Steering Committee Meeting Sunflower Project Statewide Financial Management System Update

1. Steering Committee MeetingSunflower ProjectStatewide Financial Management System Update June 12, 2009

2. Today’s Topics • Project status and activities – Kent • Change control – Peggy • Agency visits and interactions – Gary • Data Warehouse Advisory Group – Gary • Project success factors – Gary • Agency Readiness – Connie

3. Project Timeline “Go-live” only 1 Year Away! May June July August September October November December 3rd Change Agent Mtg Agency Interface Testing Phase Unit Testing Phase Conversion Workshops System Testing Phase Agencies Develop Interfaces & Make System Changes Configuration Workshops Configure System, Develop Mods Develop Reports, Build Interfaces, Run Data Conversions Agencies Complete Interface Mapping

4. Project Status & Activities – Build Phase – Finance Team • Defining and loading configuration values from agencies such as Programs and Dept IDs – values are determined via agency assignments and workshops and loaded via spreadsheets • Completing remaining change requests for software mods • Developing data conversion templates • Defining security roles • Developing: • Test conditions and test scripts • Functional designs for modifications • Functional designs for reports

5. Project Status & Activities – Build Phase – Enterprise Readiness Team • Continuing to meet with agencies to resolve final scope issues • Monitoring progress of agencies and completion of assignments • Preparing for business process workshops with agencies • Developing training materials • Recruiting trainers and facilities

6. Project Status & Activities – Build Phase – Tech Team • Developing technical designs for customizations • Developing technical designs for reports • Building and maintaining environments • Architecting data warehouse including security

7. Project Status & Activities – Build Phase – Central Systems • Completing change requests for Time and Labor mods • Identifying and prioritizing changes to SHARP to support SMART (“musts” and “wants”) • Working with IBARS vendor on changes to budget development application • Overseeing integration of warrant recon process in SMART

8. Project Status & Activities – Miscellaneous • Continue meeting with individual and groups of agencies to resolve interface questions • Monthly forum to address issues and communicate with interfacing agencies • Reviewing project plans to assess agencies’ progress and early identification of problems

9. Project Status and Activities – Overall Assessment • Project has a total of 108 staff on board; 61 for the State and 47 for Accenture; this is close to peak staffing • Project has fallen slightly behind schedule in the following areas: • Report design • Interface development • Modifications • Most of this is attributable to State Tech Team learning curve as well as delays in functional designs from the Finance Team • Overtime has been authorized for State Tech and the Finance Teams to catch up; Accenture staff also working additional hours to recover the schedule • Testing phase will begin as scheduled

10. Change Control Change orders approved since last Steering Committee meeting

11. Change Control – Payroll SME for SHARP II • State payroll personnel lack knowledge “vanilla” general ledger integration from PeopleSoft Payroll module into PeopleSoft financials • Team was struggling to identify required changes to SHARP customizations • Accenture providing senior-level consultant to assist team identifying required and desirable changes to SHARP to facilitate integration with SMART • Key deliverables will be decision documents and knowledge transfer of payroll knowledge to A&R personnel using Personal Learning Plans • Consultant is scheduled to be on-site for 3 months; $143K • Funding provided by reserve created by de-scoped areas such as FARMS, e-Grants and Purchasing

12. Change Control – Manager Self Service • As delivered Time and Labor does not provide a means to link supervisors to staff but supervisors need to view and approve direct reports timesheets • Mod is to link supervisors to staff using the “Reports_To” field stored in SHARP’s Position Data • Needed to dynamically maintain relationships between changes in personnel and the timesheet approval process • Without this modification approval paths for timesheets would have to be maintained manually which is labor-intensive and could result in employees’ timesheets not being approved • Modification required on nearly all Time and Labor implementations • Cost of modification is $144K

13. Change Control – Manager Self Service Example: • Group ID ‘P001’ • Data Permission List ‘P001’ should include Group IDs P001, P002, P003, and P007 • Data Permission List ‘P001’ should be assigned to Joe Smith’s User Profile Joe Smith EmplID: K001 Position #: P001 • Group ID ‘P003’ • Data Permission List ‘P003’ should include Group IDs P003 and P007 • Data Permission List ‘P003’ should be assigned to Susan Smith’s User Profile Susan Smith EmplID: K003 Position #: P003 David Smith EmplID: K002 Position #: P002 • Group ID ‘P007’ • Data Permission List ‘P007’ should include Group ID P007 • Data Permission List ‘P007’ should be assigned to Jane Smith’s User Profile Jane Smith EmplID: K007 Position #: P007 Will Smith EmplID: K004 Position #: P004 Mark Smith EmplID: K006 Position #: P006 Diane Smith EmplID: K005 Position #: P005 Jack Smith EmplID: K008 Position #: P008

14. Change Control – Custom Labor Distribution Solution • Time and Labor is being implemented to distribute labor costs to projects and grants • As delivered Time and Labor does not distribute fringe costs to projects and grants • These State expenditures are reimbursable by the Feds but for most State agencies these costs are based on actuals vs. a multiplier or burdening factor • Without this modification agencies will be required to manually compute fringe costs and enter these costs into Project Costing to support billing for federal reimbursement • Most states implementing Time and Labor, e.g. Tennessee, have to modify PeopleSoft to distribute actual fringe costs • Cost of modification is $341K

15. Change Control – Custom Labor Distribution Solution • The applicable requirements are as follows: • TL106.000 All actual costs (labor and fringe) should send to Projects at the PC ChartFields level • TL065.000 The system shall have the ability to calculate and post labor costs to a project • TL066.000 The system shall be able to capture payroll expense by various levels such as job, activity, grant and task levels through the timesheet and systematically distribute this expense • TL067.000 The system shall be able to capture payroll costs by business unit/project/grant/activity. • TL068.000 The system shall have the ability to meet federal reporting requirements by tracking time and effort, not just expenditures • TL069.000 The system shall be able to send project/grant information related to employee time to the general ledger • TL071.000 The system should send all the labor cost with corresponding Project ChartFields to General ledger

16. Central Labor Distribution – Total Cost $2.16MM Mods $654K } Interfaces $180K Base Cost $778K Baseline Costs SOW $242 Software $344* Time & Labor Solution Component & Cost * Includes 1st year of software maintenance Note: the final Time & Labor Solution was materially different than what was originally proposed by Accenture. The State added on-line time entry and self-service to position the rest of State agencies to use the solution in the future

17. Change Control – Multiple Set IDs • Modification will enable agency-specific listings of ChartFields • Agencies will only see their values in dropdowns for Fund, Department Program, Budget Unit, Project, Service Location and Agency Use • Enabling agencies to only see their values creates complications from a central perspective including Statewide consolidations and reporting • This modification reduces the maintenance workload for A&R and helps ensure accuracy and completeness for Statewide reporting • Cost of modification is $ 110K (reduction of approx $35K from original cost due to elimination of non-critical requirements)

18. Change Control – Speedcharts in Travel and Expense • Speedcharts are very useful for distributing transactions across multiple combinations of chartfields by percentage, e.g. Fund, Program or Department • Speedcharts are defined for repetitive distribution percentages then reused over and over again, e.g. an agency’s five programs are each charged 20% of the agency’s monthly rent • Speedcharts increase data entry efficiency by greatly decreasing the number of keystrokes and reduce errors – many transactions for travel • Speedcharts will be used extensively by many agencies for A/P; in FY2008 116,335 travel vouchers were processed for over $50,000,000 • As delivered, Speedcharts are not available for use in the Travel and Expense module • Cost of modification is $112K (reduction of approx $30K from original cost due to elimination of non-critical requirements)

19. Change Control - Interfunds • Background: • Interfunds are managed in SOKI which was developed 10 years ago by STO and is supported by STO (also processes receipts and journal vouchers) • SOKI interfaces with STARS and processes hundreds of thousands of transactions and billions of dollars annually • Transactions entered into SOKI via direct key, spreadsheet upload or interfaces • In SMART receipts are processed in A/R and journal vouchers are processed in G/L • SOKI has some very useful and user-friendly capabilities for processing interfunds • Two alternative solutions for processing interfunds in SMART: • Use delivered A/R and A/P with no customizations • Replicate SOKI’s interfund capabilities and integrate with delivered PeopleSoft processes

20. Change Control - Interfunds • Alternative 1 - Use delivered A/P and A/R with no linkage of inter-agency transaction pairs, no concurrent posting and no notifications • Advantages • No mod required which eliminates need for proposed expenditure of approximately $500K • No additional scope for Finance and Tech Teams • Disadvantages • Major “step back” in functionality and usability from SOKI; according to STO in 2008 over 230K expenditure lines were entered and $2.9B processed/transferred among agencies • Agencies are unable to see both side of the interfund transaction or to know that the reciprocating agency has processed the transaction; without modification the AR transactions would flow through the normal deposit process that requires STO review and approval; no way for A&R review and approval of the interfund transactions; AP and AR may not process in the same fiscal year; AR transactions processing without the corresponding AP side of interfund will artificially inflate cash balance in agency fund and statewide. • Eliminations (netting interagency revenues and expenditures) will be complicated • Transactions could post at different times creating balancing discrepancies within agencies and centrally • SMART will not meet the requirements identified centrally and by agencies • Expect significant agency (customer) dissatisfaction with solution; this could affect how end users adopt and embrace SMART • May require some agencies with many interfund transactions to (temporarily or permanently) use a “shadow system” to track the other side of their inter-agency transactions

21. Change Control - Interfunds • Alternative 2 - Implement the proposed mod with all features and functionality, i.e. paired transactions, bi-agency approvals, A&R approval and concurrent processing and notifications fully integrated within PeopleSoft • Advantages • Meets requirements and provides an interfund solution that is nearly functionally equivalent to SOKI fully (e.g. simultaneous posting of transaction pairs and bi-agency approvals) integrated with PS navigation and delivered processes (e.g. A/P and A/R, budget checking, encumbering) • Facilitates eliminations and accurate financial reporting for $2.9B of expenditures/receipts • Compact and user-friendly to facilitate nearly 250K annual transactions • Disadvantages • Significant modification requiring design, development and testing for new pages, business logic, data structures, security • Additional scope for the Finance and Tech Teams who are presently stretched (Accenture will provide additional resources to execute this mod) • Additional training component required  • Modification cost is approximately $488K

22. Change Control - Interfunds

23. Change Control - Interfunds • Alternative 3 - Implement the proposed mod (Alternative 2) but eliminate central (A&R) approval of interfund transactions • Advantages • Same as Alternative 2 but savings of approximately $30K • Disadvantages • Same as Alternative 2 with slightly less work required by the Finance and Tech Teams • Alternative 4 - Obtain and modify KU code used for inter-department transfer customization • KU has developed an extensive customization for PeopleSoft 9.0 to initiate and process transactions across departments. The solution uses G/L rather than A/P and A/R so Purchase Orders cannot be used to encumber funds. • This solution is extensive and could be expected to cost at least 50% of the cost to implement the proposed interfund solution. • Due to these considerations Alternative 4 was not evaluated further.

24. Change Control - Interfunds • Recommend Alternative 2 or 3 • Although the $500K fixed-price cost is high, implementing this customization is a good investment given: • the large user base • the large number of transactions (230K+) • the dollar amount of transactions • The customization supports end users with a user-friendly solution fully integrated into PeopleSoft that will help expedite and insure the accuracy of State Financial reporting Work-around or Customization Customization High Low Number of Transactions Work-around Work-around Low High Number of Users

25. Change Control – Remaining CRs • Balance of hours for customizations (including all customizations discussed today) • Total Accenture hrs used = 15,800 (8,163 last month) • Total available contract hrs = 19,130 • % Used = 82% (42.3% last month) • % Remaining = 18% (3,330 hours)

26. Change Control • Only 4 – 6 previously approved mods remain to be brought before the CCB • These should be relatively small with only one or two possibly exceeding the $50K threshold for Steering Committee approval

27. Agency Visits and Interactions • Meetings held with agencies: • KDOT • Health Policy • Commerce • DOL • SOS • KDHE • Aging • Insurance • Regents • SRS • Legislature • And others…

28. Responses from Workshops – Data Conversion • The presentation provided an overview that helped me understand "the big picture" regarding Data Conversion • The handouts and materials helped me understand the workshop content • The Workshop clearly described key conversion activities and their timelines • The Workshop clearly described agency responsibilities in the data conversion process • Conversion workshops for each module are scheduled; after these workshops agencies will begin working on conversion activities Strongly Agree or Agree 79% 83% 74% 72%

29. Responses from Workshops – Barriers to Interface Development • The presentation helped me understand how to identify and address barriers to my agency's progress in developing interfaces and modifying systems to support SMART implementation • The presentation helped me understand how to establish stronger channels of communication with the Project • The handouts and materials helped me understand the workshop content • The Workshop clearly addressed various barriers that may exist to agencies completing tasks • The Workshop clearly addressed the timelines for key interface and configuration activities • The Workshop clearly outlined agency tasks over the next 60 days Strongly Agree or Agree 78% 89% 100% 67% 89% 67%

30. Agency Tasks – Next 60 days • “The Workshop clearly outlined agency tasks over the next 60 days” => 67% • Determine interfaces needed by agency • Download updated layouts on website and review • Map STARS chart of account values to SMART (involve agency fiscal folks); DeptID, Program, Service Location, Agency Use are “owned” by agencies • Identify changes to system(s) required to generate interface values • Identify edits • Develop a design document • Update project plan with additional detail; plan should sync with overall project plan • Schedule visit during office hours to get questions answered

31. Data Warehouse Advisory Group • Held 2nd meeting on 06/10 • All-day hands-on workshop hosted by Oracle to “test drive” the data warehouse, dashboards and reporting/query tools • Shared prototype dashboards being developed for agency managers and CFOs • Discussed data warehouse security and each agencies’ sensitive data • Next meeting in September

32. Success Factors Success FactorActionsOn-Target Implement purchasing, accounting, asset management, data warehousing and reporting functions using a single integrated platform that will streamline core administrative functions. 23 modules in original SOW 3-4 marginal ones removed Yes

33. Success Factors Success FactorActionsOn-Target G/L BU to provide agencies future flexibility Set IDs so that agencies only see their chartfield values Allow intelligent (agency) numbering Permit agencies to store & manage any asset regardless of cost Relieve Regents of year-end encumbrance process Provide a data warehouse for agencies to perform ad-hoc queries and reporting Strike a balance between central policies, business process standardization, best practices and decentralization – enabling agencies to configure some elements of the system specifically for their agencies, i.e. workflow routing, budget thresholds, and attempt to address the concerns and needs of large and small agencies alike. Yes

34. Success Factors Success FactorActionsOn-Target STARS, SOKI, Warrants de-commissioned Over 60 agency systems slated to be retired Countless databases and spreadsheet and paper-based system retired Extensive effort made to demo PeopleSoft to agencies so they can make informed decision re system de-commissioning Move as many financial and administrative functions onto a single software platform and de-commission legacy systems, as appropriate, so that agencies can focus resources on the specialized systems and business processes that are germane to agencies’ missions. Yes

35. Success Factors Success FactorActionsOn-Target Implementation of Labor distribution/project costing Providing agencies the means to interface or upload datasets to or from SMART, e.g. receipts interface for State Hospitals Centralized purchasing integrated with A/P and asset management Agency Readiness working closely with agencies to ensure most interfacing needs are met Gain efficiencies in central and programmatic agencies by eliminating dual entry of data and the need for manual reconciliation Yes

36. Success Factors Success FactorActionsOn-Target Redesign and automate business processesBusiness process workshops will include best practices to gain efficiencies but ultimately it is up to the agencies to re-engineer their processes and re-organize accordingly Give Agencies tools in the workshops to approach their re-engineering of their processes and re-organize accordingly Gain efficiencies in central and programmatic agencies by re-designing and automating business processes as appropriate. Yes

37. Success Factors Success FactorActionsOn-Target Extensive set of agency reports available at “go-live” Implement the data warehouse to enable agencies to answer their own questions by providing them access to the data and the query and reporting tools Provide the data and analysis tools for agencies to measure and improve internal performance, to improve management decision-making and to improve customer service. Yes

38. Success Factors Success FactorActionsOn-Target Scrutinize every request for a mod Have a well-structured and disciplined change control process Do not exceed funds available in the Mod Bucket Minimize customizations to the software to reduce software lifecycle costs. Yes

39. Success Factors Success FactorActionsOn-Target Extensive training program consisting of instructor lead training, web-based training, on-line help All Priority 1 staff are trained prior to go-live Attendees receive passing scores on EUT training assessments Provide CAN, KT, EUT, BPW, UPK, workshops, newsletters Invest in the workforce by ensuring adequate training and two-way communication to generate acceptance of change in the workplace resulting from the Sunflower project. Yes

40. Success Factors Success FactorActionsOn-Target Have already added AR/billing, travel, labor distribution Compiling a list of agency needs for adding functionality in the future Build upon the core financial system, in future phases, to integrate budget development, labor distribution, AR/billing, travel and other functionality as needed to support agencies’ missions. Yes

41. Agency Readiness Activities

42. Agency Visits and Interactions Meetings held to discuss scope and interfaces: 629 DEPT OF SOCIAL & REHABILITATION SERVICES 173 DEPARTMENT OF ADMINISTRATION – DISC 039 AGING, DEPARTMENT ON 143 CORPORATION COMMISSION 046 DEPARTMENT OF AGRICULTURE 159 STATE DEPARTMENT OF CREDIT UNIONS 331 INSURANCE DEPARTMENT 264 DEPT OF HEALTH AND ENVIRONMENT 082 ATTORNEY GENERAL 330 INFORMATION NETWORK OF KANSAS, 565 DEPARTMENT OF REVENUE 363 KANSAS NEUROLOGICAL INSTITUTE 122 CITIZENS' UTILITY RATEPAYER BOARD 428 LEGISLATURE 039 AGING, DEPARTMENT ON

43. Upcoming Events Data Conversion Module Specific Workshops • Accounts Receivable Pending Item & Customer Conversion Workshop on Tuesday, June 16, 2009 from 1:00 to 2:30 p.m. •  Project Conversion Workshop on Thursday, June 18, 2009 from 10:00 to 11:30 a.m. •  Asset Conversion Workshop on Thursday, June 18, 2009 from 1:00 to 2:30 p.m. Workshops will be held at the Memorial Hall Auditorium, Room 210, 120 SW Tenth Ave., Topeka, Kansas Data Configuration Workshops • Program and Department ID ChartFields Configuration Workshop • June 15 – 18 (attend one 2 hour session) • Project Setup Configuration Workshop • June 16 – 18 (attend one 2 hour session)

44. Baseline Readiness Assessment • 96 agencies responded to questions about readiness for SMART go-live • Results help to: • Identify issues or risks across all agencies where additional attention is needed • Identify agencies requiring additional support • Sets the baseline for more frequent assessments as go-live approaches.

45. Agency Readiness Assessment Schedule

46. Baseline Readiness Assessment (continued) • Agencies analyzed in 6 “Areas of Focus” • Progress on Agency Tasks • Primary Contact's Engagement with Project • Agency's Engagement with Project • Agency Perception of Ability to Achieve Readiness • Effectiveness of Readiness Liaison Relationship • General Comments and Concerns • Results based on: • Responses to readiness assessment • Agency type (size, interfaces, etc.) • Project records of task status • Generated a readiness analysis for each agency (as shown) • Generated summary data from detailed analysis • Analyzed trends and specific areas of need GD = Good SC = Somewhat Critical CR = Critical

47. Baseline Readiness Assessment (continued) • Findings include: • Agencies are completing a majority of their tasks on time • Some agencies do not feel they have what they need to move forward with tasks • 94% of Primary Contacts are committed to Sunflower Project goals • Increased communication is needed among Change Agents and agency leadership • It is sometimes unclear which tasks and events apply to each agency • Some Change Agents are unclear on project goals or the Change Agent role • Next steps include: • Clarify and simplify the Agency Task List • Increase the relevance of communications by targeting the correct audience • Provide clearly stated, actionable next steps for work assigned to agencies • Promote communication among Change Agents to ensure agencies consider all the key factors when making decisions about SMART (for example, related to configuration activities) • Going forward… • Continue to respond honestly • This helps identify specific needs to address

48. Shared Services • The post go-live support organization will include a shared services center • Will process transactions for participating agencies • Lessons learned in other statewide implementations indicate the need • Similar to approach used by “paper agencies” at SHARP go-live • Not a substitute for support…support will be available to online agencies • Criteria for identifying agencies will include: • Low headcount • Low transactional volume • Transactions processed by Dept. of Administration today • Agency desire to participate • Project Team has identified twenty-four agencies who could be potential candidates for the service center

49. Questions and Answers For additional information on the project, please see the project website: http://da.ks.gov/smart ?

50. Authority for Change Requests