1. BTS - Business Tools for Schools Project Update Audit Business Technology Committee November 2006

2. 2 Agenda Recap scope and schedule BTS Release 1 Go-Live July 2006 BTS Release 2 Status

3. 3 What is.... Business Tools for Schools? The Business Tools for Schools Project is the District’s initiative to replace our outdated, fragmented business systems with a modern ERP (Enterprise Resource Planning) System.

4. 4 What is the scope and schedule of BTS? Release 2Release 3Release 1 Kick-off: June 2005 Finance This release focuses on the financial capabilities which includes: General Ledger Funds Management Accounts Receivable Grants Management Cost Accounting Project Systems Controlling (Internal Orders) Business Warehouse modules Kick-off: Aug 2005 HR and Payroll This release focuses on the implementation of the core Human Resources and Payroll Functionality which includes: Position Budget Control Personnel Admin Organization Mgmt Applicant Tracking Payroll Processing Time and Attendance Benefits Administration Budget Planning for FY07-08 Kick-off: Oct 2006 ESS & Supply Chain Employee Self Service (ESS) and Supply chain implements the major elements of procurement, expands the capabilities of HR through self service and completes the implementation of Workflow and Business Warehouse. Release 3 ESS and Supply Chain integrates: Manager Self-Service Employee Self-Service Procurement Accounts Payable Inventory Supplier Relations Mgmt Asset Management Go-Live: July 2006Go-Live: January 2007Go-Live: July 2007

5. 5 The schedule from a calendar perspective.... We are here!!!

6. 6 What is the status of Release 1 - Finance? The District successfully went live on-time with the accounting functions of SAP July 1, 2006!!!!

7. 7 What is the status of Release 1 – Finance? There are approximately 500 users of the system presently using BTS for accounting entries, accounts receivable, grant accounting, internal order accounting and project accounting. The BTS helpdesk received fewer than 50 calls for assistance in the first 2 months after go-live. School and office level financial reports were subsequently deployed in August 2006. Currently, they supplement the reports available in FRDB. In July 2007, these reports will become the primary financial reports for all schools and offices.

8. 8 Grants Master Data Example

9. 9 What are the biggest ongoing challenges with Release 1? Keeping IFS and SAP in sync with each other on a daily basis is very labor intensive. SAP is fully SACS (standard account code structure) compliant as required by California law. IFS, BRASS and other legacy systems do not natively use SACS, so there is substantial effort required to maintain the crosswalk tables and reference data to keep them synchronized in the one year of transition. What are the biggest wins Release 1? SACS compliance, increased visibility and management of accounts receivable and grants accounting are major improvements and efficiencies. The introduction of flexible reporting for schools and offices lays the foundation for better management decisions and local control of reports.

10. 10 What is the status of Release 2 – HR/Payroll? The District is on schedule to implement SAP Payroll, Time-Reporting, HR, Benefits and Budget in January 2007.

11. 11 What is the status of Release 2 – HR and Payroll? HR, payroll, time reporting, benefits, and budget are scheduled to go-live on January 1, 2007, seven weeks from today. The risk of catastrophic failure in our 40 year-old legacy payroll system was the single greatest reason for the BTS project. Ironically, the risk associated with changing out any payroll system remains the single greatest risk for the District in the BTS project. The design and configuration activities of this release are completed. Testing of the new HR, Payroll, Time-Reporting, Benefits and Budget modules is nearing completion. Training of end users including site administrators, time- reporters and HR/Payroll professionals has begun using a mix of web-based and in-person training. The conversion of data from over 20 legacy HR, time, budget and payroll systems into SAP has also begun.

12. 12 What are the primary challenges for a successful go- live in January 2007? Our first priority is to get all employees paid correctly. Consequently, our challenges are the conversion of data from our legacy systems, and the accompanying changes in business practices. –We are moving from 13 pay periods per year to 12 –We are changing the method of annualization –As a result of the pay period and annualization changes, employees monthly paycheck amounts will change, creating some potential anxiety about the differences –While the January 1 conversion date simplifies IRS reporting and related calendar year totals, fiscal year balance conversions are made more complex by the mid-year change –Over 38,000 of our current 110,000 employees are not currently assigned to formal “positions” in the legacy systems. In SAP, they need to be in a position. This complicates the conversion of their data.

13. 13 What other challenges are there? Other major challenges include: –Training 5,000 people in 12 weeks when they were already busy before we added this training to their workload –Providing the right mix of on-line training and web-based training to a user population with vastly different technology skills to begin with –Standardizing the business practices of the District using off-the- shelf software while accommodating the requirements of the CBAs and Ed Code –Communicating effectively with 110,000 employees about the changes in pay dates, pay periods and pay amounts. –Developing and implementing a post-go-live strategy for ensuring that all payroll and assignment problems that occur after January 1 are swiftly and effectively solved so that employees are properly paid in a timely manner. In other words, we KNOW someone will experience a payroll problem. The challenge for us is to be READY with the right resources to solve problems quickly.

14. 14 What major benefits will the District obtain after Release 2 goes live? The first benefit is always eliminating the risk that our 40 year old payroll system would collapse. In addition, the payroll replacement addresses audit findings by KPMG, OIG audit recommendations, CGCS recommendations, and many more independent reviews and audits over the years. Payroll, HR and budget will share the same data about positions, headcount, and related dollars. Schools will have access to that data as well. Real-time posting of payroll costs to school financial statements when each payroll is issued should greatly enhance the meaningfulness and usefulness of local school financial reports.

15. 15 What major benefits will the District obtain after Release 2 goes live? In the spring, schools will have access to on-line school budget development worksheet tools to streamline budget planning. On-line budget transfers will follow. Local schools will have access to a variety of employee roster reports, position funding reports, norm position reports and other tools to help them manage their resources more effectively. Visibility to on-line classified eligibility lists will be deployed in the spring as well, which should help expedite the interviewing and selection of eligible candidates for school vacancies.

16. 16 Where can employees, administrators, union reps and others go for up-to-date information on the BTS Project and how it will affect them? www.lausd.net/bts is the project website containing newsletters, presentations, frequently asked questions, training links and more.www.lausd.net Beginning last week, there is a special section for employees on what kinds of changes to their paydates and pay amounts they may anticipate. In early December, we will disseminate posters detailing the new paystub and key information employees can find there.

17. 17 Representatives from the District’s contracted partners in the BTS Project Tanya DanceKelly, Deloitte Consulting, Systems Integrator William Fort, SAP, Software Provider Susan Bostick, Project Solutions, District Contract Project Manager Other District Offices Alfred Rhodas, OIG