Enterprise Resource PlanningPresentation to the Joint Legislative Oversight Committee

on Information Technology

December 18, 2014

ERP is a business system that enables an organization to integrate processes and functions to effectively manage operations and consolidate information in areas including:

Financial Management Budget & Cash

Grants

Asset

Inventory

Fleet

Human Resources

Procurement

Enterprise Resource Planning (ERP) definition

12/18/2014 Summary in response to S.L. 2014-100 7.1 (b) - ERP 2

Session Law 2014-100 7.1(b)

“Funds … shall be used by the State Chief Information Officer, in

conjunction with the North Carolina Government Efficiency and Reform

Initiative (NC GEAR) and the State Controller, to develop a strategic

implementation plan for a statewide ERP”.

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Benefits of an ERP

Enables effective objective setting and progress monitoring Improves responsiveness to shifts in the market, emerging

strategies and changing customer demands

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Efficiency & Automation

BusinessKnowledge

BusinessManagement

Streamlines many important day-to-day tasks Allows staff to focus on higher value activities Enables different agencies and divisions to operate as a cohesive team

Improves information consistency and accuracy across organizational boundaries

Empowers organizations to quickly identify problems and take immediate corrective action

Why does the state need an ERP

Business operations across state agencies are disjointed and do not interact with each other Thousands of different processes and systems are used to run government

Activities involve numerous workflows and procedures – some manual, some automated

Hundreds of agency and departmental specific applications and databases handle similar functions

The primary reasons the state should implement an ERP solution are to:

1) Effectively manage the business and adapt to the needs of customers

2) Improve business knowledge and decision-making enabled by an integrated and authoritative system

3) Drive operational efficiency by standardizing and automating processes and information

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What we learned

Most states have an ERP system 84% (41 of 50)

Core Financial Management

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Custom / OtherERP Solution

ERP focus areas for the state

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Financial Management Inconsistent processes across agencies

Grants Over 25 separate grants systems

Asset Unable to track full lifecycle of an asset

Inventory Unable to accurately manage inventory

Fleet Multiple systems managing fleet

Statewide Business

Operations and Administration

Refresh and expand BEACON Historically underfunded, complex configuration based on state policy

Integrated with financial system Stand alone system

Human Resources

Timely and accurate reports Manual, time-consuming process

Transparency across businesses Disparate information and processes

Informed Decision Making

Current Situation

Approach to the plan

Constraint - limited planning time available to inform long session

Assumption - expansion of the SAP system for planning purposes

Expected Outcome - to inform a decision on commitment and funding for implementation of a statewide ERP Budgetary cost estimate

Planning estimate for implementation time

Change management areas of focus

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To fulfill the General Assembly’s request

The State Budget Director, State Controller and SCIO:

Established a governing committee to manage the creation of an “ERP Implementation Plan and Budget Estimate”

Aligned with NC GEAR initiative

Collaborated with the 26 agencies and boards currently using NCAS 11 executive interviews with agency leadership

17 workshops – business (12) and technical (5)

9 business management focus areas – finance, HR, procurement, grants, budget, assets, inventory, fleet, and reporting/data analytics

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Disparate systems across various state agencies

An ERP system is designed and built to work together

Today ERP

We’re an auto parts company Is a State Technology Car

ERP transforms state operations

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Estimated timeline and costs

7 years from approved budget

3 years for core financials

$301 Million $50.4 next Biennium

Average $97.2 following biennia

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67% Business $200M -

implementation team, facilities, IV&V...

33% Technical $100M - hardware,

software, security...

Note: Percentages and biennia numbers are approximate values.

High Level Timeline

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Next steps

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Alternative reviews

Independent Validation & Verification (IV&V)

Systems Integration (SI)

Prepare RFPs for 3rd party

expertise

Establish governing bodies and Program Management Office (PMO)

Inventory and document existing business processes requirements

Define working teams

across state agencies

With approved budget:

Award contracts

Begin implementation program

Post Long Session

Thank YouQuestions?