Planning for the Enterprise

Broad agency involvement helped Missouri gracefully survive the transition to one of the largest ERP systems around.

by / April 16, 2002
In the beginning, Missouri set out to buy new budget preparation software. But before long, the state had embarked on a much more ambitious project -- replacing all of its financial management and human resources applications with a single, integrated system.

The migration to an enterprise resource planning (ERP) system is often fraught with peril. For Missouri, the cooperation of dozens of employees from throughout the state government went a long way toward easing the passage.

Missouri started considering ERP because a study revealed that a new budget system alone wouldn't meet its needs. No matter how excellent a system it chose, the application wouldn't function as required because the state's other financial systems, all 20 years old or more, couldn't send it data, said James Carder, director of the Division of Accounting in the state's Office of Administration (OA). Beyond that, agency employees were complaining about the state's antiquated financial technology.

Getting information from the old systems meant waiting for the printed reports the OA distributed each month. But, sometimes state workers needed data not covered in a regular printout. "We'd have to write the program to do the query and pull the report, then print it and send it back," said Jan Heckemeyer, administrator of Statewide Advantage for Missouri (SAM) II, the state's new ERP system. "You were talking about weeks, or months, just to get a simple report, in some cases."

To give them faster access to their own data, many agencies developed separate financial systems for internal use, she said. Such redundancy did not promote efficiency.

Pre-Buzz Word

"We came to the conclusion that if we were going to spend any money at all, it wouldn't do us any good to replace just a piece of our overall financial planning systems," Carder said. "I don't think ERP was even a buzz word when we reached that conclusion. But as it turns out, what we envisioned was the ERP approach."

That vision spurred Missouri to implement one of the largest government ERP systems operating today. The finance, budgeting and purchasing functions within SAM II serve 6,000 end users, and its human resources and payroll modules serve 9,000.

Missouri brought the financial functions online in July 1999 and completed the human resources side of the project in June of last year. One of the most important keys to success for the implementation was that all state agencies had a say in the project from its earliest stages.

Developing a strategic plan and bringing all stakeholders on board are crucial early steps in implementing ERP, said Ken Munson, senior principal in the State and Local Solutions Division of AMS Inc., Missouri's ERP vendor. "The plan has to be well communicated and well bought in, not just by the different branches of government, but by all levels of each of the branches," he said.

The OA pulled together about 120 volunteers, drawn from throughout the government, to do preliminary planning. The group gathered information from potential vendors and drew up requirements to serve as both a planning document and the core of Missouri's request for proposals. The state awarded a contract to AMS in April 1997.

The planning team worked so well, OA decided to tap state agencies for members of the steering committee that oversaw the project, Carder said. Beyond that, it recruited agency personnel to work with people from OA and AMS on the implementation team. About 50 state employees, many from outside OA, took leaves from their regular jobs to work full time on the project.

Involving "the best and the brightest in the state agencies" ensured SAM II would address everyone's concerns, Heckemeyer said. It also gave each agency one or more resident experts when it came time to start using the new system.

Policy Debates

One big challenge the implementation team faced was settling policy issues that determined how SAM II would handle everyday processes. For example, the team decided to stop paying employees on an anticipatory basis, cutting checks before each pay period ended. Instead, the state would pay on a lag basis, cutting checks for the previous period. That plan prompted a move from a monthly pay cycle to a shorter one. The team had to agree on the length of that cycle, figure out how to comply with federal labor standards rules within the new system and obtain legislation to allow the change. Heckemeyer said the question of pay cycles took months to resolve.

Hammering out the many policy issues took much more time than the team had expected. But the group stayed on schedule by following a detailed project plan. "We very systematically worked that plan and made sure we were meeting deadlines," Heckemeyer said. "If at any time we felt we were falling behind, we'd try to pull in more state resources, or AMS pulled in more of their resources and devoted them to that area."

A major milestone occurred on July 1, 1999, the date the team chose to go live with phase one of SAM II, including the finance, budget and purchasing systems. The state chose to switch all 6,000 users to those systems at once because it wanted to start fresh on the first day of the state's fiscal year, Heckemeyer said.

Fallout from Big Bang

In hindsight, the "Big Bang" probably was not the best approach. Thousands of users had to climb a steep learning curve at once, and the system itself got off to a rough start. As hard as they had tried to plan for every contingency, the SAM II project team simply couldn't anticipate the demands its massive user base would put on the system. It crashed often, "or the response time was so slow, you'd hit a key and wait minute before it would make a change or bring you the screen you were looking for," Heckemeyer said.

Some agencies found they didn't have adequate infrastructure to support the system, and OA also found it had to make changes in the software. Ironing out most of the problems took about 60 days, she said.

When it came time to move human resources and payroll functions to SAM II, Missouri used a different tactic: It phased in the system across four groups of users from November 2000 through June 2001. "Our implementation on the human resources side went much more smoothly," Heckemeyer observed. She said a state implementing an ERP system would do well to conduct a pilot before starting a full-scale installation, or to introduce the system gradually across agencies.

Missouri hasn't yet measured the benefits of SAM II, but the system has boosted efficiency because agencies are no longer using separate financial systems, Heckemeyer said. Instead of waiting days or even months for printed reports from OA, end users can run queries themselves and get immediate results. Also, an online bidding system included in SAM II has allowed the state to stop printing and mailing solicitations to vendors.

A government that plans to implement ERP should expect "to be very committed, because it's a long process," Heckemeyer advised. It is especially important to involve every agency and resolve policy questions before configuring the system. "It drags out the process a bit, trying to build consensus and work out those issues," she said. "But it's time very well spent."

Merrill Douglas is a freelance writer based in upstate New York. She specializes in applications of information technology.
Merrill Douglas Contributing Writer
Platforms & Programs