In order to meet the tight project timeframe, several decisions were made up front. First, in order to fight scope creep, tight control was maintained on requested changes. Also, all recommended process changes would be quickly reviewed and approved by the Steering Committee. The Commonwealth and BearingPoint would also assign over 250 full-time staff. Some of the fundamental process changes that were to occur included:
- Procurement: Streamlined acquisition of supplies/services to fulfill agency missions,
- Accounting: Real-time results of financial postings to the accounting system, including adjustments,
- Budget: Central database of budget preparation data and narrative,
- HR: Fewer approval steps for personnel administration,
- Payroll: Online access to Employee Pay/Benefit statements and historical payroll data.
Evaluation criteria and “train-the-trainer” strategy
It also became clear that the Steering Committee had to develop some criteria for evaluating and disallowing some of the proposed process changes. The committee came up with eight criteria:
- Regulations/laws can’t be changed in the allotted implementation time frame,
- Policies that cannot be changed in time,
- Can’t operate core agency functions,
- Doesn’t fit agreed upon Case for Change Vision,
- Doesn’t fit with external agency requirements – State and Feds,
- Adversely affects service delivery level to public,
- Doesn’t fit in-force collective bargaining unit agreements,
- Doesn’t satisfy generally accepted internal controls / segregation of duty principles.
As of July 2003, three waves of the Imagine PA project have been completed. Over 90 percent of the processes have been redesigned and approved by the steering committee. In a “train-the-trainer” strategy, more than 100 state employees were trained in workshops and these in turn have trained more than 16,000 state employee end-users in Budget, Procurement, Finance and Travel Planning functions. This is involving both classroom based training and CBTs. At the agency level, they have also been involved in mapping current state employee positions to the SAP “To Be” roles and security profiles. As of the July 2003, 52 state agencies have come up and running on procurement, budgeting, finance and travel planning functions.
Hesitancy and attacks on the budget
As the first large-scale, public sector ERP project, the Imagine PA presents a number of interesting issues. It is well-documented that the culture of the public sector is resistant to organizational changes such as those required by ERP. This was evident early on in the negativity of some of the employees and hesitancy of some of the agencies to get involved. But once they saw it was inevitable and that they would have a real voice in the redesign process, it seemed that most of them eventually were eager to participate. The emphasis on constant communication and training also helped to assuage employee fears.
As the economy turned down and the state surpluses began to dry up, legislators who did not have a good understanding about what ERP tried to attack the line-item in the budget. It required a strong governor to put the annual funding for the project back in the budget each time it was taken out. From an employee perspective, this project required that they learn the SAP terminology, which is a bit foreign to them.
First benefits for the state and citizens´ outlook
Seventy five percent of the way through the largest public-sector ERP project ever attempted, the Commonwealth of Pennsylvania has gone live with the new financial, budgeting, procurement, and travel planning processes. The Commonwealth is already beginning to see some of the benefits of this project. The procurement life cycle has now been integrated with the accounting and budgeting processes to support the Commonwealth’s desire to take full advantage of its purchasing power. Now that administrators are beginning to see that the information is centralized via Business Information Warehouse, there is a renewed interest in re-examining procurement regulations and procedures. This could result in 100’s of millions of dollars of further savings every year. Now for the first time, everyone in the state government is working on the same database for budgeting. There has also been a marked improvement in the timeliness of vendor payments, which has improved to an average of 28 days to payment. This means the state can take advantage of early payment discounts more often. Soon vendors will be able to enter invoices on line for purchase orders and further track their payments through the process when the vendor self-service application comes online.
As this project moves further towards completion some of the implications of integrating all these agencies on one shared database in real-time will become more apparent. When integrated with the mySAP Web front end, citizens will be able to submit street repair orders on-line and track them in the system. People wishing to start new businesses in the state now can go to the Web portal to fill out and submit the forms where it used to require physical visits to five different agencies. New citizens will be able to create a “profile” on-line which will match them up with any state programs for which they might qualify.
Internally, there will be one RFQ which will be on-line and the sending and receiving/approval of requisitions (workflow) will be automated. To date, the success of this project is proving that the processes of public sector agencies are not as different from the private sector as they have claimed and that public sector employees can be motivated to participate in the changes required of a successful ERP project.
From the experience of implementing the Imagine PA ERP project it is clear that though there are obstacles, the time is now right for government entities to begin to take advantage of ERP technology. Though there are many similarities between public sector and private sector implementations, some important lessons have been learned from this project. These include:
- ERP has no constituency in the public sector. Because not much is known about it, there is no natural support for it in the public sector. Thus there is little demand for “integrating business processes” in the public sector since it hasn’t been done before and other things like road and bridge improvements will have a priority in general. This means that you have to have a strong ERP champion and work hard to build a constituency among the various participating agencies.
- Make sure that users have input into the redesigning of their processes. Having true input into the decision making processes such as vendor selection and process redesign will generate enthusiasm and commitment from the various agencies and users. Make sure that the tech types understand the idea of business process redesign too.
- Begin with the budgeting, finance and procurement processes and make sure they are stabilized before going onto the HR processes. Give plenty of time for stabilization period.
- Be proactive with the use of SWAT teams that are trained to handle end user problems at all the different agencies. Each agency, depending upon its size, should also have a core implementation team that functions as a mirror image of the state level project teams.
- Do as much prep work as possible in advance of the implementation. It was crucial that the functional requirements of the new system were mapped to the laws, bargaining agreements, policies and procedures that might be impacted by them. This meant that attorneys could be pulled in from the agencies to validate the redesign of the processes from a legal and regulatory perspective.
- Use a “train the trainer” strategy, but make individual agencies responsible for training their own users on some of the more idiosyncratic features of their processes such as time management.
- Communicate, communicate, communicate. An important way to build a constituency and generate interest in the project is to invite group participation in the vendor selection process. A well-designed project Web site can be a portal for the project and provide frequent project updates.
- Create a Steering Committee with members from the key agencies that will develop a set of criteria for evaluating proposed process change requests.
- Don’t expect to be able to leverage the purchasing power of the entire organization as much as you would in the private sector. Despite changes in procurement regulations and procedures, there will still be regulations that will prohibit, taking complete advantage of the newly integrated procurement processes.
- Expect that there will be continuous improvement in the system. In the Imagine PA example, there were over 800 recommendations for changes from either the user acceptance testing or agency end-users and some of the roles had to be modified for payroll and travel processing. As users get more accustomed to the revolutionary nature of the Imagine PA project, more opportunities for taking advantage of the integrated information and processes will become apparent.