Best Practices in Software Selection and Business … Practices in Software Selection and Business ... GFOA has become a nationally recognized leader in the ERP system market generating

Government Finance Officers Association

Best Practices in Software Selection and Business Process Improvement

Mike MuchaDeputy Executive Director / Director, Research and Consulting

GFOA

GFOA is a non-profit association focused on the professional management of governments

o Established in 1906o 19,200 Members Offices in Chicago and Washington DC

o GFOA offers resources, publications, training, networking/conferences, award programs, and consulting services.

o GFOA has become a nationally recognized leader in the ERP system market generating value for clients through: Reducing costs Reducing risk during implementation Providing best practice recommendations Focus on improving business processes

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GFOA has worked with over 500 local governmentsS3

ERP projects are large

HR/Payroll

Budget

Finance

Applicant Tracking

Forecasting

Capital AssetsUtility Billing

Property

Budget Prep

Business Intelligence

Contracts

Bids

Grant ManagementProjects

Accounts Payable

Accounts Receivable

General Ledger

P-Cards

Purchasing

Employee Records

Risk Management

Position ControlTime EntryPension Admin

Payroll

Self ServiceCashiering

Work Orders

BenefitsPerformance Evals

Employee Relations

Training / Learning

Business License

Special Assessments

Property Tax

CRM

Permitting

Performance Management

GFOA Recommended Approach to ERP

o Governance Identify goals

• Focus on process / outcomes (not software)

o Structured process for change Business process focus Organizational change (change management) Documentation

• Track decisions• Define process• Define policies

o Competitive Vendor Selection Requirements Interviews

ProcessImprovement

Readiness/Procurement

Recommended ERP Project Schedule

VendorSelection

Contract / Ramp Up

Planning Design / Configuration / Test Train

Planning Design / Configuration / Test Train

1 2

Core Financials

Core HR/Payroll

0 3

= Go Live

Planning Process / Policy

Governance

Four Elements of Readiness1. Governance2. Business Process 3. Vendor Selection4. Contract Finalization

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1. Governance

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ERP governance is the structure for achieving goalsS9

Governance answers “how?”Tools

Process

Policies

People

Example Project Structure

Executive SteeringCommittee

Project Manager

Admin. Support

Project Team

Functional Leads / Business Process Leads Technical Leads

Why are we doing this?o Need direction for the project?What are we trying to accomplish?

• Why? How will we measure success?

• Who determines if success was achieved?

o Need to set expectations and communicate Formal communications Informal communications

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Project Resource PlanningS12

What does a failed project look like?

Lack of Communications

Stakeholders Left Out

Poor Executive Support

Re-Create the Old System

Rush to FixThings

Break Other Things

Resources are Strained

Short Cuts Taken

System Scaled Back

System Doesn’t Work

Shadow Systems Created

Project Not Organized

Inadequate Staffing

Unclear Goals

Lack of requirements

QA and Testing Suffer

System Doesn’t Meet Needs

Participation Suffers

No Accountability

Purpose

Vision

Teamwork/Culture

Planning

Governance Checko Are goals clear?o Are common assumptions clear?o Are roles defined? Do roles overlap? Are roles understood?

• Do members understand all roles

o How are decisions made?What is escalation path?

• How to handle conflicts

2. Business Process

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Business Process Improvement

As-Is Mapping

Best Practice GAP Analysis Business Process Decision

Part #1 Part #2

FunctionalRequirements

Project Goals

Why?Why? Why?Why? Why? Why? Why?Why?Why? Why?

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“We’ve always done it this way”

- Someone (and likely more than one) from every organization

Process Improvement Teamso Empowered team made up of

representatives from city departments Tasked with managing process

documentation Challenging the status quo

• Why? Why? Why? Why? Why? Discussing improvementsMaking recommendations

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Documented processes are essentialS19

Process Map

Process Analysis

Requirements relate to business process

Process focus mitigates implementation riskS21

o Projects don’t often fail because of issues with software Implementation is a far greater risk in almost

all projectsMany organizations do not have a vision for

how the system will be used• Vendors can’t help with vision (or want to)

o Most organizations do not deploy 100% of the software seen at demosMany organizations don’t come close

o Many software vendors treat implementation as an afterthought

3. Vendor Selection

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Vendor Selectiono Identify what you wantGoals Scope Schedule Considerations

o Selection Proposals Demos Interviews

o Decide

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RFP

Procurement

Finance System Componentso General ledgero Project / grant accountingo Purchasing / contractso Inventory o Accounts payable (vendors)o Billing / ARo Asset tracking

Work orders / Asset management Advanced billing Extended purchasing

“Core”

“Extended”

HR/Payroll Componentso Human Resourceso Positionso Benefitso Leaveo Payrollo Time Entry*

Recruiting Professional development Evaluations Self-service Time Entry* / Scheduling

“Core”

“Extended”

Know the market know what you are buying

o Split procurement vs. one RFPo Optional “scope”o Cloud vs. hosting vs. on premise

o How attractive is your project?

Cloud bringing about major change in government

o Governments core competency is not server administration

o Change, resiliency, updateso Managed risko Allow for more powerful products and

sophistication in smaller governments

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RFP Roadmap

Final Agreement

Final Software Scope

Final Implementation Scope

Terms and Conditions

Project Team

RFC DocumentsRFP Vendor Proposal

Decide on Modules

Right Size Scope

Discuss Major Issues

Interview Project Team

Modules to Match Requirements

Standard Services

Standard Terms

Functional Requirements

Preferences for Implementation

Gov. Essential Terms

Software Demonstrationso In-depth review of softwareo Review of proposed implementation serviceso Demos are scripted - requires that the vendors

show what you want to see rather than what they want you to see Allowing the vendor to control what you see allows

them to control what you don’t see as wello Involve as many people as possible in the demoso The purpose of the vendor demo should be on

evaluating if the software will work (not on viewing the bells and whistles)

o You should leave the demos feeling confident it will accommodate all of your requirements

Implementation Interviewso Demos should focus on both software and

implementation Software is worthless if you don’t implement it Majority of risks are with implementation

o What to cover Implementation approach Best practice definition

• How would they handle a specific issue? Staffing

• Roles Project management Project culture / (What the project will be like)

Making a Decision

GFOA Score sheet

Instructions:

PROPOSAL TEAM COST REQMTS IMP RISKPROJ EXPER TECH SCOPE SUSTAIN Total

Total w /o Cost Rank

Rank Without Cost

25 20 15 10 10 10 10 100

NA 27 20 13 13 13 13VENDOR 1 2 5 3 5 5 5 5 54.5% 46.0% 1 2VENDOR 2 4 4 4 4 4 4 3 52.0% 52.7% 2 1

Score each each catetory for each vendor by placing a number (0-5) in the cells below. The spreadsheet will automatically calculate the score using the appropriate criteria weights.

Agree on rules before going through the process!

4. Finalize Contract

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Finalizing the Contracto Master terms and conditionso Third-party agreementso Statement of work

Master Agreement

Services Agreement

License Agreement

Hosting Agreement

Order List

SLA

SOW

3rd Party Agreement

Requirements

Support Agreement SLA

The “Facts” of ERP Implementationo Software selection is not anywhere as important

as “people” selectiono Many organizations fail with ERP even before

the project starts (no chance to succeed) o ERP vendors do NOT share your goals You need to watch them. You need to be

prepared. You need tools to hold them accountable

o Software is worthless if your staff doesn’t use ito ERP projects are NOT impossible and can

provide a great opportunity to transform your organization

GFOA Contacto Mike Mucha

Deputy Executive DirectorDirector, Research and ConsultingGFOA, Research and Consulting Center

www.gfoa.org [email protected] 312.977.9700

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