Next summer, Fresno, Calif., will throw the switch on a comprehensive financial, payroll and human resources system designed to beat the millennium bug and provide a new level of decision-making data. The state's fifth-largest city, Fresno intends to roll out the integrated client-server applications to more than 1,000 users throughout the municipality, replacing its 15-year-old mainframe financial and payroll systems.

Not only will the system provide quick access to financial information for both staff and residents, it's key to drawing high-tech industry into the region, according to city officials. And, in a situation familiar to state and local government organizations throughout the nation, Fresno's technology upgrade also is being spurred by the rapidly approaching year 2000.

"Our current system is not [Y2K] compliant, and we literally would not be able to run the city financial operations as of July 1, 1999," said Fresno CIO Hap Cluff. "We could push the payroll system out to the end of the year, but on January 1, 2000, we would not be able to produce W-2s or 1099s or paychecks."

Neither the existing IBM mainframe computer nor its COBOL-based financial and human resources applications will handle the date change. Moreover, Fresno does not own the application source code or have access to the hardware code, making any attempt to fix its old systems a risky proposition, Cluff said. Instead, the city is installing PeopleSoft's enterprise financial, human resources and payroll applications.

"We just took a proactive approach," Cluff said. "We said, 'Let's do it right. We've got one shot, and we're going to have to spend X amount of dollars anyway.'"

Enterprise Approach

Fresno finds itself among a growing number of state and local government organizations installing enterprise resource planning (ERP) software packages, which evolved in the private sector to provide a common, integrated software foundation for managing finances, manufacturing, purchasing, planning, payroll and other essential functions.

Public-sector ERP systems offer integrated packages of financial and human resources applications tailored to the unique needs of government. On the financial side, they may provide general ledger, accounts payable and receivable, and various specialized accounting functions. For human resources, they may track employees and handle payroll, benefits and pensions.

What's more, ERP packages also support emerging industry-standard functions like automated online workflow, electronic data interface, interactive voice response, and electronic catalogs and forms.

The ability of these systems to provide nearly instant access to a wide range of integrated decision-making data -- as well as their year-2000 compliance -- has triggered strong interest among both government agencies and private companies. In fact, AMR Research, a market-analysis firm specializing in ERP software, foresees the overall market for enterprise systems growing by nearly 40 percent over the next five years.

That broad trend is reflected in the public sector as well, according to Robert Salvucci, president of SAP Public Sector. Salvucci expects his company, a relative newcomer to the government market but a subsidiary of the leading ERP supplier to the private sector, to more than double its government customer base this year.

"The market is definitely there," he said. "[Agencies] have to do more, and they have to do it with fewer people. They have to be more efficient. So that's driving them to look for ways to integrate the enterprise.

"Government sees what its counterparts in industry are doing," Salvucci added. "They know what's going on in the Fortune 500; they see the efficiencies and they hear about the savings."

Indeed, not only are more agencies implementing ERP solutions, he said, but the number of users at current ERP installations is climbing as agencies provide new functions to their staffs.

No Pain, No Gain

However, reaping the benefits of integrated ERP software does not come without a few challenges, according to