Financial and Cash Management Task Force. Strategic Business Plan

Transcription

1 Financial and Cash Management Task Force January 30, 2009

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3 Table Of Contents 1 Executive Summary Introduction External Reports on Project Aspire Council on Efficient Government Report to the Governor Gartner s Evaluation of Project Aspire Deficiencies in Governance Customization of Business Processes Business Process Design Document Functional Specification Documents Functional Requirements Analysis of Customizations Funding Challenges Implementation Costs Operational Costs Establish Enterprise Financial Governance Legislature Governor and Cabinet Enterprise Financial Business Operations Officer (Officer) Enterprise Financial Business Operations Council Enterprise Financial Integration Sub-Council Enterprise Business Owners State Agencies/User Groups Develop Strategic Enterprise Financial Business Operations Plan (Plan) Standardization of Enterprise Financial Business Processes Implementation of Successor Financial and Cash Management System Develop Business Case for Successor System Establish Funding for Successor System Funding Option #1 - General Revenue Funding Option #2 Internal Service Trust Fund Other Considerations Recommended Funding Approach Establish Project Governance Project Sponsor Steering Committee Project Director Project Managers Escalation Process Proceed with Procurement of 37

4 1 Executive Summary The Financial and Cash Management Task Force (Task Force) was established in Section , Florida Statues, and given the primary purpose of creating a that provides solutions to the issues faced with the previous attempt at implementing a new system, Project Aspire, and identifies the actions that need to be taken for the State of Florida (State) to resume the replacement of the financial and cash management systems. The Task Force is chaired by the Chief Financial Officer (CFO) and includes the Executive Director for the Agency for Enterprise Information Technology, the Director of the Office of Policy and Budget in the Executive Office of the Governor, the Chief of Staff for the Department of Management Services, and a former Director of the Department of Revenue, who has been recognized nationally for his expertise in organizational design and performance measurement. The Task Force reviewed external reports on Project Aspire and focused on resolving the following issues that were raised in the reports: Lack of enterprise governance at the executive level Lack of a strategic vision for the State s financial business operations Over customization of the State s business processes The prepared by the Task Force recommends the following actions: Establish Enterprise Financial Governance Establish an enterprise financial governance structure that is responsible for preparing a Strategic Enterprise Financial Business Operations Plan annually and making decisions that impact the State s enterprise financial business processes and enterprise reporting. The enterprise financial governance structure consists of: Enterprise Financial Business Operations Officer (Officer) reports to the Governor and Cabinet and is accountable for all enterprise financial governance decisions. Enterprise Financial Business Operations Council (Council) is chaired by the Officer and is comprised of the Enterprise Business Owners and representatives from the Agency for Enterprise Information Technology, Agriculture Commissioner, Attorney General, and the Florida Association of State Agency Administration Service Directors. The Council s primary purpose is to assist the Officer in developing a Strategic Enterprise Financial Business Operations Plan annually and providing recommendations on issues impacting enterprise financial business processes and enterprise reporting. Enterprise Financial Business Operations Integration Sub-Council (Sub-Council) is chaired by the Executive Director for the Agency for Enterprise Information Technology or designee and is comprised of the technical subject matter experts for the State s enterprise business systems also referred to as functional owner subsystems in Section , Florida Statutes. The Sub-Council s primary purpose is to assist the Council with the development of the Strategic Enterprise Financial Business Operations Plan and 4 of 37

5 provide advice on the technical issues associated with the recommended enterprise financial business process and enterprise reporting improvements. Enterprise Business Owners are the owners of the State s core business functions: Financials, Cash Management, Procurement, Human Resource Management, and Budget Administration. The Enterprise Business Owners are responsible for escalating issues to the Enterprise Financial Business Operations Council and Officer that have an impact on the enterprise financial business processes or enterprise reporting. Develop a Strategic Enterprise Financial Business Operations Plan Enterprise financial governance must establish a Strategic Enterprise Financial Business Operations Plan annually that documents the State s current enterprise financial business processes and the current enterprise business systems that support the enterprise financial business processes. The plan will establish annual goals for improvements in enterprise financial business processes, enterprise reporting, and enterprise data management. The plan will also identify enterprise financial business operations policies that will be issued or requested in support of the improvements. Standardization of Enterprise Financial Business Processes The State needs to change from governance that is system-centric to governance that is focused on standardizing end-to-end business processes for the core business functions: financial reporting, cash management, purchasing, human resource management, and budget administration. The recommended enterprise financial governance structure will be responsible for making decisions on the standardization of enterprise financial business processes. Enterprise financial governance will establish operational policies consistent with law for the standardization of the following enterprise financial business processes: Personnel Hiring to Separation Financial Business Process Procurement to Payment Business Process Asset Acquisition to Disposal Business Process Revenue Billing to Clearing Receipts Business Process Budget Administration Business Process Financial Recording to Reporting Business Process Implementation of a Successor Financial and Cash Management System Once the State has established an effective enterprise financial governance process and made sufficient progress in the implementation of standard enterprise financial business processes, the process for selecting and implementing a successor financial and cash management system should begin. The Department of Financial Services will have to complete several key activities before the successor project is started: Develop a business case on how best to proceed with a successor system and submit the case to the Enterprise Financial Business Operations Council for review and approval by the Officer 5 of 37

6 Determine an approach for funding and submit it to the Enterprise Financial Business Operations Council and Officer for review and approval by the Governor and Cabinet before proceeding with a request to the Legislature Prepare a Project Charter and a project governance structure and submit it to the Enterprise Financial Business Operations Council for review and approval by the Officer Procure the implementation services and software as needed 2 Introduction In August 2003, the Department of Financial Services began Project Aspire to replace the State s financial and cash management systems. The objectives of the project were to: Use web-based technology to provide enterprise-wide access to the State's financial information, as well as, provide that information in a timelier manner. Deploy web-based applications for e-commerce and e-government services that are tightly coupled to the State's financial management system. Develop a new chart of accounts that would allow for access to financial management information by program and activity, including access across state agencies and government branch. Improve integration of data between the various State systems so that users can perform more detailed analysis and reporting that is not possible today. Reduce the number of shadow systems, thus eliminating sources of out-of-sync, out-ofdate, incomplete, and erroneous data. Improve integration and reduce the number of reconciliations, and thus reducing the staff effort assigned to reconciliation activities. Enhance accounting for contracts, grants and projects to better manage these funds that comprise a significant portion of the State's budget. Project Aspire suffered from unanticipated delays, lacked an enterprise-wide focus and was not guided by effective, strategic governance 1 ; therefore, the Chief Financial Officer suspended the project on May 17, The Legislature s recognition of the need to address the challenges encountered by Project Aspire and concern with the longevity of the current accounting and cash management systems created the Financial and Cash Management Task Force, Section , Florida Statues. The Task Force was charged with preparing a strategic business plan that: 1 DFS Press Release dated May 17, of 37

7 Identifies problems and solutions with the current law and current administration with respect to the existing state accounting system. Provides solutions to known failures identified in external reviews and audit reports of the previous project. Recommends business processes, requirements, and a governance structure that will support a standardized statewide accounting and cash management system. Evaluates alternative funding approaches for the equitable distribution of common accounting infrastructure costs across all participating users. 2.1 External Reports on Project Aspire The Task Force has focused their efforts on providing solutions to the issues raised in the external reports prepared by the Council on Efficient Government and Gartner, Inc Council on Efficient Government Report to the Governor 2 The Council on Efficient Government was tasked by the Governor in February 2007 to conduct a review of three large state projects: MyFloridaMarketPlace (MFMP), PeopleFirst, and Project Aspire. The objective of the report was to review the status of the projects, identify key findings, identify key lessons learned, and make recommendations for improvements to future project planning and execution. The report provided findings in several areas for Project Aspire that are restated below: Executive Sponsorship The CFO acted as the Executive Sponsor. The Board of Directors was created to act as the governing body. However in 2004 various representatives on the Project s Board of Directors disengaged and left the project. Top level sponsorship was no longer actively participating in the creation of the new system. Loss of executive project sponsorship from the three bodies of government was a major issue negatively impacting the project s success. Business Process Standardization A major challenge has been the lack of standardization of business rules among state agencies and the resistance to change to a uniform process. Attempting to replicate existing functionality by modifying the new software added additional risk to the project. The lack of standardization has caused complexities within the proposed system that have ultimately led to a heavily over-customized system. 2 Report to the Governor on MyFloridaMarketPlace, People First and Project Aspire, Report No. R08-002, prepared by Council on Efficient Government, January 17, of 37

8 Use of Best Practices The State did not incorporate third party advice to change existing internal business processes and not over-customize the best of breed software selected. The project team did not follow industry best practices to enforce standardization in order to minimize customization Gartner s Evaluation of Project Aspire 3 Gartner, Inc. was hired by the Department of Financial Services in February 2007 to provide an independent, objective third-party evaluation and assessment of Project Aspire with a focus on steps needed to successfully complete the project, as well as long-term issues of maintainability/upgradeability. Some of the findings are restated below: Finding # 1 Lack of an executive governance process There is a lack of an executive governance process to provide discipline, executive guidance, and decision-making, consequently resulting in: Software that has been customized beyond normally acceptable limits Process standardization not being addressed Expectations of financial leaders are not consistent Key stakeholders at the senior level have not been engaged in the implementation Finding #2 No statewide enterprise resource planning (ERP) vision and strategy The scope of the Project Aspire is limited to financial management with the State, consequently resulting in: Complex interfaces and product modifications that are required to enable end-toend processing of financial transactions with MFMP, People First, FLAIR-Payroll Subsystem, and Legislative Appropriations System and Planning and Budgeting System (LAS/PBS) High and increasing cost and effort levels to develop and maintain integration Aspire is also dependent on funding of other State initiatives which, if not adequately funded, may negatively impact the interface work being completed for Aspire Finding #3 External environment changes affect long-term viability External environment changes may critically affect the long-term viability of the PeopleSoft application. A comprehensive statewide ERP and Enterprise Architecture strategy would better align the technical solution with business objectives and investment The mapping of business requirements to the technical solution was unclear and dated Opportunity to follow best practices and reduce customizations of the technical 3 Project Aspire Evaluation, Final Report, Engagement No , prepared by Gartner, May 17, of 37

9 solution through business process re-engineering Gartner s recommendation was to establish governance and funding processes and develop a statewide ERP strategy before moving forward with a System Integration (SI) partner. The issues identified in the Council on Efficient Government report go hand in hand with the issues identified in the Gartner report. Both reports identified the lack of authoritative governance, proper strategic vision for the State s business operations and an inability to standardize business processes. 2.2 Deficiencies in Governance The State of Florida has several governance entities established in law that perform oversight, and/or decision-making, or set policy for business processes or business systems. The table below provides an overview of each entity and their role as defined in law. These entities should be taken into consideration when developing the recommended enterprise governance structure. Table 1 Florida s Governance Entities for Enterprise Business Systems 4 ENTITY LAW RESPONSIBILITY MEMBERS Financial Management Information Board (FMIB) Florida Financial Management Information Systems (FFMIS) Coordinating Council Section , Florida Statutes Section , Florida Statutes Adopt policies and procedures that : Strengthen and standardize fiscal management and accounting practices Improve internal financial controls Simplify the preparation of objective, accurate, and timely fiscal reports Provide the information needed in the development, management, and evaluation of public policy and programs Approval and oversight of: Information subsystems' designs prior to the development, implementation, and operation of the subsystems and subsequent proposed design modifications The exchange of unified and coordinated data between information subsystems Resolution of problems between functional owners Governor Cabinet Chief Financial Officer Agriculture Commissioner Secretary, DMS Attorney General Director, Office of Policy and Budget, EOG 4 Referred to as functional owner subsystems in Section , Florida Statutes 9 of 37

10 ENTITY LAW RESPONSIBILITY MEMBERS Section , Executive Director Florida Statutes Agency for Enterprise Information Technology (created - July 2007) Develop strategies for design, delivery, and management of the enterprise information technology services established in law Establish policies for the management of enterprise information technology services Provide oversight on the implementation of enterprise information technology services The governance entities discussed in this section have been established in law for the purpose of providing oversight and establishing policies for the enterprise. However, the State s inability to re-engineer/standardize business processes and improve enterprise reporting indicates that there are deficiencies in the governance process. Historically, the State s governance entities have been unsuccessful at establishing and/or enforcing enterprise financial business operations policies that provide consistency and standardization across the enterprise business systems. This has resulted in the core business functions being governed independently with a focus primarily on technical modifications to each enterprise system as displayed in the diagram below. The ineffectiveness of the FMIB and FFMIS Coordinating Council has led to decisions being made outside the current governance process. Decisions are currently being driven by user needs and are not focused on standardization and re-engineering of the end-to-end business processes that cross the State s enterprise business systems. 10 of 37

11 Diagram 1 For governance to become effective there must be one individual with the proper authority, from the Governor and Cabinet, to make timely decisions and be accountable for the enforcement of enterprise financial business operations policies. This individual should also be responsible for establishing a strategic vision for the State s enterprise financial business operations and continually looking for improvements that will enhance financial or program reporting or gain efficiencies in daily operations. Decisions must be focused on improving the end-to-end enterprise financial business processes for the State and involve input from the Enterprise Business Owners and state agencies. 2.3 Customization of Business Processes An organization s resistance to changing its business processes is one of the key factors to the failure of many ERP system implementations. Executive leadership and the project team must continually monitor for the tendency to recreate/build the existing processes instead of implementing the business processes provided by the system. If the State is to proceed with replacing the current financial and cash management systems, then executives must understand the challenges that Project Aspire faced with implementing standardized business processes. An analysis has been performed using the Business Process Design document, Functional Specification documents, and Functional Requirements from 11 of 37

12 Project Aspire to determine the core business functions and functional requirements that resulted in the highest number of customizations and the cause for each customization Business Process Design Document A business process is defined as a series of tasks or procedures that yield a specific result. The delivered software for Project Aspire was divided into six core business functions. The delivered software was designed to provide standard business processes that are either performed entirely within a core business function or may cross the core business functions. During the design phase, the project team in collaboration with state agencies developed business processes that incorporated both delivered processes inherent in the software and customizations to meet the State s functional and business processing requirements. The project s Business Process Design document outlined the six core business functions and provided 221 process flow diagrams associated with the core business functions Functional Specification Documents A functional specification document clearly and accurately describes the design for a customization that is to be built for the software being implemented. During Project Aspire s requirement confirmation and design phases, a functional specification document was developed for each enhancement to the software, interface to other systems or custom report that was to be built. Each functional specification document was reviewed and approved by project management, assigned a number and added to the Application Design Master List (ADML). The project s final ADML had a total of 280 approved customizations. Of the 280 customizations, 114 were software enhancements, 104 were system interfaces and 62 were for custom reports. The customizations are grouped by core business function and summarized in the table below: Table 2 Summary of Functional Specifications Number of Core Business Function Functional Enhancement Interface Report Specifications Accounts Receivable & Billing Asset Management Project & Grant Management Procurement to Payment Recording to Reporting* Treasury Technical and Misc TOTAL CUSTOMIZATIONS *The Recording to Reporting core business function included payroll processing for the State. 12 of 37

13 2.3.3 Functional Requirements A functional requirement is defined as the fundamental actions that must take place in software in accepting and processing the input of data and the processing and generating of the output of data. In preparation for the procurement of a software package to replace the financial and cash management systems (Project Aspire), the Department of Financial Services, with assistance from consultants and state agencies, developed 1,110 functional requirements that were used for the selection of software. Additional functional requirements were identified during Project Aspire s requirements confirmation and design phases, bringing the total to 1,180 functional requirements Analysis of Customizations An analysis was performed by the Task Force s Business Process Workgroup to determine the causes for the customization. Although workgroup members could select one or more causes from a list of seven causes, only one cause could be selected in the analysis database as the primary cause. The primary cause is the one cause that significantly initiated the customization. In order to provide consistency in evaluating customizations, each workgroup member had to apply pre-established criteria. The following defines the seven causes and how the workgroup members applied criteria to determine the primary cause: 1) State Legal Requirement the State Constitution, Statute or the Florida Administrative Code had to specifically require the action. For example, Section , Florida Statutes, has specific statutory requirements regarding the timeliness of voucher processing. 2) Federal Legal Requirement the U.S. Constitution, U.S. Code or the Code of Federal Regulations had to specifically require the action. For example, the Internal Revenue Code has specific requirements regarding 1099 reporting of vendor payments. 3) Florida Financial Management Information Systems (FFMIS) it would have to be a requirement of one of five subsystems listed in Section , Florida Statute. For example, there are certain requirements within these subsystems that were required to be carried over into the new system for the new system to operate effectively. These systems include: MyFloridaMarketPlace - procurement subsystem PeopleFirst - human resource subsystem LAS/PBS - budgeting and appropriation subsystem FLAIR - financial subsystem CMS - cash management subsystem. 4) State Agency Need at least one state agency had a business need that was not in the functionality of delivered software. Changes of this type would involve specific agency business systems interfaces. 5) Enterprise Need the CFO and/or state agencies collectively had business needs that were not included in the functionality of delivered software. 13 of 37

14 6) Replicating Existing Functionality - there was a business need that was not being met in functionality of delivered software and alternative processes could not accomplish the same results. 7) Other there was a technical limitation in system s functionality to accomplish a prescribed task. The top three causes for customization were: replicating existing functionality, FFMIS, and enterprise need. The table below summarizes the findings for the primary causes by the type of customization. Table 3 Customization by Cause and Type of Customization Cause of Customization Number of Customizations Enhance Interface Report State Law Federal Law FFMIS Agency need Enterprise need Replicating existing functionality Other The top three core business functions with the highest number of customizations were Procurement to Payment, Recording to Reporting, and Treasury. The table below summarizes the findings for the primary causes by core business function. Table 4 Customizations by Cause and Core Business Function Core Business Function Number of Customizations State Law Federal Law FFMIS Agency Need Enterprise Need Replicating Existing Functionality Other Accounts Receivable & Billing Asset Management Project & Grant Management of 37

15 Table 4 (cont) Customizations by Cause and Core Business Function Core Business Function Number of Customizations State Law Federal Law FFMIS Agency Need Enterprise Need Replicating Existing Functionality Other Procurement to Payment Recording to Reporting* Treasury Technical and Misc TOTAL CUSTOMIZATIONS *The Recording to Reporting core business function included payroll processing for the State. The Task Force s Business Process Workgroup also reviewed the 1,180 requirements from Project Aspire to determine if a requirement could be directly linked to the 280 customizations. The Workgroup identified 253 of the 1,180 functional requirements as having a direct relation to the customizations to the delivered software. The top three functional requirement areas with the largest percentage of requirements that could be directly linked to customizations were: Budget control/execution requirements associated with the Recording to Reporting core business function Cash management/treasury requirements associated with the Treasury core business function Procurement accounting requirements associated with the Procurement to Payment core business function The 253 requirements should be included in the scope of re-engineering enterprise financial business processes in an effort to minimize customization in a successor financial and cash management system. The purpose of the analysis was to identify causes for the customizations so that the enterprise governance entities could use the information in an effort to standardize the enterprise financial business processes. Enterprise governance should examine the causes of customizations to determine if: State laws should be changed to support standardization Changing business processes will improve the integration between the enterprise systems 15 of 37

16 Agencies and Enterprise Business Owners should justify the reasons for not conforming to the standard business processes Enterprise governance would then have sufficient information to make decision on the enterprise financial business operation policies needed for the State going forward. 2.4 Funding Challenges There is no direct benefit to the private sector for the implementation or maintenance of a financial and cash management system for the State. This makes it difficult, if not impossible, to justify a service fee to the citizens or vendors for the services provided by the system. A more logical approach is to examine options for funding within the State s existing funding sources with the cost shared equally by the entities that are using the current system or will be using the replacement system. There is a cost impact for the on-going maintenance of the current system and the implementation of a new system, making it important to examine funding options that will support both Implementation Costs Implementation costs include, but are not limited to, initial hardware and software purchases, contractual service costs, state personnel to support the project, as well as travel and training during the go-live phase. Acquiring funding for the implementation costs is a challenge due to the high cost estimated to be spent in the first few years, typically $80 to $100 million. Establishing a reliable funding source for implementation is critical to the project s success. To accommodate the spike in expenditures, many organizations look at financing as an option to handle the immediate cash flow needs for the project. The Department of Financial Services projected a total of $80,000,000 would be financed over 7 years for the Project Aspire. Contract deliverables and other implementation costs represented approximately $48 million of the overall funding for the project. The remaining $32 million was used to cover software, hardware, and overhead costs. A master equipment financing agreement was executed in October The project requested a total of seven draws between October 2003 and June 2006 totaling $71,219,824. The loan payments have been funded through the appropriations received from the General Revenue Fund or the Insurance Regulatory Trust Fund Operational Costs Operational costs can be defined as the day to day costs, such as personnel and hardware and software licensing costs, incurred in running the systems that will support the State s accounting infrastructure. The State s accounting infrastructure is currently comprised of FLAIR and the Cash Management Subsystem (CMS). The FLAIR system supports the accounting and financial management functions for the State s Chief Financial Officer, which includes budget posting, receipt and disbursement of funds, payroll processing, and the accounting information for the State s Comprehensive Annual Financial Report. The CMS supports the functions of the State 16 of 37

17 Treasury, which includes the receipt of state funds, payment of state disbursements, and the investment of available funds. CMS is comprised of 16 applications that facilitate the Treasury s functions, some of which interface with FLAIR. The operational costs for FLAIR are currently funded by the General Revenue Fund. Revenue for the General Revenue Fund is derived from taxes, charges and miscellaneous income obtained from the state and local level. The costs for funding the FLAIR system are $12,062,802 for fiscal year The operational costs for CMS are currently funded by the Treasury Administrative and Investment Trust Fund. Revenues for this trust fund are generated from the administrative fees charged to investment participants in the Treasury Investment Pool. The costs for funding CMS are $452,361 for fiscal year The Task Force is recommending the following steps be taken in order to successfully implement a successor financial and cash management system: Establish enterprise financial governance Develop a Strategic Enterprise Financial Business Operations Plan Standardize the enterprise financial business processes Develop a business case for a successor system Establish funding for a successor system Establish project governance Proceed with procurement 3.1 Establish Enterprise Financial Governance What is governance? Governance, by definition, is to control and direct the making and administration of policy. The enterprise financial governance model will provide a process for making strategic enterprise financial business decisions and the establishment of policies that impact all the agencies within the executive branch of government. The effectiveness of the enterprise financial governance model will be determined by executive leadership s commitment, resolve, and oversight. The enterprise financial governance structure should: Be transparent and accountable Have clearly defined roles and responsibilities Have the authority to make decisions Have a clearly defined escalation process that identifies when issues need to be raised to the decision-making group Have a clearly defined decision-making process that supports a proactive approach for new ideas and reactive approach for resolving issues Make decisions in a reasonable time frame 17 of 37

18 Include aspects of information technology and business policy decision-making for the enterprise The State needs to change from governance that is system-centric to governance that is focused on standardizing end-to-end business processes for the core business functions: financial reporting, cash management, purchasing, human resource management, and budget administration. The recommended enterprise financial governance structure will be responsible for making timely decisions on the standardization of enterprise financial business processes, developing an annual Strategic Enterprise Financial Business Operations Plan for the State, and establishing policies and procedures that enforce standard enterprise financial business processes. The State s enterprise financial governance structure must have clearly defined roles, responsibilities, and an understanding of the relationships between each role. There is a need for three levels of governance that (1) allows Enterprise Business Owners to make day-to-day decisions that do not impact the enterprise, (2) establishes an Enterprise Financial Business Operations Council that provides recommendations for the enterprise financial business operations, and (3) establishes one individual with the decision-making authority for the enterprise financial business operations. Below is a diagram depicting the recommended enterprise financial governance structure and a detailed explanation for each entity s/individual s role and responsibilities. Diagram 2 18 of 37

19 3.1.1 Legislature It is important to acknowledge the role of the State Legislature in any governance structure. The Legislature makes final policy and funding decisions for the State. In support of the new enterprise financial governance structure, the Legislature may consider/request recommendations from the Governor and Cabinet before making decisions on funding and/or laws that have an impact on the enterprise financial business processes of the State and/or the enterprise business systems that support the enterprise financial business processes Governor and Cabinet It is the role of the Governor and Cabinet to make recommendations to the Legislature on law changes and funding requests that support the enterprise financial business operations for the State. The Governor and Cabinet also have the authority to enforce enterprise financial business process improvements for the entities within the executive branch of government. The Governor and Cabinet will be designated as the head of a new office, Enterprise Financial Business Operations Office (Office). The Office will be administratively housed within the Department of Financial Services and directed by the Enterprise Financial Business Operations Officer. The Office will not be subject to control, supervision, or direction by the Department of Financial Services. The Governor and Cabinet as head of the Office will be responsible for: Adopting an annual Strategic Enterprise Financial Business Operations Plan including the rules, policies and procedures that support the standardization of enterprise financial business processes Enforcing the implementation of enterprise financial business process improvements Requesting funding from the Legislature for modifications to or the replacement of enterprise business systems Requesting law changes from the Legislature that support the standardization of enterprise financial business processes Enterprise Financial Business Operations Officer (Officer) The Officer will be appointed by the Governor and Cabinet. The Officer s role is to make timely decisions on the State s enterprise financial business processes and enterprise reporting needs, propose law and funding recommendations that support improvements to the enterprise financial business processes to the Governor and Cabinet, and set priorities for the State s projects to enhance or implement enterprise business systems. The Officer will chair the Enterprise Financial Business Operations Council and have the authority to: Recommend rules, policies, and procedures that support the standardization of enterprise financial business processes 19 of 37

20 Govern the development, adoption, and implementation of the annual Strategic Enterprise Financial Business Operations Plan Approve the Business Case for funding requests to modify or replace enterprise business systems Approve the Project Charter and project governance structure for projects to enhance or implement enterprise business systems Monitor compliance with the Strategic Enterprise Financial Business Operations Plan and the status of enterprise projects and report regularly to the Governor and Cabinet The Officer will also have the authority to sponsor change management activities (e.g., workshops for agency personnel, speak at agency leadership meetings, etc) that promote the enterprise financial business process improvements for the State Enterprise Financial Business Operations Council The Enterprise Financial Business Operations Council s role is to prepare the State s Strategic Enterprise Financial Business Operations Plan annually and advise the Officer on issues that impact the State s end-to-end enterprise financial business processes and enterprise reporting needs. The Officer will chair the Council. The Council will include, at a minimum, the following nine members: Cash Management Business Owner or designee Financial Management Business Owner or designee State Purchasing Business Owner or designee Human Resource Management Business Owner or designee Budget Execution Business Owner or designee Agency for Enterprise Information Technology, Executive Director or designee Representative from the Florida Association of State Administrative Service Directors Attorney General s designee Agriculture Commissioner s designee The chair may include representatives from state agencies, consultants, or industry subject matter experts as needed. 20 of 37

21 The Council will be responsible for: Reviewing the State s enterprise financial business processes, designing and recommending enterprise financial business process improvements and working with the respective business process owners to implement the improvements on an on-going basis Recommending and implementing data management standards that support the State s enterprise reporting needs Recommending policies that support standardization of enterprise financial business processes and enterprise reporting needs Preparing the State s Strategic Enterprise Financial Business Operations Plan annually The Council must be adequately staffed and have a commitment from the members to support the weekly or monthly enterprise financial governance process required for the on-going enterprise financial business operations of the State Enterprise Financial Integration Sub-Council The Enterprise Financial Integration Sub-Council s role is to provide technical advice to the Enterprise Financial Business Operations Council and Officer. The Sub-Council has the expertise to identify system impacts for proposed enterprise financial business process changes and provide suggestions on process improvements that leverage new technologies or result in system integration efficiencies. The Sub-Council will be chaired by the AEIT Executive Director or his/her designee and will include, at a minimum, the following six members: Representative for FLAIR Representative for CMS Representative for MyFloridaMarketPlace Representative for People First Representative for LAS/PBS Representative for state agencies Chief Information Officers The chair may include representatives from state agencies, consultants, or industry experts as needed. The Sub-Council will be responsible for Reviewing the State s current enterprise business systems and document the integration points between the systems Estimating the life cycle costs for maintaining these systems and the overall enterprise architecture currently in the State Provide annual risk assessments of the enterprise business systems security and data security and plans that address internal controls in the high risk areas 21 of 37

22 Assisting with the development of an Enterprise Data Management Plan The Sub-Council must be adequately staffed and have a commitment from applicable Chief Information Officers to support the assignments from the chair of the Sub-Council Enterprise Business Owners The State s Enterprise Business Owners role is to support enterprise financial governance and make decisions on the daily operations of their core business function. Many daily operational decisions do not have an impact on the end-to-end enterprise financial business processes and need to be handled timely. The recommended governance structure is designed to allow the State s Enterprise Business Owners to manage their daily operations in a timely manner and only escalate the issues that have an impact on the end-to-end enterprise financial business process. The governance structure also provides the Officer with the authority to make timely decisions for the enterprise so that the Enterprise Business Owner s business operations are not impeded. The enterprise financial business process flows developed for the Strategic Enterprise Financial Business Operations Plan will identify the integration between each Enterprise Business Owner that has a step in the enterprise financial business process flow. Decisions that have an impact on another Enterprise Business Owner s step in the end-to-end enterprise financial business process must be escalated to the Enterprise Financial Business Operations Council for review and final decision by the Officer. Enhancements to Current Enterprise Systems or New Enterprise Systems Enterprise Business Owners may also sponsor projects to implement an enterprise application or enhance an existing enterprise application when the need arises. Projects that have an impact to the end-to-end enterprise financial business process must be approved through the enterprise financial governance process. If the Enterprise Business Owner is requesting additional funds for the project, a business case must be prepared and submitted to the Enterprise Financial Business Operations Council to be reviewed and approved by the Officer. The recommended funding will be reviewed by the Council and Officer with the final decision on proceeding with a request to the Legislature being made by the Governor and Cabinet. The project charter and project governance structure must be reviewed by the Enterprise Financial Business Operations Council and approved by the Officer. The State s Enterprise Business Owners and the core business function they are responsible for are listed below: Financial Management - Director, Division of Accounting and Auditing, Department of Financial Services Cash Management - Director, Division of Treasury, Department of Financial Services Human Resource Management - Director of People First, Department of Management Services Purchasing - Chief of State Purchasing Operations, Department of Management Services Budgeting - Director, Office of Policy and Budget, Executive Office of the Governor 22 of 37

23 Enterprise Business Owners will be responsible for: Supporting the Enterprise Financial Business Operations Council in the review of the State s enterprise financial business processes and recommending improvements on an on-going basis Supporting the Enterprise Financial Integration Sub-Council in identifying and documenting integration points between the enterprise business systems and recommending data security/integrity improvements on an on-going basis Adhering to the Strategic Enterprise Financial Business Operations Plan approved by the Officer Providing open forums with the user community to raise issues Escalating issues to the Enterprise Financial Business Operations Council that have an impact on the end-to-end enterprise financial business processes Preparing a Business Case and submitting it to the Enterprise Financial Business Operations Council for review and approval by the Officer when seeking additional funds for the enhancement or implementation of an enterprise business system Preparing a Project Charter and submitting it to the Enterprise Financial Business Operations Council for review and approval by the Officer for projects to implement or enhance an enterprise business system Establishing a project governance structure that has been reviewed by Enterprise Financial Business Operations Council and approved by the Officer and ensure regular communication with the Council and Officer during the life of the project The State s Enterprise Business Owners play a key role in the escalation of issues to the Enterprise Financial Business Operations Council and the adherence to the State s Strategic Enterprise Financial Business Operations Plan. Their commitment to the enterprise governance process is a critical element to its success State Agencies/User Groups The state agencies roles are to provide input to Enterprise Business Owners on enterprise financial business process improvements and enterprise reporting needs. The state agencies also have a need to request changes to business processes to support the programs and services they provide to the citizens of Florida. There are instances where the state agencies in collaboration with the Enterprise Business Owner have established user committees to evaluate requests and set priorities. The recommended governance structure supports the continued efforts of the state agencies and user community to raise issues and set priorities for their requests. It will be the responsibility of the Enterprise Business Owner to escalate requests that have an impact on the end-to-end enterprise financial business process to the Enterprise Financial Business Operations Council. 23 of 37

24 State agencies will have the responsibility to: Adhere to the enterprise financial business processes and enterprise reporting requirements established in the Strategic Enterprise Financial Business Operations Plan Adhere to the rules, policies, and procedures issued by the Enterprise Financial Business Operations Office Adhere to the IT standards and data management requirements established in the Strategic Enterprise Financial Business Operations Plan Raise issues in the appropriate user group forums and/or to the appropriate Enterprise Business Owner State agencies perform the majority of the steps in the enterprise financial business process flows and therefore are considered stakeholders. The recommended enterprise governance structure supports their need to raise issues to the business owners as well as provide representation in the enterprise decision-making process by having a representative on the Enterprise Financial Business Operations Council. The Agency Administrative Service Director that is selected by the Florida Association of State Administrative Service Directors will be the conduit of the agencies to the enterprise decision-making process. 3.2 Develop Strategic Enterprise Financial Business Operations Plan (Plan) Enterprise financial governance must establish a Strategic Enterprise Financial Business Operations Plan that documents the State s current enterprise financial business processes and the current enterprise business systems that support the enterprise financial business processes. The Plan will establish annual goals for improvements in enterprise financial business processes, enterprise reporting, and enterprise data management. The Plan will also identify the enterprise financial business operations policies that will be issued or requested in support of the improvements. The Plan must provide information in the following areas: Enterprise financial business processes Creation of business process flow diagrams outlining the high-level process steps for enterprise financial business processes that must be followed by all the state agencies. The diagrams should also identify the enterprise business system(s) performing these functions and the integration points with other enterprise business systems. Recommended enterprise financial business process improvements Recommendations for enterprise financial business process improvements that should be implemented over the next fiscal year. The recommendations should include any associated system impacts, life cycle cost impacts, and enterprise reporting impacts. The recommendations should be prioritized based on the impact on existing resources (e.g., budget and workload). Enterprise reporting needs Documentation on the current enterprise reporting associated with each enterprise financial business process. The documentation should 24 of 37