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

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The ERP Plan

Assumptions Associated with Our Recommendations

The following assumptions are very important to the advisory council’s recommendations regarding BCA 3. Changes to any of these assumptions may materially impact the project’s timeline, cost, scope, resources and expectations.

  • Funding for the project will not come from agency savings as a result of ERP or agency budget reductions.
  • The requirements development and fit/gap phases will occur during periods in which state agencies and institutions of higher education have resources available to participate.
  • The state is committed to change business processes and requirements when possible, as opposed to customizing the ERP software solution.
  • The core of the new ERP system will be configured, tested and implemented for a subset of agencies during an implementation period, starting in fiscal 2010.
  • After the initial agency deployment in 2012, the ERP system will be rolled out in multiple waves, over a five-year period. The roll-out will start in fiscal 2012 and end in fiscal 2016.
  • It is assumed that a full-time equivalent number of hours per year are 2,000 for both contractor resources and State resources. An average inflation factor of 3 percent was applied to non-state staff costs. An average inflation factor of 2 percent was applied for state staff.
  • A software upgrade will occur during Year 7 of the project. However, it is not expected to be a major architectural upgrade.
  • If PeopleSoft is selected, the software upgrade during Year 7 is not expected to be Oracle Fusion; however, if the upgrade is to Oracle Fusion, the cost will be significantly greater.
  • The estimated costs associated with BCA 3 are based on continuing the relationship with Oracle’s PeopleSoft ERP software suite. If a different software provider is selected, the cost may increase as the state would not be able to leverage the work performed to date on the various PeopleSoft projects in Texas state government and higher education.
  • It is assumed in BCA 3 that institutions of higher education and Health and Human Services are hubs. Hubs may, or may not, choose to implement internally the statewide ERP solution. Because of this, Hub costs related to implementation of the ERP solution are not included in the project costs.
  • All hubs (as per BCA 3) must interface with the ERP solution and establish data warehouses as required. The costs associated with these initiatives are included in the BCA 3 costs.
  • Each hub will follow its own business processes as defined by their business requirements and as dictated by their specific application set.
  • A statewide ERP project steering committee comprised of a cross-section of state agency and higher education executive management will be formed to provide high-level project oversight and guidance with authority to make decisions.
  • Strong project governance standards are applied equitably and fairly in a manner that ensures opportunity for input by all state agencies and higher education.
  • The Comptroller establishes a strong project management team with appropriate levels of authority and project status reporting.
  • State agencies and institutions of higher education will commit sufficiently skilled state staff resources to the project for extended periods of time during system development.
  • State agencies and institutions of higher education can reach agreement on critical decisions such as statewide system requirements and whether software to requirement gaps can be addressed through other means than system customizations.
  • The Comptroller’s statewide administrative systems will be eliminated as scheduled.
  • State agency and higher education administrative systems and/or interfaces will be replaced as scheduled.
  • There are no external constraints that will adversely impact the ERP deployment schedule.
  • It is not expected nor estimated within the project costs that the ERP system will address all programmatic or “specialty” functionality and system needs of agencies or higher education. It is understood that the ERP solution cannot reasonably be a replacement for all peripheral systems (e.g., hospitals, student administration, library, etc.).
  • The ERP project will not begin until the project is approved by the legislature, funding is secured and available and agency and higher education resources are available to participate. This would not be any sooner than June 2009 and September 2009 is preferable.
  • The costs associated with documenting agencies’ unique business requirements are included within the project.
  • Either through the current statewide contracts or the proposed project budget it is assumed that there are sufficient Oracle tools and database licenses; if not, additional costs will be incurred.
  • The business requirements development phase will include only minimal business process reengineering. Most business process reengineering will occur once the ERP software solution is confirmed and appropriate resources are available for the software to requirements fit/gap phase.