Presentation is loading. Please wait.

Presentation is loading. Please wait.

The Need for Finance Transformation NASACT Conference, Chicago, Illinois Sharon Minnich – Deputy Secretary for Finance Administration Christina Dorfhuber.

Similar presentations


Presentation on theme: "The Need for Finance Transformation NASACT Conference, Chicago, Illinois Sharon Minnich – Deputy Secretary for Finance Administration Christina Dorfhuber."— Presentation transcript:

1 The Need for Finance Transformation NASACT Conference, Chicago, Illinois Sharon Minnich – Deputy Secretary for Finance Administration Christina Dorfhuber – Principal, Deloitte Consulting LLP August 12th, 2008

2 - 1 - Copyright © 2008 Deloitte Development LLC. All rights reserved. Agenda Highlights of Deloittes Global Finance Transformation Survey Deloitte Finance Transformation Framework and Methodology The Commonwealth of Pennsylvanias Finance Transformation Journey Embarking on Your Journey – Implementation Considerations Questions & Answers

3 - 2 - Copyright © 2008 Deloitte Development LLC. All rights reserved. More than 200 responses from across the world. Deloitte Research conducted a global survey to understand the maturity of the financial function in governments across the world. The survey results were supplemented with secondary research and case studies. Background of Global Finance Transformation Survey Source: Deloitte Research Global Study on Finance Transformation 31 54 2 2 2 4 13 68 3 8

4 - 3 - Copyright © 2008 Deloitte Development LLC. All rights reserved. Summary Significant gaps exist between current finance capabilities and government needs. Most finance organizations do better in the tactical roles than in the strategic roles that are the most critical to addressing many of governments biggest fiscal and operational challenges. The greatest need in government finance today is for a finance function that can offer timely information and advice to government leaders on key operational and strategic decisions. Twenty-four percent of respondents are Finance Masters who support the business in making strategic decisions and act as a catalyst for change, built on a foundation of excellence in finance stewardship and operations.

5 - 4 - Copyright © 2008 Deloitte Development LLC. All rights reserved. Understanding Finances Roles Strategist Steward Operator Catalyst CFO Focus Triangle CFO Focus Triangle Finance Function Execution Performance Efficiency Control Leading Edge Threshold Performance Balance capabilities, costs and service levels to fulfill the finance organizations responsibilities Provide financial leadership in determining strategic business direction and align financial strategies Protect and preserve the assets of the organization Stimulate behaviors across the organization to achieve strategic and financial objectives

6 - 5 - Copyright © 2008 Deloitte Development LLC. All rights reserved. Invalid responses comprise 4%. Mastering Finance in Government – Finance Masters Represent 24% of Responders Most respondents fit into what we classify as Novices or Intermediates 3% 24% 27% 42% High Strategist + Catalyst Low Steward + OperatorHigh Source: Deloitte Research Global Survey on Finance Transformation

7 - 6 - Copyright © 2008 Deloitte Development LLC. All rights reserved. A Framework for Assessing Finance Transformation Opportunities

8 - 7 - Copyright © 2008 Deloitte Development LLC. All rights reserved. Finance organizations can use six Value Drivers and four Enablers to improve their operations and better achieve their objectives towards becoming a Finance Master. To Become a Leading Finance Organization: You Need to Drive Value Enablers

9 - 8 - Copyright © 2008 Deloitte Development LLC. All rights reserved. Stage Rating Scale Stage 1 – Nonexistent: No formal process, technology, organization is in place Stage 2 – Developing: Process, tech., org. is partially defined and informally communicated Stage 3 – Defined: Process, tech, org. is defined, documented, understood and operational Stage 4 – Advanced: Process, roles, tech, is defined, documented and introduced throughout the organization Stage 5 – Leading: Continuous planning process is fully integrated into all parts and aspects of the organization The Commonwealth Applied the Diagnosis in Five Critical Areas Process Maturity Assessment Procure to Pay Revenue /Cash Management Accounting OperationsCAFR and Financial Reporting Internal Audit Current State Future Vision 0.0 1.0 2.0 3.0 4.0 5.0

10 - 9 - Copyright © 2008 Deloitte Development LLC. All rights reserved. The Commonwealth of Pennsylvanias Finance Transformation Journey

11 - 10 - Copyright © 2008 Deloitte Development LLC. All rights reserved. Foundational Initiatives and Their Objectives ERP Implementation: IMAGINE, PA Access to real time, on line data Adopt best practices Replace aging systems Enhance customer and employee service

12 - 11 - Copyright © 2008 Deloitte Development LLC. All rights reserved. Foundational Initiatives and Their Objectives SRM: SAP Procurement Upgrade Implement end to end e-procurement Implementation of XML for transmittal of PO and Invoices Improve vendor service Register as a supplier, maintain company data as an administrator Set up additional users for the company for bidding (or other administrators) Maintain order addresses and remit to information Update banking details for electronic payment processing Respond to bid invitations Revenue Initiative Eliminate duplicative revenue entry systems Standardize revenue processing Provide real time revenue reporting

13 - 12 - Copyright © 2008 Deloitte Development LLC. All rights reserved. Pennsylvanias Timeline for Beginning Finance Transformation ImaginePA Budget, Finance, Procurement, Reporting – (Start - March 2001) HR, Payroll (Start – March 2001) SRM (Start - February 2006) Revenue Initiative (Start - Within OB 2006) Finance Transformation (Start - February 2008) Scheduled Go Live – May 2009 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 Scheduled Go Live May 2009

14 - 13 - Copyright © 2008 Deloitte Development LLC. All rights reserved. Results to Date – ERP ERP Implementation: IMAGINE, PA Commonwealth Employees Can: View their benefits, pay, and leave balances on-line change or modify personal information on-line Select their benefits on-line Request leave and track the approval process File travel claims on-line and be paid electronically View W-2 Federal Tax information Monthly Transactions: Electronic paychecks processed: 192,000 Travel expense vouchers processed: 25,000 Human resource actions processed: 206,000 Financial transactions processed: 1,300,000 Budget transactions processed: 1,666 Procurement transactions (requisitions, purchases, etc) processed: 143,000 Business reports processed: 25,000 Total Monthly Transactions Processed: 1,892,666 Recurring Major Activities Supported: Creation of the comprehensive annual financial report and creation of the Governors budget

15 - 14 - Copyright © 2008 Deloitte Development LLC. All rights reserved. Results to Date – SRM Implementation Established online catalogs for agency and Commonwealth use. Over 83 warehouses have been loaded to date resulting in proper price and item data, streamlines process Established Auto POs for suppliers. Today there are 10,349 orders flowing through. 7 percent of POs are Auto. P-card enabled for payment on PO to eliminate manual invoice entry Suppliers register themselves in database and maintain their profiles. More than 10,800 suppliers currently

16 - 15 - Copyright © 2008 Deloitte Development LLC. All rights reserved. Results to Date – Revenue Revenue Eliminate duplicative revenue entry systems Approximately 600 end user trained between November 2007 and April 2008 Decommissioned legacy revenue entry system – July 1, 2008 Provide real time revenue reporting SAP Reporting running parallel to Department of Revenue reporting All current revenue reports able to be replaced with new reports Improved reporting functionality Receipt of Treasury data directly to SAP Planning to decommission Department of Revenue legacy reporting system end of 2008

17 - 16 - Copyright © 2008 Deloitte Development LLC. All rights reserved. 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 Develop a strong internal audit function Develop training organization

18 - 17 - Copyright © 2008 Deloitte Development LLC. All rights reserved. Project Scope Policy & Process Procure to Pay Chart of Accounts/GL Revenue/Cash Management Accounts Receivable Grant Accounting Budgetary Accounting CAFR/Financial Reporting Special Accounting Quality Assurance/Management Reporting Internal Audit Talent & People Office of the Budget, Agencies, and External Partner: Change Management and Communications Organization Impact Training Systems & Information SAP ECC 6.0 Configuration SAP Workflow Optical Character Recognition (OCR) and/or Imaging

19 - 18 - Copyright © 2008 Deloitte Development LLC. All rights reserved. Timeline Commonwealth Technical Upgrade Finance Transformation Project (FT) November 1 Complete Integration Testing Stabilized Production Environment Provide a Copy to the FTT Development & Unit Testing Executive Session Prepare And Doc. Review Design of Business Processes FT Go-Live Integration/Regression Testing - - JFMAMJJASONDJFMAM 2008 J Check Out Cutover Technical and Organizational Assessment 2009 Phase 1 – Vision/Plan/DesignPhase 2 - Build Phase 3 – Deliver & Operate Stabilization

20 - 19 - Copyright © 2008 Deloitte Development LLC. All rights reserved. Current Status Workshops and validation sessions across all scope areas: Draft design and recommendations document for processes in scope Imaging and workflow analysis Preparing for prioritization session for recommendations

21 - 20 - Copyright © 2008 Deloitte Development LLC. All rights reserved. Embarking on Your Journey - Implementation Considerations

22 - 21 - Copyright © 2008 Deloitte Development LLC. All rights reserved. Path to Finance Mastery – Two Stage Process Almost no agency in our analysis or experience has been able to master strategist and catalyst capabilities without a foundation in stewardship and operator capabilities Stage One Improve Core Capabilities Stage Two Provide More Strategic Insight What government does: Set strategic priorities Improve resource allocation Evaluate policy alternatives Set performance measurements and targets How government should do it: Provide better value for money Protect value through improved risk management Support talent management Compliance Management reporting Forecasts and budgetary plans Financial policies, processes, and procedures

23 - 22 - Copyright © 2008 Deloitte Development LLC. All rights reserved. Lessons Learned Diagnose starting place and define expected or desired end and communicate to senior leadership Understand tolerance and capacity for change Create business case to bridge gaps, create focus and common ground Secure executive decision makers who understand benefits, willing to make tough decisions, become an active participant Address the core infrastructure and operational deficiencies before going to far into strategic role Involve and engage all parts of the enterprise (HR, IT, Procurement, Treasury, Budget, Comptroller, Revenue, Agencies) Stage and pilot your implementation

24 - 23 - Copyright © 2008 Deloitte Development LLC. All rights reserved. Questions & Answers

25 - 24 - Copyright © 2008 Deloitte Development LLC. All rights reserved. Contact Information Christina Dorfhuber Principal, Deloitte Consulting LLP cdorfhuber@deloitte.com +1 717 651 6230 Sharon Minnich sminnich@state.pa.us

26 - 25 - Copyright © 2008 Deloitte Development LLC. All rights reserved. This presentation contains general information only and is based on the experiences and research of Deloitte practitioners. Deloitte is not, by means of this presentation, rendering business, financial, investment, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte, its affiliates, and related entities shall not be responsible for any loss sustained by any person who relies on this presentation.

27 - 26 - Copyright © 2008 Deloitte Development LLC. All rights reserved. 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. About Deloitte

28 A member firm of Deloitte Touche Tohmatsu


Download ppt "The Need for Finance Transformation NASACT Conference, Chicago, Illinois Sharon Minnich – Deputy Secretary for Finance Administration Christina Dorfhuber."

Similar presentations


Ads by Google