0. Maximizing the benefits from your ERP – before and after implementation
NASACT
August, 2009

1. Finance Transformation is a Long Journey
State governments cumulatively spend hundreds of millions of dollars annually on ERP planning, acquisition, implementation, and maintenance
Maximizing the benefits of your ERP requires:
Inter- and intra- agency collaboration
Strong executive sponsorship and participation
Recognition that all benefits cannot be realized on Day 1
Each state has its own nuances, but there are enough similarities that we can learn from each other. Two states are currently pursuing a path to maximize benefits from their ERP:
State of New York – pursuing a first in the nation approach to coupling financial systems through a Service Oriented Architecture (SOA)
Commonwealth of Pennsylvania – demonstrating that “after implementation” business process analysis further increases benefits

2. State of New York Approach to Integrated Financial Management between Separate Constitutional Entities
NASACT August, 2009

3. Decision Process Towards Integration
Discussion Points
How to best streamline interdependent business processes between separate constitutional entities?
The Case for Financial Systems Integration
Decision Process Towards Integration
Solution Overview and Related Challenges

4. The Case For System Integration
Joan Sullivan
Executive Deputy Comptroller for Operations
New York State Office of the State Comptroller

5. State of New York Organizational Context
State of New York is implementing two instances of PeopleSoft “loosely coupled” via SOA “middleware”
Elected State Comptroller
Responsible for audit of payments and contracts, statewide accounting and financial reporting
Elected Governor
Responsible for business operations within executive agencies
Joint Governance established to coordinate new financial systems
Several states have separately elected officials with check and balance responsibilities that make a single ERP very challenging.

6. State of New York Government Organization
New York State Government
Executive Branch
Judicial Branch
Legislative Branch
Governor
State Attorney General
State Comptroller
All four officials are separately elected on a statewide ballot
LT. Governor
Department
of Law
Department
of Audit and Control
State Agencies (in the following functional areas):
Economic Development
Education
Parks/Environment
Health and Social Welfare
General Government
Transportation
Mental Health
Public Protection

7. Statewide Financial Systems Governance
Joint Governance Board (JGB)
Legislature
Quality Assurance (QA)
Joint Coordinating Committee (JCC)
Domain Owners
Budget/Finance
Procurement
Human Resources
Accounting
Domain Owners
IT Domain
Operating Decisions
NYFMS Steering Committee
Business/Design Decisions
IT Architecture/ Design Decisions
FOCAS Steering Committee
NYFMS
Project Director
PMO
Joint Project Team Lead(s)
FOCAS
Project Director
PMO
Operating Decisions
Operating Decisions
NYFMS Project Team
Joint Project Team(s)
FOCAS Project Team
Executives from the State Comptroller, Division of the Budget, and Office for Technology comprise the Joint Governance Board (JGB)

8. History of the New York State Financial Systems Program
Statewide Financial Systems Program Evolution
Pre-2007
2007
2008
2009
Initial efforts/ assessments/ planning (business case, stakeholder assessment, strategy discussions) toward replacement of OSC’s Central Accounting System (CAS)
Quality Assurance Consultant (KPMG) selected for OSC Project
Oracle’s PeopleSoft Financials software chosen for OSC project
Deloitte assists with Executive Agencies’ system requirements definition for NYFMS
OSC and DOB announce intention to create a strategic partnership to coordinate implementation of statewide financial system
Deloitte joins FOCAS Project Team as Integrator/Developer
OSC implementation project begins December
NYFMS selects PeopleSoft Financials software
Joint Governance Board requests integration analysis from Deloitte Consulting and KPMG and selects option that best balances risks and rewards
Integration approach and 4/1/2011 go-live date announced
MOU governing statewide financial systems program approved
Teams begin joint work on COA and SOA designs
NYFMS Project awards System Integrator contract to IBM
Joint efforts toward integrated statewide financial system continue…

9. Decision Process Towards Near Real-time Integration
Terry Blake
Principal
Deloitte Consulting

10. Considered 5 Options for Integration (from 2008)
Option 1: Batch file transfer Two Systems, Minimally Integrated Approach
Separate transaction and master data
Batch file transaction transmission between OSC and Executive Agencies
Option 2: Two Systems, One Maintains Master
Separate systems; separate transaction data; some common master data
Option 3 – Two Systems, Common Master, Near Real-Time Transaction Synchronization
Near-real-time transaction transmission between OSC and Executive Agencies
Option 4 – Single System Logically Separated as Two
Single systems logically partitioned; separate transaction data; some common master data
Option 5: Single System Application
Single systems; common transaction data; common master data
Common real-time transactions between OSC and Executive Agencies
Integration Continuum
Integration Options
Low Integration --- High Integration 1 2 3 4 5
Business Process Integration
Data Integration
Core Data
Master Data
Transaction Data
Low
Medium
High

11. Assessment of Integration Options (from 2008)
Integration Assessment Categories
Integration Options 1 2 3 4 5
Benefits – Business and IT
Degree of Difficulty – Technology difficulty, organization change requirements, funding and governance requirements
Cost – Design and Build
Cost – Operate and Support
Risks – Related to governance, reputational damage, delays, conflicting needs and priorities, and security
Today - This was probably underestimated – should have been at least a half ball:
Cross OSC and Executive Agencies workflow transformation

12. Summary of Integration Options (from 2008)
Pros
No interference with OSC development and timetable
Maximum physical separation of application and data with simple security
Key common master data across systems
Separation of application and most data requires simple security setup
Minimal interference with OSC schedule development and timetable
Near real-time transaction workflow substantially improves end user experience
Addresses needs during transition as well as the long-term
Integration platform easily leveraged for future needs
Key common master data across systems
Still simple security setup
Near real-time transaction workflow
Most flexibility to gradually increase transaction integration
Real-time transaction workflow
All common data across systems
Cons
No business process integration across agencies – batch transaction data exchange
Duplication of data on both systems hinders integrity and may require significant reconciliation
No transaction integration across agencies – batch transaction data exchange
Additional risk of frontloading OSC with Executive Agencies system implementation work
Integration platform required
Project risk increases as additional workload accelerates ahead of the OSC go-live
Moderate increase in complexity of governance
Enhanced governance for common system development and ongoing maintenance and operation
Extra effort during OSC design phase or significant rework later on
Enhanced governance for common system development and ongoing maintenance and operation with substantial risks in an adversarial political climate
Note: Red Italics denote critical items

13. Conclusion: #3 best balance of risks and rewards
#1 and #2 further automate financial management for OSC and Executive Agencies, but independently
Easiest to implement
Do not improve business process integration across agencies/systems
#3 affords a significant improvement in business process for agencies
Improves end-to-end workflow and near real-time processing
Reduces need to reconcile the two systems
Enables the “black box” translator, links to external systems, and future integration with Executive Agencies systems
Presents moderate risk to timeline
#4 and #5 offer even greater integration and business benefits; however they
Require a common data center
Increase project risk substantially
Costs may initially be higher to implement #4 and #5, but over the long term ongoing maintenance costs go down

14. Solution Overview and Related Challenges
Daniel Keene
Senior Manager
Deloitte Consulting

15. New York Financial Systems Integration Solution
New York’s solution connects two instances of PeopleSoft Financials using Oracle’s Fusion middleware SOA architecture.
SOA Integration Layer
Near real time transactions
Orchestrates interagency approvals
Keeps budgets and ledgers in synch
Streamlines processing
OSC
PeopleSoft
Governor
PeopleSoft
Chart of Accounts Crosswalk – Converts old chart of accounts to new chart of accounts
Interfacing Agencies

16. Statewide Financial Systems Timeline
2009
2010
2011
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
SI Procurement
IAM Build & Deploy
Phase 1 Go-Live
H/W Env. Est.
DR & HA Plan
Prod H/W Env Est.
NYFMS
Team Training
Training
Requirements
Fit-Gap
Design
Configuration
Testing
Agency Interface Dev & System Mods
UAT
Agency Data Conversion
Statewide COA Definition
Agency Specific COA Definition
Ongoing COA Governance and Maintenance
Statewide Vendor File Design
Procurement Domain Governance and Statewide Vendor File creation, cleansing, agency support
Statewide Vendor File Live
JOINT
SOA Governance
SOA Design
SOA POC and Build
SOA Integration Test
SOA UAT
Identity & Access Management Design
IAM POC and Build
IAM Integration Testing
IAM Governance and Maintenance
Functional Design
Configuration
Test Prep
Sys. & Integration Testing
Prepare and Conduct OSC UAT
Technical Design
Develop Enhancements
Agency Interface Certification
Design Interfaces
Construct Interfaces
CAS Go- Live
FOCAS
Design & Construct Reports
Map/Convert Data
Data Conversion Testing
Mock Conversions
Procure & Install Prod. Env.
Training Design & Development
TTT
End User Training
OSC IAM Build & Deploy
Copy of FOCAS Instance to NYFMS
Change Impact Analysis
Implement Business Transformation
Implementation Guides
Deploy Imp. Guides
Bulkload Layouts to Agencies

17. Top Challenges Challenge New York Methodology
Defining a uniform statewide chart of accounts
Dedicated joint COA team
Accounting Domain owners empowered to make decisions
Active participation by agency SMEs
SOA requires integrated business process transformation
Dedicated joint SOA team
Business owners review proposed business processes and identify “biggest bang for the buck” - evolve to greater integration over time
Competing priorities of separate constitutional offices
Creation of formal governance body to resolve issues and make decisions
Identify “best approach” vs. current approach
Define implementation and post production governance structures for joint components (e.g., COA, SOA, Statewide Vendor File, Identity & Access Management)
Managing scope and resources of two system implementations under a single program
Reviewed the OSC project for integration opportunities that leveraged completed or planned work.
Manage deliverable schedule around distractions due to state budget crisis and seasonal activity
JGB controls budget across the program and resolves integration issues (people, process, costs)

18. Questions?
Joan Sullivan Terry Blake Daniel Keene

19. Commonwealth of Pennsylvania Building on a Solid Foundation The Next Wave of Finance Transformation
NASACT August, 2009

20. Pennsylvania’s Timeline for Finance Transformation
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
ImaginePA - SAP
Budget, Finance, Procurement, Reporting – (Start - March 2001)
HR, Payroll (Start – March 2001)
Go Live 3 Phases between July 2002 and January 2003
Go Live January 2004
SRM
(Start - February 2006)
Procurement Upgrade March 2007
EBP Upgrade August 2006
XML Go Live July 2007
Go Live Training November 2007
Revenue Initiative
(Start - Within OB 2006)
Agency Kick Off June 2007
Reporting July 2008
Finance Transformation
(Start - February 2008)
Scheduled Go Live – May 2009
Go Live
May and June 2009

21. PA Finance Transformation Project Goals
Identify and implement strategies to reduce cost
Use available resources more efficiently
Manage accuracy
Reduce transaction processing time
Improve invoice processing and imaging
Improve cash management and revenue processing
Design quality assurance function
Improve accountability
Develop a strong internal audit function
Develop training organization

22. Finance Transformation Project Scope
Policy & Process
Procure to Pay
Chart of Accounts/GL
Revenue/Cash Management
Accounts Receivable
Grant Accounting
Budgetary Accounting
Talent & People
Office of the Budget, Agencies, and External Partners
Change Management and Communications
Organization Impact
Training
Systems & Information
SAP ECC 6.0 Configuration
SAP Workflow
Imaging

23. Project Governance Was a Key to Success
Steering Committee
Secretary of Budget
Secretary of Administration
Treasurer
Secretary of Revenue
Secretary of General Services
Chief Accounting Officer
PMO Members
PMO
Project Manager
Business Leads
Technical Leads
Communications Lead
Implementation Lead
Functional Leads
Advisory Committee
Comptrollers
CAO
CIOs Treasury, Revenue, Procurement
Chief Procurement Officer
PMO
Agency Deputy Secretaries for Administration
Deployment Team Leads and
Agency Liaisons
Project Team
Agency CIOS and HR Officials

24. Finance Transformation Project
Specific process impacts to Invoice Processing include:
Vendor requirements and mailing procedures for invoice submission were changed and enforced
Invoice Processing moved from a paper-based process to an electronic document-based process using workflow and work items in SAP
The review and resolution of most issues related to Invoice Processing is shared among the agency and the Comptroller Exception Processing Unit or the Quality Control Unit within Office of Budget. Documents are routed electronically to the groups involved in invoice processing.

25. Finance Transformation Project
Business practices were and are being standardized across all agencies:
Even though they were all using SAP, Agency-facing Comptroller units each had significant differences in financial processes
Now that the Office of Comptroller Operations has been reorganized, financial processes are changing so that they will be consistent across the Commonwealth
Printing of Revenue documents is done centrally by the Comptroller; agencies no longer have to print and mail documents
Utility billing for our largest vendors is now done electronically between the vendors’ systems and SAP

26. Finance Transformation Project
As a result of the FT Project, the organizational structure of the Office of the Budget changed to support the project goals.
Changes to the current organization include:
Relocation of most Comptroller staff to one site in Harrisburg
Organization by functional expertise:
Centralization of Comptroller Services around business functions
Creation of a Payable Services Unit to manage the Accounts Payable function across the Commonwealth in a centralized structure, including separate units for PO and Non-PO Invoice Processing
Creation of a Comptroller Exception Processing Unit (including a Quality Control function) to resolve invoice issues
Creation of a Call Center within the Payable Services Center (PSC) to serve as the primary point-of-contact for Commonwealth vendors and agencies regarding payment issues.

27. Previous Structure of Office of Comptroller Operations
Chief Accounting Officer
Anna Maria Kiehl
Previous Structure of Office of Comptroller Operations
Bureaus
Bureau of
Financial Management
Herbert A. Maguire
Director
Bureau of
Audits
Michael P. Brennan
Director
Bureau of
Commonwealth
Payroll
Operations
David L. Kessler
Acting Director
Decentralized Comptroller Operations
Structure did not accommodate the tracking and management of invoices or maximizing efficiencies within processes
No Training organization
No Continuous Process Improvement organization
No support function or strategy function for CAO
Audit Policy and
Subrecipient Review
Christine Wegemer
Assistant Director
Accounting
Operations
Mike Burns
Assistant Director
Financial
Operations
Vacant
Assistant Director
Payroll Accounting
David L. Kessler
Assistant Director
Commonwealth Reporting
Eric Bartholomew Senior Manager
Financial Program Support
Kenneth Walker
Manager
Payroll
Processing
Bobbi L. Sweeney
Assistant Director
GAAP Accounting
Lauren M. Dungan
Manager
Special Projects
Richard Cardamone Manager
Quality
Assurance
Donald Uleau
Assistant Director
Commonwealth Accounting
Dennis Peachey Manager
Central Vendor
Management
Susan S. Fortini
Manager
Budgetary Accounting
Scott Heisey
Manager
Comptroller Offices
Labor Education and Community Services
Connie L. Huber
Comptroller
Public Health and Human Services
Joyce Haskins
Acting Comptroller
Public Protection and Recreation
Mary K. DeLutis
Comptroller
Liquor Control Board and PA Port Authorities
Joseph Lawruk
Comptroller
Central Services
Joseph C. Natoli
Acting Comptroller
Transportation
Timothy A. Guss
Comptroller
Accounting
Stanley J. McCollum
Assistant Comptroller
Accounting
Joshua Naylor
Assistant Comptroller
Accounting
Deb Chernicoff
Assistant Comptroller
Accounting
Linda Sieber
Assistant Comptroller
Accounting
Catherine J. Kelly
Assistant Comptroller
Accounting
Gregory R. Sides
Assistant Comptroller
Audits
John Gargiulo
Assistant Comptroller
Audits
Thomas R. George
Assistant Comptroller
Audits
Steven L. Swalm
Assistant Comptroller
Audits
Alan R. Miller
Assistant Comptroller
Audits
Joseph C. Natoli
Assistant Comptroller
Audits
Jenny Righter
Assistant Comptroller
Medical Assistance
Joyce Haskins
Assistant Comptroller

28. New Structure of Office of Comptroller Operations
Developed approximately 60 new position descriptions to account for technology and process changes
Union communication throughout project
Increased span of control for many positions
Decreased organizational layers
Organization Chart Legend
Budget
Secretary
Primary Level
Advisory relationship
Out of scope
Chief Accounting Officer, Office of Comptroller Operations
Office of Workforce Development and Training
Bureau of Planning and Management
Audit Committee
BCPO²
Bureau of Liquor Control Board (LCB) Services
Bureau of Commonwealth Accounting
Bureau of Payable Services
Bureau of Financial Management
Bureau of Quality Assurance
Bureau of Audits
[2] Out of scope
[3] This LCB Services Organization will not be apart of the centralization

29. Key Cooperation Across Many Agencies
Office of Budget – Comptroller Operations
Department of Revenue
Office of Administration (Statewide HR and IT)
Treasury
Auditor General

30. Significant Results in a Short Timeframe
Invoice Processing
Within the first two months improved processing times from an average of 1200 daily to 1500 daily
All Purchase Orders and non-Purchase orders are handled in a centralized location and either received electronically or are immediately scanned and imaged (one more wave of agencies to implement)
All processing now handled via workflow and moves automatically between agencies and the comptroller
Doing more with less – consolidation of offices and budget demands led to a reduction of positions (vacancies)
Treasury Review
Treasury is no longer scanning invoice documents, reducing the invoice processing time by days.
Vendor Accountability
Vendors now receive returned invoices if they have not prepared them correctly
Utility Billing
852 invoices totaling $1.5M have been received and posted via electronic billing since 6/8/09
Elimination of “Paper Pushing”
documents are typically printed per day. Since 6/8/09, approximately documents have been printed centrally instead of being printed and mailed by agencies
Human Resources
Changed many professional positions from civil service to non-civil service to enable better hiring and professional development opportunities in the future
Accounting
Better utilization of existing staff resources through standardization, reprioritization, and realignment.
Auditing
Of Comptroller activities on a state-wide perspective

31. Lessons Learned & Next Steps
Don’t underestimate the time needed to get the operational support components defined and organized
Keep all critical stakeholders involved and frequently engage them in critical decisions
Training is needed at various intervals for the same employees throughout the change process.
Begin Early with Change Management meetings to get managers comfortable with their role in the change and the reporting tools available to them to manage the change.
Next Steps… Improvements are Ongoing
Continued process improvement of invoices processing and support functions
Internal Audit improvements
Accounting standardization of processes
Steering Committee continues to meet to indentify areas of interagency collaboration and cost savings

32. Change Management After Action Review is important to encourage “we’re in this together” approach to change
On going Communication of expectations and results are essential with all stakeholders
Continue to Refine Roles, Responsibilities, Workflow, training materials, and expectations
Inspect what you Expect/Measure Performance
Empowering Managers to Resolve Issues

33. Questions?
Anna Maria Kiehl Chief Accounting Officer/Comptroller Office of the Budget Commonwealth of Pennsylvania Christina Dorfhuber Principal Deloitte Consulting (717)

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