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Where Are States on the Path to Upgrading ERP Systems?

Consolidating HR and financial processes on central platforms is a major undertaking in states where legacy systems have been in place for up to 40 years. We check in with three states on their efforts.

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States are looking to consolidate assortments of financial and HR systems and retire decades-old tools and processes by switching over to modern enterprise resource planning (ERP) systems, central platforms that handle core business processes for a state’s various agencies all in one place.


Missouri is early in its ERP journey. The state selected its software product in June 2022 and expects to complete the first of three rollout phases this summer. Deputy state CIO Paula Peters said the ERP will let the state consolidate systems and more readily access data.

For example, budgeting is currently handled by a different system from procurement and payment, and so bringing together data involves many steps and manual processes, which is slow and risks mistakes and inconsistencies.

“You have to do a lot more manual transferring of information. You may have to use a shadow system or take things to a data warehouse, so you can transfer it somewhere else,” Peters said. Pulling those functions into one platform would remove such issues.

We really do try to address and meet 21st-century business challenges and expectations from our business partners, but we’re doing it on 20th-century operating systems.
The ERP modernization effort also comes at a time when supporting legacy systems is looking increasingly untenable. Missouri’s main system is more than 20 years old, and staff that are able to support it are getting ready to retire, Peters said.

Phase one of transitioning to the new ERP will see budgeting functions go live in July 2023. Starting with this smaller set of capabilities also lets the state “get our feet wet” before tackling more, Peters said, and lays the groundwork for shifting over processes that rely on those functions. Phase two will transition over finance, procurement, manufacturing and learning capabilities in July 2024, while January 2025 will involve HR and payroll, completing the project.

Executive, judicial and legislative agencies as well as elected officials weighed in on determining the state’s ERP requirements, and Missouri ultimately selected Oracle software, through reseller Mythics, with Accenture serving as systems integrator.


With some HR and financial systems as old as 30 to 40 years, Illinois faced working with cumbersome legacy processes. These could mean a flurry of paperwork whenever employees changed addresses, for example. Plus, legacy tools’ limited capabilities meant agencies had to create their own “homegrown systems” to meet specific needs, and the resulting idiosyncrasies presented a steep learning curve for staff moving between agencies. Meanwhile, would-be hires went through time-consuming processes that left them in the dark about their application statuses.

“It was kind of a black hole — you would send [your resume] off and hope that it landed wherever it was supposed to go and would patiently wait months and months to find out,” said Illinois’ ERP Program Director Tara Kessler. “… [We’re] just trying to make it more user-friendly so people feel comfortable applying.”

Now, the state is in the midst of an ERP transition that’s introducing new digital conveniences and efficiencies. Employees have gained self-serve options and job seekers can view statuses online as well as flow stored profile information into new applications rather than re-entering it each time. Auditors also can now use the ERP’s data analytics and substantive testing capabilities rather than digging through paperwork in agencies’ offices.

Following a pilot with three agencies in 2016, Illinois selected an SAP ERP. The state split the remaining agencies into groups and transitioned financial systems for one group at a time over to the new ERP every six to 12 months. By 2022, 73 agencies were on the new system, including several elected officials’ offices that chose to join the executive branch agencies in the transition. Accenture and Deloitte served as system integrators, with one company leading each phase while the other quality assurance tested its work.

Illinois has taken a different strategy for transitioning HR systems. Rather than launch full sets of capabilities at increasingly more agencies, the state is instead gradually introducing more and more functions to all agencies at the same time. Roughly 90 agencies will adopt the HR system, and its recruitment model is now live. Modules enabling core HR functions, onboarding, labor, learning and compensation are slated to go live in May 2023. Timekeeping and payroll pieces will be adopted in March 2024.

Kessler emphasized the importance of consulting with agency staff early on to fully learn their needs. Such discussions prompted Illinois to move business intelligence functions sooner than originally planned. Changing the timeline “was a very heavy lift for us, but it was really critical because if they were going to use the new system, they needed to make sure that they could continue their work uninterrupted,” Kessler said.


Washington’s more than 120 agencies rely on core administrative systems that are 20 to 40 years old, said Cristie Fredrickson, executive sponsor of the state’s One Washington ERP modernization project. To work with legacy technology, staff often must follow “outdated business processes” as well as spend considerable time on maintenance.

“We really do try to address and meet 21st-century business challenges and expectations from our business partners, but we’re doing it on 20th-century operating systems,” Fredrickson said. Plus, it’s easier to attract employees when they’re not asked to use four-decades-old systems, she said.

As with Illinois, Washington found that because its core systems had limited capabilities, agencies often have had to create additional systems to support their unique business needs. Lack of integrations among all the systems makes it difficult to produce desired data.

The state expects all that to change. By 2013, Washington had crafted an ERP business case and in 2020 it selected a system from Workday, with Deloitte as the systems integrator. With these companies in place to advise, the state re-evaluated the project’s scope and set a new timeline in 2022. Frederickson herself joined in February 2022 as the project became large enough to warrant a dedicated executive sponsor.

The state’s plan aims to first modernize those systems facing greatest risks and which are most business critical. Summer 2025 will see core financial functions — like accounting — transitioned, followed by procurement and other financial systems. The ERP’s more numerous capabilities will make some of the agencies’ supplementary systems redundant, and Frederickson expects at least 22 financial systems can ultimately be retired, saving the state time and money. A later phase modernizes the budgeting systems and the final phase transfers payroll and human capital management systems.

“Sometimes it can be hard for people to get excited about administrative functions that are what keep the wheels moving in such a large state enterprise,” Frederickson said. “But knowing how important all of these administrative functions are to the state … having a robust modern enterprise application is going to be so beneficial in such a large number of ways and so impactful.”

This story from our March 2023 magazine is part of a larger look at modernizing state systems. Click here to read the rest of the feature.
Jule Pattison-Gordon is a senior staff writer for Government Technology. She previously wrote for PYMNTS and The Bay State Banner, and holds a B.A. in creative writing from Carnegie Mellon. She’s based outside Boston.