A Plan for the Implementation of Enterprise Resource Planning (ERP) for the State of Texas
Exhibit B – Independent Business Case Study Executive Summary
© Salvaggio, Teal & Associates
The following are the key recommendations for the Comptroller and the ERP Advisory Council to consider when evaluating future ERP plans for Texas State government and higher education.
Recommended Business Case Alternative
STA recommends that the Comptroller implement the BCA 3: Hub Model scenario as its solution for addressing statewide ERP system needs. Under BCA 3:
- State agencies (with the exception of the Health and Human Services agencies) would migrate to a new Statewide ERP platform operated by the Comptroller’s ASP service;
- Health and Human Services agencies and the Higher Education Systems would operate as reporting Hubs and interface directly into the Statewide Data Warehouse;
- Existing statewide legacy administrative systems (USAS, USPS, SPA, HRIS, SPRS, TINS) would be replaced by the Statewide ERP system that would provide all functionality identified in HB 3106;
- Each Hub would be able to operate its own platform with the only restriction being that the Hub reporting capability conforms to the statewide data standards and standard business processes required for statewide reporting; and
- The Statewide ERP baseline code would be made available to every Hub and would be patched and maintained according to the ERP vendor’s recommended schedule. Our BCA 3 recommendation is based upon the following reasons:
- The State achieves business process standardization based on best practices, economies of scale and efficiency gains through the implementation of a single, unified platform for almost all State agencies
- Provides for a statewide procurement system that will be fully-integrated with the financial accounting, asset management, and inventory management modules, as well as the Comptroller’s Online Ordering System currently in development. A statewide procurement function would provide numerous benefits to the State, including increased competition for the State’s business, lower inventory carrying costs, reduced printing and mailing costs, reduced procurement cycle times, reduced “maverick” spending, and a level “playing field” for small/ disadvantaged businesses. Additionally, the State should obtain the spend intelligence necessary to make effective strategic sourcing decisions at the statewide level.
- Addresses HB 3106 requirements and the Comptroller’s Rider 16 regarding fleet management.
- Complies with the ERP Advisory Council’s guiding principle of “not throwing out what works” by leveraging the considerable work done to date by Higher Education and the Health and Human Services agencies in implementing their own ERP systems.
- Allows the State to significantly upgrade the functionality and reporting capabilities of its statewide administrative systems and resolves the fragmentation associated with the State’s existing administrative systems environment.
- BCA 3 total project implementation costs are considerably less than the costs associated with BCA2 and are only $35.4 million more than BCA1 over the 11-year planning timeframe of this BCA. For an additional $35.4 million, the State could address numerous deficiencies with their existing systems – the State will need to spend approximately $121 million in “rewrites” of the existing administrative systems, which will do nothing more than “pave the cow path.” In addition, BCA 3 is a proven model that is most often utilized by other states and would result in lower overall project risk.
- Establishes a common language for reporting expenditures and provides for significantly enhanced statewide reporting which will facilitate a “single source of the truth” and taxpayer transparency.
- Allows the State to comply with recent data privacy, accessibility and information security mandates.
- Provides for better tracking of the State’s $104 billion in assets, thus helping agencies and the Legislature in budget planning by identifying replacement costs and schedules.
- Allows for the Hubs to address ERP consolidations through an evolutionary process as their existing systems reach the end of their useful lives.