Enterprise Resource Planning Presentation to the Joint Legislative Oversight Committee on Information Technology.

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1 Enterprise Resource Planning Presentation to the Joint Legislative Oversight Committee on Information Technology December 18, 2014

2 Enterprise Resource Planning (ERP) definition ERP is a business system that enables an organization to integrate processes and functions to effectively manage operations and consolidate information in areas including: Financial Management Budget & Cash Grants Asset Inventory Fleet Human Resources Procurement 12/18/2014 Summary in response to S.L (b) - ERP 2

3 Session Law (b) Funds shall be used by the State Chief Information Officer, in conjunction with the North Carolina Government Efficiency and Reform Initiative (NC GEAR) and the State Controller, to develop a strategic implementation plan for a statewide ERP. 12/18/2014 Summary in response to S.L (b) - ERP 3

4 Benefits of an ERP Business Management Enables effective objective setting and progress monitoring Improves responsiveness to shifts in the market, emerging strategies and changing customer demands Business Knowledge Efficiency & Automation Improves information consistency and accuracy across organizational boundaries Empowers organizations to quickly identify problems and take immediate corrective action Streamlines many important day-to-day tasks Allows staff to focus on higher value activities Enables different agencies and divisions to operate as a cohesive team 12/18/2014 Summary in response to S.L (b) - ERP 4

5 Why does the state need an ERP Business operations across state agencies are disjointed and do not interact with each other Thousands of different processes and systems are used to run government Activities involve numerous workflows and procedures some manual, some automated Hundreds of agency and departmental specific applications and databases handle similar functions The primary reasons the state should implement an ERP solution are to: 1) Effectively manage the business and adapt to the needs of customers 2) Improve business knowledge and decision-making enabled by an integrated and authoritative system 3) Drive operational efficiency by standardizing and automating processes and information 12/18/2014 Summary in response to S.L (b) - ERP 5

6 What we learned Most states have an ERP system 84% (41 of 50) Core Financial Management ERP Solution Custom / Other 12/18/2014 Summary in response to S.L (b) - ERP 6

7 ERP focus areas for the state Current Situation Statewide Business Operations and Administration Human Resources Financial Management Inconsistent processes across agencies Grants Over 25 separate grants systems Asset Unable to track full lifecycle of an asset Inventory Unable to accurately manage inventory Fleet Multiple systems managing fleet Refresh and expand BEACON Historically underfunded, complex configuration based on state policy Integrated with financial system Stand alone system Informed Decision Making Timely and accurate reports Manual, time-consuming process Transparency across businesses Disparate information and processes 12/18/2014 Summary in response to S.L (b) - ERP 7

8 Approach to the plan Constraint - limited planning time available to inform long session Assumption - expansion of the SAP system for planning purposes Expected Outcome - to inform a decision on commitment and funding for implementation of a statewide ERP Budgetary cost estimate Planning estimate for implementation time Change management areas of focus 12/18/2014 Summary in response to S.L (b) - ERP 8

9 To fulfill the General Assembly s request The State Budget Director, State Controller and SCIO: Established a governing committee to manage the creation of an ERP Implementation Plan and Budget Estimate Aligned with NC GEAR initiative Collaborated with the 26 agencies and boards currently using NCAS 11 executive interviews with agency leadership 17 workshops business (12) and technical (5) 9 business management focus areas finance, HR, procurement, grants, budget, assets, inventory, fleet, and reporting/data analytics 12/18/2014 Summary in response to S.L (b) - ERP 9

10 ERP transforms state operations Disparate systems across various state agencies Today An ERP system is designed and built to work together ERP We re an auto parts company Is a State Technology Car 12/18/

11 Estimated timeline and costs 7 years from approved budget 3 years for core financials $301 Million $50.4 next Biennium Average $97.2 following biennia 67% Business $200M - implementation team, facilities, IV&V... 33% Technical $100M - hardware, software, security... Note: Percentages and biennia numbers are approximate values. 12/18/2014 Summary in response to S.L (b) - ERP 11

12 High Level Timeline 12/18/2014 Summary in response to S.L (b) - ERP 12

13 Next steps Prepare RFPs for 3 rd party expertise Define working teams across state agencies Post Long Session Alternative reviews Independent Validation & Verification (IV&V) Systems Integration (SI) Establish governing bodies and Program Management Office (PMO) Inventory and document existing business processes requirements With approved budget: Award contracts Begin implementation program 12/18/2014 Summary in response to S.L (b) - ERP 13

14 Thank You Questions?

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