GovERP panel

Initially I was really excited by this and it could turn out to be a fantastic long term pillar of growth but it could also go nowhere and it may also take a couple of years to get any sales from it at all. As stated the potential opportunity is 6 times their current Federal govt footprint.

GovERP is to be a Federal whole-of-government ERP system (financials, HR, procurement and reporting). Two significant quotes from https://www.finance.gov.au/government/shared-services-transformation-initiative/goverp

• "When GovERP is implemented alongside the existing TechnologyOne/Aurion ERP capability."
• "The GovERP capability is currently in the preparation and planning phase. In this phase, there is a focus on engaging with key stakeholders to confirm the approach"

So GovERP isn't even at the design phase yet. They are still trying to get cross-agency committees together. They still need to agree requirements, design, implement and migrate any willing agencies to migrate to it. Federal Govt agencies have a fantastic record of not adopting whole-of-government solutions. Yawn!

Here's the ASX announcement

https://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=02401020

Thanks to Wini for the excellent information on 8Common. I've had a couple of looks at it and decided to add it to the scorecard. Reasons.

- 3 consecutive quarters of cash flow positive

- excellent customers with federal and NSW state governments. Some have been using the product for 16 years.. Federal Govt depts tend to be like sheep for a solution that works. The first sale is the hardest, but there is a good chance that many will follow. Add to this Scomo's recent govt dept shake up and his statements about cross-agency efficiencies and removing ineffectual, duplicate IT systems. Dept Finance will be at thte heart of this I reckon. 8Common also ticks the boxes of being a small, Australian, cloud IT provider which govt has said they want to procure more from. Additionally, 8Common provides software for a corporate, backoffice function and these are exactly the types of functions that govt tries to adopt common solutions for.

- announcement on 18 Dec that "The Company is in preliminary and non-binding discussions (which may or may not result in any agreement or transaction) with:i. existing Federal Government agency clients to provide both new services and enhancements to existing services; ii. existing NSW Government agency clients to provide enhancements to existing services; andiii. existing clients for both renewal of existing services and the provision of new services. " This reinforces view that organic growth can continue.

- subsequent announcements of sales have not been to any of the clients listed in that announcement

- The CardHero product in only new and hasn't contributed yet, but it has the potential to make a material contribution for quite different customer requirements.

Noted that this is in the past and it could be argued that the companu has turned this issue into a strength. They left unsecured credit card transactions for Dept Social Services from 2004-2015 inclusive. The Minister got involved. They didn't configure an Amazon S3 bucket correctly which hosted all the historical transactions they were migrating across after they won the work. There was an issue with S3 buckets a few years ago where people were forgetting to secure them with a password or other protection.

https://www.dss.gov.au/sites/default/files/documents/03_2018/foi_request_1718_079_documents_in_the_form_for_release.pdf

The fact that they have won further work after this perhaps points to a strength.