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

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Exhibit B – Independent Business Case Study Executive Summary
© Salvaggio, Teal & Associates

Section 1. Executive Summary

Key Findings

As a result of our analysis of survey responses and interviews with key stakeholders within the Comptroller’s Office and across State government, we identified the following key findings:

  • A total of 1,220 administrative system functional modules (General Ledger, Accounts Payable, etc.) are currently utilized to address the functional areas addressed in HB 3106. More than twenty (20) human resources/payroll systems are in operation across the State and three (3) statewide payroll and personnel reporting systems are in existence for validation and reporting (USPS, SPRS, HRIS). There are significant redundancies in functionality and capabilities of the three systems that could be consolidated to reduce the complexity of the reporting function and significantly reduce the cost of operating and maintaining the platforms.
  • Of the total number of functional systems in operation across the State, roughly one-third (1/3) are custom developed solutions and roughly one-quarter (1/4) are statewide systems. The remaining systems are a mixture of various commercial off-the-shelf systems (COTS) and somewhat evenly spread across PeopleSoft, SunGard and MIP with the “Other” leading all categories at 13%.
  • Each agency and institution (except those utilizing the USAS and USPS platforms as their processing system) must interface their systems into the existing Statewide systems resulting in more than 250 interfaces in operation that must be managed, maintained, and reconciled across the State at both the statewide and agency/institutional levels.
  • Data is fragmented across a wide array of systems and platforms, which makes it difficult to generate management information on a timely and accurate basis due to differences in formats, cycle times, and controls across all systems, which leads to complications in preparing enterprise (statewide) reports. This results in a lack of confidence by the State’s citizens and their elected leaders.
  • Each of these systems has its own ongoing operating and maintenance costs for hardware, software and infrastructure which, in the aggregate, could represent significant savings through consolidation and standardization.
  • In order to roll-up the fragmented data to a statewide level, manual, labor intensive processes must be performed to reconcile, update and adjust the data across the various systems and interfaces. This effort represents a significant cost to the State and dramatically reduces the efficiency and effectiveness of the State’s business processes.
  • Because the current statewide administrative systems do not meet many of the State’s business needs, the State’s administrative business processes are less efficient and effective than they could be. As an example, the State is unable to track method of finance for all transactions, resulting in a significant information gap regarding what money was used and in what ways, which is especially critical in times of budget constraints. To address critical unmet needs, agencies have expended significant amounts of money on their own ERP and/or “best-ofbreed” systems. Instead, these funds could be spent toward the implementation of a single, statewide ERP system that would benefit all agencies.
  • The State does not utilize a statewide procurement system at this time, which causes the following deficiencies:
    • Other than the agencies that already use ERP systems, the majority of other agencies follow manually-intensive business processes or maintain “stand-alone” systems or spreadsheets to address their procurement needs. Manually-intensive processes and redundant data entry tend to be slow, error-prone, and costly;
    • Lack of integration of procurement function with financial accounting and other administrative systems;
    • Most purchasing organizations lack the transaction data (at the proper commodity code level) required to effectively negotiate with suppliers; and
    • Most procurement managers spend much of their time “chasing paperwork” rather than managing their supplier base or negotiating better prices.
  • The existing statewide administrative systems were developed and implemented based on user and State business requirements that are now more than fifteen (15) years old. As new requirements have emerged, the State continues to patch or rewrite the systems to meet or comply with the new, point-in-time requirements. The cost of maintaining these systems continues to escalate due to the difficulty of locating skilled personnel to make the changes as well as the overall limitations of the original system architecture (e.g., often changes must be made to the actual computer code instead of simply changing data table entries to make the changes).
  • The State Property Accounting System is 15 years old. It does not support accounting standards enacted in recent years. Therefore, inefficient manual reconciliation and rework is required. Insufficient internal system controls necessary to maintain the integrity of transaction data have caused State audit concerns.
  • TINS lacks the ability to ensure that funds are not paid to individuals indebted to the State. Instead of netting all payments against amounts owed, the State pays some individuals in full and, therefore, misses an opportunity to recoup funds owed.
  • The existing statewide systems are not providing adequate protection for confidential state employee information and are not in compliance with the information security, data privacy and accessibility regulations, exposing the State to possible lawsuits and public relations risks.

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