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

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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

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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

• 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

• 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

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Current ERP Projects in Government(Counties/Citie
s)

• 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

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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

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Keys to success

• Roles and Responsibilities
• Money
• Staff
• System Integrator and Consultants
• User Expectations
• Scope Management
• Methodologies
• Readiness Assessment

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Roles and Responsibilities
Marriage of IT and Business

• 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

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Money Money Money

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

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Project Managers Fiscal Responsibilities

• Project manager responsible for
• Identifying cost categories
• Estimating costs
• Managing expenditures
• Not responsible for
• Doing a 20M project for 10M

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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

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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

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Full-time Staff Is Key

• Project Management
• Business Experts
• Development
• Infrastructure

• Training
• Public Relations and Communication
• Quality Assurance

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

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User Expectations

• Systems shouldnt 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

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Schedule

• 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

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
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Summit Departmental Readiness
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Remember Its 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

42
Questions?