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Enterprise Applications Program Review

ITIB

July 19, 2007

Peggy.Feldmann@governor.virginia.gov

Modernizing the Commonwealth’s

Administrative Processes and Systems

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Executive Summary

At the April 2007 ITIB, the following questions were asked:

• What is the vision for EA?

• What revenues will be spent after the planning dollars are expended?

• What value have you achieved so far?

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What is the Vision for EA?• Program (based on projects) to provide the

Commonwealth with modern, effective and efficient business processes and systems

• Data Centric vice Application Centric– Near term focus on Financials business processes

• Performance Budgeting• Financial Management

– Common Reporting tools

– Data Consolidation

• Long term, continuous upgrades of the systems

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Enterprise Applications Objective

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CoVA Business Applications Center of Excellence

(Functional and Technical Expertise within the Commonwealth)

CoVA Enterprise Programs (Future State)

Contractor support to supplement CoVA team

Service Center

Service Center

Service Center

Service Center

Agencies

Benefits Streams will support the Life Cycle Costs of the EA Program

Mandates

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What Revenues will be Spent after the Planning Dollars are Expended?

General Assembly• Complete FM ERP planning phase in April 2008

• No scope change, complete PMD requirements for entrance into development phase• Coincide with the consideration of the 2008-2010 Biannual Budget• Determine if sufficient dollars are available for successful development

Benefits / Revenue Stream• Stand alone projects that can be accomplished within the

Working Capital Advance (Line of Credit)

• Projects that can spiral to the larger Enterprise• Possibilities: Budgeting, reporting, portals• Projects that will lower the FM ERP risk

• Long term maintenance of the EA program

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EA Projects and Benefits Timeline

Jan 2007

Oct 2007

Business CasesSigned

Sign RecoveriesAgreement

Jan 2007

Jul2007

Jan2008

Jun2008

PrioritiesAnd

costs

RecoveriesCheckpoint

Jan2008

Apr2008

Jul 2007

GA in Session

Oct2007

RecoveriesCheckpoint

Apr2008

Jan2009

Jun2009

Jul 07 ITIBVision / Strategy

High level ConceptsAuthorization to continue planning

OCT 07 ITIBProjects priorities and costs

Project MilestonesPlanning Status

JAN 08 ITIBAuthorization for projects

within Working Capital Advance

Apr 08 ITIBSpiral Status

RecoveriesCheckpoint

Planning Phase Projects Development Phase

Future TBD Milestones

BenefitsProjects

Authorized

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FM ERP Planning Timeline

Dec 2006

General Assembly - $11M for EA Planning

Jul 2007

Jan 2008

Jun 2008

Dec 2008

Jun 2009

FY08 - $5.5MFY07 - $5.5M

Jan 2007

Oct 2007

General Assembly funding for FM ERP Development

SW Integrator RFP proposals

Out / In

Jan2008

Apr2008

Jul 2007

GA in Session

Jul 07 ITIBVision / Strategy

StatusAuthorization to continue planning

OCT 07 ITIB3rd party Estimate

Planning Status

JAN 08 ITIBPlanning Status

Apr 08 ITIBFunds available for development

FM ERP authorization

FM ERPPlanningcomplete

FM ERPAuthorized

FM ERPcosts

fine tuned

3rd PartyCost

Estimate

Planning Phase

Dec 2008

Jun 2009

FM ERP Development Phase

RFP

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What value have you achieved so far?

Commonwealth

Business ProcessesPlanning Framework• Requirements • Process Improvements • Organizational changes

FY07 FY08

Technical Planning• Conversion • Interfaces • Data Management• InfrastructureFY07 FY08

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FY07 EA Planning (ITIB Approval for Planning to June 30, 2007)

Functional 8 Future State Business Process documents• To-be business process flows• Detailed business requirements• Draft Business Process Improvements• Procurement Assessment / Industry Best

Practices Enterprise Wide Participation• 30 Core team members from across the state• 43 Agencies participating in validation

workshops• Over 120 agency staff validation future state

documents via workshops

Technical• Current state systems architecture• Current state interfaces (integration)• High level conversion requirements• Future State Architecture (conceptual model)• Business Intelligence model / approach

– Database, data warehouse & data store– Reporting

• Test Strategy

Change Management• Change Management Plan• Stakeholders matrix development• Change Impact Survey• Facilitator training for functional validation• Implementation training strategy

Project Management Office• Project plan• Project management methodology• Deliverables/work products repository • Risk management and issue resolution process

Data Gathering• Lessons learned from our research• RFP process• Agency interactions and requirements• Agency phasing data

AR Example

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FY08 EA Planning

Functional• QA 8 Future State Business Process document• QA Agency data and reporting requirements• Enterprise wide participation• Business Process Improvements Impacts • FM SW / Implementation RFP evaluations• Data Cataloging and Reporting Plan

Technical• Future state technical architecture• Future state application architecture,

requirements & costs• Future state integration architecture, requirements

& costs • Future state business intelligence architecture,

requirements & costs– Database, data warehouse & data store– Reporting

• Future state conversion requirements/costs• Technical training plan• Legacy disposition plan

Change Management and Communications• Policy and Legislative Actions• Continued stakeholder management through

leadership action plans • Change management preparation and training • Solutions training plan through multiple delivery

means--classroom, self-study, Web • Populate and maintain an informative and interactive

program Web site•

Communication outreach efforts

Project Management Office• FM SW / Implementation RFP execution• Performance Budget implementation plan• Risk and Issues Management• Work Plan Management

Data Gathering• Agency interactions and requirements• Lessons learned research

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Request Approval of FY08 Budget

Approved Budget

to DateNew Budget

RequestTotal Budget

RequestAdministrative

Budget

Business Process

(Financials) Budget

Personnel 906,894 400,406 1,307,300EA Project Management Office 256,894 40,092 296,986 40,092

CoVA Project Team 650,000 360,314 1,010,314 360,314Operational Costs 15,000 29,093 44,093 29,093Other 7,881 3,200 11,081 3,200Contracts 5,830,949 3,370,077 9,201,026 3,370,077Office Supplies 8,000 8,500 16,500 8,500Travel/Business Meals 3,000 2,000 5,000 2,000PMO Contingency 0 415,000 415,000 415,000Total: 6,771,724 4,228,276 11,000,000

Budgets 455,092 3,773,184

Budget Request Total 4,228,276

FY07 Budget MotionDetailed FY08 Budget

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Hyperlinks

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Application Centric to Data Centric

App

App App

App

App

CoVA DataAppApp

App

datadata

data

data

dataMoving to

Application Centric

DataCentric

Reports

Reports

data

data

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EAProgram

FinancialsHuman

ResourcesSupplyChain

Administration

FinancialManagement

Phase 1

Phase 2

PerformanceBudgeting

Current Effort•Budget

• All Agencies•Financial Management Phase 1

• All CARS users• VITA, VEC, VDOT, DGS,DOA

Performance

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Future State Documents

• Functional blue prints for the future state– Define improved business processes– Outline organizational structure to support the processes– Identify functional software solution requirements

Performance Budgeting

General Accounting

Cost Accounting

Accounts Payable

Accounts Receivable

Purchasing

Fixed Assets

Time and Attendance

Functional Business Areas

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Future State Documents

• Guiding principles used in the development– Incorporate best business practices

– Look for opportunities to gain efficiency and effectiveness

– Ensure business needs are met

– Challenge “status quo”• Ensure adequate internal controls remain in place

– Take advantage of technology• Workflow• Security• Consolidation opportunities

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Future State Documents• Validation (Internal)

– Build in direction/vision from the Commonwealth business owners– Obtain input/verification from the Commonwealth subject matter experts– Incorporate feedback from consulting experts– Ensure process integration across business areas– Employ lessons learned from other similar initiatives– Reconcile against proven “best business practices”

• Validation (External)– The Hackett Group (Best Practices)– Forrester (Procurement (eVA) study on integration)– Gartner (Total Cost Ownership, Maintenance strategies)– Other States Lessons Learned

• Ohio, Florida, Pennsylvania, New York, Tennessee

– North Highland (IV&V)

Validation is a continuous process!!! .

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FY 08 Functional Planning Areas

• Refine Future State Business Process documents– Enterprise wide participation

• FM SW / Implementation RFP evaluations• Business Process Improvements Impacts• Data Cataloging and Reporting Plan

DOA VEC DHRM APADPB VDOT VITA DGS

Core TeamJanuary – March 07

WorkshopsApril – May 07

120 ParticipantsAcross 43 agencies

Enterprise OutreachJuly – October 07

Remaining Executive Branch Agencies

Judicial Branch

Legislative Branch

33 ParticipantsAcross 7 agencies

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COTS Procurement

• RFP 2007-17 cancelled on May 25– Procurement Scope Change

• Team agreed with VITA Supply Chain Management (SCM) that expanding the scope to incorporate Fit/Gap and other related activity would be in the Commonwealth’s best interest

• Currently discussions underway with VITA SCM on ERP RFP way forward– Financials application (software and implementation)– Options

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Current Technical State

CARS

CIPPSMetafile (Client)Reportline (Web)Mantissa (Mainframe)

FAACS

FINDS

• Manual, inefficient and redundant business processes

• Approaching end-of-life supportability

• Limited (or no) business intelligence (reporting) capability

• Lacks enterprise capability (workflow, integration, analysis)

• Application Centric

ProBud

CARS

Expend Wise(Query / Reporting Tool)

Budget Wise(Query Tool)

Web Bears

Flat file

Flat

file

Flat file

FATS

Budget Dev.

Execution Master

FinancialManagement

Budgeting

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Current State Financial Management and Budget

Interfaces• 409 Interfaces

– 261 involve manual intervention (64%)– 148 fully automated (36%)

• 316 are “flat files”• Over 80 identified as unnecessary with an ERP (and

growing)• Many interfaces are in support of a reporting requirement• Current transfer methods include email, FTP, magnetic

tape, database to database • Current file formats include text, Excel, Access, paper

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Current State Financial Management Reports

• Tools in use today vary by agency, but include:– EasyTrieve - MS Analytical Service– nVision - Crystal – Mantissa - Viador – Cognos - Business Objects– SQR

• Requirements gathering underway

• Analysis in August

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Current State Financial Management and Budgeting Tools

(DOA, DPB, DGS, VEC, VDOT & VITA )

DBMS TotalMS SQL Server 12Oracle 10VSAM 5ADABAS 4Oracle 7.x 1Grand Total 32

Denotes “transitional / contained” technology*

Denotes “obsolescent / rejected” technology* * ITRM Standard EA225-00

Operating System TotalMS Windows Server 13Mainframe 9MS Windows Desktop 6Unix 3AIX 1Sun Solaris 1Grand Total 33

D&R Environment TotalCOBOL 7ColdFusion 6MS Access 6PeopleTools 5Natural 2Oracle Forms 2VisualBasic 2.Net/C# 1Powerbuilder 1PeopleTools 6.1 1Grand Total 33

Reporting TotalEasyTrieve 3nVision 3Crystal 1Mantissa 2MS Analytical Services 1Viador 1Business Objects 1Cognos 1SQR 2Grand Total 15

4

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Future Technical State

DB

Data Store

ERPTransactionalEngine

Phase I&II

Flat Files

Other DBs

BI Tool BI Tool

Data Warehouse

• Standardization – reduced reporting and analysis costs

• Increased control – lower operational expenses

• Improved service delivery – increases customer satisfaction

• Data Centric

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Current vs Future State Comparison

Current Future

Enterprise Service Bus

Business Intelligence

Self-Service

Data warehouse

Content Management

Integrated Data View

Operational Data store

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Business T

ransformation M

ethodologies

Platform

, Tools

Enterprise Security

Presentation Internal/ExternalSystems andData Sources

Developm

ent Fram

ework

Business Process Integration

Infrastructure Services

Enterprise Data Repository

Business Intelligence DataRepository

System Management

Hardware and Software Platform

Process Server

IdentityManagement

ContentManagement

Search

BI

ERP

SelfService

COTSApp’s

LegacyApp’s

SpecializedApp’s

ExternalInterfaces

Enterprise Service Bus

ERP Business Intelligence

BI ToolIntegrator

ToolSCM

FM

HR

PB

ADMIN

Integrated Data View

ExternalData Sources

End Users

Technical Architecture: Conceptual Model Diagram

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User Interface

Interfacing Systems

“Hot” Site

Disaster Recovery Site

Web Servers

Web Servers

Enterprise Servers

Data Warehouse

Integration Broker

Transform

Business Rules

Route

Enterprise Servers

FM Servers

PB Servers

Report Servers

Enterprise Data

Storage

Auto Tape

StorageReal Time

Server

System Monitoring

Polling

Correlation

Aggregation

Root Cause Analysis

Data Storage Backup and Recovery

Corporate Data Center

BorderSecurity(DMZ)

Batch Servers

App Servers

Policy Server

Technical Architecture: Implementation Model Diagram

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Application vs. Data Centric

CARS

CIPPSMetafile (Client)Reportline (Web)Mantissa (Mainframe)

FAACS

FINDS

ProBud

CARS

Expend Wise(Query / Reporting Tool)

Budget Wise(Query Tool)

Web Bears

Flat file

Flat

file

Flat file

FATS

Budget Dev.

Execution Master

FinancialManagement

Budgeting

Old – Application CentricNew – Data Centric

DB

Data Store

ERPTransactional Engine

Phase II

Flat Files

Other DBs

BI Tool BI Tool

Data Warehouse

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FY 07 Change Management and Communications Planning Area

• Change Management Plan– Change Impact Assessment– Stakeholder Map– Communications– Training Strategy

• Facilitator training

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Change Readiness Assessment

• Focus group exercises with Future State Business Process workshop teams

• Leadership interviews• Change readiness survey of Phase 1 users• Agency information review• Agency focus groups

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Stakeholder Engagement Matrix

• Type of influence• Needs and expectations• Success criteria• Key challenges, issues, or concerns• Risk if not addressed• Level of interest (low, medium, high)• Action required, when, and by whom• Status and action taken

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Communications

• Message development • Audience analysis• Delivery methods• Name, logo, and tag line• Web site

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Training

• Comprehensive training plan• Influenced by software solution selected• Agency information review

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Enterprise Standards and Mandates

Direct benefits of standards• Reduced project costs• Reduced technical

infrastructure costs • Greater leverage with vendors• Reduced reconciliation costs 

Indirect benefits of standards• Higher end-user acceptance • Greater IT user satisfaction• Better use of the application• Better data analysis

 

• From an Enterprise perspective, standardization and mandated processes and tools benefit the Commonwealth

 

• EA program will mandate the enterprise standard – CIO will execute the toolset standards – Business owners will execute the process standards

 

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Revenues for the EA Program

• A number of CGI initiatives have been discussed to generate resources for the EA Program

• Enhanced Tax Collection is the most viable revenue stream at this time

• Two possible candidates are:– Spend Management Initiatives– Revenue Reimbursement Initiatives

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Enhanced Tax Recoveries

$40,357,931 $42,862,913 $43,545,051 $44,912,853 $45,581,404 $45,757,206 $46,091,570 $309,108,900

               

$34,029,000 $34,029,00 $34,029,000 $34,029,000 $34,029,000 $34,029,000 $34,029,000 $238,203,000

$6,328,931 $8,833,913 $ 9,516,051 $10,883,853 $11,552,404 $11,728,206 $12,062,570 $ 70,905,900

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

Total Net Revenue

Current VATAX Net Baseline

Variance Above Baseline

1. Each Series is $230M in new tax delinquencies

2. Payfile estimate and Returns (2nds) derived from accounts now in repayment, those not in repayment returned to VA Tax to be reworked as 2nd placements

3. Uncollectible pool contains $310M in accounts designated presently as uncollectible per VATAX

4. Project year 1 begins March 1, 2007 (this is flexible)

5. Current VATAX Net Baseline calculated as $39.8M gross collections minus 14.5% average fee per VATAX

6. Servicing fee at 20% for Series I through VII, 22% for Returns (2nds), and 35% for Uncollectible Accounts

7. Liquidation rates of 21.6% for Series I and II, 25.0% Series III through VII, 6% for Returns (2nds), and 3% for Uncollectible

Assumptions