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

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Presentation on theme: "Maximizing the benefits from your ERP – before and after implementation NASACT August, 2009."— Presentation transcript:

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

2 Copyright © 2009 Deloitte Development LLC. All rights reserved. 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

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

4 Copyright © 2009 Deloitte Development LLC. All rights reserved. 3 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 Discussion Points

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

6 Copyright © 2009 Deloitte Development LLC. All rights reserved. 5 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 State of New York Organizational Context Several states have separately elected officials with check and balance responsibilities that make a single ERP very challenging.

7 Copyright © 2009 Deloitte Development LLC. All rights reserved. 6 State of New York Government Organization Executive Branch New York State Government Judicial Branch Legislative Branch State Attorney General State Comptroller Governor 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 All four officials are separately elected on a statewide ballot

8 Copyright © 2009 Deloitte Development LLC. All rights reserved. 7 Statewide Financial Systems Governance Executives from the State Comptroller, Division of the Budget, and Office for Technology comprise the Joint Governance Board (JGB) Joint Governance Board (JGB) Legislature Joint Coordinating Committee (JCC) Domain Owners Budget/Finance Procurement Human Resources Accounting Domain Owners IT Domain NYFMS Steering Committee Quality Assurance (QA) NYFMS Project Director PMO FOCAS Project Director PMO NYFMS Project Team Joint Project Team(s) FOCAS Project Team FOCAS Steering Committee Business/Design Decisions IT Architecture/ Design Decisions Operating Decisions Joint Project Team Lead(s)

9 Copyright © 2009 Deloitte Development LLC. All rights reserved. 8 History of the New York State Financial Systems Program Statewide Financial Systems Program Evolution Pre-2007200720082009 1999-2005 Initial efforts/ assessments/ planning (business case, stakeholder assessment, strategy discussions) toward replacement of OSCs Central Accounting System (CAS) 2005-2006 Quality Assurance Consultant (KPMG) selected for OSC Project Oracles 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 2007 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…

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

11 Copyright © 2009 Deloitte Development LLC. All rights reserved. 10 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 Batch file transaction transmission between OSC and Executive Agencies Option 3 – Two Systems, Common Master, Near Real-Time Transaction Synchronization Separate systems; separate transaction data; some common master data 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 Near-real-time transaction transmission between OSC and Executive Agencies Option 5: Single System Application Single systems; common transaction data; common master data Common real-time transactions between OSC and Executive Agencies Considered 5 Options for Integration (from 2008) Integration Continuum Integration Options Low Integration --- High Integration 12345 Business Process Integration Data Integration Core Data Master Data Transaction Data LowMediumHigh

12 Copyright © 2009 Deloitte Development LLC. All rights reserved. 11 Assessment of Integration Options (from 2008) Cross OSC and Executive Agencies workflow transformation Today - This was probably underestimated – should have been at least a half ball: Integration Assessment Categories Integration Options 12345 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

13 Copyright © 2009 Deloitte Development LLC. All rights reserved. 12 Summary of Integration Options (from 2008) Option 1Option 2Option 3Option 4Option 5 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 Key common master data across systems 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

14 Copyright © 2009 Deloitte Development LLC. All rights reserved. 13 #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 Conclusion: #3 best balance of risks and rewards

15 Solution Overview and Related Challenges Daniel Keene Senior Manager Deloitte Consulting

16 Copyright © 2009 Deloitte Development LLC. All rights reserved. 15 New Yorks solution connects two instances of PeopleSoft Financials using Oracles Fusion middleware SOA architecture. New York Financial Systems Integration Solution SOA Integration Layer Near real time transactions Orchestrates interagency approvals Keeps budgets and ledgers in synch Streamlines processing Chart of Accounts Crosswalk – Converts old chart of accounts to new chart of accounts OSC PeopleSoft Governor PeopleSoft Interfacing Agencies

17 Statewide Financial Systems Timeline 2009 20102011 JOINT NYFMS FOCAS JanFebMarAprMayJunJulAugSepOctNovDecJanFebMarAprMayJunJanFebMarAprJulAugSepOctNovDec SI Procurement H/W Env. Est. Team Training RequirementsFit-GapDesignConfiguration Agency Interface Dev & System Mods Agency Data Conversion Prod H/W Env Est. Testing Phase 1 Go-Live Training Functional DesignConfiguration Develop Enhancements Design & Construct Reports Sys. & Integration TestingTest Prep Training Design & Development CAS Go- Live Change Impact AnalysisImplement Business Transformation UAT DR & HA Plan Technical Design Map/Convert Data Prepare and Conduct OSC UAT TTT Implementation Guides Procure & Install Prod. Env. Data Conversion Testing OSC IAM Build & Deploy IAM Build & Deploy Design InterfacesConstruct Interfaces Mock Conversions End User Training Deploy Imp. Guides Agency Interface Certification Copy of FOCAS Instance to NYFMS Bulkload Layouts to Agencies Statewide COA Definition Statewide Vendor File Design SOA Design Identity & Access Management Design Agency Specific COA Definition Ongoing COA Governance and Maintenance Procurement Domain Governance and Statewide Vendor File creation, cleansing, agency support SOA POC and BuildSOA Integration TestSOA UAT SOA Governance IAM POC and BuildIAM Integration TestingIAM Governance and Maintenance Statewide Vendor File Live

18 Copyright © 2009 Deloitte Development LLC. All rights reserved. 17 Top Challenges ChallengeNew 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)

19 Copyright © 2009 Deloitte Development LLC. All rights reserved. 18 Questions? Joan Sullivan jsullivan@osc.state.ny.us Terry Blake tblake@deloitte.com Daniel Keene dkeene@deloitte.com

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

21 Copyright © 2009 Deloitte Development LLC. All rights reserved. 20 Pennsylvanias Timeline for Finance Transformation ImaginePA - SAP Budget, Finance, Procurement, Reporting – (Start - March 2001) HR, Payroll (Start – March 2001) 2001200220032004200520062007200820092010 Go Live 3 Phases between July 2002 and January 2003 Go Live January 2004 EBP Upgrade August 2006 Procurement Upgrade March 2007 XML Go Live July 2007 Agency Kick Off June 2007 Go Live Training November 2007 Reporting July 2008 Go Live May and June 2009 Revenue Initiative (Start - Within OB 2006) SRM (Start - February 2006) Finance Transformation (Start - February 2008) Scheduled Go Live – May 2009

22 Copyright © 2009 Deloitte Development LLC. All rights reserved. 21 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 PA Finance Transformation Project Goals

23 Copyright © 2009 Deloitte Development LLC. All rights reserved. 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

24 Copyright © 2009 Deloitte Development LLC. All rights reserved. 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 Advisory Committee Comptrollers CAO CIOs Treasury, Revenue, Procurement Chief Procurement Officer PMO Project Manager Business Leads Technical Leads Communications Lead Implementation Lead Functional Leads Agency Deputy Secretaries for Administration Deployment Team Leads and Agency Liaisons Project Team Agency CIOS and HR Officials

25 Copyright © 2009 Deloitte Development LLC. All rights reserved. 24 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. Finance Transformation Project

26 Copyright © 2009 Deloitte Development LLC. All rights reserved. 25 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 Finance Transformation Project

27 Copyright © 2009 Deloitte Development LLC. All rights reserved. 26 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. Finance Transformation Project

28 Copyright © 2009 Deloitte Development LLC. All rights reserved. 27 Previous Structure of Office of Comptroller Operations 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 Payroll Accounting David L. Kessler Assistant Director Audit Policy and Subrecipient Review Christine Wegemer Assistant Director Bureau of Commonwealth Payroll Operations David L. Kessler Acting Director Bureau of Audits Michael P. Brennan Director Payroll Processing Bobbi L. Sweeney Assistant Director Bureau of Financial Management Herbert A. Maguire Director Chief Accounting Officer Anna Maria Kiehl Quality Assurance Donald Uleau Assistant Director Accounting Operations Mike Burns Assistant Director Financial Operations Vacant Assistant Director Commonwealth Reporting Eric Bartholomew Senior Manager GAAP Accounting Lauren M. Dungan Manager Financial Program Support Kenneth Walker Manager Central Vendor Management Susan S. Fortini Manager Special Projects Richard Cardamone Manager Commonwealth Accounting Dennis Peachey Manager Budgetary Accounting Scott Heisey Manager Transportation Timothy A. Guss Comptroller Central Services Joseph C. Natoli Acting Comptroller Liquor Control Board and PA Port Authorities Joseph Lawruk Comptroller Public Protection and Recreation Mary K. DeLutis Comptroller Public Health and Human Services Joyce Haskins Acting Comptroller Labor Education and Community Services Connie L. Huber 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 Thomas R. George Assistant Comptroller Audits John Gargiulo 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 Comptroller Offices Bureaus

29 Copyright © 2009 Deloitte Development LLC. All rights reserved. 28 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 New Structure of Office of Comptroller Operations [2] Out of scope [3] This LCB Services Organization will not be apart of the centralization Primary Level Out of scope Organization Chart Legend Advisory relationship Budget Secretary Bureau of Payable Services Bureau of Financial Management Bureau of Quality Assurance Bureau of Commonwealth Accounting Bureau of Audits Bureau of Liquor Control Board (LCB) Services BCPO² Chief Accounting Officer, Office of Comptroller Operations Office of Workforce Development and Training Bureau of Planning and Management Audit Committee

30 Copyright © 2009 Deloitte Development LLC. All rights reserved. 29 Key Cooperation Across Many Agencies Office of Budget – Comptroller Operations Department of Revenue Office of Administration (Statewide HR and IT) Treasury Auditor General

31 Copyright © 2009 Deloitte Development LLC. All rights reserved. 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 5-11 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 200-300 documents are typically printed per day. Since 6/8/09, approximately 4500 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

32 Copyright © 2009 Deloitte Development LLC. All rights reserved. 31 Lessons Learned Dont 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 Lessons Learned & Next Steps

33 Copyright © 2009 Deloitte Development LLC. All rights reserved. 32 Change Management After Action Review is important to encourage were 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

34 Copyright © 2009 Deloitte Development LLC. All rights reserved. 33 Questions? Anna Maria Kiehl Chief Accounting Officer/Comptroller Office of the Budget Commonwealth of Pennsylvania akiehl@state.pa.us Christina Dorfhuber Principal Deloitte Consulting cdorfhuber@deloitte.com (717) 503-0819

35 About Deloitte Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu and its member firms. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Copyright © 2009 Deloitte Development LLC. All rights reserved. Member of Deloitte Touche Tohmatsuwww.deloitte.com/aboutwww.deloitte.com/us/about


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