Financial Management Systems – Smoothing the Implementation Process

Professional Development Institute 2010

Financial Management Systems – Smoothing the Implementation Process

Presented by:Dick Willett – Senior Principal, TCBA

Bill Webb – Director Public Sector, Enterprise Solutions GroupLisa Fiely, Director, Grant Thornton LLP


Why Implement New (or Upgrade an Existing) Financial System?

Because You “Have To”

Because You “Want To”


Because You “Have To”• Current System Does not Meet Mandatory

Requirements

• Discontinued or Proposed Discontinued Vendor Support (under standard maintenance)

• Requirement to Move to a Shared Services Provider


Because You “Want To”• Existing System or Legacy Systems Antiquated• Process Improvements Constrained by Existing

System• “Aging” Workforce (Loss of Domain Area Expertise in

Legacy Systems)• System not Cost Effective to Maintain• Want to Take Advantage of Newer Technology and

Functionality; e.g., Business Intelligence• Need to “Keep Up with the Joneses”


Parameters for New System Operations

• Improved Business Processes• Move from Transaction-Focused to Analysis• Compliance with Mandatory Requirements (at a

minimum)• Reduced Need for “In-House” Infrastructure Support • Move Toward Single Point of Entry• More Timely Reporting and Processing (reduction in

closing timeframes)• Ensuring Vendor Support Over Time


Assumptions for All Implementations• Gain “Quick Wins” for User Buy In• Implement Synergistic Business Flows

Together• Implement in Manageable Phases to

Improve Chances for Success• Minimize Customizations• Reduce Risk• Focus on “Self Sufficiency”


Assumptions for All Implementations

• Implement “Best Practices”• Allow for Upgrades• Defer Implementing Functions that May

Change Substantively


What Are the Headaches and Symptoms?


Three Major Areas of Headaches and Symptoms

• Getting Started

• Implementation (or Upgrade)

• Operations (Sustainment)


Requirements Continue to Change, Never Frozen

Complaints About “We Are Unique and Different from Everyone Else”

Determining Nature of the Solicitation (Software First, Services Second, or Combined)

Risk of Protest Following Award

Getting Started includes defining requirements, planning and executing the solicitation, issuing an award and beginning the project planning phase.

Typical Symptoms

Headaches in Getting Started


During implementation the risk of changing scope and new requirements are always present.

Costs Continue to Increase and Timelines Expand

Management Becomes Skeptical of Additional Funding Requests

Project Management and Planning Are Lost

Management Team Looses Ability to Say “No”

Typical Symptoms

Headaches During Implementation“Scope Creep”


With any implementation of upgrade change is inevitable and many times the biggest challenge is for users to accept and adopt the new processes.

Users Will not Accept the Changes Associated with Inherent System Functionality

Users Find Mechanisms to Delay the Inevitable

Users Believe the System Is “Vapor Ware”

Typical Symptoms

Headaches During ImplementationInability to Accept Change, Lack of User “Buy

In”


During any implementation or upgrade effort, concerns are always prevalent regarding the availability (and affordability) of internal and external resources.

Lack of Expertise in Newer Technologies Within the Organization

Need to “Retool” Existing Skills (especially if Moving to Shared Services Provider)

Retaining Existing Staff Once “Retooled”

Ability to Manage Large and Diverse Contractor Personnel

Typical Symptoms

Headaches During ImplementationResource Constraints and Concerns


Implementing a New Financial System also includes integrating legacy systems and other COTS products to the new system.

Difficulties with “Syncing Up” Legacy and Financial Systems (particularly during upgrades)

Difficulties Integrating Third Party or “Best of Breed” Solutions

Realization That Legacy System Data Lacks Integrity or Is not Needed.

Inherent “Turf Issues” Among Owners of Legacy Systems

Typical Symptoms

Headaches During Implementation“Band Aiding” Legacy Systems to New Financial

System


Once the Implementation or Upgrade is Completed, there are additional issues to address including how to maintain it.

Concerns Over Loss of Control if System “Outsourced”

Fear of Inability to Maintain New System Once Contractor Personnel Are Gone

Realization that Users Must Take Final Ownership of End Product

What Do We Do Now??

Typical Symptoms

Headaches During Operations Phase


How Can We Reduce Headaches?


Delineate Clear Lines of Responsibility as Part of Initial Planning

Document Responsibilities for Agency, Integrator and Shared Services Provider

Consider Implementing Incentives in Personnel Performance Plans

Clearly State What WILL Happen, No Exceptions (“Big Bang” vs. Phased Approach)

Cures

Reducing Headaches: Getting Started


Consider Decommissioning Oldest Systems First

Consider Outsourcing Non-Mission Critical Functions

Avoid “Best of Breed” if at All Possible

Cures

Reducing Headaches: Getting Started


Source: Gartner, 2002 IT Spend Survey

Current State of IT83% spent managing existing systems, 17% innovating


Source: Aberdeen Group, June 2001

ERP vs. “Best of Breed”The Integration Dilemma


View New Implementation as a Way to Implement New Processes and Still “Save Face”

Do not Simply Replicate Old Processes, Consider Implementing Standard Business “Flows”

Do not “Clutter New System with Historical (Particularly Closed) Data

Rely on “Iterative” Prototyping (Allows Users to “Digest” Future Business Models Early)

Cures

Reducing Headaches: Implementation


Business Flow “Accelerator” Approach Characteristics

• Relies on Pre-Defined Integrated Business Flows Based on Industry and Public Sector Best Practices

• Focuses on Processes Not Modules• Eliminates Extensive Requirements Gathering,

Vetting and Approval• Provides Application Prototype Very Early in Project

(e.g., first 30 days)


Approvals (PRS05) Purchase Orders (PRS04)Requisitions (PRS03)PR1180

Manage Non Production

Requisition

• Federal Agency needs new monitors for their desk tops.

• A Requestor creates a requisition defining the needs.

PR1182Issue A

Purchase Order

• The buyer creates a purchase order for the selected supplier of the monitors.

PR0128Authorize

Requisitions

• The department manager approves the requisition.

• Check funds, create commitment

Supplier Invoices (PRS07)PR1010

ManageSupplierInvoice

• The AP Clerk receives the invoice.• The invoice is matched against the

purchase order.• The invoice is approved for payment.

Approvals (PRS05)PR0129

AuthorizePurchase

Order

• The buyer approves the requisition.

• Release commitment, create obligation

Purchase Agent

Purchase Manager

Roles

Accountant

Requestor

Accounting Transactions to Financial Reports Flow

Non-Production Receiving (PRS06)PR1935

Receive Non Production

Goods & Services

• The non-production goods arrive at the requisitioner/ receiver’s desk.

• Two-Way or Three-Way Matching.

• Ability to control Receiving Routings.

• Receive using express transactions for fast data entry.

Send to external payment system


Flows Accelerator ApproachRapid Prototyping with Defined Deliverables

StandardPre-Defined

BusinessFlows

CRPIteration 1

StandardBusiness FlowsUsing Agency

BusinessRules

PRIORITIZED

Timebox

Timebox

Requirements“Fit” Analysis

CRPIteration 2

ProductionReady


Implement Business Case Process for Evaluating “Required” vs. “Nice to Have” Functionality

Learn to Say “NO”

Develop Strong Relationship with the Product Vendor (“They Can Be Your Best Friend”)

Cures

Reducing Headaches: Implementation


Make Sure Contractor Has Included Post Implementation Support as Part of Plan

Ensure Service Level Agreements Are in Place and Understood

Never Consider the Project Done

Begin Planning for Next Large Initiative (e.g., Upcoming Upgrade)

Cures

Reducing Headaches: Operations


Lessons Learned from the Implementation Process


U.S. Department of Education • Highlights

– Replace 53 disparate systems & comply with OMB ground rules

– Process disbursements and receivables from providers estimated at approximately 3+ Million per day.

• Solution– Oracle Federal Financials– Oracle Hyperion Planning and Budgeting

• Results– First Cabinet Level agency to “Green” in financial

management– Three unqualified audit opinions– 92% of Department’s funds have no cash differences– Eliminated use of over 2,000 legacy systems– Automating budget execution processing

Federal Civilian

Financials

http://www.whitehouse.gov/goodbye/0b48066e9f8b8d8e551fda9344aadc1b2265031d.html


AQ&


Lisa Fiely703.373.8720

[email protected]

Bill Webb703.623.1046

[email protected]

Dick Willett202.778.3434

[email protected]

mailto:[email protected]



Financial Management Systems – Smoothing the Implementation Process

Documents

new requirements

mandatory requirements

toexisting system

tocurrent system

existing financial system

inevitable users

financial management

new processes