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A Plan for the Implementation of Enterprise Resource Planning (ERP) for the State of Texas

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Executive Summary

The Enterprise Resource Planning Advisory Council (“Advisory Council”) is pleased to submit “A Plan for the Implementation of Enterprise Resource Planning (ERP) for the State of Texas” (Plan) to the Texas Legislature. We believe adoption of this Plan is in the best interest of the State of Texas.

It is important for anyone reviewing this Plan to first have an understanding and appreciation of the scope of the initiative. Within this Plan, we address an ERP solution to support a state government that serves a state with the 12th largest economy in the world. Texas’ 230,000 plus state employees and $168 billion biennial budget comprise the third largest state government in the United States. In terms of a financial enterprise, Texas state government is comparable to such private sector companies as Home Depot and Proctor and Gamble. We believe this Plan not only takes into account the size and complexity of Texas state government, but also the government transparency expectations of our Texas citizens.

Background and Purpose

In May 2007, the 80th Texas Legislature passed House Bill (HB) 3106, which address the concept of ERP for the state of Texas. From a practical standpoint, the term ERP for the state of Texas refers to an integrated software package that provides functionality similar to that offered in the existing statewide administrative systems (e.g., USAS, SPA, USPS, SPRS) as well as critical additional functionality currently provided by agency and institution of higher education administrative systems. The scope of this ERP project follows the definition stated in Section §5.300 Enterprise Resource Planning of Title 34 Texas Administrative Code effective Jan. 8, 2008. That definition excludes higher education student system administration as well as community colleges.

HB 3106 requires the Comptroller to set clear standards for the implementation of ERP software for the state. The Legislation also requires the Comptroller to establish and coordinate an Enterprise Resource Planning Advisory Council (established Feb. 8, 2008) charged with the development of a plan that contains key requirements, constraints, and alternative approaches for the Comptroller’s implementation of ERP standards, including related core functionality and business process reengineering requirements.

HB 3106 establishes the Advisory Council members as the Department of Information Resources (DIR), Health and Human Services Commission (HHSC), Information Technology Council for Higher Education (ITCHE), Texas Comptroller of Public Accounts and two State agencies selected by the Comptroller with fewer than 100 employees (Texas Commission on the Arts and Texas Soil and Water Conservation Board).

The Advisory Council adopted guiding principles fundamental to the ERP Plan. Those principles are as follows:

  • Through workgroups and committees, we will engage statewide agencies and institutions of higher education in the project;
  • We will establish and implement common data standards where possible;
  • We must ensure future ERP system projects are compatible with statewide standards;
  • We will not throw out what works; and
  • We will adapt our processes to the software rather than the software to our processes when possible.

The legislation requires the Comptroller to report to the Legislature on progress made toward implementing the Plan prior to each legislative session. This report must include any planned modifications and/or upgrades to existing statewide and agency-specific administrative systems and the associated financial impact of those modifications and upgrades.

In June 2008, the Comptroller’s office hired an independent consulting firm (Salvaggio, Teal & Associates) to develop a comprehensive business case analysis (BCA) and the related strategic planning associated with ERP, collectively referred to as the “Study.” The Study was completed on Sept. 17, 2008 and reviewed with the Advisory Council and Comptroller on Sept. 24, 2008. The purpose of the Study was to provide the ERP Advisory Council and the State Comptroller with alternatives, data and other information necessary to determine whether implementing a statewide ERP system is economically feasible for the State of Texas. The following three alternative scenarios were analyzed:

  • Business Case Alternative 1: Status Quo (BCA 1) – The State continues on its current path and each agency and institution of higher education continues operating their existing administrative systems as currently planned. The 11-year cost for this approach per the business case was $1,342,400,000.
  • Business Case Alternative 2: Statewide ERP Platform Deployment (BCA 2) – Replace the existing statewide legacy administrative systems (USAS, USPS, SPA, SPRS, HRIS, TINS) with a new, fully integrated, commercially-available ERP system that would provide all functionality identified in HB 3106. One statewide ERP system for all State agencies and all Higher Education would be established and operated by the Comptroller. The 11-year cost for this approach per the business case was $1,813,400,000.
  • Business Case Alternative 3: Hub Model (BCA 3) – Replace the existing statewide legacy administrative systems (USAS, USPS, SPA, SPRS, HRIS, TINS) 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 with the exception of the Health and Human Services (HHS) agencies and institutions of higher education. The HHS agencies and Higher Education would operate under a decentralized processing model as data reporting “Hubs”. They would interface into the Statewide Data Warehouse platform and their transactional data would interface into the new ERP system. The 11-year cost for this approach per the business case was $1,377,800,000.

Of the three alternatives, Salvaggio Teal & Associates (STA) recommended BCA 3.

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