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ProjectONE Report to the 82nd Legislature

Executive Summary

Enterprise Resource Planning (ERP) is a business approach that consolidates all aspects of a business — accounting, payroll, human resources (hr), inventory, fleet management and more — on a common system.

ProjectONE – Our New Enterprise – is charged with implementing ERP for the state of Texas over the next several years. The resulting system, known as the Centralized Accounting and Payroll/Personnel System (CAPPS), will be more cost effective over time than current agency and statewide systems. CAPPS will also offer greater accuracy and functionality.

Why do we need CAPPS?

Rewriting and deploying vital components of the current statewide administrative systems would cost approximately $121 million. These systems have major deficiencies, redundancies and risks that could negatively impact the state of Texas.

Complications resulting from the current use of multiple, incompatible platforms and applications include the following:

  • Gaps in data collection, which impairs decision-making and hinders transparency efforts.
  • Duplicate data entry requirements, which compromise data integrity. Because data and information must be entered into multiple systems, it is difficult to determine which version is correct when discrepancies arise.
  • Use of Social Security numbers (SSN) as the primary identifier exposes the state to liability for identity theft on a massive scale.
  • Non-compliance with Section 508 of the Americans with Disabilities Act.

Benefits of CAPPS

Among other benefits, CAPPS will accomplish the following:

  • Provide easy, secure access to the state’s vast array of financial and HR information.
  • Eliminate data discrepancies often encountered when using financial accounting programs that lack proper integration.
  • Provide better tracking and standardization of financial information, such as method of finance, appropriations, budgets, expenditures and state assets.
  • Create real-time transparency, enabling legislators and citizens to “follow each dollar” and know how agencies and institutions are spending funds.
  • Allow users to estimate carry-forward or lapsing federal funds or grants. This is a difficult and problematic exercise at the statewide level today.
  • Eliminate obsolete business processes, including manual processing, duplicate data entry, paper processing and manual reconciliation.
  • Eliminate redundant databases.
  • Increase security of data and information while maintaining transparency of spending.
  • Improve response time to inquiries from legislators, oversight agencies, media and the public by using real-time processing and integrated databases.
  • Establish a common data language to provide for consistent reporting and better analysis of how the state’s money is spent.
  • Establish a procurement system that will be fully integrated with the financial accounting, asset management and inventory management modules, thus providing strategic sourcing data that can reduce the state’s cost of goods and services.

Project scope

The 81st Texas Legislature passed HB 3106, which charged the Comptroller’s office with establishing clear standards for implementing ERP in Texas. The Texas Department of Transportation (TxDOT), the Department of Information Resources (DIR) and the Health and Human Services Commission (HHSC) were each appropriated funds to implement an ERP project during the 2010-2011 biennium.

The original project scope called for TxDOT and DIR to implement the full suite of PeopleSoft financials and HR/Payroll modules. HHSC was to upgrade and enhance its current PeopleSoft HR/ Payroll system, which would be used as a baseline for the new HR/Payroll component of CAPPS.

However, as part of the established management review process, it was determined that the existing HHS HR/Payroll system did not have the depth of coding documentation necessary to continue within the original project timeline. In addition, another 90,000 hours of software development was needed to maintain current HR functionality and efficiencies for the participating agencies.

At that point, HHSC assumed responsibility for upgrading the base HR/Payroll system to PeopleSoft 9.1. HHSC recently received preliminary authorization to complete this upgrade, and although the revised timeline is still being determined, HHS anticipates completion in May 2012.

To complete all the changes necessary for the Financials component to meet TxDOT’s needs, an additional 37,000 hours of software development is required. TxDOT requested approval to move $34 million from available agency funds so this functionality could be added to CAPPS, but to date approval has not been granted.

Without this additional funding, the Financials component cannot be implemented for TxDOT. The Financials component for DIR and the Central Texas Turnpike System (a division of TxDOT) will go live as planned on Sept. 1, 2011.

Current and future agency participation

To provide necessary ongoing maintenance and support to agencies that have converted to CAPPS, the Comptroller’s office originally requested $39.9 million for the fiscal 2012-13 biennium. As a result of the recent change in project scope, this request is being revised. Funding is necessary to provide ongoing services to support, maintain and enhance the system, including hardware, software, maintenance and disaster recovery services.

Other agencies are quickly recognizing the need to implement ERP, and in 2010, 13 Texas state agencies contacted the Comptroller’s office to request evaluation and approval of ERP solutions. Bringing additional agencies onto CAPPS cannot be done, however, without additional funding from the Legislature. As a result, approval of these requests had to be delayed until funding can be secured. The legislative appropriation requests (LARs) submitted by the Department of Public Safety (DPS) and Texas Department of Motor Vehicles (TxDMV) for the 2012-2013 biennium include requests for $18.6 million and $4.3 million, respectively, to deploy CAPPS.

The next logical group of agencies to implement ERP, perhaps in the 2014-2015 biennium, would be those now using the Integrated Statewide Administrative System (ISAS) as their accounting system in either the Application Service Provider (ASP) database hosted by the Comptroller’s office, or a version of ISAS the agency has customized to fit its needs. These agencies include the Comptroller’s office, the Texas Department of Insurance, Texas Workforce Commission, Texas Department of Housing and Community Affairs, Texas Education Agency and the five HHS agencies.

The version of PeopleSoft used by non-ASP agencies is no longer supported by the software vendor. Moving these agencies to CAPPS would result in reduced maintenance costs to agencies and the state, eliminating the effort now required when changes have to be made to multiple systems as a result of changes in federal or state requirements.

Building on lessons learned

Past system implementations have yielded valuable information about what works — and what doesn’t — when launching enterprise-wide changes. With that in mind, ProjectONE has established processes and activities that emphasize three components fundamental to the success of any major business transformation: user participation, effective communication and appropriate training.

Reporting is another key component, reflecting the principle that CAPPS must create immediate value for agencies.

Accomplishments to date

ProjectONE was conceived as a seven-year plan to implement an ERP solution for all Texas agencies, but the final timeline will depend on how quickly other agencies are funded for implementation. Software development projects typically consist of six phases: vision, plan, design, build, deliver and operate.

With CAPPS already in the build phase during its first year, we are well over halfway through the steps needed to create and launch the first version of the statewide system. Moreover, the project has already yielded the most comprehensive list of statewide requirements ever compiled – a key step in developing a system that multiple agencies can deploy.

To date, the ProjectONE team has identified at least 19 legacy systems and numerous manual processes and desktop applications that will be retired when CAPPS is implemented at DIR and TxDOT. Once CAPPS is fully implemented, the retired systems will number in the hundreds. In addition, we have reviewed 450 reports now used by agencies and determined that more than 50 percent of these can be eliminated by combining multiple criteria in a single CAPPS report. This will mark an unprecedented step forward in accountability and efficiency for the state.

As of December 2010, the first eight milestones have been completed on time, a significant achievement for a project of this size and scope. Deliverables produced for these milestones include a detailed project work plan, documents outlining plans for the technical architecture, interface system requirements and standards, data conversion, training, knowledge transfer, communication and change management activities.

Work on the Financials track has proceeded ahead of schedule. At this time, 80 percent of the technical specifications are complete, as well as 50 percent of the coding and unit testing. The hardware is purchased and installed, and we are in sight of a completed system.

Much of the work on this initial round of ProjectONE is laying the groundwork for future CAPPS implementations by creating templates, processes, procedures and training materials. By September 2011, a core team of state employees will have the skill sets, experience and expertise to better assist the implementation or maintenance vendor in supporting future implementations and providing ongoing agency assistance.

Next steps

Once the remaining technical specifications, coding and initial testing are completed in January 2011, the system will be thoroughly tested, and end users will be trained. Agencies will then transition from their old systems onto CAPPS. In the final phase, the implementation team will transfer responsibilities to appropriate agency support teams, optimize overall system performance and initiate a continuous improvement program to refine the system and increase its efficiency as we get feedback from users and bring more agencies onto CAPPS.

Planning for the future

In this report, we have outlined the needs of ProjectONE through 2015 and explained why this presents such a critical need to state government. In future reports to the Legislature, we will continue to relate progress and outline a plan of execution that extends beyond 2015 and includes an implementation schedule for all remaining state agencies.

Conclusion

CAPPS will provide Texas with the best tools and information available while creating a higher standard of accountability and transparency in state government. This creates a mutually beneficial scenario for state decision makers, agencies and the people of Texas. Decision makers will gain a single source of real-time, reliable information and a clear picture of the state’s full financial picture. Agencies will gain increased efficiency in operations and ease of reporting. And the people of Texas will gain improved transparency, better tracking and standardization of information and a better value for their tax dollars as agencies operate more efficiently and effectively.