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ProjectONE Report to the 82nd Legislature

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ERP in Texas

Project scope

Before appropriating funding to implement ProjectONE, the 81st Texas Legislature assessed A Plan for the Implementation of Enterprise Resource Planning (ERP) for the State of Texas, the master plan submitted by the ERP Advisory Council, and also considered the fact that certain other states have attempted and failed to successfully implement ERP statewide. Legislators also assessed which Texas agencies had the most compelling need to implement an ERP solution in the short-term. As a result, the Legislature approved a modified version of the report’s Option 3 with an approach that presented less exposure to the state and lower risk of failure.

With this approach, TxDOT, the Department of Information Resources (DIR) and the five Health and Human Services (HHS) agencies were each funded to implement an ERP project during the 2010-2011 biennium. Section 17.03 (f ) of the General Appropriations Act directed the Comptroller’s office to enter into an interagency contract to manage the development and implementation of the projects. In 2009, the Comptroller selected an implementation vendor and project oversight vendor.

The original project scope called for TxDOT and DIR to implement the full suite of PeopleSoft financials and HR/Payroll modules. The Health and Human Services Commission (HHSC) was to upgrade and enhance the current HHS PeopleSoft HR/Payroll system.

The HHS system would be used as a baseline for the new HR/Payroll component of CAPPS. This involved a two-stage software upgrade from PeopleSoft 8.3 to 8.9, then from 8.9 to 9.1. The first stage of the upgrade was completed according to schedule in March 2010.

However, as part of the established management review checkpoint before the second upgrade, it was determined that the existing HHS HR/Payroll system did not have the depth of coding documentation necessary to continue within the original project timeline.

In addition, another 90,000 hours of software development would be needed to code customizations, including interfaces, conversions, enhancements and workflows, required to maintain current functionality and efficiencies for the participating agencies.

At that point, HHSC assumed responsibility for upgrading the base HR/Payroll system to PeopleSoft 9.1 before adding final CAPPS customizations. HHSC, working with NorthgateArinso, planned to complete the HR/Payroll upgrade plus some ERP enhancements at an estimated cost of $10 million. HHSC requested authorization to transfer available agency funds to ProjectONE for these services. This request was not approved. HHSC then submitted an alternate request and received preliminary authorization to complete the upgrade. The project plan is being scaled accordingly.

Although the timeline for the HR/Payroll component is still being determined, HHSC anticipates completing the upgrade from PeopleSoft 8.9 to 9.1 in May 2012. This upgrade will include the majority of the HR customizations prioritized and approved by the ProjectONE Steering Committee for inclusion in CAPPS.

Meanwhile, work on the Financials component will continue on its own timeline. The Requirements Gathering phase identified additional functionality that is needed, including enhanced tools for fleet management, federal and state project billings, investments and both short- and long-term bonds. This functionality is especially critical for TxDOT, which currently maintains $1.5 billion in bonds and $448 million in investments on a series of individual spreadsheets. By incorporating these requirements into CAPPS, TxDOT would receive additional functionality within a single statewide integrated system.

However, to complete all the changes necessary for the Financials component to meet TxDOT needs, an additional 37,000 hours of software development is required. TxDOT requested approval to move $34 million from available agency funds to ProjectONE so this functionality could be added to CAPPS, but to date approval has not been granted.

Without this additional funding, CAPPS cannot be implemented for TxDOT. The Financials component for DIR and the Central Texas Turnpike System (CTTS), a division of TxDOT, will go live as planned on Sept. 1, 2011. For more information, see Appendix C: ProjectONE Timeline.

These changes to the project plan were made with an eye toward long-term needs of state agencies. A state as large and multifaceted as Texas requires more than the standard “out-of-the-box” software package, however, and during the past year, representatives from each of the participating agencies have carefully analyzed and cultivated the list of requirements for CAPPS. The result will be a system that will meet current needs while allowing for future changes and growth.

In order to provide necessary ongoing maintenance and support to agencies that have converted to CAPPS, the Comptroller’s office originally requested $39.9 million for the fiscal 2012-13 biennium. As a result of the recent change in project scope, this request is being revised. Funding is necessary to provide ongoing services to support, maintain and enhance the system, including hardware, software, maintenance and disaster recovery services. For more information about the original request, see Appendix E: Project-related Financial Information.

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