State of Kansas Statewide Financial Management System Pre-Implementation Project

1. State of Kansas Statewide Financial Management System Pre-Implementation Project Steering Committee Meeting February 8, 2008

2. Meeting Agenda • Update FMS Activities • Project Vision • Final Discussions on Project Scope • Steering Committee Agenda – March 2008

3. Update FMS Activities • RFP Status • Agency Visits and Analysis Report • KITO Filing • Meetings w/ Vendor Community – Software and Systems Integrators • Project Vision

4. Summary of Agency Visits & Analysis • Twenty-three agencies surveyed – two visits per agency • Agencies selected based on size and interfaces to STARS • Met w/ representatives of the seven universities and validated interfaces • Most draft write-ups reviewed by agencies • Identified approximately 54 agency systems to be de-commissioned (accounting, purchasing, grant/project/contract management, asset management) • Identified 69 interfaces that will need to be modified or developed by agencies • Identified numerous central agency interfaces that will need to be modified or developed by Systems Integrator (Set-off, SHARP, BMS)

5. Currently Agreed-to FMS Project Scope • Current project scope includes functionality used by most agencies • Purchasing • Accounts payable • Cash management • General ledger including budget control • Grant and project accounting • Asset management including bar coding • Data warehouse and reporting

6. Scope Decision - AR/Billing Agencies with a need for an integrated AR/billing solution: • Aging • Commerce • Corporation Commission • KBI • Health and Environment • Highway Patrol • Lottery • Secretary of State • Lottery intends to retain/upgrade its central accounting • if there is no AR/billing solution in FMS • Other agencies with significant AR/billing business processes: • KDOT – has an integrated billing system • KHPA – in the process of acquiring a billing system

7. Scope Decision - AR/Billing • Options: • AR/billing remains out-of-scope – possibly part of future phase • AR/billing brought back into scope • AR/billing pilot • 1 – 2 agency(s) selected for implementation based on need and desire to participate • all agencies needing AR/billing would participate in design sessions • other agencies brought on after “go-live”

8. Scope Decision - AR/Billing ProsCons No add’l cost over current estimate Less project risk and complexity No AR/billing team required Significant need of 8 agencies not met Does not support Vision May never be implemented AR/billing out of scope Add’l cost $500 - $750K Will need AR/billing team Add’l involvement of agencies Meets needs of 8 agencies Supports Vision AR/billing in scope Enables Lottery to retire accounting system Supports Vision Enables other agencies to quickly implement after “go-live” Creates momentum for project in agencies needing AR/billing Add’l cost $250K Will need small AR/billing team Add’l involvement of agencies, but mostly in design AR/billing pilot Recommendation: Include AR/billing pilot

9. Scope Decision – Labor Distribution Agencies needing Labor distribution solution (# of employees shown in parenthesis): • Health and Environment (889) • Health Policy (252) • Highway Patrol (859) • Juvenile Justice (minor) • KBI (minor) • Labor (504) • Wildlife and Parks (842) • Aging (183) • Agriculture (321) • Commerce (307) • Corporation Commission (143) • Corrections (minor) • Education (216) • KBI (minor) • Some agencies in process of developing a solution • Some agencies will have to develop a new solution (due to FMS) • Education and Labor will probably not de-commission agency accounting systems unless labor distribution is in FMS • Although desire is to minimize changes to SHARP, SHARP will be significantly impacted by FMS changes to chart of accounts • Spoke to several vendors, State of OH and Santa Clara Co. who faced similar situation integrating legacy PeopleSoft HR/payroll and new FMS

10. Labor Distribution vs. Cost Allocation

11. Scope Decision – Labor Distribution • Options: • Labor distribution remains out-of-scope – possibly part of future SHARP replacement • Labor distribution brought into scope • Labor distribution as optional scope in RFP • Vendors propose solution that meets business need, while minimizing the impact on SHARP • FMS project team/Steering Committee make “go/no-go” decision based on proposed cost, complexity, impact on project and agencies • Based on design phase make final “go/no-go” decision

12. Scope Decision – Labor Distribution ProsCons Doesn’t meet need of 14 agencies (some more than others) Does not support Vision May never be implemented No add’l cost above current estimate Less project risk and complexity No labor distribution team required Labor distribution out of scope Add’l cost $500K - $1.0MM Need labor distribution team Add’l involvement of agencies affected Meets needs of 14 agencies Reduces dual entry and reconciliation efforts Supports Vision Labor distribution in scope Preserves option to enable FMS Team/ Steering Committee to make “go/no-go” decision with better information than what is currently known Supports Vision Creates momentum for project in agencies needing labor distribution Add’l proposal evaluation element May set stakeholder expectations of a solution RFP option Recommendation: RFP option

13. Add’l Scope Element – Software to be Priced but not Implemented • Inventory • KDOT would like to use the Inventory functionality of the FMS for integration with Crew Card • RFP will include line item for software vendor to price Inventory separately • Depending on the pricing, sponsors would determine who would pay, FMS project or KDOT • Implementation of Inventory for KDOT would most likely occur after “go-live” and be funded by KDOT

14. Out of Scope Elements • Travel and Expenses • Tracking travel and expenses was identified by several agencies as a need (Agriculture, KBI, Wildlife and Parks) • A/P (used to make travel reimbursement requests) will have a couple of fields that can probably be used to store details on travel; if used consistently by the agency, this should suffice • Could be implemented in subsequent phase

15. Out of Scope Elements • Fleet Management • Managing equipment was identified as a need by numerous agencies (KCC, Health, Highway Patrol, SRS, Wildlife & Parks) • Agencies could pool their resources and purchase and share a commercial-off-the-shelf fleet management application • Unlikely without a central agency initiative • Fleet management systems have two primary purposes: • to manage preventative maintenance and • assist with replacement cost decisions and to calculate operating costs • Operating costs are derived from numerous financial transactions (i.e. fuel, maintenance, repairs and depreciation) • Therefore, integration of a fleet management system with FMS is necessary to realize benefit #2 • This central functionality would benefit numerous agencies and should be considered in a future FMS phase

16. Out of Scope Elements • Barcoding • Barcoding was identified in the 2006 Needs Assessment as integral to asset management • Barcoding is currently in-scope for the initial project phase • Initial challenge with asset management will be to work with agencies to standardize, cleanse and consolidate asset data • Use of FMS-integrated barcoding would probably begin at the end of 2010 for annual inventory of assets • After asset conversion, “go-live” and system stability barcoding would be implemented

17. Analysis Summary of Agency Systems