Out Of The Shadows
ERP leaves the back office and emerges as an economic development tool.
ERP means more than cleaning up back-office business processes for Richmond, Calif., a community of 90,000 situated across the bay from San Francisco. Once home to one of the West Coasts largest shipbuilding operations, Richmond views the technology as a cornerstone of an ambitious economic-development plan meant to put the city on even footing with its affluent, tech-savvy Bay Area neighbors.
To be sure, the city expects its $5 million ERP installation to deliver benefits like up-to-the-minute financial reports and streamlined payroll administration. But, like a growing number of public-sector ERP users, Richmond also wants the software to change how it interacts with businesses, citizens and other governments.
The massive, multi-phased project stretches across Richmonds 16 government departments, touching nearly everything the municipality does. The city threw the switch on the financial portion of its ERP software package in December. It was scheduled to fire up the human resources/payroll module in May, along with a plant maintenance application designed to help the public works department track inventory and facilitate repairs. After that comes integration with the citys GIS system and the roll out of Web-based business licensing, permitting and employee benefits systems.
City Manager Isiah Turner calls the overhaul vital to Richmonds effort to replace its reliance on heavy industry with a new economy based on technology and light industrial jobs. According to Turner, the broad-ranging ERP installation is key to drawing employers to the municipality, which sits just up the road from Californias Silicon Valley.
"Technology certainly is playing a large role in how we are viewed by potential investors in the community. If youre online and youre a cutting-edge city, it makes you more attractive to businesses in terms of relocation and expansion," he said. "We want to put our best foot forward, so that when people survey the Bay Area, we have the same assets that [nearby cities] have."
Selling the Plan
For Turner, the project began with a sales job. Leery of bringing a $5 million undertaking before city leaders without a plan for paying the bill, he convinced the citys largest departments to squeeze money from their existing operations to fund the implementation.
"I took nine of my department heads with the biggest budgets and told them, I want you to help me invest in you and your staffs future and in this organizations future," Turner said. "I asked each one of them for a certain appropriation from their budget."
When those key departments -- which account for about 80 percent of Richmonds overall spending -- decided to pony up, other city departments followed suit, and the plan won city council approval. A lease-financing arrangement allows Richmond to spread the projects cost over five years.
Turner said he entered the long, complex undertaking with caution, given the well-publicized failure rate for large information technology projects in government. But ultimately, he and other city leaders decided the projects benefits outweighed the potential dangers.
"I knew the venture itself was a calculated risk. This kind of mammoth change on our part did produce fear in our organization," Turner said. "But I knew in some instances, you just have to believe in yourself and show people you believe in them. We had to set a tone for what our future would be like in the next two or three years if we all move down this path in a cooperative mode."
Richmonds broad-scope approach is typical of government ERP projects, according to Tom Shirk, president of SAP Public Sector Services, supplier of the citys software package. Unlike private companies -- which began updating and integrating core business systems years ago -- many governments are just now replacing their aging, stand-alone finance and payroll applications, he said. At the same time, theyre moving services and transactions to the Web, adding greatly to the complexity of the task.
"Youve got a broader scope and a bigger project. Thats the challenge facing government," said Shirk. "Private industry put in a lot of the plumbing, and is now taking e-initiatives and aligning them to the plumbing. The public sector is, in many cases, where the private sector was about eight years ago."
Thats certainly the case in Richmond, where integrated ERP software is replacing 15-year-old applications. Its an upgrade thats triggering dramatic changes for city workers.
"The biggest thing Ive seen is the empowerment of the users," said Sue Hartman, Richmonds IT director. "They depended on IT and finance to run their reports and support them in their processes. This has truly given the process back to them. They know how to get their information and analyze it. They are much more efficient because of that."
But giving city employees hands-on access to vital information created additional training demands as workers transitioned from mainframe terminals to personal computers, or in some cases began using desktop technology for the first time. Richmonds shift to an ERP package put PCs on about 500 desks throughout the city, up from 150 before the installation.
"We deployed a lot more technology, and we found that we had some people who were computer illiterate," said Finance Director Anna Vega. "That was one of our biggest challenges. Some people soared to the top, and others were stragglers that we really had to work with."
Richmond addressed the issue by taking a "train-the-trainer" approach, said Vega. The city thoroughly educated 40 team leaders, who now provide personal training at all city government locations. Employees also may access multimedia training courses on their desktop PCs.
Government, in particular, benefits from this type of workforce investment, said Frances Schreiner, director of public-sector sales for Solbourne, a Colorado-based systems integrator that is installing Richmonds ERP software. "When you say, 80 percent of my budget is my people, and they are performing my services, they need to accept the change or you cant make it happen," Schreiner said.
Governments reliance on human assets also makes employee self-service applications a cost-effective tool for public agencies, she added. Richmond is implementing SAPs Employee Service System, which allows workers to enroll in benefits programs, change personnel information and view pay stubs via the Web.
On the Map
Beyond meat-and-potatoes finance and payroll applications, Richmond is using ERP to build a foundation for better serving citizens and industry.
One of the most unusual developments is a plant maintenance/work-order system being installed in Richmonds Department of Public Works. The software allows city workers and citizens to electronically report problems such as malfunctioning streetlights or potholes, then track the progress of repairs.
"Citizens themselves can input requests right into the software," Hartman said. "With this new mechanism, even a police officer who works at night and notices a streetlight out can punch it into a handheld PDA device and the information would go into our system and create a work order."
Integration with Richmonds GIS system will link repair and maintenance data to a spatial representation of city assets. "Well have a map-based environment," she said. "Users will pull up a map and drill down to the functional location -- a street, for example -- and call up inventory and look for repairs and work orders. Everything will be driven on a physical location." Parcels of land also will be mapped and coordinated with the ERP software, allowing users to request permits and licenses online through the work-order system, according to the city.
Meanwhile, an electronic purchasing module is making life easier for city employees and suppliers. The system eliminates paper purchasing forms and a cumbersome centralized approval process. Now, key employees in each of the citys 16 departments have the authority to enter orders into the system, which automatically routes requests through an approval process and releases purchase orders. Rather than mailing paper purchase orders and checks, the city intends to e-mail purchase orders to suppliers and wire payments directly into vendors accounts.
The new technology results in more purchasing power for individual employees, faster purchases and greater accountability throughout the process, said Vega. "Everything is tracked. Anyone who wishes to know where a certain purchase order stands can look into the system and see whos holding it up or when it was processed."
A New View
Ultimately, Turner believes advanced applications like these are beginning to cast his formerly industrial city in a new light among potential investors and employers. "[Businesses] see us as a city that is enlightened thanks to the utilization of technology," he said. "They see us as a city that they can interface with more efficiently."
Economic Development Director David Thompson already credits Richmonds ERP project with luring a number of technology and medical firms to the community. Among the recent arrivals: DiCon Fiberoptics, a manufacturer of optical networking equipment; QRS Corp., an e-commerce provider for retail businesses; and biotechnology firms Berlex Laboratories and Onyx Pharmaceuticals.
For Turner, the massive project also represents an opportunity to make a positive impact on the community where he grew up. "Its a destiny for me that I didnt plan for," he said. "My plans were to be in other places, but my career led me back here, and Im very grateful that it did."