A government ERP is the software that runs a government's own money and staff: its budget, its accounts, its purchasing, its staff records and its payroll. ERP stands for enterprise resource planning, the kind of system in which a company keeps its accounts, orders and staff in one database. The products on this page are sold mainly in the United States, to cities, counties and school districts that are too small to build their own.
America has about 90,000 local governments. Each must pass a budget every year, keep accounts in the form the law requires, buy through set procedures and pay its staff. Most have small finance teams. So companies sell them ready-made systems. These were once installed on the government's own servers, and are now more and more sold as software as a service (SaaS).
A government's accounts differ from a company's in two ways. First, they are kept in funds. A fund is a separate set of accounts for money that may be spent only on one purpose, such as a water fund paid for by water charges. Second, the budget is law. The elected council passes a budget that sets how much each department may spend, and the software must stop any spending beyond it.
Take, for example, a county in Ohio with 1,200 employees and a yearly budget of $240 million. The council gives the roads department $9 million for the year. In August, the roads department raises a purchase order for $400,000 of asphalt, in the ERP's purchasing module, a form of procure-to-pay software. The ERP checks the roads budget first. $8.8 million has already been spent or committed to earlier orders, so only $200,000 is left. The ERP blocks the order. The roads manager must either reduce the order or ask the council to move money from another budget line. Setting money aside when an order is raised, rather than when the bill is paid, is called encumbrance. It is what lets the ERP see that the budget is already committed.
The same system records money coming in. Payments of water bills and taxes, collected online through a bill payment platform, are posted to the right fund each night. Spending on large building projects arrives from capital project management software. The budget is published for residents on the county's website, through a government communication platform. Two more modules deal directly with the public: permits and licensing, and court case management and property tax systems.
Governments buy these systems through a government tender, and they rarely replace them, because switching is risky. Many counties still run systems that were built decades ago.
In India, most city and state accounting systems are built by the National Informatics Centre (NIC) or by IT services firms hired through tenders, rather than bought as a product. How is a government ERP different from a company's ERP? A company's ERP is built around sales and profit. A government ERP is built around funds, budgets set by law and public purchasing rules.