systems by delivering the non-functional capabilities (like portals and workflows and automations and integrations and analytics) that traditional solutions struggle to offer in isolation.
For that reason, the conversation should no longer be about choosing the best software tool for each function, but about how the organisation can now build an adaptable, integrated architecture that can grow with the needs of the community.
Reach out through the app or on LinkedIn if you’d like to dive deeper into potential solutions or to understand the broader considerations for these type of solutions in your corporate systems roadmap. Or perhaps you know someone exploring this area. If so, feel free to share this link with them.
The subtopic of infrastructure costs is worthy of a little sidenote. In many single-source ERP cloud models, the vendor does manage the infrastructure, but they "onsell" it to the customer, meaning that the council still pays for the cloud resources as part of the overall service package. This differs significantly from true SaaS or PaaS models. In pure cloud solutions, the infrastructure and software are fully integrated, and the customer only interacts with the application layer, without needing to worry about the infrastructure.
The challenge with these traditional ERP cloud setups is that while the vendor manages the clients infrastructure instance, the council has no visibility into its operations. This lack of transparency can become problematic, especially when things go wrong, such as performance issues, outages, or scaling failures. In such cases, the council is reliant on the vendor to resolve issues, but they don't have access to critical information about what’s happening behind the scenes—adding a layer of complexity and risk.
Moreover, the council is still paying for cloud infrastructure but without the flexibility or control that comes with direct cloud management or pure cloud services. This makes the model even less efficient because, although the council is paying for a cloud service, it is not getting the full benefits of cloud elasticity, visibility, or seamless scalability that are standard in SaaS or PaaS environments. This hybrid model can also lead to higher costs with fewer advantages, leaving local governments burdened with a system that feels like the worst of both worlds: paying for infrastructure without gaining the operational control or responsiveness that could be critical during crises or system failures.
In contrast, PaaS-based solutions reduce this burden significantly. Since the infrastructure is fully managed by the PaaS provider, customers don’t need to worry about infrastructure maintenance or troubleshooting. The seamless integration of infrastructure and software in pure cloud models means updates, scaling, and maintenance are handled behind the scenes, minimising disruptions and lowering ongoing costs. By eliminating the need for separate infrastructure management, PaaS platforms offer greater cost efficiency, enhanced flexibility, and a more reliable operating environment for local governments. This simplifies maintenance and allows councils to focus on service delivery rather than infrastructure management, making PaaS a far more attractive option in the long run.