A Plan for the Implementation of Enterprise Resource Planning (ERP) for the State of Texas
Before explaining “Why” ERP it is important that the reader clearly understand “What” ERP is. An ERP system is a suite of fully integrated software applications that are used to perform administrative business functions such as financial accounting, procurement, and personnel administration. What distinguishes ERP systems from “stand-alone” best-of-breed administrative software solutions is the integration that allows for more efficient processing and eliminates redundant data entry and reconciliation tasks. The functionality provided by ERP systems is usually provided in major groupings or modules. These modules typically address the major administrative functions within state government: financial accounting and management, human resources and payroll administration, procurement and logistics and budget development. Additionally, certain features such as automated workflow and electronic approvals, security, reporting/data warehousing and the development toolset, cross all functional modules.
In addition to the existence of a viable statewide approach to ERP as contained in BCA 3 recommendation of the Business Case Analysis, there are two major classifications of drivers that we believe support the implementation of a Texas statewide ERP system. They are elimination of legacy system deficiencies and technology enablers.
Elimination of Legacy System Deficiencies
The greatest justifications for implementing a statewide ERP system are attributable to the shortcomings of the existing statewide administrative systems and the “work-arounds” required by user agencies to address these deficiencies.
A fully-integrated ERP system will address the deficiencies noted in Section 2 by providing for the following:
- Replace the state’s existing statewide ERP systems over a 7-year period and eventually eliminate many of the “shadow” systems currently maintained by agencies because the existing statewide systems do not meet their functional needs. This action would eliminate much of the fragmentation found under the current environment.
- System-wide integration of the various ERP modules offers integration that has been built by, and will be maintained by, the software vendor. Continued vendor upgrades increase functionality in an ERP environment at a faster pace than with legacy systems.
- Offering individual agencies a viable alternative to purchasing a new accounting system or upgrading their existing system to meet internal accounting and reporting needs.
- Standardized business processes built on “best practices” that are inherent in ERP systems for the public sector.
- Provides for data standardization to support a “single source of the truth” and taxpayer transparency.
- Establishes a common language for reporting expenditures through use of commodity codes for procurement spending analysis and chart of accounts for financial reporting purposes, which provides for consistent reporting and better analysis of how the State’s money is spent.
- A statewide procurement system that will be fully integrated with the financial accounting,
asset management and inventory management modules.
- Reduce cost of goods and services through the following: increased competition for the State’s business; enabling strategic sourcing benefits; lowering inventory costs for the State; reducing printing and mailing costs
- Improve process efficiencies for the state through the following: reduced procurement cycle times; reduced time and effort required to complete purchasing activities; improved monitoring of the procurement process; leveling of the “playing field”
- Leverage the benefits of the OOS while identifying the capabilities of procurement functionality available within the ERP solution and determine if an OOS bolt-on as currently defined is necessary long-term
- More efficient processing and control of documents through automated workflow, reviews, approvals, and inquiries on document status and the elimination of possible “bottlenecks” in approval process.
- Elimination of duplicate data entry as pertinent data is entered once and then carried throughout the system.
- Reduction of data integrity concerns and the effort required to reconcile duplicate data in multiple databases.
- Consistent and complete statewide federal funds analysis and management for more effective draw-down of federal dollars, including the ability to estimate carry-forward or lapsing federal funds; monitor, coordinate and establish the priorities for the use of federal funds statewide; and review agencies’ federal funds budgets, expenditures and transfers on an ongoing basis.
- More efficient and accurate research capabilities through enhanced ad hoc reporting and inquiry functionality associated with new technologies.
- Elimination of the use of Social Security numbers (SSN) as the primary identifier in the statewide administrative systems, thus helping to reduce identity theft opportunities and the related legal risks and costs associated with incident response, investigation and public relations.
- Compliance with Section 508 of the Americans with Disabilities Act regarding accessibility.
- Better tracking of the state’s assets, thus helping agencies and the Legislature in budget planning by identifying replacement costs and schedules.