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From Statewise, Winter 2009

Countdown to ERP liftoff

NASA makes rocket science look easy. Count backward from 10, press a button and get out of the way. But in reality, every launch is preceded by years of careful planning, as well as a substantial technological investment, and each mission builds on the successes — and failures — of previous missions.

As Texas begins its Enterprise Resource Planning (ERP) Project, the space mission metaphor is apt. Project managers have studied both successful and unsuccessful ERP projects from across the country, and the lessons they learned will guide the implementation of a Texas system that will take state accounting and fiscal transparency to an unprecedented level. But as with that first moon shot, everything depends on the planning.

Who goes first?

From the beginning, it was clear that the Texas ERP plan would require a substantial investment of both time (seven years) and money (an estimated $280 million). Unfortunately, 2009 wasn’t a great time to ask the Legislature for $80 million dollars a biennium over the next several budget cycles.

"That’s a lot of money, times were tough and there were a lot of needs," says Sandra Woodruff, Fiscal Projects and Operations section manager, who is also one of the ERP project managers. "With the downturn in the economy, there just wasn’t that kind of money to fund this project as originally intended. However, it is a good project, and legislators did see value in moving forward with our plan."

To kick off the state’s ERP investment, the 81st Legislature, Regular Session, authorized eight agencies to proceed with ERP over the next two years: the Texas Department of Transportation (TxDOT), the Department of Information Resources (DIR), the five Health and Human Services (HHS) agencies and the newly created Texas Department of Motor Vehicles (DMV).

Under this modified ERP plan, TxDOT, DMV and DIR will be implemented on the new ERP HR/Payroll and Financial system, which will be maintained and supported by the Comptroller. Meanwhile, the five HHS agencies will move to the new ERP HR/Payroll system, which will be supported and maintained by either the Comptroller or HHS.

Requests for vendor proposals went out before the end of summer, when most state employees were still recovering from the legislative session. By November, contracts were negotiated and signed. Oracle/PeopleSoft would provide the necessary software, Deloitte Consulting would handle implementation and Salvaggio, Teal and Associates would provide project management.

The project timeline calls for design, development, testing and implementation of at least two modules for TxDOT by January 2011. By August 2011, the remaining TxDOT modules should be complete, as well as all modules needed for DMV, DIR and HHS.

A technological leg up

Previous efforts to accommodate agencies technological needs have provided a natural starting point for the new ERP approach. Since 1997, J.P. Wardle and the Integrated Statewide Administrative System (ISAS) Support and Statewide Financial section have worked with agencies to create software solutions for their most pressing accounting and HR/payroll needs. Most of these solutions used Oracle/PeopleSoft programs.

"We’re leveraging our pre-existing knowledge of how we handled things with the PeopleSoft product," says J.P. Wardle, ISAS Support and Statewide Financial section manager and Woodruff’s IT counterpart in ERP. "We’re going to build on that solution as we move forward. We’re starting halfway down the road instead of at the beginning."

Woodruff adds that several state agencies already use PeopleSoft, including the Texas Workforce Commission, Texas Department of Housing and Community Affairs, Texas Education Agency, the Comptroller’s office and the five HHS agencies.

Putting it together

Of course, ERP is more than just a transfer from mainframe to Web technology. It’s a re-imagining of the business process from start to finish, with an eye toward finding the ways to streamline processes and use technology to its fullest potential. Before the process is over, agencies will have to consider the best ways to manage general ledger, accounts payable, accounts receivable, budgeting, inventory, asset management, billing, payroll, projects, grants, human resources and procurement.

"We want to create integrated systems that talk to each other, rather than having an accounting system that creates a data file that gets passed monthly to the HR system," says Wardle. "With an integrated system, you can select a payment option, and the system will take funds out of your account and record the transaction into your accounting system automatically."

That doesn’t mean that every existing business process will be put into the ERP system. "One goal of the ERP project is to modify processes to fit the software rather than modify the software to fit the process," says Woodruff. Software modifications are both costly and complicated, causing difficulties with technical support and updates, and this has been reported as a leading cause of failure in other ERP projects. By taking the process modification approach, the Texas ERP project can minimize costs while maximizing the effectiveness of the new system.

Out with the old … eventually

Everyone is anxious to see the shiny new tools that ERP will create, but for the time being, most agencies will have to make do with the old standbys: the mainframe statewide accounting systems. And that’s not necessarily a bad thing.

"The statewide accounting systems were designed by state governmental accounting experts and have served the financial reporting needs of the state of Texas well," says Steve Schiurring of Fiscal Analysis. "They can handle the state’s high transaction volumes and complex editing requirements, as well as several significant accounting standards and legislative changes. And the Business Intelligence initiative will phase in additional reporting capabilities, including the ability to produce ad hoc reports."

Woodruff recommends that agency staff participate in the various user groups and attend CPA-provided training in order to fully take advantage of the strengths of the current system, and she reminds them to contact agency support staff when they encounter problems.

"Our systems currently do what we need them to do at a minimum," says Woodruff. "But because technology changes so quickly, there are a lot of things that we could be doing better. We can have greater efficiency, with more functionality and more user-friendly tools. With so many people moving to Web-based technology, it’s a natural progression that we move in that direction as well."

Wardle agrees. "The world we’re in today is Web-based, and that’s what our customers are seeking — instant access to information, instant results," says Wardle. "That’s what this system will give people while also carrying out the Comptroller’s vision for transparency in government."

ERP: The Next Generation

The hope is that more agencies will be added to the ERP project as funding becomes available. It may take some time to get everyone on board the ERP train, but once that happens, Wardle predicts positive impacts for agencies, lawmakers and even the public.

"As each agency comes on — years down the road — we’ll have greater transparency, because we’ll have data consolidated in one spot," says Wardle. "The reporting is better as well, and you can give legislators and Open Records requestors what they’re looking for. You can show people that state government is something that is open and available to the public."