Title — Times New Roman 32pt, line spacing .85 Title 2

Report
Making enterprise systems
work for State Government
NASACT — Concurrent session #15
August, 2012
Topic overview
Terry Blake
Principal
Deloitte Consulting LLP
Government organization vs. enterprise system
efficiency
Government is not organized for
efficiency, it is organized for checks
and balances with clear separation
of duties and responsibilities which
often result in redundancy
vs.
Enterprise systems are
built for efficiency, with
limited redundancy and
high levels of dependency
between users
Options (or a path?) for getting the two aligned:
• Limit the system to fit within the existing organizational boundaries, which is not
really an enterprise system
• Use technology to improve the updates of the redundancy, e.g. Service Oriented
Architecture (SOA) which increases costs and complexity
• Have assertive leaders that cross the organizations and force the changes
required via a governance model overseeing the enterprise system to handle the
interactions between organizations and prioritize what is done
• Either gradually instill the culture to institutionalize the change or make dramatic
reorganizations
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Making enterprise systems work for State Government
Copyright © 2012 Deloitte Development LLC. All rights reserved.
Statewide Financial System (SFS) as an example
We will use NYS SFS as an example of an enterprise system
3
Approach
New York
Timing
1. Limit the system to fit within the
existing organizational boundaries
Separate systems for
Comptroller and Governor with
MOU
2000 – 2009
2. Use technology to improve the
updates of the redundancy (e.g.,
Service Oriented Architecture)
Share COA, vendor file, and use
SOA to tie systems together
2008 – 2009
3. Have assertive leaders that cross
the organizations and force the
changes required via a governance
model overseeing the enterprise
system to handle the interactions
between organizations and prioritize
what is done
Combined projects, individual
leaders for Governance Board,
used consultants heavily. State
not ready to go it alone.
2009 – 2012
4. Either gradually instill the culture to
institutionalize the change or make
dramatic reorganizations
Today — reorganization of SFS
entity and phased reduction of
consultants. Concern of long
term success
2012 +
Making enterprise systems work for State Government
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Sometimes you can’t take the direct path
Sometimes things change that aren’t planned, and you need to adapt.
Whether that be a change in leadership, additional budget challenges,
inability of the organization to adapt to change quickly, or taking
advantage of a new opportunity.
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Making enterprise systems work for State Government
Copyright © 2012 Deloitte Development LLC. All rights reserved.
Scope of SFS — PeopleSoft modules
•
•
•
•
•
•
•
•
•
•
•
•
•
•
5
General Ledger
Commitment Control (Budgets)
eSupplier Connection
Purchasing (including Vendors and P-card Functionality)
Accounts Payable
Grants
Projects
Contracts
Billing
Accounts Receivable
Banking (including Bank Reconciliation)
Cash Management
Deal Management (including Investments)
Travel and Expense (including Travel Credit Card Functionality)
Making enterprise systems work for State Government
Copyright © 2012 Deloitte Development LLC. All rights reserved.
SFS has been a very successful implementation
The following statistics reflect transactions processed and usage of SFS
from April 13, 2012 through July 16, 2012:
• $30,430,236,269 in payments processed
• 1,263,091 vouchers paid
• 52,142 vendors paid
• 12,690 vendors using SFS Self-Service (eSupplier)
• 114,988 total vendors registered in SFS
• 7,864 Agency travelers users
• 12,796 Agency financial SFS users
• CAFR Report submitted within 120 days
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Making enterprise systems work for State Government
Copyright © 2012 Deloitte Development LLC. All rights reserved.
SFS customer model
• There are 97 organizational entities that are currently using the
SFS system:
–
–
–
–
63 Phase 1 entities of which 27 are hosted by other entities
15 Future phase entities of which 2 are hosted by other entities
4 never phase agencies: SUNY, SUNYCF, CUNY, CUNYCF
15 public benefit corporations using SFS to initiate debt service payments with
other functions (such as budget set up) emerging
• The agencies providing hosting services are as follows: OGS (17), DOB
(3), DCJS (2), OSC (2),OCFS (2), DMV (1), Tax (1) and OPWDD (1)
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Making enterprise systems work for State Government
Copyright © 2012 Deloitte Development LLC. All rights reserved.
SFS customer model (cont.)
10 entities (2 hosted). DOH,
OMH, and OPWDD, are a hybrid
of Phase 1 and Phase 2
functionality.
2 entities that are not ever
scheduled to go on line to SFS
The Business Service Center is
currently in the planning
stages and does not host
agencies yet
Business
Services Center
Future Phase
Entities (10)
Phase 1 Entities
(60)
Office of
the State
Comptroller
SUNY & CUNY
60 Phase 1 entities (27 hosted)
that are candidates for BSC.
DOH, OMH, and OPWDD, are a
hybrid of Phase 1 and Phase 2
functionality.
Phase 1
and 2
SFS
OSC as a control agency is
Phase 1, but as an operational
agency is Phase 2. Controlled
by separately elected official.
Courts
Public Benefit
Corporations
Phase 1
Legislature
Assembly &
Senate
Phase 2
Department of
Law
15 entities that use SFS to
initiate debt service payments
and potentially additional
functionality
Phase 1
In addition to OSC, 4 entities
controlled by separate
branches of government or
separately elected officials
Provided by KPMG
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Making enterprise systems work for State Government
Copyright © 2012 Deloitte Development LLC. All rights reserved.
State of New York
The journey towards
enterprise systems
NASACT
August, 2012
The organization of
State Government in NY
Joan Sullivan
Executive Deputy Comptroller for Operations
New York State Office of the State Comptroller
State of New York organizational context
• Elected State Comptroller
– Responsible for audit of payments and contracts, statewide accounting and
financial reporting
• Elected Governor
– Responsible for business operations within executive agencies and cash
management via the State Treasurer
• Change with multiple office holders over last six years:
– Four Governors (George Pataki, Eliot Spitzer, David Paterson, Andrew
Cuomo)
– Two Comptrollers (Alan Hevesi, Thomas DiNapoli)
• Joint Governance established to coordinate new financial systems
Several states have separately elected officials with check and balance
responsibilities that make an enterprise system very challenging.
11
Making enterprise systems work for State Government
Copyright © 2012 Deloitte Development LLC. All rights reserved.
State of New York Government organization
New York State
Government
Judicial
Branch
Executive
Branch
12
Governor
State
Attorney
General
State
Comptroller
Department
of Law
Department
of Audit and
Control
LT.
Governor
State Agencies
(in the following functional areas):
• Economic Development
• Education
• Parks/Environment
• Health and Social Welfare
• General Government
• Transportation
• Mental Health
• Public Protection
Making enterprise systems work for State Government
Legislative
Branch
All four officials are separately
elected on a state wide ballot.
Department of Tax and
Finance.
Deputy Commissioner and
State Treasurer.
Copyright © 2012 Deloitte Development LLC. All rights reserved.
Statewide Financial Systems Governance (2009)
Joint Governance Board (JGB)
Legislature
Quality
Assurance (QA)
Judicial Branch
Business
Domain Owners
Accounting
Budget
Procurement
NYFMS
Steering
Committee
Operating
Decisions
Business/Design
Decisions
NYFMS
Project Director
PMO
NYFMS
Project Team
Operating Decisions
Joint Coordinating Committee (JCC)
Information
Technology
Domain Owners
Joint Project
Team Lead(s)
Joint Project
Team(s)
FOCAS
Steering
Committee
IT Architecture/
Design Decisions
FOCAS
Project Director Operating
Decisions
PMO
FOCAS Project
Team
Executives from the State Comptroller, Division of the Budget, and Office for
Technology comprise the Joint Governance Board (JGB)
13
Making enterprise systems work for State Government
Copyright © 2012 Deloitte Development LLC. All rights reserved.
New York financial systems integration solution (2009)
The planned solution was to connect the two instances of PeopleSoft
Financials using Oracle’s Fusion middleware SOA architecture.
SOA Integration Layer
• Near real time transactions
OSC
PeopleSoft
• Orchestrates interagency
approvals
• Keeps budgets and ledgers in
synch
Governor
PeopleSoft
• Streamlines processing
Chart of Accounts Crosswalk — Converts old chart of accounts to new chart of accounts
Interfacing
Agencies
14
Making enterprise systems work for State Government
Copyright © 2012 Deloitte Development LLC. All rights reserved.
. . . And then more budget challenges
• Revenue was down significantly because of the economy and its affect
on Wall Street
• We couldn’t afford both projects and the SOA to tie them together, so we
asked our vendors to privately meet and help us figure out what we
should do
–
–
–
–
Deloitte
KPMG
Oracle
IBM
• The outcome was to combine the projects into one and deal with the
challenges of a single instance through the business focus of the GB
15
Making enterprise systems work for State Government
Copyright © 2012 Deloitte Development LLC. All rights reserved.
Approaches to address
organizational challenges
Joan Sullivan
Executive Deputy Comptroller for Operations
New York State Office of the State Comptroller
Don Edmiston
Advisor
Deloitte Consulting LLP
Statewide financial systems governance (2010–2012)
Quality
Assurance (QA)
Steering Committee
Operating
Decisions
Joint Governance Board (JGB)
Business
Domain Owners Business/Design
IT Architecture/
Design
Decisions
Decisions
Accounting
Statewide
Budget
Financial System
Procurement
Project Team
Legislature
Information
Technology
Domain Owners
Judicial Branch
Agencies under
Governor’s
Jurisdiction
OSC
Operating Decisions
Executives from the State Comptroller and Division of the Budget comprise the
Joint Governance Board (GB)
17
Making enterprise systems work for State Government
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Desired enterprise approach . . .
DOB, OSC, Agencies and SFS should work closely together with an enterprise view
GB
DOB
OSC
SFS
Agencies
18
Making enterprise systems work for State Government
Copyright © 2012 Deloitte Development LLC. All rights reserved.
. . . . The reality
• SFS was playing facilitation role between DOB, OSC and Agencies
• Stakeholders providing information directly to GB
• GB was playing too detailed of a role, requiring too much time and effort
GB
Legislature
DOB
SFS
OSC
Treasurer
Agencies
19
Making enterprise systems work for State Government
Copyright © 2012 Deloitte Development LLC. All rights reserved.
Allow time for the organization to adapt
• Extended “testing” time, that really included a lot of training
• Separation of “System Readiness” and “Organization Readiness”
– Allowed users to use the system in “test mode” for an extended period
(“Sandbox” turned into an operational, production sized, test system they
could access at their desk and send and receive bulk transactions)
– Allowed users to gain confidence that the system was real and worked
– Allowed users to change their procedures if needed
– Allowed users to “get comfortable” with the system before go-live
– Provided two full dress rehearsals
20
Making enterprise systems work for State Government
Copyright © 2012 Deloitte Development LLC. All rights reserved.
In search of the program director
Limited resources within State with skills and willingness to take on the
challenge of the Program Director that was acceptable to both members
of GB
• Split the role between the former project directors of NYFMS and
FOCAS
• Advertised for the role with limited success
• Brought on an experienced contractor to fill the role
• Asked the SIs to fill the role
• Placed someone from the State that was open, logical, and willing to
make project decisions and able to drive to go-live
• Now looking for leader to take SFS to next level
21
Making enterprise systems work for State Government
Copyright © 2012 Deloitte Development LLC. All rights reserved.
Changes to the team
• Replaced State team leaders that:
–
–
–
–
were not open to an enterprise view,
were not focused on customer service,
did not perform at the appropriate level, or
were not the right fit
• Each replacement of a key resource took its toll, but in the long run, we
believe the State is better off
• But there is a concern that we are running out of replacements
22
Making enterprise systems work for State Government
Copyright © 2012 Deloitte Development LLC. All rights reserved.
Potential SFS organization
Separates the Service Desk and Tier 2 Support from the Business Team to create a Service
Delivery Team. Service Delivery will be responsible for the Service Desk and Customer
Outreach.
Governance
Board
Change Control Board
User Groups
Director
Planning has
been
strengthened
with Change
Management
Admin overhead is
minimized
Deputy Director
Compliance
Office
Quality
Assurance
23
Customer
Service focus
Security
Management
Planning
Enterprise
Architecture
Administrative Services
Technology
Service Delivery
Operations
Service Desk
Release
Management
Application
Development
Customer
Outreach
Project Mgmt
SFS BI & DW
Development
Change
Management
Making enterprise systems work for State Government
Business
Business
Process
Copyright © 2012 Deloitte Development LLC. All rights reserved.
Integrating business processes
Simhadri Basava
Specialist
Deloitte Consulting LLP
Stakeholders, ownership and relationships
OSC
Vendors
SFS
Legislature
Banks
DOB
Media
Agencies
25
Making enterprise systems work for State Government
Treasury
Copyright © 2012 Deloitte Development LLC. All rights reserved.
Examples of integration of business processes
Business process
Benefit of integration (Silo to enterprise)
Reconciliation
Using the same system simplifies and improves reconciliation,
but requires OSC and Treasury to work closely together
Payment release
New processes provide better controls between OSC and
Treasurer for the release of big money items such as investments
and funding transfers
Payment status
Using one online system for payment status, including
cancellations, reconciliations, and escheatment processes,
provides up-to-date information to the agencies
Budgets and
approvals
SFS greatly simplifies budget checking and approvals through
automated workflow, multiple levels of budget control and
reduction in paper processing for agencies, OSC and DOB
Vendor payments
An online, accessible statewide vendor file streamlines
processing and provides additional information to vendors on
their payments
26
Making enterprise systems work for State Government
Copyright © 2012 Deloitte Development LLC. All rights reserved.
Lessons Learned
Joan Sullivan
Executive Deputy Comptroller for Operations
New York State Office of the State Comptroller
Terry Blake
Principal
Deloitte Consulting LLP
Enterprise change requires leadership
• Enterprise Systems need leaders that are committed, respected by the
stakeholders, and work well together
• New York had such leaders that additionally balanced their independent
management styles, goals and objectives
• Approach-Driver vs. Guardian
• Management-Strong Disciplinary vs. Forceful Direction
• Focus-Management Reporting vs. Operations/Accuracy
• End Game-Implementation Date vs. Doing It Right
28
Making enterprise systems work for State Government
Copyright © 2012 Deloitte Development LLC. All rights reserved.
Six lessons learned
1. Make sure all stakeholders are identified, involved and managed.
Preach and live the enterprise gospel
2. Be adaptable and flexible about how you get there, but drive to get
there
3. The governance structure can’t be too bureaucratic — it must be
action oriented
4. The silo culture is entrenched in the separation of duties — you must
find the individuals that can force the change, become customer
service oriented, and build the rest of the team around them, even if it
takes several tries and time
5. It takes one set of people to implement the change, it may take
another set to maintain the change
6. Be sure to have Trusted Advisors that bring the needed experience
and insights
29
Making enterprise systems work for State Government
Copyright © 2012 Deloitte Development LLC. All rights reserved.
Questions?
Joan Sullivan
Executive Deputy Comptroller, Office of the State Comptroller,
State of New York
[email protected]
Terry Blake
Principal
Deloitte Consulting LLP
[email protected]
Don Edmiston
Senior Advisor
Deloitte Consulting LLP
[email protected]
Simhadri Basava
Specialist Leader
Deloitte Consulting LLP
[email protected]
30
Making enterprise systems work for State Government
Copyright © 2012 Deloitte Development LLC. All rights reserved.
Appendix
Integrating business processes — Details
Integration for reconciliation
Using the same system simplifies and improves reconciliation, but requires OSC and
Treasury to work closely together.
Prior to SFS (Silo)
After SFS (Enterprise)
Treasury maintained their own set of books,
separate from the Office of the State Comptroller
(OSC).
SFS replaced both Treasury and OSC books with
a single set of books resulting in the single source
of truth for reconciliation.
Treasury reconciled the bank balances to the
Treasury Books and OSC reconciled the bank
balances to OSC cash ledger.
Treasury reconciles the transactions — Payments
and Receipts from the State General Checking to
the SFS Sub-Ledgers at individual transaction/
payment/deposit level.
Treasury performed monthly book to bank
reconciliation using their own set of books and
forwarded the results to OSC.
Treasury also performs book to bank reconciliation
on a monthly basis and inquiries and queries are
built to trace the reconciling items.
OSC could not verify or validate Treasury results
since they are using a different set of books for
reconciliation.
OSC reconciles the expenses, revenue and cash
balances between sub-ledgers and the main
ledgers (Mod Accrual and Cash).
Treasury faced significant challenges in accurately
identifying the reconciling items that could not be
explained or tallied with Treasury books.
32
Making enterprise systems work for State Government
Copyright © 2012 Deloitte Development LLC. All rights reserved.
Integration for payment release
New processes provide better controls between OSC and Treasurer for the release of big
money items such as investments and funding transfers.
Prior to SFS (Silo)
After SFS (Enterprise)
OSC Cash Management Unit created transactions
in a shadow system and then reentered/duplicated using bank software, and
released the transactions at the bank
OSC Cash Management Unit creates transactions
in SFS and selects them for OSC Bureau of State
Expenditures approval.
OSC Bureaus (BSE and BAO) recorded
accounting transactions in the central accounting
system, sometimes before it is released at the
bank and sometimes after it released at the bank.
There is no formal approval of these transactions.
OSC BSE approves the transactions after verifying
the recipients/destination accounts using
automated workflow.
Treasury did not have any role in the release and
reconciled the transactions the next day using
bank statements.
Treasury releases the payment file to the bank
after verifying the transactions and totals.
33
Making enterprise systems work for State Government
OSC Cash Management unit creates the payment
file in SFS for dispatch to the bank without any
need for re-entry through bank software.
Copyright © 2012 Deloitte Development LLC. All rights reserved.
Integration for payment status
Using one online system for payment status, including cancellations, reconciliations, and
escheatment processes, provides up-to-date information to the agencies.
Prior to SFS (Silo)
After SFS (Enterprise)
OSC maintained a shadow system, Remittance
Management System (RMS), to perform
cancelations, reconciliations and annual
escheatment process for Comptrollers refunds and
unclaimed funds.
SFS became the single source for cancelations,
reconciliations and annual escheatments. The
shadow system is still maintained but only as
document management tool.
No integration existed between the main
accounting system and shadow system to easily
track the reissuances which resulted in the need
for multiple bank accounts to track second and
third reissuances.
Outbound Interfaces from SFS provided RMS the
info on check issuances, cancelations and
reconciliations.
Agencies did not have access to the RMS and
could not easily know the status of the check
whether it is paid or not.
All reissuances could be easily tracked to the main
issuance eliminating the need to maintain multiple
bank accounts.
Agencies have access to verify the status of the
check and any related reissuances.
34
Making enterprise systems work for State Government
Copyright © 2012 Deloitte Development LLC. All rights reserved.
Integration for budgets and approvals
SFS greatly simplifies budget checking and approvals through automated workflow, multiple
levels of budget control and reduction in paper processing for agencies, OSC and DOB.
Prior to SFS (Silo)
After SFS (Enterprise)
Agencies, OSC and DOB maintained separate
systems for tracking agency budgets, state-wide
appropriations and segregations, and DOB Cash
Control budgets.
Agencies, OSC and DOB are able to use single
system for tracking agency budgets, state-wide
appropriations and segregations, and DOB Cash
Control budgets.
Central accounting system only enforced controls
for Appropriations and Segregations.
Agencies/DOB used their own systems for
tracking the budget spending.
Automated end to end workflow involving all
stakeholders, (agencies, DOB and OSC)
eliminated the need for manual/paper based
approval for budget certificates and provided
timely status.
Agencies have to obtain paper approval of their
budget certificates before submitting in the central
accounting system for OSC approval.
Agencies and DOB are able to setup their own
budgets along with State-wide budgets and
enforce all budget controls on the transaction at
the same time.
No functionality existed in the system to enforce
controls on grant related expenditure based on the
grant liquidation date.
Functionality to capture liquidation date for grants
and enforce controls on grant spending
accordingly.
35
Making enterprise systems work for State Government
Copyright © 2012 Deloitte Development LLC. All rights reserved.
Integration for vendor payments
An online, accessible statewide vendor file streamlines processing and provides additional
information to vendors on their payments.
Prior to SFS (Silo)
After SFS (Enterprise)
There is no single state-wide vendor master file
and agencies maintained their own vendor
masters.
A single state-wide vendor master file maintained
centrally by OSC and can be accessed by all
agencies.
Vendors did not have easy access to the
information that State maintained about their
addresses and bank accounts.
Self Service portal for vendors to view and update
their addresses and bank account information.
Vendors did not have information on what
vouchers comprised a particular payment amount.
Self Service portal for vendors to view the
underlying vouchers for a particular payment and
contact respective agencies for any clarifications.
36
Making enterprise systems work for State Government
Copyright © 2012 Deloitte Development LLC. All rights reserved.
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