Mike Middleton, CPA Deputy Finance Director, City and Borough of Sitka [email protected].

Enterprise Resource Planning (ERP) Systems

What is it?Why would we need it?

How do you implement it?

Mike Middleton, CPADeputy Finance Director, City and Borough of [email protected]

What is an ERP?

More than just accounting software Improved ability to analyze information Designed to be integrated with

multiple systems

More than accounting software

Not an Accounting system› Decision support system

Integrates multiple systems› Subledgers, Modules› Data imports and exports

Intended to be used by other departments› Finance doesn’t need to create all reports

Improved ability to analyze information

Common database Typically real-time data

› (For various values of real-time) Improved data access

› Reports, Inquiries, Queries› Configurable

Quantity and cost

Export to EXCEL!!!

Designed to be integrated with multiple systems

Multiple modules › Link functionality to general ledger

Import/Export with other systems› Eliminate manual entry errors

Systems balance

Why do I need an ERP?

Everybody is doing it Elimination of manual entry/reentry

errors› **** Formula errors

Elimination of dual systems Eliminate dueling systems

› Which has the “right” number Quicker analysis

Why do I need an ERP?

Would you drive a 35 year old car?

Even with a new transmission?

Everybody is doing it

Systems age out › Technology; Industry standards› New regulations› Trained future employees

Compare to a car › 1987 Subaru Brat with a 2012 motor

Is it a 2012 or 1987?

Is this a 2012 or 1987?

Elimination of manual/reentry errors

Excel errors happen› Hardcoding› Bad formulas

Fat fingering – tpyos› Typos

Elimination of dual systems

Same information› General Ledger› Revenue system› Billing system› Spreadsheet on Mike’s computer

Elimination of dueling systems

Mike’s Law› If an account is tracked by more than one

nonintegrated system, the amount in the account will differ by whatever the project manager needs.

Have you had this discussion before?› “But my spreadsheet says…”

Quicker analysis

What is the cost per utility meter? What is the cost per utility account? Not restricted to financial data

› Statistical also

How do I implement an ERP?

Research Buy in Finance Select a system Develop Implementation Plan Implement Continuous improvement

Research

Dig. Talk. Know the topic.› Vendors› Other users

That person across the table from you – they use something

Cost matters Not all systems perform the same way

› Best fit for me might not be for you

Buy in - 1

Who are your allies?› It might not be who you think

Bring Department Heads to the table› What will the ERP do for them?

Buy in - 2

Return on Investment› Dollars

Staffing Systems Paper - Toner

› Capacity Work load Error rate

Finance

What are the price limitations? How will you pay for it? Costs other than the system itself?

› IT network› Training

Remember a contingency amount› Something WILL be missed

Select a system

Features/Modules - prioritize› Needed› Wanted› Nice to have› NO. Just NO.

Will NOT have everything Look for future expandability Pull in other Departments

› Buy in. You will need it.

Develop Implementation Plan

Buy in from top individual Will not survive contact with the enemy

› Flexibility Involve other Departments

› Takes more time but pulls in Buy in Do not be overly aggressive/optimistic

› Overpromising will cost Must set target date/mileposts

› No targets = failure

Implement

Bring the Pain› It will hurt› Everything will take longer – at first

More information in = longer to enter Turn over

› Expect it

Implement continued

TESTING› Do it before › Do it while live› No other option

Not just Finance› Users will do things you would have never

thought of in your wildest dreams

Implement continued

TRAINING› Do it before› Do it while live› No other option

Not just Finance Create reference material

Continuous Improvement

Does not end – you are not done Not all features used

› Roll out to improve New modules Keep current with updates Ongoing training

› Annual conference› User groups

Sitka’s Upgrade 1

Went fine Nothing to see Move along Really

Sitka Upgrade 2

Done right› Buy in – Leadership/Focus› Financing› Selection› Training after go live› Continuous improvement› Ongoing training› Keeping current› Uncovered hidden systemic problems

Sitka Upgrade 3

Room for improvement› Training› Testing› Knowing what we purchased› There may have been some

overpromising…› Audit difficulties

Sorry BDO

Sitka Upgrade 4

Allies & Opposition› IT › Garage & Solid Waste

Turnover› Went live 1/1/14

On 3rd Grant Accountant, AP Clerk, Tax Clerk› For the better even if painful

Sitka Upgrade 5

Better analysis› Minutes vs Days

Departments can find information› Not dependent on Finance to run reports

AP actually processes faster with more data entered

Turnover gave change in Department attitude› Less “We always do it this way”

Current on updates

Sitka Upgrade 6

New processes coming up› Bank reconciliation online› Grant module – maybe› eSuites – electronic citizen portal

Conversation changed:› Was “Why?”› Now “How?”

Sitka Upgrade 7

Return on Investment› Soft factors

Work loads dropping TIME Visibility

› Uncollected billings decreased $165,000+ Last 3 months

› Unmeasurable Bottom Line

› Worth the effort

Questions?

Mike Middleton, CPADeputy Finance DirectorCity and Borough of Sitka, [email protected]