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NASC Annual ConferenceReno, NevadaMarch 11-14, 2014

ERP Governance Models and Strategies:How States Manage Critical Post-Implentation ERP Decisions and Keep All Players on the Same Team.

Keith Johnson, OracleLynne Bajema, State Comptroller, OKJan I Sylvis, Chief of Accounts, TNKristopher Knight, Director, Division of Accounting, DEDavid A Von Moll, State Comptroller, VAKathy Sheppard, Deputy Comptroller, MAAlan Skelton, State Accounting Officer, GA

SPEAKERS

Trends in State ERP Systems*

• ERP II – Greater self service, business intelligence and built in analytics, moving beyond core applications

• Definite move towards cloud, hosting, IaaS and SaaS

• Necessity of security while improving transparency

• Demand for mobile capability, BYOD integration, etc

• Improved project and portfolio management with strategic IT planning

• Budget and cost control

• Shared services

*NASCIO State CIO Priorities for 2014

Trends in State ERP Systems

Earlier adopters moving to ERP II – Greater self service,

business intelligence, move beyond core applications

• Transparency – Expose data, records and information to external parties

• Business Intelligence/Analytics – Financial/Budgets/Procurement/Projects etc.

• Performance Management/Performance Based Budgeting – Move beyond basic budget preparation

• Self service – Employee/Vendor/Client• Expand beyond core – Projects/Maintenance/Performance Management

/Treasury/Grants – Integrated platform

Transparency

BI - Budgetary Control AnalyticsOverview

Overspending alerts with drill-down to the budgets that have been overspent

View report by Cost Center, Fund, Program, Project or Group Account dimension and only by the data user has been granted access to.

Freeze report headers enables scrolling within the report view

Secured link for executives to view reports summarized by Budget and Budget Period

Self Service

TN open enrollmentFor 300,000 State, Higher EdAnd Municipal Employees

Decision Packages and Budget RequestsUse Decision Packages to develop budget proposals or incremental requests for funding

Dynamically include or exclude packages from the total.

Toolbar icons are used to add a new decision package, edit it’s narrative, share with another entity or navigate to budget requests

Rank each decision package

Trends in State ERP Systems

Definite move toward shared services

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Accounts Payable• Scan, process and pay ~10,000 invoices per month

Vendor Maintenance• Manage ~4,000 vendor maintenance requests per month• Provide eSupplier vendor self-service

Travel & Expense• Process and pay ~8,500 expense reports per month

Chart of Account Maintenance

Contact Center• Respond to ~3,500 employee and vendor inquiries per month

Many Examples• Delaware – State, 2 State Colleges, 17 K12• Cal State System – 23 instances to 1• County/City and Schools – Multiple Cities

Imaging

Trends in State ERP Systems

Considering multi-organization processing models

Provide services across different jurisdictions – Examples:

• State of New York – Learning Management Services for 600,000 State, Municipal and School District Employees

• State of Tennessee – Benefits management and open enrollment for 300,000 State, Higher Education, School, Municipal and retirees.

• State of Delaware – Finance and HR/Payroll services for all State agencies, 2 State colleges, 17 school districts and 18 charter schools

• State of Connecticut – HR and Payroll for State University• Pittsburgh – ERP for City, Allegheny County and Allegheny Port

Authority• Minnesota – Local Government Information Services (LOGIS) –

Provides applications and IT services for 45 Cities and Counties

Trends/Deployment Options

The ERP Market is changing

• “Traditional” - Licensed-based pricing model- On-premise solution (with managed service option)- Single tenant- Client supported (with vendor supported option)

• “Pure” Cloud/Software as a Service - Subscription-based pricing- Delivered through the cloud- Multi-tenant- Vendor supported

Not either/or but both

Comparison of Traditional ERP to Cloud/SaaS ERP

Key Features Traditional ERPManaged Service

(Hosted) Cloud/SaaS ERP

Software Features and Functionality

Mature Mature Evolving

Customizations Allowed Allowed Not allowed; done through configuration

Upgrades Every 2-3 years Every 2-3 years Pushed every 4 months

Infrastructure Dedicated, owned by client

Dedicated or shared, owned by provider

Shared, owned by ERP vendor

Cross-jurisdiction Single tenant Single and/or multi tenant

Multi tenant

Staffing Client owns and operates

Client contracts out some functions

Client contracts out most functions

Business model Upfront CAPEX with license and maintenance

“Smoothed” CAPEX with license and maintenance

“Smoothed” CAPEX with subscription

Less sharing More sharing

ERP Project Success Factors

• Active Executive Sponsors• User Acceptance• Change Management vs. Training• Staffing project with FTE’s – use the

brightest• Define Project success • Identify current metrics- track success• Identify project quick wins

Expected Business Benefits – Financials

Potential Process Improvements Potential Business Benefits

Streamline financial processes Increase cash management Streamline asset recording and tracking process Eliminate or reduced data entry/paperwork Reduce or elimination of reconciliations Provide for accrual basis of accounting Integrate financial accounting transactions with

other relevant financial data

Improved process efficiencies/response time Increased financial analysis time for better

decision support- Performance Management Reduced cycle processing time such as time to

close the books Enhanced cash flows Lower finance costs

• Standardized financial processes across the organization and provides for more efficient transaction processing thereby providing more time for value-added analysis and decision support.

• The solution provides the necessary functionality to comply with current standards. The solution will eliminate the need for many manual procedures currently in place.

Expected Business Benefits – Budgeting

Potential Process Improvements Potential Business Benefits

Eliminate error-prone manual processes Ensure complete, current information Enable budget reports Maintain accurate and balanced data Monitor budget status Link budget planning with operational systems

(e.g., financial, human resources, and project systems)

Improved ability to construct, manipulate and view complex budget structures

Improved integration of strategic and operational planning

Focused budget decisions on results and outcomes Supplement financial targets with non-financial

value drivers Coordination of objectives and executive processes

• Provides the functionality to manage and track an organization’s expenses and projects. • Provides the necessary functionality to comply with current standards.• Eliminates the need for many manual procedures currently in place.

Expected Business Benefits – Human Resources

• Increase productivity through an integrated HR system with improved process efficiencies. • Remove the duplication of data collection, manual processing, and the passing of paper from person to person. • The use of Manager and Employee Self Service capabilities will provide more timely access and control over

information. • Eliminate the need for many manual procedures currently in place.

Potential Process Improvements Potential Business Benefits

Streamline human resources processes Reduce data entry due to automation Reduce recruitment and new hire paperwork Integration to payroll and financial transactions Reduce time and effort on time reporting

Reduced transaction processing time Reduced cost for new hires Reduced cost per payment transaction Consolidated administration of Benefit programs Better tracking of leave time

Suggested Best Practices in ERP Governance:

Have a sound business case for what you want to do

Gain and keep executive and legislative buy-in and commitment

Determine governance structure early in the process

Establish and stick to your business plan and methodology

Document business processes and system requirements

Beware of change management

Invest in people – the right talent on the job and emphasize training

Build in essential risk mitigation strategies

COTS over Custom is almost always better

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