Statewide ERP Update for Agency Executive Management
Meeting Notes
Feb. 27, 2012

Speakers: (in order of speaking)

• Phillip Ashley, Comptroller of Public Accounts, Director of Fiscal Management; ProjectONE Steering Committee, Co-Chair; CAPPS Steering Committee, Chair
• Jay Waldo, Comptroller of Public Accounts, Assistant Director of Innovation and Technology; ProjectONE Steering Committee, Co-Chair
• James Bass, Texas Department of Transportation, Chief Financial Officer; ProjectONE Steering Committee, Member; CAPPS Steering Committee, Member
• Robert Snipes, Texas Department of Transportation, Financials Project Lead; ProjectONE Financials Change Control Board, Member; CAPPS Financials User Group, Member
• Nick Villalpando, Department of Information Resources, Chief Financial Officer; ProjectONE Steering Committee, Member; CAPPS Steering Committee, Member

Introduction: Phillip Ashley

• Welcome to the “Statewide ERP Update for Agency Executive Management” Meeting. The last meeting of this kind was held in early fiscal 2009.
• The purpose of this meeting is to give an overview and provide an update of the Enterprise Resource Planning (ERP) project.
• This project is a legislatively commissioned project to create a single set of books for the state of Texas in the form of a Financials and HR/Payroll System.
• This meeting is being presented via a webinar for those who cannot attend in person.
• All questions and answers will be addressed at the end of the meeting.
• After the meeting, the slide presentation and meeting notes will be available online on the CAPPS System Page as well as the ERP - CAPPS Topic Page.
• The following is the agenda for today’s meeting:
  1. Statewide ERP Project Background
     • Overview of where we started
     • ProjectONE plan: adjustments and accomplishments
  2. Update on ProjectONE
     • CAPPS update
     • TxDOT update
     • User agency testimonials
     • Next steps
  3. Agency ERP Project Review
     • Project review process
     • How to request funding for CAPPS
  4. Q&A
  5. Future Meetings
  6. Adjourn

I. Statewide ERP Project Background (Phillip Ashley)

Overview of where we started

• At the outset of the ERP process, the Texas Comptroller of Public Accounts (CPA) conducted a survey to get agency feedback on legacy system processes and related costs.
• The cost information from the survey noted that the state was spending in excess of $88 million per year on legacy system maintenance. Agencies were also asked to project future costs upgrades and enhancements over the next six-year period that totaled more than a projected $144 million.
• The results of that survey showed there were a number of share limitations amongst the agencies, including:
  • A need to use manual processes to supplement system processes,
  • Data not being easily shared between the systems, and
  • An inability to retrieve data in a timely manner.
• The results of this survey lead to an assessment of whether ERP would be a good solution for the state.
• The ERP system integrates an organization’s data into a single system. A notable objective of an ERP system is a seamless integration between business processes and the underlying technology.
• ERP offers a modern, intuitive, Web-based interface with better overall access to leverage data.
• Successful ERP Implementations consist of:
  • Consistent Executive sponsorship,
  • Business Process Improvement (BPI) and standardization of processes, and
  • Change Management and User Training.
• Managing Expectations
  • Projects of this scale and scope are difficult even under the best of circumstances.
  • Agencies interested in joining ERP should know their organization will experience slippage in performance immediately following Implementation.
• Major project milestones:
  • 2007 – HB 3106 passed
  • 2008 – Business case conducted and ERP Advisory Council report issued
  • 2009 – Appropriations granted
  • 2009 – ProjectONE launched
  • 2011 – DIR and CTTS Financials go-live
  • 2012 – Health and Human Services HR/Payroll go-live and CPA/TDI migrate from ISAS to CAPPS
• 2007 – HB 3106 tasked the Comptroller’s office with establishing a plan for ERP in Texas. This legislation also created the ERP Advisory Council that consists of representatives from small agencies, large agencies and higher education agencies. HB 3106 gave the Comptroller's office the authority to require agencies to modify, delay or stop other system implementations. This was important and necessary to eventually achieve statewide convergence into ERP. The Advisory Council contracted with the independent consulting firm Salvaggio, Teal and Associates (STA) to develop the business case for ERP.
• 2008 – The business case for ERP stated that, to implement ERP for all state agencies, it would require an eight-year, $285 million process.
• 2009 – Due to economic stresses, the Legislature instead opted to provide funding for ERP to those agencies that had made specific technical update requests in their Legislative Appropriations Requests (LARs). These agencies were:
  • Texas Department of Transportation (TxDOT)
  • Department of Information Resources (DIR)
  • Health and Human Services (HHS) agencies
    • Health and Human Services Commission (HHSC)
    • Department of Family and Protective Services (DFPS)
    • Department of Assistive and Rehabilitative Services (DARS)
    • Department of Aging and Disability Services (DADS)
    • Department of State Health Services (DSHS)
• The business case for ERP recommended that the state leverage its existing investment in Oracle PeopleSoft. CPA and HHS were already using PeopleSoft for their internal systems. It was determined that CPA’s Integrated Statewide Administrative System (ISAS) would be the baseline for the Financials System and that HHS’s upgraded Access HR system would become the baseline for the HR/Payroll System.

ProjectONE Plan: adjustments and accomplishments

• The participating agencies have lent some of their best staff to the project.
• The project has a successful governance structure. (Reference slide 15 of presentation)
  • Governance was divided to three major tracks: Financials, HR/Payroll and Technical.
  • The first rung on the Governance hierarchy are the Enterprise Work Groups who met early in the project timeline to agree on requirements and decide which ones needed to be elevated for a decision at a higher level.
  • All decisions made in the work groups as well as items that were in dispute and required resolution were elevated to the Change Control Boards for review and approval.
  • The top level of governance is the Steering Committee which provided final approval and signoff on all major decisions.
  • The Legislative Budget Board and the State Auditor’s Office are members of the state’s Project Quality Assurance Team (QAT) and so they serve as Oversight Agencies for the project.
• The project has maintained several guiding principles that have been the keys to its success:
  • Engage agencies in the project.
  • Implement standard business processes and common data standards. To the extent possible eliminate variations.
  • Ensure that future ERP system projects are compatible with the statewide system.
  • Limit customizations to only those areas where the state has a need that cannot be achieved by the system. Customizations that will increase organizational efficiencies or provide long term cost savings would be taken into consideration.
• The project has involved a significant amount of effort from CPA and the participating agency staff.
  • The Requirements gathering phase took place from January through April 2010. From these sessions the project team put together the most comprehensive set of statewide requirements.
    • Requirement gathering efforts – Financials Team:
      • 175 four-hour workshops
      • 4,081 approved requirements
    • Requirements gathering efforts – HR/Payroll Team:
      • 97 four-hour workshops
      • 5,612 approved requirements
  • Requirement sessions were followed by Fit/Gap Workshops to identify if requirements were a “fit” or a “gap.” A “gap” represented those requirements that could not be met via delivered PeopleSoft functionality and a “fit” represented those items that would be met with delivered PeopleSoft functionality.
    • Fit/Gap efforts – Financials Team:
      • 159 four-hour workshops
      • 2,414 “fits” and 1,335 “gaps”
    • Fit/Gap efforts – HR/Payroll Team:
      • 148 four-hour workshops
      • 2,674 “fits” and 2,732 “gaps”
  • After development the agencies and CPA staff conducted testing on:
    • More than 1500 functional tests
    • Integration testing of 377 test scripts
    • User Acceptance Testing (UAT) on more than 400 test scripts
  • The training that was developed and provided to agencies was both comprehensive and adaptable. As new agencies continue to join ProjectONE this training can be expanded to be relevant for their users. It should be noted that CAPPS training class evaluations averaged a score of 4.55 on a 5 point scale.
• There are several notable accomplishments on the Financials project timeline:
  • November 2009 – Deloitte was selected as the implementation vendor.
  • April 2010 – Requirement gathering was completed. At that time there was also a complete upgrade from PeopleSoft 9.0 to 9.1.
  • June 2010 – Fit/Gap analysis was completed.
  • February 2011 – Object development was completed.
  • July 2011 – UAT completed.
  • Sept. 1, 2011 – The Financials system went live for DIR and Central Texas Turnpike System (CTTS), an enterprise fund of TxDOT.
• The new system is named CAPPS – Centralized Accounting and Payroll/Personnel System.
• The HR/Payroll project is still ongoing. Some notable accomplishments include:
  • November 2009 – Deloitte was selected as the implementation vendor.
  • January 2010 – The baseline system, HHS’ Access HR, was established.
  • April 2010 – Requirements gathering completed.
  • November 2010 – The project was transitioned from Deloitte to NorthgateArinso (NgA).
  • April 2011 – Upgrade from PeopleSoft 8.3 to 8.9 completed.
  • The build effort is scheduled for completion at the end of February 2012.
  • UAT is expected to complete in April 2012 and go-live is anticipated in summer 2012. The finished system will serve as the baseline for future agency payroll implementation.
• Many of the ProjectONE accomplishments to date directly tie back to the ERP Advisory Council recommendations. (Reference slide 24)

II. Update on ProjectONE (Jay Waldo)

CAPPS Update

• On the Financials side there are 10 modules agencies can use: Purchasing/eProcurement; Accounts Payable; Billing/Accounts Receivable; Inventory; Asset Management; Planning and Budget; Project Costing; Customer Contracts; Grants; General Ledger/Commitment Control
• Several notable improvements on the Financials side include:
  • The Purchasing/eProcurement module — the Uniform Statewide Accounting System (USAS) does not have a purchasing module that enables a purchase to be routed all the way through the system. CAPPS has automated routing and approvals and additional procurement functionality. CAPPS uses the full PeopleSoft eProcurement solution.
  • CAPPS has the ability to create statewide contracts. This is one of the main benefits of moving to a statewide system.
  • The Inventory and Asset Management modules will have more functionality than the State Property Accounting (SPA) system currently does. An agency will not have to go directly through SPA, which is an older system.
• Agencies will not be required to use all of the modules.
• On the HR/Payroll side there are nine modules: Talent Acquisition Manager (TAM), Candidate Gateway, Core HR, Time & Labor, Position Management, Payroll, Performance Management, Enterprise Learning Management and Self-Service.
• Several notable improvements include:
  • The current Uniform Statewide Payroll/Personnel System (USPS) focuses on the payroll tasks and does minimal work on the other HR tasks.
  • TAM is a full solution for people to apply for and post jobs and gain approvals for a new employee. TAM will directly interface with the Work In Texas solution used by the Texas Workforce Commission.
  • Time & Labor. USPS is limited to recording leave only while CAPPS provides a full solution that allows the employee to log time, activities and leave.
  • Self-Service is included in all modules and allows employee/manager to update mailing addresses, check payroll deductions or view pay stubs without having to go through HR staff.
• CAPPS also has the potential to integrate between HR modules and Financials modules. This is a comprehensive solution.
• As part of the preparation for ERP, CPA researched other ERP implementations. They were able to identify that for an ERP implementation to be successful it is important to work with customers both at the management and the worker level.
  • CPA has attempted to address this through governance. Agencies are involved in the governance process at all levels.
  • The ERP project is a high priority for Texas Comptroller Susan Combs. She communicates regularly with participating agency executives to ensure they are kept in the loop.
• CPA has also learned some valuable lessons from the first implementation of CAPPS including:
  • Getting data out of the system is as important as putting it in. In our efforts to produce a good PeopleSoft solution we did not spend enough time on the reporting side. CPA is working closely with the participating agencies to address this issue and have added more staff to this part of the project.
  • ERP requires a major time commitment from agencies. Staff at the implementing agencies was often pulled in two directions: ERP and regular business activities. CPA is working with agencies to create a better solution for the future.
• CPA wants agencies considering CAPPS to know that there were some setbacks, but the ProjectONE team is attempting to recognize and rectify these so that future implementations will continue to get better.

TxDOT Update: James Bass

• TxDOT is in the middle of several modernization efforts which will increase effectiveness and efficiency both operationally and organizationally. Critical to the success of these efforts is updating the current IT systems that the agency uses.
• TxDOT appreciates the approach of collaboration and coordination that has been brought to the project by CPA management.
• As the project has moved forward, one of the main focuses has been the importance of getting it done right, ensuring that requirements are met and still within the framework and principles of the project.
• TxDOT has not yet fully implemented on CAPPS. TxDOT has several unique requirements due to their federal and local government partners.
• CPA suggested doing a Proof of Concept to provide TxDOT with a level of comfort that CAPPS will be able to handle TxDOT’s special needs.
• TxDOT is looking forward to moving forward with CAPPS and working with CPA and other agencies.

User Agency Testimonials:

TxDOT Testimonial: Robert Snipes

• Robert participated in the TxDOT Proof of Concept project to determine a solution for project costing.
• As the Financials Lead for TxDOT Robert noted some benefits of CAPPS:
  • It is highly configurable to fit the needs of the agency.
  • It is not required that agencies use all modules.
  • It is a Web-based system that operates via a “point-an-click” method.
  • CAPPS has a great deal of data in one place.
  • CAPPS allows uploading from Microsoft Excel spreadsheets.
  • CAPPS is helpful for auditing and reporting purposes because all information is located in one place.
• Robert believes CAPPS will be transformational for TxDOT.

DIR Testimonial: Nick Villalpando

• From the DIR perspective, some of the benefits of CAPPS include:
  • The “point-and-click” functionality is much easier to operate than the previous DOS-based application.
  • Many of the DIR processes have been simplified. The purchasing requisition process is vastly improved through the use of electronic approval and workflows. Prior to CAPPS, this process was manual.
  • The reporting process for DIR was highly manual before CAPPS. There have been some growing pains through this implementation and Reports have been one of those areas. DIR and CPA are working together to address the issue.
• DIR has appreciated the level of effort and the recognition by CPA that the agencies are the customers in implementation.
• DIR encourages agencies considering CAPPS to take the next step and join ProjectONE. There will always be “bumps in the road” but the benefits outweigh those greatly.

Next Steps: Phillip Ashley

• Thank you to James Bass, Nick Villalpando and Robert Snipes for speaking today.
• The HHS HR/Payroll track is scheduled for implementation late this summer.
• Another major implementation is to transition CPA and Texas Department of Insurance (TDI) from Integrated Statewide Administrative System (ISAS) to CAPPS Financials. This is referred to as the CPA/TDI Implementation on CAPPS (CTIC) project. With this implementation, we will bring the total number of agencies on CAPPS to four (DIR, CTTS, TDI and CPA).
• The TxDOT prototype subproject was successfully completed in February 2012.
• ProjectONE is looking forward to future agency implementations in the 2014/2015 biennium.

III. Agency ERP Project Review (Phillip Ashley)

Project Review Process

• For agencies pursuing system development work outside of the statewide ERP process, we are asking them to go through a Project Review Process to ensure it will not affect a long-term statewide ERP solution.
• Criteria for the need to go through the Project Review Process:
  • Implementing a new system,
  • Implementing a new module,
  • Upgrading to the latest version of software, or
  • An ERP change costing more than $500,000.
• The project review process and Agency ERP Project Request form are available on the ProjectONE website.
• Once an agency submits the form, the Comptroller’s office schedules a follow-up discussion to further address the agency's needs.

How to Request Funding for CAPPS

• Any agency interested in CAPPS should communicate directly with CPA. The first step is to submit the Project Request form.
• A system demo can be set up for external agencies.
• CPA can help estimate the probable cost for each agency to implement.
• CPA can assist agencies in developing the Legislative Appropriations Request (LAR).

IV. Q&A (Phillip Ashley unless otherwise noted)

Question: For the gaps that were identified during the Fit/Gap workshops, can we characterize how many were resolved by customizations versus one of the other processes mentioned?

Answer: CPA does not have the official number right now. The gaps were run against the vanilla (basic) product. Some of the gaps were addressed in the baseline Access HR system. ProjectONE will not have the official number until the HHS upgrade is final. (J.P. Wardle, ProjectONE Project Manager; Manager, ISAS Support and Statewide Financials)

Question: At what point will agencies be required to move over to the CAPPS system? At what point will the legacy systems be replaced?

Answer: This is unknown at this point. The primary reason for it being unknown is the funding issue. At this time, CPA does not know when the funding issue will improve, so we cannot be certain when other agencies will be affected by ERP. The ultimate direction is to have every agency on the statewide ERP system.

Question: How many agencies do we anticipate coming on board in the 2014/2015 biennium?

Question: On the Financials side, which modules are the current production agencies using?

Answer: DIR is using all modules except Project Management and Grants. CTTS is only using General Ledger and Asset Management.

Question: Can you confirm which agencies are considering going live on the HR system after it’s complete?

Answer: TxDOT is considering both the Financials and HR/Payroll system. If TxDOT chooses to move forward with HR/Payroll system, DIR will also move forward with implementation of the HR/Payroll.

Question: How is the pricing for ERP being determined? Is it based on Full-Time Employee (FTE) count or transactional count?

Answer: This has not been determined yet. This is a concern for all agencies but particularly small to midsize agencies. As we build the system, we expect the required customizations, and therefore costs, to decrease over time.

Question: Are there any agencies currently using the Grants module?

Answer: Not at this time.

Question: If an agency is prepared to do so, is it possible to implement prior to the 2014/2015 biennium?

Answer: CPA would be happy to discuss this with the agency. More than likely this would not be possible, given where we are in the HR/Payroll project; however, CPA would need to discuss this in more detail with the interested agency.

Question: Does CAPPS have a cash module for cash receipts?

Answer: There is the ability to do some cash receipts tasks within CAPPS; however, it really depends on how you do business if the system will need to be enhanced to meet your agencies needs. (J.P. Wardle, ProjectONE Project Manager; Manager, ISAS Support and Statewide Financials)

If you have further questions please contact us: txprojectone@cpa.texas.gov

V. Future Meetings (Phillip Ashley)

• Statewide ERP Update meetings will be held semi-annually.
• The next meeting will mostly likely be in the early part of the next fiscal year (September 2012).

VI. Adjourned