ERP Implementation in Government

1. ERP Implementation in Government IPMA Executive Conference September 13, 2000 Marty Chakoian, CTO, City of Seattle Mike Herrin, Summit Project Director, City of Seattle Barbara Read, Principal, IBM

2. Agenda • Introductions • Trends in ERP Marketplace • Implementation Considerations • Critical Success Factors • Government ERP Projects • City of Seattle Summit Project Case Study

3. ERP Defined Enterprise resource planning (ERP) software is a set of applications that automate finance and human resources departments as well as handle jobs such as order processing and production scheduling. ERP vendors have expanded into applications such as supply-chain management, customer relationship management, and industry verticals.

4. ERP Functionality Human Resources Finance e-Business -eProcurement - Employee Self Service - e-Recruiting/e-Hiring - e-Filing - Citizen Access - Web-enabled transactions - e-Commerce -General Ledger -Accounts Receivable -Accounts Payable -Procurement -Fixed Assets -Treasury Mgmt -Cost Control -Grant Management -HR/Benefits Administration -Payroll -Self-service HR Transaction Engine Core software that manages transaction flow among applications and handles tasks like security and data integrity Customer Relationship Mgt Data Analysis Supply Chain Mgmt -Consistent user experience - Personalization of services - Realtime access- enterprise info Decision support software that lets senior executives and other users analyze transaction data to track business performance Planning, scheduling and fulfillment applications that address all procurement requirements across the enterprise

5. Characteristics of an ERP System • Includes business management software that enables finance and human resources in a completely integrated fashion • Enables high levels of integration across business functions and units • Provides for widespread sharing of data from a single information repository • Drives extensive business transformation and change management efforts • Requires high levels of implementation effort and support

6. ERP Solution Components

7. ERP Implementation Benefits • Streamlines or eliminates inefficient manual processes • Eliminates disparate stand-alone systems • Provides integrated, enterprise-wide common tools, processes and systems • Establishes a backbone structure that can be leveraged to handle all operational processes • Integrates and increases control of budgeting, planning and financial management processes

8. ERP Implementation Benefits(continued) • Provides enterprise-wide reporting and decision support • Presents opportunity for re-engineering with industry best practices and templates • Presents opportunity to lever vendors’ future investment in enhanced functionality • Incorporates new functionality and technology - provides a springboard to e-Business

9. ERP Implementation Challenges • Focus on applications rather than business processes • Turf battles over ownership • ERP project management expertise • Issue resolution bottlenecks • Scope and change management • Sub-optimization of system capabilities • Staffing and retaining full time project resources • Experienced implementation partners • Product maturity and limitations • Nature of government funding cycles

10. Trends in the ERP Marketplace • Speed, Speed, Speed • Templates • Rapid Implementation Methodologies • Cost Effective Implementations for Large Enterprises • Product expansion (tax collections, fleet management) • Internet/Intranet and Electronic Commerce • Outsourcing and Application System Providers • Application Management Services

11. An ERP Start-up Roadmap • Functional Requirements Analysis • Procurement Strategy • Proposal Evaluation Plan • Analysis of Software / Implementation Resources • Comparative Cost Analysis • Software Demonstrations • Site Visits • Discovery • Contract Negotiations • Evaluation of Final Vendor • Final Contract

12. Package Integration (SAP,PeopleSoft, JDE, Oracle...) Software Environment Builds Enterprise-wide Infrastructure Planning/Design & Roll-out Interfaces and Conversions Data Warehouse Integration E-Business Business Intelligence Networking Design Implementation Tuning ERP Implementation Activities Manage It... Change It... Implement It.. Operate It... Service It... Teach It... • Change Mgment • Business Vision and Goals • Process Analysis • Package Select . • Business Case • Bus. Process Reengineering • Industry Best Practices • As Is /To Be Process Modeling • Fit-Gap Analysis • Policy Design and Procedure Dev. • Readiness Assessment • Organizational Design • Communications Plan • Prime Contractor Project Management • Detailed Project planning and Tracking • Communications Plan • Subcontractor management • Project Scope Control • Financial Control • Project Oversight and Quality Assurance Reviews • Data Center Operations • Application Development & Maintenance • Network Station Management • Network Operations & Support • Platforms & Technology Services • Installation/Customization & Maintenance • Performance and Tuning • Software Services • Planning/Design/Install • Migration Management • Problem Mgmt. • Systems Mgmt. • Internet Enablement • Web Site Design • Help Desk • Disaster Recovery • Business Resumption Services • Training Needs Assessment • Custom Curriculum and Material Development • CBT Development • End User Training Classes • Train-the-Trainers • Roll-out of Training

13. ERP Software Considerations • Support for Government Functionality • JDEdwards • Lawson • Oracle • PeopleSoft • SAP • Platform and Database • Technical Architecture • Functionality Relative to Unique Processes and Scope of Project • References

14. ERP Systems Integrator Considerations • Successful government ERP implementation track record • Established relationships and implementation practices with major gov't ERP software vendors • Full range of ERP implementation skills from software selection to post-production support • Use of structured ERP implementation methodology and project management tools and techniques • Ability to address unique government terms and conditions

15. Project Critical Success Factors • Leadership commitment • Communication • Full-time staff • Professional project management • Phased implementation approach • Scope management • Business transformation and change management • Job-specific end-user training • Focused issue resolution • Post implementation support

16. Avoiding the “Train Wreck” • Pick the right system • Build a strong cross-disciplinary team at project start-up and foster them through project completion • Deal with organizational resistance quickly • Make decisions and manage change effectively

17. Current ERP Projects in Government(States) • State of Arkansas - SAP - Financials, HR/PR currently implementing • State of California - HR/PR sw and implementer selection • State of Colorado - Financials/HR/PR procurement • State of Connecticut - Requirements analysis in progress • State of Florida - Financials/HR/PR/implementer procurement • State of Hawaii - PeopleSoft - Financials, HR/PR currently implementing • State of Indiana - PeopleSoft rollout to agencies • State of Iowa - ERP Assessment/Case for Change out to bid • State of Kentucky - AMS - Financials currently implementing • State of Louisiana - SAP - HR/PR currently implementing • State of Maryland - HR sw procurement • State of Michigan - Lawson - HR/PR currently implementing • State of Montana - PeopleSoft - Financials, HR/PR in production • State of Nebraska - Finl/HR/PR business case and RFP development • State of Pennsylvania - SAP Financials/HR/PR , implementer procurement

18. Current ERP Projects in Government(Counties/Cities) • Anchorage, AK - PeopleSoft - Financials,HR/PR - in production • Anne Arundel County, MD - JDEdwards - Financials - in production • Chicago, IL - Oracle - Financials - currently implementing • Cook County, IL - JDEdwards - Financials, HR/PR in production • City and County of Denver - PeopleSoft - Financials currently implementing • Detroit, MI - Oracle - Financials - in production, HR/PR currently implementing • Multnomah County, OR - SAP - Financials currently implementing • Los Angeles, CA - PeopleSoft - Financials currently implementing • Los Angeles County, CA - Finls/HR/PR - in procurement • New York, NY - AMS Financials in production; P/S procurement for HR • San Diego County, CA - Oracle Finls, P/S HR/PR - currently implementing • Seattle, WA - PeopleSoft - HR/PRand Financials - in production

19. City of Seattle Case Study • Large, complicated, loose knit organization • 30 Departments - Several Utilities • 14,000 Employees • 10,000 Retirees • 50 Unions represented • $2 Billion annual budget

20. City of Seattle Summit Project • High visibility project • Y2K solution • 25,000 vendors • Complicated business rules • 1000 users • $25 million dollar project budget • PeopleSoft 6.2 GL/AP/PC/PO • AIX/Oracle Platform

21. Keys to success • Roles and Responsibilities • Money • Staff • System Integrator and Consultants • User Expectations • Scope Management • Methodologies • Readiness Assessment

22. Business Right idea seeded in a ready organization Project Ownership Provide business resources IT Quality product on-time and on-budget Infrastructure Keeping things running Provide technical resources Manage the project Technical implementation Roles and Responsibilities Marriage of IT and Business:

23. Money Money Money • Money - get lots of it, you will need it !

24. Project Manager’s Fiscal Responsibilities • Project manager responsible for: • Identifying cost categories • Estimating costs • Managing expenditures • Not responsible for: • Doing a $20M project for $10M

25. Organization staff Consultants Hardware Space and space planning Phones Operating supplies Copier/Fax machines Software applications/software utilities/software other software Miscellaneous Contingency Training and travel What are the Costs?

26. Project Budget • Pad everything • Round up • $10,875 = $50,000 • Use miscellaneous expenditures • Include money for budget cuts and contingency • Include a 10% - 20% contingency • Protect it with your life

27. People Factors to Consider • Full-time staff • Pay for backfilling • Right skills • Co-location very important • Willing to sacrifice • Project oriented

28. Project Management Business Experts Development Infrastructure Training Public Relations and Communication Quality Assurance Full-time Staff Is Key

29. Attracting and Keeping Staff • Broadband pay range • Performance bonuses • Reversion rights • Training and opportunities • Empower them • Nice facilities

30. Roles of Consultants • Necessary for ERP implementations • Expensive but indispensable • Systems Integration - the whole thing • Project Management • Product Functional Specialists • Developers • Trainers • Wear the dark hat

31. User Expectations • Systems shouldn’t be designed around idiosyncrasies • ERP systems are common denominator based, not exception based • Set realistic (or even lower) expectations • Communicate constantly • Communicate to many forums

32. Scope Management • Define it carefully • Be explicit • Secure top management buy-off • “Scope Creep” will kill the project • Just say “NO”

33. The Vanilla Dilemma • Vanilla is good • Reduces implementation risk and cost • Facilitates upgrades • But, be realistic • adding chocolate chips is okay (but no rocky road)

34. Modifications • You will do some • Tools are powerful • Set-up modification review process • Critical, must have for production • Lower priority/cosmetic • Enhancements • Bare bones implementation • Lay a foundation and build from there

35. Methodologies • Implementation is highly structured • The Integrator brings the tools of the trade, and there are a lot of them • Project management & production schedule • Fit analysis & prototyping • Functional & technical specification standards • Testing (SIT/UAT) strategies • Development standards • Deliverable review process • Cutover techniques • Training strategies • Readiness Assessment

36. Be realistic Based on scope & resources Publish it Allow for testing time Fit with user community Example, Summit scheduled around year-end activities Adhere to it: Keep your eye on the critical path Build in downtime: Holidays Include contingency Schedule

37. Save time • No RFP for software • Use scripts and demos

38. End User Readiness • The core project is just half of the story • The other half are the user departments who have lots to do • But they need help: • Guide them • Assess readiness by department and for the project overall • Implement a go/no go strategy and contingency plan

39. Summit Project Success Departmental Responsibilities Summit Project Responsibilities

40. Interface Coordinator Training Coordinator Business Practices Coordinator Summit Team Reports Coordinator Infrastructure Coordinator Data Clean-Up Coordinator Security Coordinator Summit Departmental Readiness

41. Get all the resources you need Manage scope aggressively Keep realistic expectations Implement on time and on budget Lay a foundation and build Be in the top 10% who succeed It can be done Remember: It’s all about risk

42. Questions?