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GTC-Southwest

Feb. 17, 2010

Agenda

First, let’s get an Overview

About Texas

  • 11th largest economy in the world
  • Third largest state government in the United States
  • More than 230,000 state employees and $168 billion biennial budget
  • Comparable to private sector companies such as The Home Depot and Proctor & Gamble (from a financial perspective)

How We Got Here

The State of Texas is on its journey to develop and deploy a highly efficient ERP system for processing integrated statewide financial and human resources transactions

  • 2007: HB 3106 passed
  • 2008: Business Case Study conducted
  • 2009: Appropriations granted and project launched
  • 2011: First Go-Live

2007

  • HB 3106 passed
    • Identified core business functions and gave the Comptroller of Public Accounts (CPA) responsibility for ERP
    • Established ERP Advisory Council comprised of :
      • Department of Information Resources (DIR),
      • Health and Human Services Commission (HHSC),
      • Information Technology Council for Higher Education,
      • CPA,
      • Texas Commission on the Arts (agency with less than 100 FTEs)
      • Texas Soil and Water Conservation Board (agency with less than 100 FTEs)
    • ERP Advisory Council responsible for creating report for the legislature by December 2008

Targeted Functionalities

Functionalities Targeted in ProjectONE

  • General Ledger
  • Accounts Payable
  • Accounts Receivable
  • Budgeting
  • Inventory
  • Asset Management
  • Billing
  • Payroll
  • Projects
  • Grants
  • Human Resources
  • Procurement
  • Fleet Management
  • Data Warehousing

2008

Business Case

  • Analysis performed by an independent consulting firm (Salvaggio, Teal & Associates: June 2008 – September 2008)
Alternative Description 11-Year Costs Involved
Business Case Alternative 1: Status Quo The state continues on its current path with each agency operating existing operating systems $1,342,400,000
Business Case Alternative 2: Statewide ERP Platform Deployment (including Higher Education) Replace the existing statewide legacy systems (USAS, USPS, SPA, SPRA, HRIS, TINS) with a new fully integrated, commercially available ERP system $1,813,400,000
Business Case Alternative 3: Hub Model
(Recommended Alternative) 		Replace the existing statewide legacy administrative systems with a new fully integrated, commercially available ERP system that the Comptroller’s office would operate as an Application Service Provider(ASP) for all state agencies $1,377,800,000

Advisory Council Report

  • Legislative report prepared by the ERP Advisory Council
    • February 2008 – December 2008
    • Supported Alternative 3 from the business case study
    • Sent to Legislature
    • Estimated 8-year project cost of $285 million

2009

  • The 81st Legislature appropriated funds to HHSC, Texas Department of Transportation (TxDOT), and DIR for ERP implementation projects
    • Established CPA as project manager
    • Provided funds to each agency and not CPA
    • IACs required
    • Required CPA to ensure project supported statewide direction and ERP
    • Required that processes be changed to accommodate the software
  • Software license procurement
    • Acquired separately from implementation services bid
    • Leveraged existing investment in software
    • Obtained statewide perpetual license based on 160,000 FTEs (HR and Financials)
  • Implementation services, oversight services and hardware procured

2010

  • In January 2010, the ERP Project was named ProjectONE (Our New Enterprise)

Current Statewide Standards

  • USPS/USAS
  • ISAS
  • ERP
  • CPA has established 3 statewide standards to meet agency needs
  • As agencies plan projects related to ERP, they must submit an ERP Project Request form
  • CPA will work with the agency to identify the best solution to meet the agency’s needs, budget and timeline

Now let’s discuss the Approach

Project Factors

The appropriations process establishes funding on a biennial cycle.

Large Scope and Undocumented Requirements

  • HB 3106 outlined the functions to be included in ERP
  • Procurement for implementation services was done before requirements were completed
  • Documenting requirements is part of the implementation services

Short Timeline

  • With a defined appropriation budget and schedule, the project could not start from scratch and previous work had to be leveraged
  • Agency involvement had to exist early in the project and will have to be maintained throughout
The approach for ProjectONE has been designed keeping the factors above in mind

Designed to Address the Constraints at Hand

The following strategies are being implemented to overcome the challenges posed by the enormity of scope and the short timeline

  • Governance Model
  • State Standard Perspective
  • Project Structure for Open Communication
  • Requirements Gathering
  • Fit/Gap
  • Testing
  • Deploy
  • Maintain

Governance Structure

Flowchart Representing ERP Governance Infrastructure Detailed Below

The statewide ERP project governance provides not only an infrastructure for addressing project issue resolution and project approvals, but also sets up important communication channels

First, we have:

  • ERP Project Executive Sponsor, CPA
  • Executive Council: Susan Combs, Chair; Executive Directors of HHS, TxDOT, DIR and DMV
  • Oversight Agencies

Reporting to the groups just mentioned are:

  • Financials: Change Control Board (CFOs of HHS/TxDOT/DIR/DMV)
  • Financials: Enterprise Work Groups (HHS/TxDOT/DIR/DMV)
  • HR/Payroll: Change Control Board (HHS/TxDOT/DIR/DMV)
  • HR/Payroll: Enterprise Work Groups (HHS/TxDOT/DIR/DMV)
  • Technical: Change Control Board (HHS/TxDOT/DIR/DMV)
  • Technical: Enterprise Work Groups (CIOs of HHS/TxDOT/DIR/DMV)

All of the above-groups interact with

  • CPA ERP Planning Team
  • ERP Enterprise Project Management Office

Let’s talk about what some of these groups do.

Executive Council

  • Serve as the highest (final) escalation decision point in the resolution of Project issues
  • Responsible for executive communications on Project related matters with CPA
  • Provide executive input to the Steering Committee
  • Disseminate Project information within their organizations
  • Advocate for the implementation of approved standardized business processes and data across all agencies

Steering Committee

  • Provide direction to the Change Control Boards (CCBs), provide advice and guidance to ERP project management, and serve as the Project liaison to the Executive Council and Oversight Agencies
  • Address Project roadblocks and provides resolution, when possible, to Project issues elevated to this level by the CCBs
  • Executive sponsors of the Project and demonstrate an “enterprise” approach to solving statewide ERP issues

Change Control Boards (CCB)

  • Make recommendations to the Steering Committee after reviewing all standardization and/or modifications of the ERP system as recommended by the Enterprise Work Groups
  • Review and recommend for Steering Committee approval all Project deliverables submitted for their review. Also review and provide resolution as appropriate to Project issues submitted by the Enterprise Work Groups
  • Elevate Project issues, as necessary, to the Steering Committee as an integral part of the issue escalation process

Enterprise Work Groups (EWG)

  • Develop/confirm ERP requirements
  • Assess system and functional requirements to the software through “Fit/Gap” analysis; and recommend standardization and/or modification of business processes to the CCBs
  • As an integral part of the issue escalation process, EWGs submit unresolved Project issues to the CCBs as needed

ERP Project Management Office

  • Ensure compliance with Project goals, objectives, project management guidelines, Project standards, Project scope, risk identification and mitigation, quality management, Project budget, reporting and documentation
  • Ensure Project state staff and contracted resources are leveraged effectively across the Project and reviews and recommends approval of Project deliverables
  • Monitor the Project work plan, activities of the Project team, timelines and risks, and has overall responsibility for reporting on status of Project activities, milestones, and deliverables

Benefits of the Governance Structure

  • Driven by Consensus
  • Defined Escalation Process
  • Open Communication (Horizontal and Vertical)
  • Proven Model for Texas

Project Structure

  • Deloitte Consulting is the primary implementation vendor
  • STA is the vendor for independent oversight
  • Assignment of Project Managers to agencies for ERP system to enable agency participation
  • Project philosophy
    • Consensus vs. majority rule
    • Real stakeholder buy-in
    • Horizon planning

Maintain checks and balances with independent oversight

Maintain open communication between vendor, CPA and agencies

Ensure agency involvement throughout

Why Is This Approach Needed?

This approach has been designed in order to ensure project success and to avoid the challenges faced during most ERP system implementations.

  • Buy-in/Overcoming resistance to change
  • Accurate requirements definition
  • Effective communication
  • Proper training and education

All of these can lead to project success, realized goals, and financial benefits.

Independent oversight, open communication and regular involvement of agencies is critical for the success of ProjectONE.

Establishment of State Standards

Current Process

  • CPA – Compiled initial set of requirements from HHSC, DIR and TxDOT
  • The baseline requirements were vetted for standardization and improvement of business processes – accepted as baseline requirements
  • Business Process Improvement Group – Monitors requirements gathering to facilitate inclusion of statewide standards and business process improvements

Future Process Impacts

  • Future agencies will not undergo requirements gathering sessions from scratch but rather build upon the foundation currently being developed
  • Business Process Improvement Group will assist agencies with the adoption of statewide standards and business process improvements

Requirements Gathering Process

Process

The process starts with the Enterprise Work Groups, which finalize requirements with agencies and submit for approval. Then the ERP Core Team validates or returns the requirement. Then the Change Control Board reviews and forwards recommendations. And finally, the Steering Committee reviews recommendations and approves requirements, which are accepted as statewide requirements.

Agency Participation

  • Functional agency experts attend workshops to identify requirements and Business Process Improvement opportunities
  • Detailed documentation maintained for Requirement Matrix and workshop meeting minutes
  • Two way communication throughout the process for feedback and review
  • Agency SMEs review minutes of work group meetings and provide comments
  • Agency SMEs review final draft of recommendations prior to submission to Steering Committee
  • Agency Executives provide feedback and approve

Fit/Gap Overview

Definition of Fit/Gap:

  • Fit is a requirement that is met by using delivered Release 9.1 PeopleSoft functionality and does not require a customization
  • Gap is a requirement that is not met by using delivered PeopleSoft functionality and requires a customization

Benefits of Fit/Gap Process:

  • Greater involvement by participating agencies in analyzing fits and gaps and developing the new processes
  • Decreased risk of rejection of the system during acceptance testing
  • Higher quality of product
  • Greater acceptance of the solution by the participating agencies

Fit/Gap Process

First the Enterprise Work Groups hold requirements gathering workshops. Then the Core Team plus Agencies hold Fit/Gap Work Sessions. Then the Change Control Board finalizes gap resolutions (customization, fix, work-around analysis). Then the Core Team plus Agencies hold process design work sessions. And finally, the Change Control Board finalizes the process design.

Now let’s discuss Risk and Quality Management

Risk Management

The risk management process is an interactive and iterative process, occurring throughout all phases of the project. The ProjectONE risk management process is comprised of five key steps:

  • Plan and Prepare
  • Identify Risks
  • Analyze Risks
  • Develop Response Strategies
  • Monitor and Control Risks

Quality Management

Chart showing quality management process detailed below
  • Monitor and adjust processes as they are deployed
  • Ensuring the project team understands quality expectations increases the likelihood that the team will meet quality standards
  • Extensive testing of solution components as they are developed improves quality
  • Agency participating in quality management activities improves both quality and project team performance

Quality Planning

  • Establish process and deliverable quality expectations early
  • Document Quality Management Plan

Quality Assurance

  • Review internal project processes to assess effectiveness
  • Train team on development procedures and templates to improve performance

Quality Metrics

  • Develop metrics and standards to monitor quality performance
  • Compare quality metrics over time to identify changes

Quality Control

  • Determine templates and acceptance criteria
  • Review work in process
  • Increase state review as deliverable nears completion

Now let’s discuss Organizational Change Management

Our Challenge: Different Starting Points, One End Point

Chart visualizing different starting points detailed below

The starting point is having multiple technology and platforms to serve multiple missions and constituencies. The goal is to address the agency differences while establishing a common ERP platform.

  • The HHS agencies have about 56,000 employees, 5 distinct agencies, and multiple regions and districts. They are already using PeopleSoft Financials and HCM; this is an upgrade project.
  • TxDOT has about 13,000 employees and multiple geographic regions. They are using PeopleSoft HCM, and need a new integrated ERP system, and a new implementation of Financials.
  • DMV is a new agency with about 700 employees. The focus is on efficiency and technology.
  • DIR has about 250 employees and serves other agencies. This will be a new implementation as it needs a new integrated ERP system.

The end point is have a single common technology and platform – Texas ERP– – to serve those multiple missions and constituencies.

Texas ERP People Challenges, Approach and Deliverables

Chart showing Texas ERP People Challenges, Approach and Deliverables detailed below

The challenges are adoption, complexity, geography and timing. These require change and training.

To accomplish change, we must:

  • Develop standard change strategy and “localize” for each agency
  • Customize all communications to include cultural and business-specific terms
  • Engage agency-centric deployment and support teams

To provide the appropriate training, we must:

  • Use standard training processes across the implementation
  • Involve agency representatives in the design, development and deployment of the training program
  • Use a people-focused learning approach enabled by e-Learning technologies
  • Develop a process-centered training curriculum
  • Use a sustainable approach
  • Provide training content that is developed once and deployed many times

To measure change and training, we use an Organization Effectiveness Scorecard, and use these tools:

  • Training Plan
  • Training Curriculum
  • Training Materials
  • Change Management Plan
  • Communications Plan
  • End User Readiness Assessment
  • Role Mapping Matrix
  • ERP System Help Desk Plan

And the last topic for this presentation is Project Accomplishments

In less than three months:

  • Completed more than 162 requirements work sessions (more than half)
  • Inventoried more than 4900 requirements
  • Participation of more than 600 agency representatives in requirements work sessions
  • Reviewed and categorized more than 200 agency reports
  • Trained 930 ‘seats’ since November