Hidden Financial Risk - Florida Government Finance Officers

Report
City/County
Joint ERP
Implementation
By Ajay Gajjar, CPA, CMA, CFM, CIA, CTP, CGFO
November 16, 2012
What does ERP mean?
A. Energetic Reporting Program
B. Everlasting Relaxation and Peace
C. Everyone Reacts in Panic
D. Enterprise Resource Planning
Topics
• Scope of the project
• Benefits
• Issues related to:
-- Procurement
-- Management
-- Accounting
Scope of the ERP Project
Joint ERP procurement and implementation by:
City of Tampa
Hillsborough County:
– Board of County Commissioners
– Clerk of Circuit Court / Comptroller
– Civil Service Board
ERP System Goals
1. Increase efficiency
2. Improve managerial and operational
effectiveness
3. Promote intergovernmental cooperation and
participation
4. Reduce risk
5. Maximize human capital
ERP System Objectives
a. Reduce total costs of system ownership
b. Streamline business processes through
improved system integration
c. Standardize business practices across
organizations
d. Promote accountability
e. Improve ability to track and measure
performance
ERP System Objectives
f. Improve procurement management
g. Eliminate redundant systems
h. Protect sensitive data
i. Improve ability to adapt to changing business
and technical environment
j. Reduce recovery time, if there is a disaster
k. Better receivables management
ERP System Objectives
l. Instill common skill set across local
government
m. Attract, develop and retain talent
Why are we doing this now?
We currently use FAMIS, which is no longer
supported.
The number of separate computer systems will
increase and become entrenched if we do not
go to a single ERP system.
What did we buy?
• Licenses for Oracle E-Business Suite (EBS)
version 12, Kronos, JobAps, and Vertex
• AST Corporation is the system integrator
consultant for implementation
• Oracle on Demand will host the system for
both the City and the County
ERP Contract Overview
5-Year Cost Summary ($000)
Separate billing
Item
County
Software licenses
2,567
Annual maintenance
2,658
Hosting
3,041
Professional services
8,482
Interfaces
252
Training
456
Business Intelligence reptg
450
Perfromance bond
219
Contingency bucket
1,087
City
2,018
2,090
2,122
6,226
558
359
450
168
758
Total
4,585
4,748
5,163
14,708
810
815
900
387
1,845
Total project cost
14,749
33,961
19,212
Subledgers/Modules Purchased
•
•
•
•
•
•
•
•
General Ledger
Purchasing and Inventory
Accounts Payable, iSupplier, and iExpense
Accounts Receivable
Cash Management and Treasury Management
Fixed Assets
Projects and Grants
Business Intelligence (OBIEE)
Subledgers/Modules Purchased
Continued:
•
•
•
•
Human Resources and Self Service
Budgeting (Hyperion)
Payroll (Kronos)
Others
Project Phases
Wave 1
Financial, Procurement,
Projects/Grants, Core HR, Business
Intelligence, Reporting
Wave 2
Code Enforcement (city of Tampa
only)
Wave 3
JobAps, Benefits
Project Phases
Wave 4
Self-Service applications, Advanced
Procurement
Wave 5
Time Entry, Workforce Scheduling,
and Payroll
Wave 6
Planning and Budgeting
Project Governance
•
•
•
•
•
•
Executive Sponsors (Elected Officials)
Governance Committee
Executive Steering Committee
Project Managers (Consultant, City, County)
Functional Leads
Subject Matter Experts
Benefits of Joint Procurement and
Implementation
• Same consulting firm handles both
• Save about $6.6 million
Benefits of Joint Implementation
• Both City and County personnel assigned –
twice the involvement for a higher quality
implementation
• County and City personnel learn from each
other and open up lines of communication for
future collaboration.
Benefits of Joint Implementation
• Possible savings on procurements by making
purchases against City contracts, and vice
versa.
• Employees would have more marketable skills
and job opportunities across employers using
the same system.
Project “Infrastructure”
• Joint office space set up for the project at the
County
• County network IDs assigned for e-mail and
scheduler access to all members of the ERP
team including the AST consultants
• Dedicated conference rooms
• Dedicated training rooms
Project “Infrastructure”
• SharePoint set up for ERP for plans,
documents, schedules, user guides
• Change managers at AST, County, and City
• Purchased Oracle books for office library
Procurement Issues
How do you set the requirements?
-- hired a consultant to guide us through the
process.
-- If the requirements are too stringent, all
responses will be “nonresponsive.”
-- If the requirements are too vague, they will
not be useful.
When will the core financial
system go live?
• Our choice: April 1, which was pushed to May
1 due to a delay in negotiating the contract.
• Benefits: It gives us several months before the
busy fiscal year-end period to work out any
problems. It avoids the busy year-end period
of time.
Management Issues
Modifications
• When Oracle upgrades are done, all
modifications will need to be re-established
(at a high cost in consultant or staff time).
• We are trying to minimize the number of
customizations.
• Modifications are paid for jointly or separately
depending on who benefits.
Historic Data
Data conversion is difficult and expensive. How
much historical data should be converted?
• Our decision: 2 years of historic data and the
current year in detail.
• Trying to convert data on active grants and
projects (which are set up as inception-todate).
New Business Processes?
•
•
•
•
3-way match vs. Instant 3-way match
Expense reports vs. iExpense
Journal Entries after the fact vs. time reporting
Cash controls vs. allocating budget by
Getting Information From Old System
• Reports from old system will be available on
Spoolview (report viewing software).
• Old system with data through April 30, 2013,
will be available for viewing only until the new
budget system is implemented (Wave 6).
Transaction Detail
System Support Department will download
transaction detail, year by year, just in case the
details are needed for audits by:
- Federal Emergency Management Agency
- Arbitrage audits by the Internal Revenue
Service,
- Grant audits by state or federal grantors.
Superusers & Training
• What “superusers” do and why is it important
to identify them early in the process?
• How will training be handled during and after
implementation of all ERP waves?
Getting Staff Involvement
• Joint City/County meetings on requirements
• Joint City/County demonstrations by potential
vendors
• Meetings early in the process to discuss “pain
points” associated with the old systems
Why do we need Change
Management?
• We overestimate the disadvantages of change
and underestimate the advantages of change.
• Adapting to change is difficult. Some people
fear losing their jobs to “automation.”
• Some sharing between City/County/AST
Change managers
Accounting Issues
General Ledger Objectives
•
•
•
•
•
Meets statutory reporting needs
Meets management reporting needs
As simple as possible
Room for growth and additional entities
BOCC and Clerk share General Ledger
– For example, natural accounts are shared
Accounting Segments – General
Ledger
Fund
Cost Center (Department)
Natural Account (General Ledger Account)
Sub Account (Function)
Activity (for management tracking*
Project (to assist reconciliation with subledger)
Future
Accounting Segments – Projects and
Grants Subledger
P - Project number for grants and capital
projects
O - Organization (i.e. department)
E - Expenditure natural account
T - Task, a subdivision of a project
A - Award, the funding source for a grant or
capital project
Capitalization of ERP Costs
• Capitalize internally generated software such
as actual programming work.
• We capitalize the ERP Director’s time, the
salary cost of the consultant hired as the
County’s project manager, and the cost of AST
system integrator.
Shared Vendor File
• The same vendor file will be used for the City
and County. But the vendor may be 1099
reportable at one entity and not the other.
• Solution: Use a code to distinguish City and
County vendors, but use the same file. And
possibly vendor maintenance by one area for
both entities.
How do you know if the conversion
was successful?
Oracle Insight – an Oracle program to compare
metrics before and after to see measure the
change brought about by the ERP system.
Other Governments With ERP Systems
•
•
•
•
City of St. Petersburg, FL (Oracle)
Polk County, FL (Oracle)
Pinellas County, FL (Oracle)
Loudoun County/Loudoun County School
Board (Oracle)
Hillsborough County Contacts
Ajay Gajjar
Assistant Finance Director
Hillsborough County Clerk of Circuit Court
(813)307-7026
[email protected]
Eric Johnson
Strategic Planning & ERP Implementation
Hillsborough County BOCC
(813)272-6582
[email protected]
City of Tampa Contact
J. Michael Fitzgerald, Jr.
Accounting Manager
City of Tampa Accounting Office
(813)274-7101
[email protected]

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