Auckland Council has secured a new commercial partnership for business software, with SAP, a global leader in enterprise applications and business AI, that will have projected savings for ratepayers of $42.1 million over the next seven years.
SAP provides software that underpins many critical elements of the council’s technology landscape, such as payroll, finance, employee management and regulatory functions.
The new contract aligns with the council’s Long-term Plan priorities which includes improving how we engage with and support our customers, and transforms how we manage technology for greater efficiency.
Auckland Mayor Wayne Brown says instead of reinventing the wheel, the move gets the best out of existing services.
“This will contribute to the additional $20 million savings target we’ve set for council under the Long-term Plan. It creates savings by making the most of what we already have, fine-tuning the systems we have in place to serve Aucklanders more efficiently, making their ratepayer dollar go further.”
He says it will set the council group up well for the future.
“This will also prepare us well for furthering one of the visions I was voted in on: to take back control of our CCOs, which, alongside property optimisation, includes an expansion of our shared services across the council group. This is about maximising efficiency ahead of some changes coming to CCOs,” he says.
Richard Jarrett, Director Group Shared Services at Auckland Council, says the new SAP contract is a significant achievement and will help the council improve how it operates day to day, leading to greater efficiencies. He reflects on the council’s journey from the amalgamation of eight councils to taking a more agile approach to fit for purpose technology.
“We look forward to a more efficient council. We can’t change the decisions of the past, but we can learn from them, and adjust them for the future.
“Our new commercial construct with SAP gives us the freedom to make the right choices of fit for purpose technologies that will mobilise Group Shared Services under the Well-managed Local Government component of the long-term plan.”
Adrian Griffin, Managing Director, SAP New Zealand says together SAP will work closely with Auckland Council to help it derive greater value from its systems as it looks to mobilise a Group Shared Services structure.
“The new commercial construct will see its staff reap the full benefits of moving to the cloud, including simpler processes and operational efficiencies, which not only reduces the council’s costs in the long-term but frees up and empowers its people to deliver world-class services and programmes to the community,” he says.
Auckland Council had previously committed to SAP as an enterprise platform. Significant benefits had been achieved initially but as time has progressed the existing contract was constraining council and needed to change.
Neil McGowan, General Manager Technology Services, says the council decided to seek a new contract with SAP that would better suit the council group’s needs and improve capabilities over time.
“In June 2024, Auckland Council signed a new four-year deal with SAP.
“New terms were negotiated by making use of SAP’s RISE with SAP, a comprehensive business transformation package that includes an AI-powered cloud enterprise resource planning (ERP) solution, infrastructure and services. This cloud offering will see previous constraints removed, significant costs avoided, and the ability to shrink or grow the SAP function depending on the needs of the council in the future.
“The new deal also protects our existing SAP installation base and provides the opportunity to make use of modern SAP cloud software should we choose to.
“It also allows us to pick and utilise fit for purpose technology solutions from a broader range of suppliers while maximising the potential for any core services that may be modernised with SAP.
“Auckland Council’s technology strategy depends on moving to non-customised and out of the box solutions. This reduces complexity and establishes the ability to keep pace as technology evolves more rapidly.
“The new agreement contains the ability to leverage SAP’s services to remove and contain complex customisations during any migration activity to ensure the council can achieve its strategic goals for simplification.”
