Top 5 Pain Points that Agencies Face with ERP Solutions

Enterprise resource planning (ERP) solutions are the backbone of modern public administration. They bring finance, HR, procurement, and asset management under one roof, improving efficiency and accuracy. By eliminating silos and automating processes, ERP systems help government agencies manage their resources better.

With ERP, agencies can track budgets, monitor spending and generate reports in seconds. Decision-makers get the insights they need without wading through outdated spreadsheets. HR operations also benefit from seamless payroll, benefits and performance tracking.

But ERP adoption isn’t always smooth. Outdated infrastructure, poor staff training and complex data migration can slow progress. Ignoring these challenges leads to inefficiencies and subpar public services.

With public sector demands growing, agencies need ERP solutions that provide scalability, flexibility and security. By tackling ERP challenges head-on, your agency can boost efficiency and better serve the community.

1. Lack of Integration

Lack of integration is one of the biggest hurdles with ERP systems. Public sector agencies rely on multiple departments (finance, HR, procurement, operations, etc.) all working together. When ERP systems can’t communicate, it creates gaps that slow decision-making and reduce efficiency.

Finance departments, in particular, need full visibility across all functions. They track budgets, spending, and revenue, but without integration, they’re often left piecing together data from disconnected systems. This leads to delays, errors and missed opportunities for cost-saving.

Without an integrated system, real-time data synchronization isn’t possible. And when an agency’s ERP doesn’t update instantly across departments, staff end up working with outdated information. Payroll figures might not match budget reports, procurement requests could be delayed, and financial planning becomes reactive rather than proactive.

In the absence of an integrated ERP, manual workarounds become the norm. Teams waste time exporting, re-entering and verifying data across multiple platforms. Not only does this drain productivity, but it increases the risk of human error.

Modern ERP solutions can break down these barriers. Agencies need a system that connects all departments seamlessly, ensuring accurate, real-time data flows where it’s needed. Without it, inefficiencies pile up and agencies struggle to keep up with growing demands.

2. Workflow Automations

Complex and inefficient approval processes are a pain point in many ERP systems. Government agencies deal with layers of approvals for budgeting, procurement, payroll and more. When these workflows are manual or poorly structured, bottlenecks form and slow everything down.

Manual approval processes create inefficiencies. Documents move through email chains and shared drives as spreadsheets (or even physical paperwork), which are difficult to track and easy to lose. Every extra step adds time, increasing the risk of lost information or duplicated efforts. And human error (i.e. entering incorrect figures or approving the wrong requests) can slip through the cracks, leading to costly corrections later.

Delayed approvals don’t just frustrate employees; they impact operations. A stalled procurement request can slow down infrastructure projects. A delayed payroll adjustment can cause financial strain for employees. These inefficiencies ripple across departments, reducing overall productivity and increasing frustration.

Workflow automation is the fix. A modern ERP system with automated approvals moves requests instantly through the right channels. Notifications alert approvers, approvals happen with a click, and audit trails keep everything transparent. No more chasing down signatures or waiting weeks for a response.

3. Configurability

Many ERP systems struggle to provide the necessary flexibility. Government agencies operate with unique regulations, reporting requirements and workflows that can vary widely from one state or municipality to another. When an ERP system is too rigid, agencies are forced to work around its limitations.

A one-size-fits-all approach rarely works in public administration. Budgeting, procurement, and payroll processes often follow state-specific rules. If an ERP system can’t accommodate these variations, agencies must rely on manual workarounds, spreadsheets or even separate systems to fill the gaps. This not only wastes time but increases the risk of errors and compliance issues.

Lack of flexibility also stifles adaptation. As policies change or new requirements emerge, agencies need an ERP that can evolve with them. Without configurable workflows, reporting tools and permission settings, even minor adjustments can require expensive customizations or vendor support.

To truly serve government agencies, ERP solutions must offer configurable settings that align with state and local regulations. The right system should adapt to the agency – not the other way around. Without that flexibility, efficiency suffers and compliance risks grow.

4. Scalability

Scalability is important for all government ERPs – but especially for those managing growing populations, budgets and services. Is your community or department expanding? If so, your ERP will require more users, data storage and processing power.

Unfortunately, many legacy ERPs weren’t built to expand. They weren’t designed to support increased workloads, forcing agencies to invest in expensive hardware upgrades or licensing fees.

And yet, your agency still needs to scale, despite the cost and inconvenience. Adding new departments, integrating more functions, or expanding across jurisdictions often means a patchwork of disconnected solutions. This usually leads to inefficiencies and data silos.

Without scalable infrastructure, agencies face performance bottlenecks. Slow processing times, system crashes or lagging reports can frustrate employees and delay decision-making. In worst-case scenarios, an outdated ERP can’t handle peak demand, which disrupts financial operations or citizen services.

Agencies need an ERP that can grow with them. Cloud public safety software solves these issues by offering flexible, on-demand scalability. Agencies can add users, increase storage or expand functionality without costly system overhauls. A cloud infrastructure simply adjusts to demand, ensuring a smooth performance even as workloads grow.

5. Security

Government agencies often handle sensitive information about finances, staff and citizens. So of course security is a major concern for ERP systems – especially considering the rise in cyberattacks.

But many legacy ERPs weren’t built with modern cybersecurity threats in mind, making them vulnerable to breaches, unauthorized access and ransomware attacks. A single security lapse can put critical operations at risk and expose confidential information.

Ransomware attacks are a growing threat, particularly in the public sector. Hackers target outdated or poorly protected ERP systems. Then they encrypt data and demand payment for its release. If an agency lacks strong backups or recovery solutions, a successful attack can bring operations to a halt – disrupting payroll, procurement and essential public services.

Many on-premise ERP systems rely on outdated security protocols, leaving agencies vulnerable. Without regular software updates, multi-factor authentication and strong encryption, these systems become an easy target.

Agencies that delay security upgrades often don’t realize the risk until it’s too late. Fortunately, cloud-based public administration software offers advanced security measures like continuous monitoring, automated updates and redundant backups. Cloud ERPs also support strict access controls, ensuring only authorized users can view or modify data.

How to Address These Challenges

Not all ERPs are created equal. Some solutions solve all of the public administration challenges above. Others only solve a couple. Some ERP systems are ideal for medium-size agencies, but not small ones. In this recent webinar, the experts at CentralSquare help you find the perfect-sized ERP for your needs.

CentralSquare offers three ERP solutions: Finance Enterprise, NaviLine and GovAsyst. Each one addresses the pain points listed in this article, but they are built for different sized agencies. Finance Enterprise is for large. NaviLine is for medium. And GovAsyst is for smaller agencies. Schedule a discovery call today to learn how a CentralSquare ERP solution can help you streamline operations and save money.