Integrated Resource Information Systems IRIS University of Kentucky’s ERP Project

1. Integrated Resource Information SystemsIRIS University of Kentucky’s ERP Project February 2005

2. Welcome and Session Overview • Welcome • Housekeeping Items • This session will end at 4:00 p.m. • Please turn cell phones, pagers, Blackberries, etc., to silent, vibrate or off. • Please refrain from side conversations. • Please hold questions until the Q&A time. • The facilitator will keep the Q&A moving along – questions that require follow-up may need to be addressed after the session is over.

3. Today’s Agenda • Facilitator Diana Sage • Introduction J. David Hardison • Human Resources Michelle Bliffen • Materials Management Kevin Stevens • Campus Management Michelle Nordin • Finance Dale Austin • Technical Kathy Hamperian • Training Diana Sage • Questions

4. What is IRIS? Integrated Resource Information Systems  The replacement of existing financial, human resource, student, purchasing, and inventory computer-based management systems with an integrated software application that will enhance service • Phase One is a 2-3 year, 40 million dollar project that will touch every part of the University. • “Driving forces” are functional – not technical. • Established by the President and supported by his Cabinet • Executive Sponsor – EVPFA – Frank Butler • Project Director – Phyllis Nash

5. Why does this need to be done? Lack of access to information • Needed information may not be available • Needed information may not be easily accessible  Technology environment is obsolete • Poor integration of systems • Inability to maintain the current systems • Lack of capacity of the current systems • Difficulty in remaining compliant with regulations  Service delivery is ineffective and inefficient  Some business processes are out of date

6. Introduction – Replacement of Systems Goals • Improve business and service processes • Ensure high levels of faculty, student, staff and customer satisfaction • Enhance the University’s overall competitiveness

7. Change Requests • The IRIS Blueprint provides a picture of the many “targets” for which this project must aim. • To ensure we “hit” our targets, we must be aware of any changes to existing systems. • If changes are needed/desired, the University has established a process for consideration. • For information on the request process during the IRIS Project, please see the “Change Process” item listed in the Resources column of the IRIS website at http://www.uky.edu/IRIS/.

8. University of Tennessee Northern Kentucky University Johns Hopkins Medical Center University of Cincinnati University of Mississippi Are other organizations doing similar projects with SAP? • Central Michigan University • Duke University • LA Community College District • Texas State University • University of Nebraska • MIT Other institutions with SAP systems include:

9. What is addressed in Phase One? In Phase One of the IRIS Project, these SAP modules will replace the core functionality of our current systems: • Finance (FI) • Human Resources (HR) • Campus Management (CM) • Materials Management (MM)

10. What are the “Powers” of IRIS? Does IRIS make policy? Answer: NO Does IRIS change policy? Answer: NO Does IRIS ever raise questions that initiate discussions by those who do? Answer: YES

11. What methodology is being used to implement SAP?

12. Introduction – Project Timeline • Project Timeline • Project Preparation ended August 6, 2004 • Business Blueprinting began August 9 - ended December 17, 2004 • Realization began January 2005 • Go Live & Support (Starting with Financials, October 1, 2005)

13. Project Timelines Finance and Procurement • Realization January – July 2005 • Final Preparation August – September 2005 • Go Live October 1, 2005 • HR, Payroll, Hospital Inventory Management • Realization January – October 2005 • Final Preparation November – December 2005 • Go Live January 1, 2006 (technically, 12/25/05) Campus Management • Realization January 2005 – July 2006 • Final Preparation August – September 2006 • Go Live October 2006 (exact date TBD)

14. Project Phases We are Here

15. Realization “Stop Talking and Start Doing” Phase

16. Realization High-Level Activities • System configuration and documentation • Baseline Configuration – 80% (20% of Realization) • Final Configuration – 20% (80% of Realization) • End-user authorization role development • Development of R.I.C.E. items • Extraction of current systems’ data for conversion • End-user training and development • Level III project team training • System testing and documentation

17. How will the SAP Implementation affect you? • You’ll learn new processes and new technology at the same time. • Your actions will impact others. • Your work will slow down at first. • You’ll work harder to get less done at first. • You’ll deal with more data entry, duplication of effort, testing, and data review. • In other words, it may be painful…but it will get better.

18. Human Resources

19. Human Resources Blueprint Components of Human Resources Blueprint • Personnel Administration • Organizational Management • Enterprise Structure • Benefits • Time Management • Payroll

20. Business Process Changes • New hire process • Assignment change process • Elimination of half-time status • Employee ID will be system-generated • Elimination of annual roll-over process • Reduction of multiple assignments • Employees paid on one pay cycle

21. Human Resources Blueprint Phase One • Organizational Management • Personnel Administration Future Phases • Recruitment • Personnel Development • Workflow • Employee Self-service • Manager’s Self-service

22. Benefits

23. Benefits - Business Process Changes • Single point of entry for employee data • Core Benefits (health, dental, life, vision) • Bi-weekly employee deductions will pull on first and second payroll • Eliminated requirements for: • Six-month assignment requirement for temporary employees • Thirty-day waiting period for STEPS employees • Hospital employee eligibility will be consistent with campus • Health Care Flexible Spending Account Eligibility • Voluntary Benefit Eligibility

24. Benefits – Phase One • Core functionality of HRS and BMS • Administration of benefit plans • Determination of employee eligibility • Enrollment in benefit plans • Termination of benefit plans • COBRA administration • Direct Bill processing • Open Enrollment • Pre-paid deductions • Process Retiree benefits

25. Benefits - Future Phases • Employee Self-service • Manager’s Self-service • Workflow functionality

26. Time Management

27. Time ManagementBusiness Process Changes • Leave balances will be validated during timesheet entry, assisting with policy compliance and reducing errors • Retroactive changes to time and leave entries result in automatic recalculation of balances and pay • FMLA Workbench will automate the current manual process of determining eligibility • Cross Application Time Sheets (CATS) for single-entry time recording • Elimination of separate hospital payroll application • Time evaluation process manages overtime, leave accruals and balances

28. Time Management Phase One • Holiday Calendars • Work Schedules • Time Entry • Time Evaluation • Absence/Attendance Management • FMLA Support Future Phases • Employee Self-service • Manager’s Self-service • Workflow

29. Payroll

30. Payroll - Business Process Changes • University work week • Concurrent Employment/multiple assignments • Employee new hire/rehire process • Employee additional compensation and assignments • 2 direct deposit options (checking and savings) • Savings Bond process automated

31. Payroll - Phase One • Payroll Accounting • Position Budget Control • Human Resource Information System • Deferred Pay • Concurrent Employment

32. Payroll - Future Phase • Employee Self-service • Manager’s Self-service • Workflow functionality

33. Materials Management

34. Introduction Project Scope – Materials Management • Phase One-A – October 1, 2005 • Purchasing • Accounts Payable • Procurement Card • Phase One-B – January 2006 • Hospital Inventory Management • Future Phases – TBD • e-Commerce/e-Procurement • Inventory Management in other areas (Physical Plant, Stores) • EDI Transmission of Purchasing Documents (Campus) • Expanded Use of Workflow

35. Materials Management Key Decisions Made • Support uniform or standard SAP processes • Standard procurement approval process • No approval process will be required for hospital purchases of material master items • Procurement will be made using 5 basic SAP documents: Requisition, Purchase Order, Outline Agreements (Contracts), Request for Quotation, and Goods Receipt • Material Requirements Planning (Inventory Management System) will generate automatic Purchase Orders for the hospital

36. Materials Management • On-line receiving will be done by department • “Three-way match” (Purchase Order, Goods Receipt, and Invoice) will be performed on-line in SAP for commodities and equipment • “Two-way match” (Purchase Order and Invoice) will be used for certain types of purchases (e.g., rentals and leases) • Vendor File maintained by Accounts Payable, Hospital Accounting, and Purchasing

37. Materials Management – Purchasing Business Process Changes • The paper invoice transmittal process will be eliminated • The Requisition and Purchase Order processes will be standardized • Purchase Order transmittal to vendors will be automated where appropriate

38. Materials Management – Purchasing New System Benefits • Integrated System (FI, CO, FM, GM, CM, HR) • All data in one system will reduce the effort required to maintain unnecessary batch processes, interfaces and shadow systems • Improved efficiency for end-users • Standardized requisition process • Reduced reliance on paper processes • Higher Data Quality • Improved access to document flow (REQ/PO/GR/Invoice/Check) • Authorized users will be able to view and monitor the status of their requisitions on-line

39. Materials Management – Purchasing New System Benefits • Streamlined Reporting Process • Real Time Reports – Drill Down Functionality • Fewer Printed Reports • Semi-automated/Automated Process • Auto – PO for hospital MRP Orders • Transmission of Purchasing Documents via EDI/FAX/Email

40. Hospital Inventory Summary

41. Hospital Inventory Project scope Inventory management will comprise eight processes: • Goods Receipt • Goods Issue • Stock Reservation • Stock Transfer • Material Requirement Planning • ABC Classification • Physical Inventory • Replenishment Area Management (expensed unofficial inventories)

42. Inventory – Key Decisions Phase One • Implement core functionality to replace the ESI Inventory system • ESI will interface with SAP • Some ancillary areas could be converted into storage locations • Custom bar-code scanning • Low dollar ancillary areas will request supplies replenishments for their area. • Eliminate the need for paper forms and faxing

43. Materials Management – Inventory New System Benefits • Improved flexibility and growth with new bar coding technology • Real-time updating of transaction • Future Patient Billing System support possible • Integration with Materials Management and General Ledger • SAP bar code communication technology forms part of the SAP system • Re-stocking procedure at the converted Storage Location will be improved and streamlined using SAP MRP functionality • Place material orders directly via a front end • Storage Location configured for separate stock planning (individual MRP areas) • MRP can adjust re-order levels (par’s) based on actual usage

44. Accounts Payable

45. Accounts Payable Key Decisions Made • Central invoice receiving (Hospital and Campus) • Standard Invoice matching processes • Three-Way • Two-Way • An electronic non-purchase order invoice feed to Accounts Payable will be implemented to receive invoice data from departmental databases (e.g., Library) • Check printing outside of SAP • Vendor File maintenance

46. Accounts Payable • Business Process Changes • Central Invoice Receiving (Hospital and Campus)

47. Accounts Payable – New System Benefits New System Benefits • Improved access to document tracking (REQ/PO/GR/Invoice/Check) • Improved Cash management • Improved Payment alternatives • Improved Check distribution/mailing • Streamlined Reporting Process • Semi-automated/automated Process • Logistics Invoice Verification (LIV) • EDI/FAX/Email

48. Procurement Card

49. Procurement Card Key Decisions • Continue current interface process with the current card provider (Paymentnet) • Duplicate existing system with opportunity to expand

50. Campus Management