Project Management Committee Meeting

1. Project Management Committee Meeting Building the Human Resources and Payroll Environment for the Next Generation of North Carolina State Government December 2, 2004

2. Project Management Committee John Barfield Marshall Barnes Rod Davis Dan Domico Amy Faulk Bob Giannuzzi Carl Goodwin Wendy Griffin Kathy Gruer Ginny Klarman Tracy Little Jim MaCaulay Jim Newman Kim Padfield Tom Runkle Gary Wiggins Margaret Wiggins Jonathan Womer OSC Staff Gwen Canady, Deputy State Controller Julie Batchelor, Assistant State Controller (PMC Chair) Linda Hudson, SBIP Program Manager Shannon MacFarlane (Senior Business Analyst) Deloitte Team Lowell Magee, Project Manager Bradd Craver Dorie Kehoe James Stovall Katie Beacham Others TBD Welcome and Introductions

3. Agenda • Welcome, Introductions and Agenda • Statewide Kick-Off Review • HR/Payroll Project Status • HR/Payroll Vision, Goal and Guiding Principles • JAD Sessions Overview • Change Management Strategy • Open Discussion • Action Items Review • Adjourn

4. Statewide Kick-off Feedback Review

5. HR/Payroll Project Status

6. Status Report • Activities Completed This Period • 11/10/2004 - 12/1/2004 • Completed Planning Phase deliverables • Finalized project vision and drafted guiding principles • Met with Program Steering Committee • Prepared for and conducted project Kick-Off Meeting with key stakeholders • Confirmed subject matter experts (SMEs) and developed JAD calendar • Developed preliminary JAD session calendar • Refined communications plan and began stakeholder analysis activities • Met with ITS project management staff • Initiated requirements gathering interviews • Distributed NCTIME communication • Initiated project branding

7. Status Report • Plans for Next Period • 12/2/2004 - 1/5/2005 • Finalize guiding principles • Prepare for and conduct JAD Sessions on the following topics: • Develop and Train Workforce • Monitor Employee Safety & Health • Manage Employee Relations • Career and Succession Planning • Review change management approach with OSC management • Commence monthly ITS reporting • Issues Requiring Management Attention • None this period

8. Plan Execute Close Vision Project Week 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Month Nov Dec Jan Feb March Apr Date 25 1 8 15 22 29 6 13 20 27 3 10 17 24 31 7 14 21 28 7 14 21 28 4 11 18 25 • • • • • • • • • • • • • • • • • • • • • • • Project Management Change Management Group I Human Resources Group II Payroll Technical • – Project Status Report – Final Deliverables – Offsite Working/Holiday HR – Group I HR – Group II Payroll Technical • Personnel • Compensation • Payroll • High level Administration Management Administration technical requirements • Recruitment • Job and Salary • Payroll Processing Surveys • Security • Applicant Tracking • Labor Cost • Position Evaluation Distribution • Infrastructure • Disciplinary Action and Analysis Complaint Management • Time Collection & • Integration • Benefit Management • Incident and Accident Administration Tracking • Budget Support • Workforce Analytics • Exit Interviews • Organizational • Competency Based HR Management Management • Employee Self • Performance Service Management • Leave Tracking • Training Administration High Level Project Timeline

9. HR/Payroll Guiding Principles

10. HR/Payroll Vision • A strategic business partnership supporting the human resource and payroll needs of State government, enabled by utilizing leading business practices and current technology.

11. HR/Payroll Project Goal • Through a statewide collaborative effort, the goal of the HR/Payroll Project is to develop an enterprise-wide Human Resources/Payroll system utilizing leading industry practices to provide a foundation for effective management, increased efficiency, and the information needed to make timely and appropriate decisions.

12. Guiding Principles • Create a seamless HR/Payroll experience for employees • Provide an environment for employees to make informed decisions about their careers • Streamline business processes to drive efficiency • Increase productivity and make the State of North Carolina more competitive • Develop a single repository, with a common set of data elements, to successfully support the State’s reporting and management activities • Move transactions closer to the point of origin (Employee Self Service/Manager Self Service) • Provide a flexible system able to respond to changing HR/Payroll needs • Eliminate redundant systems and duplicative processing • Provide real time access to transaction activity

13. JAD Session Overview

14. JAD Session Agenda • Overview and Introductions • HR/Payroll Project Overview • Vision/Goal/Guiding Principles • Overall Project timeline • JAD Session Objectives • Guidelines for This JAD Session • Explain Industry Print • Requirements gathering and process re-design • Next Steps

15. JAD Session Objectives Deliverable for today JAD Session Industry Best Practices Process Designs State of NC Process Designs • Project Vision • Scope • Industry Best Practices • HR/Payroll Business Requirements • Future Processes • Business Impact/Benefits • Potential Barriers • Performance • Measurements • Review Process/Subprocesses • Identify Activities • Identify Opportunities

16. Guidelines for This JAD Session • Participate! Your input is critical. • This is a workshop, not a formal presentation • Discussion will be kept at a high-level to capture critical information and requirements • Discussion around detailed system functionality will be kept to a minimum • Be respectful of each other’s opinions • Issues that cannot be resolved or discussions that require follow-up will be documented on the parking lot for future resolution

17. Deloitte’s Process-Centered Tool –IndustryPrint™ • IndustryPrint™ is a process modeling tool based on industry-specific best practices • Deloitte’s IndustryPrint™ tool can be used throughout the project to help define scope and to design processes based on key inputs such as business requirements, best practices, and future vision • IndustryPrint™ jump-starts a project by providing the foundation to document the organization’s “to-be” processes in an ERP-enabled environment • IndustryPrint™ facilitates the documentation of information critical to the development and implementation of your HR Transformation • Our clients and consultants have found IndustryPrint™ key to accelerating the Plan, Design, and Build Phases of a project • The most valuable aspects of IndustryPrint™ are that it uses best practices, simple diagrams, industry-specific processes, and language to communicate with business users

18. IndustryPrint™Process Models HR-030 Document Offer Develop & Train Process Lessons Workforce Learned HR-010 Plan & Manage Employee Resources Source Candidates Internally No IT-070 Document Analyze & Create Job Qualify & Select Manage Offer Process Offer Accepted? Support & Train Employment Data & Position Candidates Users Tax Withholding Preferences Yes Source Candidates Externally HR-050 IT-020 Perform Evolve IT Perform Psychological Receive Hire Decision/ Perform Employee Employee Benefit Architecture Profile/Drug Testing Acceptance Orientation Event Maintenance & Open Enrollment Assign Company Property IndustryPrintTM Key Benefits • Starts with a model, not a white-board • Focuses on the future process design • Drives North Carolina to embedded best practices • Flexible enough to incorporate North Carolina-specific processes • Provides common language across North Carolina agencies • Ensures that process and business drivers are driving technology • Accelerates the implementation • Ensures business process ownership and consensus

19. HR Manage Human Resources IndustryPrintTM provides multiple levels Level I - Process Core Business Process family; Human Resources, Sales & Distribution, Financials, Information Technology, Materials Management, etc. Level II – Sub-Process Primary management sub-processes within Human Resources. These cover the traditional sub-processes such as HR Administration, Benefits, Payroll, Recruitment and other HR management functions. Level III – Activity Flow Diagrams Activity Flow Diagrams represent activities within a specific sub-process and their inter-relationships with other activities within and/or outside the sub-process. These are tailored to meet North Carolina’s business needs. During the workshops, we will utilize the IndustryPrint activities to finalize the North Carolina Template.

20. Level 1: Process Decomposition Diagram • IndustryPrint™ Level 1 provides a graphic depiction of each business process. Processes Subprocesses

21. Level 2: Subprocess Decomposition Diagrams • IndustryPrint™ Level 2 provides a graphic depiction of each subprocess. Process Subprocesses

22. Level 3: Activity Integration Diagrams • At the third level, the green business activities from the previous level are now displayed in a flow diagram. • The subprocess model is integrated with other subprocesses that are represented by the shadowed gray triangles, or Connectors. These Connectors depict integration across subprocesses.

23. The Subprocess You Will Design HR-060 Develop and Maintain Workforce

24. Another accelerator - Past project requirements • Deloitte has successfully completed numerous HR and Payroll requirements gathering projects • Past client deliverables can not be shared due to confidentiality, but Deloitte will leverage them when developing North Carolina’s requirements • JAD Facilitators will consider past requirements documents, which will yield stronger, more complete requirements for North Carolina

25. Change Management

26. Change Management is designed to… • Develop a strategy for managing change in process, technology and management practices • Communicate the HR/Payroll vision and ongoing status • Equip HR/Payroll project Leadership with the information and tools to lead the project • Identify and communicate potential impacts of new processes, procedures, and technology to be implemented in Phase III • Identify potential areas of project risk and devise strategies to mitigate that risk

27. Creating aclimate for change Create Short-term Wins Framework for Change Management Strategy: The 8 Steps of Change Implementingand sustainingchange Engaging and enablingthe whole organization 8 1 2 3 4 5 6 7 Increase Urgency Build the Guiding Team Get the Right Vision Communicate for Buy-in Empower Action Don’t Let Up Make it Stick 5 Kotter, John P. and Cohen, Dan S. The Heart of Change. Boston: Harvard Business School Press

28. Open Discussion

29. Action Items Review

30. PMC Action Items • ASAP - Finalize List of Process Owners • December 6, 2004 – JAD Sessions Begin • January 6, 2005 – Next PMC Meeting