Despite the enterprise resource planning (ERP) disasters of the late 1980s and early 1990s, ERP continues to gain new customers -- sometimes in unexpected places.
The promise of ERP -- consolidating discrete computer systems used by enterprises to track accounting, budgeting, human resources or payroll, among others, into one supersystem -- attracted lots of attention when the software suites hit the market. Enterprises saw the need, ponied up their dough, then floundered through troublesome implementations.
Though plentiful, the horror stories didn't deter new customers from buying ERP systems, and companies got better at deploying them. The public sector jumped on the bandwagon too, and state and local governments -- including Pennsylvania, North Dakota and San Antonio -- have already put in place, or are beginning to implement, ERP systems.
Florida is looking at ERP for more than just HR and accounting functions. Over the last several years, Florida's Department of Revenue (FDOR) has put ERP-based systems through different paces. The FDOR's system for unified taxation (SUNTAX), which administers all tax and revenue collection in the state, is a hybrid software package from SAP comprising key bits of functionality from the company's ERP and CRM solutions.
The state is also working to extend the hybrid software package to child support enforcement. Observers say these could be the first steps in taking ERP software into areas of government not typically associated with ERP.
Collecting the Bucks
The FDOR's SUNTAX replaced a variety of independent legacy systems that supported specific functions, such as sales and use tax, corporate income tax and motor fuels tax or refunds, said FDOR Executive Director Jim Zingale. Employees previously had to query as many as 10 different legacy systems to find the right information to help a taxpayer with a problem.
An integrated tax system, such as SUNTAX, that uses single business identifiers for all aspects of taxation to enable easier processing is nothing new, Zingale said, and many states deployed such systems.
"They had done them primarily in COBOL-based systems and hierarchical databases," he said. "They were out there, and there were perceived real work-system advantages to being in an integrated environment versus a nonintegrated environment."
After looking at some of those systems' successes, he said, the FDOR went to the Legislature to explain the benefits of integrated tax environments and secure funding. The FDOR considered designing a general-ledger accounting system approximately seven years ago, but soon questioned that decision and looked for outside assistance.
"We came to the marketplace at a time when we didn't feel we could do it in house, or we didn't want a simple add-on system," Zingale said. "We knew big relational databases were out there. We knew advanced writing languages were out there and felt like they had evolved to the point where we wanted to look at one of them as a solution."
The FDOR put out a bid, got several responses and selected SAP in 1999. SAP's custom-built, ERP-based solution for revenue administration would accommodate the $28 billion per year the FDOR collects from the more than 36 taxes it administers, he said.
Deloitte Consulting was selected through a different procurement process (from a state contract) to help the state with customization and integration. The system was implemented in six-month contract increments as particular taxing functions, such as corporate income tax, were transferred out of the mainframe environment to the ERP client-server environment.
"We've got about another two and a half years before everything we need to take off the legacy is gone," said Zingale.
While the system was being built, the FDOR reduced its full-time employees (FTE) by 19 percent and salaries by 15 percent, he said, noting that the FTE savings alone paid for the system.