The Australian Department of Defence has signed a new $18.7 million contract with tech giant IBM (IBM) as part of its ongoing project to upgrade its enterprise resource planning (ERP) system, according to iTnews. This deal, which starts on September 1, includes a year of consulting support to help with the rollout of SAP S/4HANA. When combined with two recent amendments to earlier contracts, worth $13 million and $33 million, IBM’s role in the program has increased significantly. Indeed, since 2019, the total value of Defence’s ERP work with IBM has now reached at least $575 million.
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This update comes after the delivery of “tranche 1B,” which is a key release that went live in May 2025 after a delay from its original October 2024 launch date. The release introduced new systems that cover finance, procurement, logistics, maintenance, and engineering. A Defence spokesperson told iTnews that the ERP program is a long-term effort to streamline business processes and merge them into one unified platform, with work spread across three major stages, or tranches.
Interestingly, the ERP overhaul began back in 2016 with a goal of finishing by 2025 and an initial budget of $1 billion. However, the 2024–25 budget now puts approved funding at $1.64 billion, and lifetime costs are expected to reach $3.5 billion in order to cover extra features, risk buffers, and support through 2033–34. Furthermore, the final phase of the program is now expected to be finished by 2030. It is worth noting that IBM first joined the project with a $95 million contract in 2019 that later increased to $112 million, while additional system integration contracts have also grown over time.
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