TechnologyOne swoops in after WA project sours
Brisbane-based TechnologyOne has stitched up deals with 21 of the 59 WA government agencies bringing their enterprise systems back in house after a centralisation strategy soured.
The WA government pulled the pin on its Office of Shared Services centre in July 2011 after a report by the state's Economic Regulation Authority found the project was over-budget and unlikely to deliver promised savings. Centralising IT service delivery was expected to save the government about $57 million a year.
The ERA report found the project had incurred costs of $401 million and achieved minimal savings for the 59 agencies it was servicing.
The Shared Services Centre ran an Oracle enterprise resource planning (ERP) software suite which was subject to a range of technical problems.
Agencies subsequently began
re-establishing their own finance, human resources, procurement and payroll systems in preparation for final shutdown of the centre in early 2014.
Besides TechnologyOne's One Government offering, other products on the state's common use agreement panel for financial and HR systems include Oracle, Peoplesoft, SAP SunSystems and Pronto.
The state went to tender recently for a contract administration system under a similar arrangement.
TechnologyOne founder Adrian Di Marco claimed the wins were evidence of a shift away from "big and expensive" multinational vendors and market resentment towards their delivery models.
Historically, Oracle and SAP have dominated the ERP market in the state and federal public sectors.
"We have people who 10 years ago wouldn't talk to us," Mr Di Marco said.
Oracle and SAP rely on third-party implementation partners, which can charge several times the price of the software to customise and install it. By contrast, TechnologyOne did its own implementations at much lower cost, Mr Di Marco claimed. He would not put a value on the body of work in Western Australia.
In recent years, TechnologyOne has focused its marketing efforts on pre-configured software which can be deployed with minimal customisation in less than six months. It has about 150 state and federal public sector clients. A growing number have opted for cloud services.
The firm was drawn into controversy in its home state of Queensland last year after it emerged it had donated to the
re-election campaign of Ros Bates and had four meetings with her after her elevation to the IT ministry.
While Oracle and SAP have historically been viewed as a safe choice, more customers now appeared willing to take a punt on lower profile alternatives, according to IBRS analyst Alan Hansell.
"I believe organisations will increasingly select tier two providers, such as TechnologyOne, with mature software and a cloud offering, based on user pays principle," he said.
"My only concern is the capacity of the tier two providers to implement when they are too successful and their resources are stretched."
Servicing all 21 WA agencies could push TechnologyOne to the limit of its capacity, Mr Hansell added.
Frequently Asked Questions about this Article…
The WA government decommissioned its Office of Shared Services after an Economic Regulation Authority report found the centralised IT project was over-budget and delivered minimal savings. Agencies began bringing finance, HR, procurement and payroll systems back in-house, and TechnologyOne won deals with 21 of the 59 agencies as they moved away from the shared services model.
TechnologyOne secured contracts with 21 of the 59 WA agencies. For investors this signals meaningful public-sector traction: it’s a sizeable body of recurring implementation and service work that can boost revenue and showcase TechnologyOne’s offering to other government customers.
An ERA report found the shared services project had incurred about $401 million in costs while delivering minimal savings to the 59 agencies. The state had expected roughly $57 million in annual savings from centralisation, but the project was deemed unlikely to deliver those savings, prompting the shutdown decision.
TechnologyOne promotes pre-configured software that can be deployed with minimal customisation (often in under six months) and does its own implementations, which the company says lowers cost compared with Oracle and SAP approaches that frequently rely on third-party implementation partners. TechnologyOne also offers cloud services, and its OneGovernment product sits alongside Oracle, Peoplesoft, SAP SunSystems and Pronto on WA’s common use agreement panel.
A key risk is implementation capacity: industry analysts warn that tier-two providers can struggle if demand spikes. The article notes that servicing all 21 WA agencies could push TechnologyOne toward its capacity limits. Operational execution, resource constraints and delivery timelines are important risk factors for investors to monitor.
According to the article, TechnologyOne has about 150 state and federal public-sector clients and a growing number of those customers have opted for its cloud services. The company has focused on pre-configured solutions that can be deployed quickly, which supports its public-sector growth strategy.
Yes. The article mentions a controversy in Queensland where TechnologyOne donated to a re‑election campaign and had meetings with the minister after her elevation to the IT portfolio. Such political or reputational issues can attract scrutiny and potentially affect investor sentiment, even if they don’t directly impact operations.
The WA contracts highlight a market shift where some government agencies are choosing tier‑two vendors like TechnologyOne over big multinationals, creating growth opportunities. However, investors should balance that optimism with caution about execution risk—especially implementation capacity and delivery—and be aware of reputation and political risks referenced in the article.
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