Exploring the Feasibility of Lower Cost, Less RiskFinancial Management SystemsThomas L. White, Jr.tom.white@comptroller.alabama.govState ComptrollerState of Alabama

Bud Borja Bud.Borja@state.or.usSenior Information Technology ExecutiveOregon State Lottery

Charlie Johnson charliej@microsoft.comManaging Director, Government ERP Microsoft Corporation

August 13, 2012

National Association of State Comptrollers - Key Findings

$35-75MWHAT MOST STATES PAID OR EXPECT TO PAY FOR NEW SYSTEMS

73%STATES EXPECTING OR EXPERIENCING PROJECT DELAYS

2YRSTIME IT TOOK OR WAS EXPECTED TO TAKE FOR ROLLOUT

76%STATES THAT DID OR EXPECT TO CUSTOMIZE NEW SYSTEM

60%STATES THAT SAID IMPLEMENTATION FELL SHORT OF EXPECTATIONS

52%STATES THAT HAVE RECENTLY MODERNIZED

Reasons for Concern

● Change management and user adoption People were reluctant to learn something new, employees were dissatisfied with the training program, or users couldn’t easily learn the complex system.

● Customization to suit business processes System modifications were costly, and all the States reported the need to customize systems to suit government specific business processes. Most reported change orders costing anywhere from 5 to 20 percent of the original contract value.

State Recommendations

● Think Partnership● Get Buy-in● Don’t Rush● Think Long-term● Consider Staffing● Stay Flexible● Communicate, Communicate,

Communicate

“I think it is possible to [improve the experience], but it takes cooperation among the groups involved. We were able to accomplish our goals during implementation by maintaining our focus on our priorities.”

Deputy Auditor

5

OREGON STATE LOTTERYEnterprise Resource Planning Implementation

6

Oregon State Lottery• First game issued on April 25, 1985• Since its inception the Lottery has continued to do good things for Oregon by transferring over $7 billion to support public education, economic development, state parks and watershed enhancement.

• 97 cents of every dollar played comes back to Oregon• The Lottery’s current product mix includes: Scratch-itsSM

and draw games including: MegabucksSM, Keno, Powerball®, Mega Millions®, Pick 4SM, Win For LifeSM, Lucky LinesSM and Raffle . ℠

• The Lottery also offers Video LotterySM games that include both poker and line games.

7

Reasons for the Project• Need to do cost/project accounting

• Requires labor distribution

• Data driven decision making• Easier, more detailed reporting• Seamless integrated system• One single source of truth• Easy to use (familiar look and feel)

8

What worked…• Strong Executive Sponsorship• Agency’s number one priority project• Self funded (no legislative approval/oversight)• Team member that has done it before• Fixed bid implementation partner (not vendor)• Expectations set and communicated prior to start

9

What worked…• Dedicated champions/power users from each area

• Core team’s day to day work backfilled so they could focus on the Project

• Increased transparency into business processes

• Asked and learned “why”• Stopped a module when it wasn’t working

10

What didn’t• Unable to change “front end” systems to meet the needs of the ERP solution

• Staff were unable to envision the full potential of the system

• Business process re-engineering• Needed to customize more that initially hoped

• We were date driven

11

What would I do differently?• Purchase modules when you are ready to implement them

• Review and purchase user licenses that make sense for your organization

• Business process re-engineering• More hands on research of the system and how to leverage the system to replace manual processes

• Have a separate team responsible for Organizational Change Management

12

What’s next for the Project?• Payroll• Human Resources (including Position Control)

• Cost Accounting Module• Project Accounting and Tracking Module

13

Benefits for the rest of the State• Identify legislative changes needed• Build the road map for others to follow • Share research and lessons learned with other agencies

• Look at “shared services” or “center of excellence model”

Exploring the Feasibility of Lower Cost, Less RiskFinancial Management Systems

2012 NASACT Annual Conference

Charlie Johnson charliej@microsoft.comManaging Director, Government ERP Microsoft

August 13, 2012

Agenda

●Before Implementation Perspective●During Implementation Perspective●After Implementation Perspective●Final Thoughts on Lessons Learned

Before Perspective

Management Endorsement & Expectation Setting

● Executive Sponsorship● ERP Project Implementation Leadership

● IT or Business Leader● Department & Agency User Buy-In● Project Completed within Current

Administration● Sufficient Project Funding ● Project Staffing (Both Project & Current

Operations)● Consider the Cloud● Define Project Success & Anticipated Benefits

Do Your Homework ● Pre RFP Process

● Vendor/Customer Research● Obtain Vendor Demos Before RFP Development● Customer References – Both Successful & Failed Projects● Conduct Site Visits

● RFP Development Options● Checklist vs. Essay – Focus on ‘How’ not ‘What’● Split vs. Combined Procurements● Acquisition thru GSA, Sole Source or State

Contracts● Focus only on Core Needs

● Defer Extended Functionality● Reduce Requirements for 3rd Party ISV Solutions

Lower the Total Cost of Ownership • Choose a System Built for Government

• Buy Vanilla – No Customizations• Beware of Best Practices Claims

• Computer Speak for Software is too Inflexible to Adjust to Your Business Needs without Substantial Customizations

• Cost Evaluation Criteria• Include Both Application AND Database Software

Licenses• Reduce Maintenance Costs

• Do NOT Purchase Additional Modules until you are Ready to Implement any Extended Functionality

• Direct Correlation between Extended Functionality and Dissatisfaction• Tends to delay projects, lower productivity, and

promote shelf-ware—software that goes unused• Prioritize Ease of Use & Agility to Change

During Perspective

Faster Time to Value & Lower Total Cost of Ownership

• Communicate Project Activities & Status to ALL

• Partner with Your Vendor & System Integrator• Your Work Plan and Schedule is Just a Plan

• Adjust as Necessary• LIMIT Customizations to Regulatory

Requirements• Minimize Change Orders – Limit only to items

not included in RFP• Leverage the Value of Shared Services

Capabilities

Minimize Risks to Achieve Success• Adopt Technologies that You Commonly Use• Do NOT Go-Live at Beginning of the Fiscal

Year or Calendar Year (Comprehensive Data Conversion)

• Implement Business Intelligence FIRST• User Training – Focus on Ease of Use – Not

Complex or Rare Exceptions• Improve User Adoption with User Inclusion• Staff Field Production Roll-out & Triage Help

Support Teams • Recognize and Plan that the Project is Only

Half Way Complete at Go-Live Point

After Perspective

Must Do’s• Include Sufficient Post Implementation

Support • Maintain the Partnerships with Your Software

Vendor & System Integrator • Demand Accountability from Software

Vendor• Software Bug vs. Enhancement• Beware of ‘Works as Designed’

• Make Sure Your Employees are Proficient with Your System• Continuous & Refresher Training• Training Certification Program

• Obtain Software Vendor Demonstrations on Current Product – See what the system is capable of

• Validate Internal Controls

Final Thoughts on Lessons Learned● Continually Meet with End Users● Interact with Similar Organizations● Maintain & Update Business Intelligence

Dashboards● Minimize Software Customizations● Explore Cloud Alternatives● Continue to Extend Shared Services ● Test & Retest any Changes and any One Time

or Year End Processes● Stay Current with Your Vendor’s Software

Releases● Understand the Vendor’s Future Product

Roadmap● Communicate, Communicate, Communicate

© 2012 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries.

The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after

the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

Q & A