ERP Implementation in Government

IPMA Executive Conference

September 13, 2000

Marty Chakoian, CTO, City of Seattle

Mike Herrin, Summit Project Director, City of Seattle
Barbara Read, Principal, IBM
Agenda

• Introductions

• Trends in ERP Marketplace

• Implementation Considerations

• Critical Success Factors

• Government ERP Projects

• City of Seattle Summit Project Case Study

ERP Defined

Enterprise resource planning (ERP) software is

a set of applications that automate finance and
human resources departments as well as
handle jobs such as order processing and
production scheduling. ERP vendors have
expanded into applications such as supply-
chain management, customer relationship
management, and industry verticals.
ERP Functionality

Finance Human Resources e-Business

-General Ledger -HR/Benefits -eProcurement

-Accounts Receivable Administration - Employee Self Service
-Accounts Payable -Payroll - e-Recruiting/e-Hiring
-Procurement -Self-service HR - e-Filing
-Fixed Assets - Citizen Access
-Treasury Mgmt - Web-enabled transactions
-Cost Control - e-Commerce
-Grant Management

Transaction Engine
Core software that manages
transaction flow among
applications and handles tasks
like security and data integrity

Customer Relationship Mgt

Data Analysis
Supply Chain Mgmt
Decision support software that lets -Consistent user experience
senior executives and other users - Personalization of services
Planning, scheduling and fulfillment - Realtime access- enterprise info
analyze transaction data to track
applications that address all
business performance
procurement requirements across
the enterprise
Characteristics of an ERP System

• Includes business management software that enables

finance and human resources in a completely integrated
fashion

• Enables high levels of integration across business functions

and units

• Provides for widespread sharing of data from a single

information repository

• Drives extensive business transformation and change

management efforts

• Requires high levels of implementation effort and support

ERP Solution Components

Infrastructure
20%

Implementation ERP Software

60% 20%
ERP Implementation Benefits

• Streamlines or eliminates inefficient manual processes

• Eliminates disparate stand-alone systems

• Provides integrated, enterprise-wide common tools,

processes and systems

• Establishes a backbone structure that can be leveraged

to handle all operational processes

• Integrates and increases control of budgeting, planning

and financial management processes
ERP Implementation Benefits
(continued)

• Provides enterprise-wide reporting and decision

support

• Presents opportunity for re-engineering with

industry best practices and templates

• Presents opportunity to lever vendors’ future

investment in enhanced functionality

• Incorporates new functionality and technology -

provides a springboard to e-Business
ERP Implementation Challenges

• Focus on applications rather than business processes

• Turf battles over ownership
• ERP project management expertise
• Issue resolution bottlenecks
• Scope and change management
• Sub-optimization of system capabilities
• Staffing and retaining full time project resources
• Experienced implementation partners
• Product maturity and limitations
• Nature of government funding cycles
Trends in the ERP Marketplace

• Speed, Speed, Speed

• Templates
• Rapid Implementation Methodologies
• Cost Effective Implementations for Large
Enterprises
• Product expansion (tax collections, fleet
management)
• Internet/Intranet and Electronic Commerce
• Outsourcing and Application System
Providers
• Application Management Services
An ERP Start-up Roadmap
• Functional Requirements Analysis
• Procurement Strategy
• Proposal Evaluation Plan
• Analysis of Software / Implementation Resources
• Comparative Cost Analysis
• Software Demonstrations
• Site Visits
• Discovery
• Contract Negotiations
• Evaluation of Final Vendor
• Final Contract
 ERP Implementation Activities

Manage It... Change It... Implement It.. Operate It... Service It... Teach It...
• Prime Contractor • Change Mgment
• Business Vision
• Package Integration • Data Center • Platforms & • Training Needs
Project Management
(SAP,PeopleSoft, Operations Technology Assessment
• Detailed Project and Goals
JDE, Oracle...) • Application Services • Custom
planning and • Process Analysis•
Software
Tracking • Package Select . Development • Installation/ Curriculum and
Environment Builds
• Communications • Business Case & Maintenance Customization & Material
• Enterprise-wide
Plan • Bus. Process • Network Station Maintenance Development
Infrastructure Management • Performance and • CBT Development
• Subcontractor Reengineering
Planning/Design & • Network Tuning • End User Training
management • Industry Best
Roll-out Operations & • Software Services Classes
• Project Scope Practices
• As Is /To Be
• Interfaces and Support • Planning/Design/ • Train-the-
Control
Conversions
• Financial Control Process Install Trainers
• Data Warehouse • Migration • Roll-out of
• Project Oversight and Modeling
Integration
Quality Assurance • Fit-Gap Analysis Management Training
• Policy Design
• E-Business • Problem Mgmt.
Reviews • Business • Systems Mgmt.
and Procedure
Intelligence • Internet Enablement
Dev.
• Readiness
• Networking • Web Site Design
• Design
Assessment • Help Desk
• Implementation
• Organizational • Disaster Recovery
• Tuning
Design • Business
• Communications Resumption
Plan Services
ERP Software Considerations

• Support for Government Functionality

• JDEdwards
• Lawson
• Oracle
• PeopleSoft
• SAP
• Platform and Database
• Technical Architecture
• Functionality Relative to Unique Processes
and Scope of Project
• References
ERP Systems Integrator Considerations

• Successful government ERP implementation track record

• Established relationships and implementation practices

with major gov't ERP software vendors

• Full range of ERP implementation skills from software

selection to post-production support

• Use of structured ERP implementation methodology and

project management tools and techniques

• Ability to address unique government terms and

conditions
Project Critical Success Factors

• Leadership commitment
• Communication
• Full-time staff
• Professional project management
• Phased implementation approach
• Scope management
• Business transformation and change
management
• Job-specific end-user training
• Focused issue resolution
• Post implementation support
Avoiding the “Train Wreck”

• Pick the right system

• Build a strong cross-disciplinary team at

project start-up and foster them through
project completion

• Deal with organizational resistance quickly

• Make decisions and manage change effectively

 Current ERP Projects in Government
(States)
• State of Arkansas - SAP - Financials, HR/PR currently implementing
• State of California - HR/PR sw and implementer selection
• State of Colorado - Financials/HR/PR procurement
• State of Connecticut - Requirements analysis in progress
• State of Florida - Financials/HR/PR/implementer procurement
• State of Hawaii - PeopleSoft - Financials, HR/PR currently implementing
• State of Indiana - PeopleSoft rollout to agencies
• State of Iowa - ERP Assessment/Case for Change out to bid
• State of Kentucky - AMS - Financials currently implementing
• State of Louisiana - SAP - HR/PR currently implementing
• State of Maryland - HR sw procurement
• State of Michigan - Lawson - HR/PR currently implementing
• State of Montana - PeopleSoft - Financials, HR/PR in production
• State of Nebraska - Finl/HR/PR business case and RFP development
• State of Pennsylvania - SAP Financials/HR/PR , implementer procurement
 Current ERP Projects in Government
(Counties/Cities)
• Anchorage, AK - PeopleSoft - Financials,HR/PR - in production
• Anne Arundel County, MD - JDEdwards - Financials - in production
• Chicago, IL - Oracle - Financials - currently implementing
• Cook County, IL - JDEdwards - Financials, HR/PR in production
• City and County of Denver - PeopleSoft - Financials currently
implementing
• Detroit, MI - Oracle - Financials - in production, HR/PR currently
implementing
• Multnomah County, OR - SAP - Financials currently implementing
• Los Angeles, CA - PeopleSoft - Financials currently implementing
• Los Angeles County, CA - Finls/HR/PR - in procurement
• New York, NY - AMS Financials in production; P/S procurement for HR
• San Diego County, CA - Oracle Finls, P/S HR/PR - currently implementing
• Seattle, WA - PeopleSoft - HR/PR and Financials - in production
City of Seattle Case Study

• Large, complicated, loose knit

organization
• 30 Departments - Several Utilities
• 14,000 Employees
• 10,000 Retirees
• 50 Unions represented
• $2 Billion annual budget
City of Seattle Summit Project

• High visibility project

• Y2K solution
• 25,000 vendors
• Complicated business rules
• 1000 users
• $25 million dollar project budget
• PeopleSoft 6.2 GL/AP/PC/PO
• AIX/Oracle Platform
Keys to success

• Roles and Responsibilities

• Money
• Staff
• System Integrator and Consultants
• User Expectations
• Scope Management
• Methodologies
• Readiness Assessment
Roles and Responsibilities

Marriage of IT and Business:

Business IT
• Right idea seeded in • Quality product on-time
a ready organization and on-budget
• Project Ownership • Infrastructure
• Keeping things running
• Provide business
• Provide technical
resources
resources
• Manage the project
• Technical
implementation
Money Money Money

• Money - get lots of it,

you will need it !
Project Manager’s Fiscal Responsibilities

• Project manager responsible for:

• Identifying cost categories

• Estimating costs

• Managing expenditures

• Not responsible for:

• Doing a $20M project for $10M
What are the Costs?

• Organization staff • Copier/Fax machines

• Consultants • Software
• Hardware • applications/software
• utilities/software
• Space and space
• other software
planning
• Miscellaneous
• Phones
• Contingency
• Operating supplies
• Training and travel
Project Budget

• Pad everything
• Round up
• $10,875 = $50,000
• Use miscellaneous expenditures
• Include money for budget cuts and
contingency
• Include a 10% - 20% contingency
• Protect it with your life
People Factors to Consider

• Full-time staff
• Pay for backfilling

• Right skills

• Co-location very important

• Willing to sacrifice

• Project oriented
Full-time Staff Is Key

• Project Management • Training

• Business Experts • Public Relations and

• Development Communication

• Infrastructure • Quality Assurance

Attracting and Keeping Staff

• Broadband pay range

• Performance bonuses

• Reversion rights

• Training and opportunities

• Empower them

• Nice facilities
Roles of Consultants

• Necessary for ERP implementations

• Expensive but indispensable
• Systems Integration - the whole thing
• Project Management
• Product Functional Specialists
• Developers
• Trainers
• Wear the dark hat
User Expectations

• Systems shouldn’t be designed around

idiosyncrasies
• ERP systems are common denominator
based, not exception based
• Set realistic (or even lower) expectations
• Communicate constantly
• Communicate to many forums
Scope Management

• Define it carefully
• Be explicit
• Secure top management buy-off
• “Scope Creep” will kill the project
• Just say “NO”
The Vanilla Dilemma

• Vanilla is good
• Reduces implementation risk and cost
• Facilitates upgrades
• But, be realistic
• adding chocolate chips is okay (but no rocky
road)
Modifications

• You will do some

• Tools are powerful
• Set-up modification review process
• Critical, must have for production
• Lower priority/cosmetic
• Enhancements
• Bare bones implementation
• Lay a foundation and build from there
Methodologies

• Implementation is highly structured

• The Integrator brings the tools of the trade, and
there are a lot of them
• Project management & production schedule
• Fit analysis & prototyping
• Functional & technical specification standards
• Testing (SIT/UAT) strategies
• Development standards
• Deliverable review process
• Cutover techniques
• Training strategies
• Readiness Assessment
Schedule

• Be realistic • Adhere to it: Keep

• Based on scope & your eye on the
resources critical path
• Publish it • Build in downtime:
• Allow for testing time Holidays
• Fit with user • Include contingency
community
• Example, Summit
scheduled around year-
end activities
Save time

• No RFP for software

• Use scripts and

demos
End User Readiness

• The core project is just half of the story

• The other half are the user departments
who have lots to do
• But they need help:
• Guide them
• Assess readiness by department and for the
project overall
• Implement a go/no go strategy and
contingency plan
Summit Project Success

Departmental Responsibilities

Summit Project
Responsibilities
Summit Departmental Readiness

Interface Coordinator

Training Coordinator

Summit Business Practices

Coordinator
Team
Reports Coordinator

Infrastructure Coordinator

Data Clean-Up Coordinator

Security Coordinator
Remember: It’s all about risk

• Get all the resources • Lay a foundation and

you need build
• Manage scope • Be in the top 10%
aggressively who succeed
• Keep realistic • It can be done
expectations
• Implement on time
and on budget
Questions?