Skip to Content

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

prev | next

The ERP Plan

Recommendations, cont.

Integration Challenge

While the advisory council supports the concept of full integration to the maximum extent possible, there are instances in which integration challenges arise as the state may best meet a specific business need through the use of a “best-of-breed” software product. A “best-of-breed” approach means that the state would choose the best software product available for a specific business function and then build the necessary interfacing “points” between that system and the statewide ERP system. STA suggested that the state may want to research alternative “bestof- breed” solutions for the following functional areas prior to committing to an ERP product line for all functionality identified under HB 3106 and Rider 16:

  • Fleet Management – a specific business need that is typically addressed through the acquisition of a “best-of-breed” solution that is then interfaced with the statewide ERP system. Best-of-breed fleet management software is typically more robust and feature-rich than the solutions offered by the major ERP vendors; they are also more reasonably-priced.
  • Time and Labor – The Comptroller must ensure that the time and labor module will meet all time reporting requirements prior to committing to its use as the statewide ERP solution for state government time reporting.
  • Budget Development – Based on the research done by STA, most state and local governments utilize one of the following solutions for developing their enterprise budgets:
    • Custom-developed software;
    • Personal computer spreadsheets;
    • Best-of-breed budget development software; or
    • Budget development module within ERP software.

Most of STA’s state and local governmental clients have chosen not to purchase the budget development module after a thorough evaluation of the software’s capabilities.

As with time and labor, the Comptroller needs to analyze whether the budget development module(s) will meet specific appropriation, operating, capital, and other budget development requirements before committing to its use as the statewide ERP solution for state government budget development.

Funding Options

As discussed previously, the ERP cost to be funded is $285,727,000 ($248,458,000 plus 15 percent contingency of $37,269,000). This includes costs incurred over the seven-year project timeframe for pre-implementation services, the implementation project, ongoing support costs during this period and the contingency. These are the costs that will require additional appropriations until the Comptroller is able to retire the existing statewide administrative systems.

Although the costs associated with implementing ERP will be significant, the advisory council believes there is a compelling business case for the state to proceed with implementation of a new statewide ERP system.

There are two primary considerations for ERP system funding models:

  1. Should debt financing, new state appropriations, or some combination of the two be used to pay ERP implementation costs?
  2. Should the ERP costs be appropriated to a central authority, be allocated to individual agencies, or some combination of the two?

It is the Advisory Council’s recommendation that additional funds be appropriated to the Comptroller to fund the ERP costs. Additional information concerning the funding options can be found in the Funding Plan section of the Study.

Estimated Method of Finance

Although the Advisory Council’s recommendation is for general revenue appropriation to the Comptroller, a portion of the general revenue appropriation will be offset by federal and other state funds through the use of the statewide cost allocation plan (SWCAP). Of the approximate $285.7 million proposed project budget, the estimated costs to the various funding sources are as follows:

  • $142.9 million general revenue
  • $18.7 million general revenue dedicated
  • $78.2 million federal funds
  • 45.9 million other funds

back to top