🇦🇺Australia

Defence ERP Overrun

1 verified sources

Definition

Defence ERP program budget escalated from $1B to $1.64B approved, total lifetime ~$3.5B including sustainment to 2033. Delays in finance/procurement modules impact suppliers' billing processes.

Key Findings

  • Financial Impact: AUD 2.5B total overrun (from $1B original to $3.5B lifetime)
  • Frequency: Ongoing through 2030 program completion
  • Root Cause: Delays and amendments in ERP rollout affecting billing integration for progress payments

Why This Matters

The Pitch: Defence suppliers integrating with ERP for milestone billing incur AUD 2.9B+ in program overruns passed through contracts. Automation aligns with ERP standards to avoid integration costs.

Affected Stakeholders

ERP Integrators, Finance Directors, Procurement Teams

Deep Analysis (Premium)

Financial Impact

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Current Workarounds

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Delayed Defence Payments

AUD 100,000+ opportunity cost per delayed large progress payment (assuming 30-90 extra days at 10% annual financing cost)

Procurement Delays and Cost Escalations

AUD 16-21B allocated over decade with delays risking 10-20% overruns; individual projects like 155mm munitions paused costing millions in sunk tender efforts

Idle Capacity from Compliance Bottlenecks

AUD 5-10M per year in idle equipment for mid-tier firms; targets 15,000 rounds/year delayed to 2028

Export Control Permit Breaches

AUD 100,000+ per breach in fines; 20-40 hours/month in permit delays per project

Compliance Ambiguities & Red Tape

AUD 50,000-150,000 per large project in extended liability and admin costs

DSGL Misclassification Risks

2-5% project delays (AUD 100k+ per delayed export); minimum statutory fines AUD 222,000 per serious breach

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