ERP Implementation in GovernmentERP 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

AgendaAgenda

• Introductions

• Trends in ERP Marketplace

• Implementation Considerations

• Critical Success Factors

• Government ERP Projects

• City of Seattle Summit Project Case Study

ERP DefinedERP 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.

ERP FunctionalityERP Functionality

Finance

-General Ledger-Accounts Receivable-Accounts Payable-Procurement-Fixed Assets-Treasury Mgmt-Cost Control-Grant Management

Human Resources

-HR/Benefits Administration-Payroll-Self-service HR

e-Business

-eProcurement- Employee Self Service- e-Recruiting/e-Hiring- e-Filing- Citizen Access- Web-enabled transactions- e-Commerce

Transaction Engine

Core software that manages transaction flow among applications and handles tasks like security and data integrity

Customer Relationship Mgt

-Consistent user experience- Personalization of services- Realtime access- enterprise info

Supply Chain Mgmt

Planning, scheduling and fulfillmentapplications that address all procurement requirements across the enterprise

Data Analysis

Decision support software that lets senior executives and other users analyze transaction data to track business performance

Characteristics of an ERP SystemCharacteristics 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

ERP Solution ComponentsERP Solution Components

Implementation 60%

Infrastructure20%

ERP Software 20%

ERP Implementation BenefitsERP 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

ERP Implementation BenefitsERP Implementation Benefits(continued)(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

ERP Implementation ChallengesERP 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

Trends in the ERP MarketplaceTrends 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

An ERP Start-up RoadmapAn 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

ERP Implementation ActivitiesERP Implementation Activities

• 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

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

• 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

• Prime Contractor Project Management

• Detailed Project planning and Tracking

• Communications Plan

• Subcontractor management

• Project Scope Control

• Financial Control • Project Oversight and Quality Assurance Reviews

ERP Software ConsiderationsERP 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

ERP Systems Integrator ConsiderationsERP 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

Project Critical Success FactorsProject 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

Avoiding the “Train Wreck”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

Current ERP Projects in GovernmentCurrent ERP Projects in Government(States)(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

Current ERP Projects in GovernmentCurrent ERP Projects in Government(Counties/Cities)(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/PR and Financials - in production

City of Seattle Case StudyCity 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

City of Seattle Summit ProjectCity 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

Keys to successKeys to success

• Roles and Responsibilities

• Money

• Staff

• System Integrator and Consultants

• User Expectations

• Scope Management

• Methodologies

• Readiness Assessment

Roles and ResponsibilitiesRoles and Responsibilities

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

Marriage of IT and Business:

Money Money MoneyMoney Money Money

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

Project Manager’s Fiscal ResponsibilitiesProject Manager’s Fiscal Responsibilities

• Project manager responsible for:

• Identifying cost categories

• Estimating costs

• Managing expenditures

• Not responsible for:

• Doing a $20M project for $10M

What are the Costs?What are the Costs?

• 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

Project BudgetProject 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

People Factors to ConsiderPeople Factors to Consider

• Full-time staff

• Pay for backfilling

• Right skills

• Co-location very important

• Willing to sacrifice

• Project oriented

Full-time Staff Is KeyFull-time Staff Is Key

• Project Management

• Business Experts

• Development

• Infrastructure

• Training

• Public Relations and

Communication

• Quality Assurance

Attracting and Keeping StaffAttracting and Keeping Staff

• Broadband pay range

• Performance bonuses

• Reversion rights

• Training and opportunities

• Empower them

• Nice facilities

Roles of ConsultantsRoles 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

User ExpectationsUser 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

Scope ManagementScope Management

• Define it carefully

• Be explicit

• Secure top management buy-off

• “Scope Creep” will kill the project

• Just say “NO”

The Vanilla DilemmaThe Vanilla Dilemma

• Vanilla is good

• Reduces implementation risk and cost

• Facilitates upgrades

• But, be realistic

• adding chocolate chips is okay (but no rocky

road)

ModificationsModifications

• 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

MethodologiesMethodologies

• 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

ScheduleSchedule

• 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

Save timeSave time

• No RFP for software

• Use scripts and

demos

End User ReadinessEnd 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

Summit Project SuccessSummit Project Success

Departmental Responsibilities

Summit Project Responsibilities

Summit Departmental ReadinessSummit Departmental Readiness

Summit Team

Interface Coordinator

Training Coordinator

Business Practices Coordinator

Reports Coordinator

Infrastructure Coordinator

Data Clean-Up Coordinator

Security Coordinator

Remember: It’s all about riskRemember: It’s all about risk

• 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

Questions?Questions?