Office of Efficient Government MyFloridaMarketPlace ...

MyFloridaMarketPlace

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Office of Efficient Government MyFloridaMarketPlace Business Case Submission

February 2010

MyFloridaMarketPlace Governance Structure

Background: Beginning in early 2000, the State of Florida began an effort to upgrade and modernize its core operational software and IT infrastructure, specifically its accounting, cash management, procurement and human resources functions. Prior to this effort the state systems had been running on five separate tools.

A state study produced by KPMG in 2000 provided high level guidance and direction on a possible course of action to accomplish the goal. The core of this recommendation was a comprehensive “best of breed” solution that used specialized applications that were rated highly in specific functional areas, while still supporting enterprise wide integration. In following this approach, the study also recommended against significant customization to increase integration and allow for future enhancements and upgrades.

In late 2000 several initiatives began to address portions of the upgrade plan, but without a cohesive integration plan. The end result was three separate projects; MyFloridaMarketPlace for procurement functions, People First for human resource functions and Project Aspire for accounting and financials.

Over the course of the next several years the state began the implementation of these three projects. Two of the three projects (MyFloridaMarketPlace and People First) have been fully deployed. The remaining project (Project Aspire) was suspended prior to deployment. All three projects were impacted by various scheduling, funding, project management and implementation issues during the development process.

Review of these projects by the Office of Efficient Government in its Report No. R08-002 dated in December 2007 found the following areas of focus that impacted the projects execution. These focus areas, as well as additional key learning’s from each project, should be comprehended when initiating projects, and incorporated into future projects implementations:

• Executive sponsorship

• Planning

• Funding

• Stakeholder buy-in

• Business process change

• Project management

• Nature of state governance

This list includes issues of most significance in the execution of large scale projects. The issues highlighted here are those that were observed across the three projects reviewed, or were of specific concern. Additional issues were identified in specific project and are not being listed here. Ultimately success with these types of projects depends on developing holistic approaches to project execution including sponsorship, planning, and execution.


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Findings: In its report, the Council of Efficient Government had several findings. Some of the findings were targeted at the State of Florida’s Governance structure. Findings focused on Governance included:

Executive Sponsorship

Strong executive sponsorship is fundamental to the leadership of large projects such as MFMP. Executive sponsorship sustains vision of the project objectives and provides guidance for stakeholder input and decision making processes. For most of MFMP development and implementation periods there was no identified executive sponsorship external to the project team. The project team operated independently from most existing state purchasing organizations. High turnover on the project team also impacted development and implementation. External subject matter experts were added to the team after implementation to improve communication and input on procurement processes. A change review board was also implemented to aid the decision making process related to system changes.

Dedicated Project Team

From the inception of MFMP there has been a high level of turnover on the project management team in multiple position including the department secretary, MFMP project managers and MFMP team members. Team members did possess specific IT, accounting and project management knowledge, but, team members involved with the decision making related to procurement processes were not subject matter experts. Stakeholder input and participation was limited. Over the course of the project procurement experts and external resources were needed for project monitoring and staff augmentation.

Business Process Standardization

A key element of the MFMP e-procurement system is the potential for business process standardization. However agencies have been resistant to significantly changing their existing procurement processes. While the MFMP implementation was generally collaborative across state agencies and addressed enterprise needs, each agency was allowed to mimic their existing approval processes in the new system, without taking advantage of the opportunity to streamline their procurement process. This has required the DMS to heavily customize the Ariba commercial off the shelf e-procurement product with approximately 400 modifications in an attempt to satisfy the various agency needs. The result is that the Ariba software contains a large amount of proprietary code and less effective standardization of business processes than otherwise could have been obtained. Although the MFMP project team has actively engaged in several initiatives to maximize standardization, the initial agency by agency customization may now present higher risks and potential integration problems with existing and future systems. These agency-specific modifications to MFMP made it inherently more difficult for the project team to train individual agency staff in the use of this tool, transition and maintain the application, and in some cases resulted in performance issues with the system.

Lessons Learned and Governance Issues:

By analyzing the key findings of the research from the MFMP, PeopleFirst, and Project Aspire projects the Council on Efficient Government hopes to provide some insight in how to improve the overall execution of state projects. This insight, or lessons learned, can be applied to projects of all sizes, and are fundamental to effective and efficient project execution.

After reviewing the research, several common issues emerged:

• Executive sponsorship • Planning


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• Funding • Stakeholder buy-in • Lack of business process change

• Project management

• Nature of state governance Each project significantly struggled to achieve success with only two out of the three actually succeeding in some level of deployment, but with mixed results. Below are common “lessons learned” taken from the three project reviews that can be applied to any future project.

Executive Sponsorship

An important characteristic of successful solutions is the designation of an executive sponsor with enforcement and conformance authority. A strong sponsor advocates for the project during its entire life cycle. Additionally, the sponsor builds consensus and attains stakeholder buy-in during conceptualization.

Projects of this nature require strong sponsorship to advocate the vision of the project, the “Project Champion”. The executive sponsor must be someone who can build consensus among diverse groups and staff levels, with the authority to resolve disputes and ensure cooperation. This person is usually a senior member of the project team, and on larger projects, a senior executive in state government. For Florida’s largest and most complex projects this would correspond to the Governor, Cabinet member or Agency head. The executive sponsor may also be a group, such as the Florida Cabinet, though a single individual is preferred. Loss of or weak executive sponsorship can negatively impact the success of the project.

Throughout the life of the project the executive sponsor generally maintains overall supervision of the project, but not direct project management. The role serves as the spokesperson for the project and provides the overall vision of what the project is to accomplish. The executive sponsor is also actively engaged in championing the project internally and externally, ensuring proper resources are available, approving high level project plans and timelines, and resolving issues related to the project. They have complete responsibility for the project and must have full authority to ensure its success.

Because of the responsibilities of the executive sponsor it is important that they are committed for the life of the project and remain engaged through out. Without this long term commitment, the project risks increase. This includes diverting from the original goal, changing scope, losing funding, cost overruns, and failing full implementation.

In the three projects reviewed, executive sponsors, where they could be identified, did not remain engaged at the appropriate levels required to marshal the project to completion. The lead factor with this issue is changes resulting from election cycles and shift in political priorities.

Planning

Possibly the most important element in the success of a project is proper planning. Planning includes defining the scope of work, allocating resources, developing project workflows, and ensuring adherence to the project plan. Generally the largest share of the project implementation process should be invested in the planning phase. Sufficient planning and proper execution to that plan significantly increases the probability for achieving project success. Appropriate time must be given to proper planning and development of the project concept and the resulting project schedule must be realistic and achievable. Proper planning will ensure that the project drives the schedule, not that the schedule drives the project.


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Planning also involves the design, negotiating and implementation of fair contracts with realistic and well-defined requirements. Contract terms must reflect a careful balancing of risks between the government and the vendor. The project must have access to resources required for planning, negotiating and managing increasingly complex contracts.

Realistic and well defined performance metrics are required to measure success and failures in project performance including customer satisfaction metrics. Defining baseline data prior to implementation ensures that performance metrics are realistic and achievable so that performance can be accurately measured to determine success levels.

Though a significant amount of time was invested in these projects, the time was not well spent. In some cases more time was spent on the solicitation, negotiation and protest phases than on the actual project planning phase. The net result of this is a weak project plan that had a low likelihood of success. Projects were rushed to the implementation phase before important planning was completed.

The state needs to be vigilant to avoid scope creep and design changes. The state can reduce risk and enhance manageability by discouraging large, big-bang projects, and encourage incremental, phased-in approaches. The state should consider dividing acquisitions of a major system into several smaller increments that are easier to manage individually than would one comprehensive acquisition. The agency can address complex IT objectives incrementally in order to enhance the likelihood of achieving workable solutions. The federal government’s Clinger-Cohen Act suggests that “incremental acceptance provides for delivery, implementation and testing of workable systems in discrete increments, each of which comprises a system or solution that is not dependent on any subsequent increment in order to perform its principal functions; and provides an opportunity for subsequent increments of the acquisition to take advantage of any evolution in technology or needs that occur during the conduction of earlier increments.”1

Funding

Proper funding is a basic requirement of all projects. Many large scale projects similar to those discussed here commonly span several years and state budget cycles. As is the case in Florida, project funding is dependent on the annual budget cycle, and currently projects are funded based on an annual appropriation model. There is the risk that a project may be “defunded” or funding will be reduced within any of the cycles for a variety of reasons potentially unrelated to the project. Contracts for these projects are based on the full product life cycle and proper execution is predicated on a steady funding stream for both internal staff and external vendors.

Due to this incongruity, vendors often encounter significant issues relative to payments during the project life. Changes to original scope often require increases in contract commitments that are not comprehended in the original funding model. Exceptions and exemptions generated subsequent to the project inception also often impact revenue expectation and funding stream. Additionally, some projects are dependent on funding releases based on third party approvals and pay process changes that have not been incorporated into the original project plan or schedule. Vendors often continue to work at risk to sustain the project while the governmental process works itself out. These risks often result in costly litigation to resolve.

To properly sustain the development, operation, maintenance and migration of projects, consideration should be given to developing secured recurring funding for multi-year large projects. A reliable multi-year funding model must be created to enable proper execution of the project life cycle and reduce risks to the state associated with unforeseen changes to the funding model.

1 Office of Efficient Government. Clinger-Cohen Act of 1996 White Paper. July 30, 2007


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Stakeholder Buy-In

Stakeholder input is vital to any successful project. This aspect allows stakeholders to voice their opinions in the development and implementation stages, so that they have buy-in and understand changes as they occur. This also builds cooperation and consensus which are essential for the initiative to succeed.

Key to successful implementation of a project is the commitment to the project of key stakeholders. Stakeholders include those that can affect and are affected by the project. Within state projects stakeholders can be system designers, users, agency or department heads, state employees, or even citizens. Input from key stakeholders is essential to building consensus and user acceptance. When stakeholders are included in the project they are more likely to remain engaged and support the projects objectives.

Stakeholders should be engaged early in the planning process and input should be obtained and considered prior to implementation of a project. Ongoing communication is also required to assure stakeholders that their input is being appropriately considered and included in the project plan. Consultation with stakeholders should also occur regarding major decisions impacting the project. Failure to include these individuals and processes will build resistance and distrust among agencies and employees.

Business Process Change

One of the goals of most large scale projects is to improve efficiencies and reduce costs. The expectation is that these goals will likely be achieved through economies of scale and streamlining of processes delivered through the project implementation. Achieving these economies of scale usually require some business process change and standardization of work flows within the organization. This change and standardization of key systems is often aligned with best practices in project implementations. The need for these changes should be addressed early in the project plan. Stakeholder input should be received and incorporated into the project plan to the extent that it does not lead to over customization and multiple parallel systems running concurrently. There is a clear need for empowerment of a governance structure to require business process changes to support best practices

Government must have the ability to adapt processes to incorporate efficiencies that new technology offers. Care must be given to changing business process to take advantage of the capabilities of new systems and not encumber the new system with processes that conform to historical business methods. Project managers can communicate a change management plan through effective training and ensure that users and clients adapt to the new processes. Focusing on stakeholder education supports successful change management. Managers must be able to educate stakeholders on the value of new methods and procedures to reduce resistance to necessary changes.

Stakeholders must understand that compromises must be made and that they may be asked to reconfigure old processes to achieve future efficiencies. The projects reviewed have generally gone against industry best practice by over-customizing vendor systems. These customizations often require additional costs to implement and render the system sub-optimal. Research by three private sector firms warned about this pitfall, KPMG in 2000, Ernest & Young in 2005 and Gartner in 2007. Federal government (Clinger-Cohen) recommends a phased in approach over a longer period of time to allow for changes in process, technology advances, etc.

Project Management

Project management is the planning, monitoring and control of all aspects of a project. It also includes influencing the motivation of all those involved in a project to achieve the project objectives on time and to the specified cost, quality and performance. Though this sounds fundamental, many projects


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fail due lack of following this basic guideline. Strong project management skills sets are needed on large project teams to ensure proper project execution.

The project manager must be skilled at providing accurate data about the project, managing and resolving conflicts between internal and external stakeholder groups while keeping the project on schedule and within budget thus eliminating future issues further into the project. Major projects can fail when managers do not deal effectively with stakeholders’ hidden or conflicting agendas and fail to properly communicate with stakeholders.

For a project to increase its likelihood for success, detailed project plans, clear scope definitions, specific deliverables, timelines, performance metrics and measurements, change management and transition planning, and budget management must be in place. Continuity of management on projects to maintain vision and mission success is essential. Historically, significant turnover in project staff, both state and vendor has occurred on all three projects reviewed. Numerous leadership changes results in lost momentum on the project and risks potential project re-direction from original concept.

To ensure successful project execution a properly funded and resourced Project Management Office (PMO) should be established. The PMO is responsible for the ongoing management and maintenance of the project.

Contracting

Designing, negotiating, and implementing a fair contract with realistic and well-defined terms reflects a careful agreement between the state and the vendor. Specifically, a sound business case with benchmarking of current conditions, risks and costs are essential to a successful project. A well developed contract that includes performance measures, monitoring, a comprehensive service level agreement and a plan for remediation is key to success. A sound business case provides the basis for a good contracting phase. Performance metrics are required to measure success in the project, without them, there is no way to tell whether or not the project is operating at a satisfactory level. Prior to executing a contract, consideration should be given to ownership issues related to application licenses and infrastructure both during the project as well as at its termination. Additionally, there should be a mechanism for independent monitoring, so that an objective party can aid in identifying problems and solutions. Finally, a plan for remediation, should something go wrong, must be written into the contract.

Nature of State Governance

Of special consideration to government projects is the transient nature of public governance. Due to the periodic changes in personnel and agendas, state and agency priorities often do not remain constant. Many state projects have historically suffered from these changes. New administrations shift the priority list to align with their goals. New appointments are made throughout agencies and trickle down to multiple levels. In many cases large portions of projects teams, including key stakeholders, are impacted. With these changes comes project knowledge loss, resources are re-allocated, skill sets are adjusted, and the level of commitment is reduced.

Public policy changes related to changes in the administration and legislatures as well as political pressure from internal and external sources are difficult if not impossible to build into any project plan. The original desire to achieve stated project goals may no longer exist or the environment may change that no longer fosters the initial project vision. Additionally, the dependence of these projects on the annual funding cycle that is driven by diverse political agendas also contributes to the difficulty in successful execution.


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MyFloridaMarketPlace Governance: First in discussing Governance within any of the state’s enterprise level projects it must be noted that Governance lies at two levels; one is internal to the program enterprise and the other is external to the program enterprise, (i.e.: at the state enterprise level).

Internal Enterprise Governance Structure: The Governance structure is a simple one that consists of internal chain of command reporting and external input from various customer groups. The chain of command consists of the organizational structure shown in section 15. For DMS, the MFMP program director reports to the Director of State Purchasing who in turn reports directly to the DMS Secretary. The MFMP Program Director and Operations Manager are very experienced and given great latitude and decision making authority in all aspects of the MFMP operation.

In addition to this internal chain of command, MFMP solicits and receives input from its Customer Roundtable and from its Change Review Board (CRB). The CRB in particular provide guidance to DMS MFMP operations by prioritizing change requests or improvements to the system. Refer to section 18 for more information on the CRB and its role.

There have been many improvements within the internal enterprise of the MyFloridaMarketPlace operation since the Council of Efficient Government issued its report in December 2007. Some key issues addressed include:

• Planning:

• Stakeholder Buy-in:

• Business Process Change:

• Project Management:

• Contracting:

Planning and Execution:

Beginning with the Ariba upgrade in April 2, 2007 and continuing with the retirement of SPURS (June 1, 2009), launch of the Vendor Information Portal (October 26, 2009) and now planned enhancements to the Vendor Bid System, DMS State Purchasing Operations has had several key successes due to improved goal setting, employment of strategic planning principles and execution of those principles. A key aspect of these planning activities unlike the initial implementation of the MFMP system is involvement of the customer agencies via various workgroups established for each initiative.

Stakeholder Buy-in:

In the last two years, DMS State Purchasing Operations has invested in enhanced training activities. The MFMP DMS team believes that involvement of customers in the process and enhanced education are the most effective means of achieving both stakeholder buy-in as well as effecting change management. Examples of stakeholder involvement are illustrated in the workgroups mentioned above. Examples of enhanced training activities can be found on the MFMP Buyer and Vendor toolkits at:

Buyer Toolkit:


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http://dms.myflorida.com/business_operations/state_purchasing/myflorida_marketplace/mfmp_buyers/myflorida_marketplace_toolkit/buyer_training_opportunities

Vendor Toolkit:

http://dms.myflorida.com/business_operations/state_purchasing/myflorida_marketplace/mfmp_vendors/vendor_toolkit

Both toolkits have significant educational opportunities for both Buyers and Vendors. DMS State Purchasing Operations has utilized a number of new tools to provide its training. Examples include, but are not limited to, WebEx training sessions, Vendor “Fireside Chats”, which are also WebEx sessions and newsletters. The MFMP DMS team is now developing WebEx recorded training sessions so that the training is available 24/7. These tools are additions to the existing hands on in person training and the “On Demand” training tools. The training continues to evolve.

In addition to its emphasis on training, State Purchasing Operations has also developed a number of other venues to involve the customers in the MFMP program. These include regular Customer Roundtable meetings, Purchasing Director meetings, Change Review Board meetings, System Administrator meetings and Florida Association of State Agency Administrative Services Directors (FASAASD) meetings. Some of these meetings are held monthly, some quarterly and some on an as needed basis.

Business Process Change:

Business process change goes hand in hand with stakeholder buy-in. Change management is occurring slowly over time but is still the greatest area of challenge for the MFMP team. Through the use of meetings, training and other resources, progress is being made but will not be effective until internal enterprise governance structure is supported with external enterprise governance structure with enforcement authority.

Project Management:

Project management has been significantly improved on both the technical front and the DMS front.

The Office of Program Policy Analysis and Government Accountability (OPPAGA) BCP International (BCPI) report dated January 12, 2009 stated, “Based on our interviews and resume reviews, we determined that the DMS MFMP support team members exhibit a high maturity level and perform their assigned roles very well.”

On the technical support side, BCPI reported:

• System Performance Has Improved and Users Are Generally Satisfied

o Agency users reported significant satisfaction with system response time, noting that it has improved considerably since MFMP’s inception. Specifically, during the early years of system implementation, users reported that the system was often very slow, limiting their ability to readily use it. Since, April 2007 the system response time has improved to such an extent that agencies are reporting system responses within one to three seconds.

• Data Reliability Issues Resolved






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o Accenture and the DMS MFMP Program support team report that the data reliability issues have been resolved. No data has been lost or changed since the system and hardware upgrade in April 2007. The backup data used by the Analysis Tool is now an accurate replica of the system data from two days prior. However, three agencies continue to report uncertainty about data reliability.

• System Reliability Issues Resolved

o All agencies interviewed confirmed that MFMP is now very stable. Those who have used MFMP for several years report that there have been tremendous improvements in system availability. Agencies interviewed do not even remember the last time the system was down unexpectedly. Our analysis only found two instances of unexpected system outages in the last 12 months, each being resolved within minutes.

• System Security Issues Resolved

o System security issues were resolved by moving the MFMP system hosting and system security to the State Resource Center, which provides physical security, intrusion detection, firewall and other system security measures.

• System Performance Measures Now Consistently Being Met

o The 24 system performance measures established in contract Modification 4 are now consistently being met. Some examples of performance measures over the last year that are being met:

96% of customer calls are answered within 90 seconds.

99% of emails from customers are responded to within 1 business day.

99.9% of customer help desk tickets are resolved within 5 business days.

99.9% of time system is available for use.

o There have only been two instances in the last year where performance measures were missed.

On the DMS program management side, BCPI further reported the following items:

• MFMP Program Management Is More Effective:

o MFMP Program management has shown great improvements under the leadership of the new MFMP Program Director. The MFMP Program Team implemented many of the practices that PMI identifies as required for effective program management, such as

identifying a strategic plan and associated goals,

focusing on improving communication with stakeholders,

limiting approval of system change requests,

showing diligence in contract management and


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offering continuous user training.

• Strategic and Tactical Plan Developed

o The new MFMP Program Director established a Strategic and Tactical Plan for MFMP in 2008. The plan covers 11 focus areas, with numerous goals within each area. Several goals have already been accomplished. For example, the legacy system SPURS has been sunset and the department has increased its interaction with vendors and agency users.

• Stakeholder Communications Improved

o A positive change in the management of the MFMP Program is that communications have improved between the DMS MFMP Program support team and the agency liaisons, vendors and Accenture support team. According to PMI, effective Program Managers spend 90% of their time communicating with their stakeholders, which facilitates conflict resolution and stabilizes stakeholder expectations. Evidence of improved communications includes:

establishing monthly discussions with vendors (“fireside chats”),

expanding user training to several cities statewide,

changing user training style to hands-on vs. auditorium,

scheduling quarterly meetings with agency liaisons to discuss their Agency Benchmarking Activity Report,

redesigning the MFMP website and

publishing a bi-monthly MFMP e-newsletter

Contract Management:

Again the OPPAGA report cited DMS’ improved contract management practices in the last two years subsequent to the CEG report in December 2007. DMS also proceeded to renegotiate the contract and, in doing so achieved improved performance, improved service levels and decreased cost. Refer to section 7 for a detailed overview of improved contract management and renegotiation achievements.

External Enterprise Governance Structure: There have been and continue to be efforts made to improve the state enterprise external to the MyFloridaMarketPlace operation since the Council of Efficient Government issued its report in December 2007. Some key issues that still need to be addressed include:

• Executive and Legislative Sponsorship • Funding • Business Process Change • Nature of State Governance

In 2008, the MFMP governance structure was strengthened when the Office of Legislative Services migrated from the State legacy procurement system SUPRS to MFMP. Additionally, the Division of Administrative Hearings and the Florida School for the Deaf and Blind vacated SPURS. These actions in 2008 enabled the full retirement of SPURS June 1,


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2009, making MFMP the true enterprise single system for purchasing activities by state agencies.

Concurrent with the SPURS retirement activities, the DMS MyFloridaMarketPlace and PeopleFirst (PF) Program Directors, along with DMS Chief of Staff and Director of State Purchasing have all been involved with the state enterprise issues that supersede the FLAIR, MFMP and PF enterprises. The nature of state governance in the state of Florida is a continuing challenge that must be embraced and addressed at the Executive and Legislative levels.

From September 2008 to January 2009 an informal Financial and Cash Management Task Force was convened to address state level enterprise governance issues. The taskforce was led by the Department of Financial Services and involved representation from the OPB, and Legislative staff.

Attached to this section are the two deliverables of that body. It is a positive development for the State of Florida that such a Taskforce was created and that the major enterprises of FLAIR, MFMP and PF were fully involved in its deliberations and products as the integration required across agencies and systems for any enterprise solution is critical.

• The Financial and Cash Management Task Force Strategic Plan dated February 1, 2009.

• Draft Legislation to enact the vision of the above plan.

In Fiscal Year 2009, SB 2088 was developed to enact the work of the Taskforce. The bill was not passed by the Legislature. This year SB 2250, which will address some aspects of enterprise governance, was introduced by Senator Alexander and is under consideration. As of this writing the ultimate outcome is uncertain.

Conclusion: The MyFloridaMarketPlace operation is now a mature operation and no longer considered a project. MFMP has made great progress in terms of both technical and programmatic areas. With the retirement of SPURS, launch of the VIP, many of the programmatic improvements cited above and planned VBS enhancements, MFMP has become the standard operation that supports the purchasing efforts of the state agencies. The MFMP governance structure has proven successful and both the DMS and Accenture organizations that support MFMP are strong.

However no matter how successful the internal enterprise may be, there will continue to be challenges with change management and achieving the full potential that these electronic systems offer with out the type of state level enterprise management and support described above.

Financial and Cash Management Task

Force

Strategic Business Plan

02/01/09

Financial and Cash Management Task Force


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Table Of Contents

1 Executive Summary ................................................................................................................ 3 2 Introduction ............................................................................................................................. 5

2.1 External Reports on Project Aspire................................................................................. 6 2.1.1 Council on Efficient Government Report to the Governor ..................................... 6 2.1.2 Gartner’s Evaluation of Project Aspire ................................................................... 7

2.2 Deficiencies in Governance ............................................................................................ 8 2.3 Customization of Business Processes ........................................................................... 10

2.3.1 Business Process Design Document ..................................................................... 10 2.3.2 Functional Specification Documents .................................................................... 10 2.3.3 Functional Requirements ...................................................................................... 11 2.3.4 Analysis of Customizations .................................................................................. 11

2.4 Funding Challenges ...................................................................................................... 14 2.4.1 Implementation Costs ........................................................................................... 14 2.4.2 Operational Costs .................................................................................................. 15

3 Strategic Business Plan ......................................................................................................... 15 3.1 Establish Enterprise Financial Governance .................................................................. 15

3.1.1 Legislature............................................................................................................. 17 3.1.2 Governor and Cabinet ........................................................................................... 17 3.1.3 Enterprise Financial Business Operations Officer (Officer) ................................. 18 3.1.4 Enterprise Financial Business Operations Council ............................................... 18 3.1.5 Enterprise Financial Integration Sub-Council ...................................................... 19 3.1.6 Enterprise Business Owners ................................................................................. 20 3.1.7 State Agencies/User Groups ................................................................................. 21

3.2 Develop Strategic Enterprise Financial Business Operations Plan (Plan) .................... 22 3.3 Standardization of Enterprise Financial Business Processes ........................................ 23 3.4 Implementation of Successor Financial and Cash Management System ...................... 25

3.4.1 Develop Business Case for Successor System...................................................... 25 3.4.2 Establish Funding for Successor System .............................................................. 26

3.4.2.1 Funding Option #1 - General Revenue ............................................................. 26 3.4.2.2 Funding Option #2 – Internal Service Trust Fund ............................................ 27 3.4.2.3 Other Considerations ........................................................................................ 28 3.4.2.4 Recommended Funding Approach ................................................................... 29

3.4.3 Establish Project Governance ............................................................................... 29 3.4.3.1 Project Sponsor ................................................................................................. 30 3.4.3.2 Steering Committee .......................................................................................... 31 3.4.3.3 Project Director ................................................................................................. 32 3.4.3.4 Project Managers .............................................................................................. 32 3.4.3.5 Escalation Process ............................................................................................. 33

3.4.4 Proceed with Procurement .................................................................................... 35 4 Appendix A ........................................................................................................................... 36



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1 Executive Summary The Financial and Cash Management Task Force (Task Force) was established in Section 17.0315, Florida Statues, and given the primary purpose of creating a Strategic Business Plan that provides solutions to the issues faced with the previous attempt at implementing a new system, Project Aspire, and identifies the actions that need to be taken for the State of Florida (State) to resume the replacement of the financial and cash management systems. The Task Force reviewed external reports on Project Aspire and focused on resolving the following issues that were raised in the reports:

• Lack of enterprise governance at the executive level • Lack of a strategic vision for the State • Over customization of the State’s business processes

The Strategic Business Plan prepared by the Task Force recommends the following actions: Establish Enterprise Financial Governance Establish an enterprise financial governance structure that is responsible for preparing a Strategic Enterprise Financial Business Operations Plan annually and making decisions that impact the State’s enterprise financial business processes and enterprise reporting. The enterprise financial governance structure consists of:

• Enterprise Financial Business Operations Officer (Officer) reports to the Governor and Cabinet and is accountable for all enterprise financial governance decisions.

• Enterprise Financial Business Operations Council (Council) is chaired by the Officer and is comprised of the enterprise business owners and representatives from the Agency for Enterprise Information Technology, Agriculture Commissioner, Attorney General, and the Florida Association of State Agency Administration Service Directors. The Council’s primary purpose is to assist the Officer in developing a Strategic Enterprise Financial Business Operations Plan annually and providing recommendations on issues impacting enterprise financial business processes and enterprise reporting.

• Enterprise Financial Business Operations Integration Sub-Council (Sub-Council) is chaired by the Executive Director for the Agency for Enterprise Information Technology or designee and is comprised of the technical subject matter experts for the State’s enterprise business systems. The Sub-Council’s primary purpose is to assist the Council with the development of the Strategic Enterprise Financial Business Operations Plan and provide advice on the technical issues associated with the recommended enterprise financial business process and enterprise reporting improvements.

• Enterprise Business Owners are the owners of the State’s core business functions: Financials, Cash Management, Procurement, Human Resource Management, and Budget Administration. The Enterprise Business Owners are responsible for escalating issues to the Enterprise Financial Business Operations Council and Officer that have an impact on the enterprise financial business processes or enterprise reporting.



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Develop a Strategic Enterprise Financial Business Operations Plan Enterprise financial governance must establish a Strategic Enterprise Financial Business Operations Plan annually that documents the State’s current enterprise financial business processes and the current enterprise business systems that support the enterprise financial business processes. The plan will establish annual goals for improvements in enterprise financial business processes, enterprise reporting, and enterprise data management. The plan will also identify enterprise financial business operations policies that will be issued or requested in support of the improvements. Standardization of Enterprise Financial Business Processes The State needs to change from governance that is system-centric to governance that is focused on standardizing end-to-end business processes for the core business functions: financial reporting, cash management, purchasing, human resource management, and budget administration. The recommended enterprise financial governance structure will be responsible for making decisions on the standardization of enterprise financial business processes. Enterprise financial governance will establish operational policies consistent with law for the standardization of the following enterprise financial business processes:

• Personnel Hiring to Separation Financial Business Process • Procurement to Payment Business Process • Asset Acquisition to Disposal Business Process • Revenue Billing to Clearing Receipts Business Process • Budget Administration Business Process • Financial Recording to Reporting Business Process

Implementation of a Successor Financial and Cash Management System Once the State has established an effective enterprise financial governance process and made sufficient progress in the implementation of standard enterprise financial business processes, the process for selecting and implementing a successor financial and cash management system should begin. The Department of Financial Services will have to complete several key activities before the successor project is started:

• Develop a business case on how best to proceed with a successor system and submit the case to the Enterprise Financial Business Operations Council for review and approval by the Officer

• Determine an approach for funding and submit it to the Enterprise Financial Business Operations Council and Officer for review and approval by the Governor and Cabinet before proceeding with a request to the Legislature

• Prepare a Project Charter and a project governance structure and submit it to the Enterprise Financial Business Operations Council for review and approval by the Officer

• Procure the implementation services and software as needed



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2 Introduction In August 2003, the Department of Financial Services began Project Aspire to replace the State’s financial and cash management systems. The objectives of the project were to:

• Use web-based technology to provide enterprise-wide access to the State's financial information, as well as, provide that information in a timelier manner.

• Deploy web-based applications for e-commerce and e-government services that are tightly coupled to the State's financial management system.

• Develop a new chart of accounts that would allow for access to financial management information by program and activity, including access across state agencies and government branch.

• Improve integration of data between the various State systems so that users can perform more detailed analysis and reporting that is not possible today.

• Reduce the number of shadow systems, thus eliminating sources of out-of-sync, out-of- date, incomplete, and erroneous data.

• Improve integration and reduce the number of reconciliations, and thus reducing the staff effort assigned to reconciliation activities.

• Enhance accounting for contracts, grants and projects to better manage these funds that comprise a significant portion of the State's budget.

Project Aspire “suffered from unanticipated delays, lacked an enterprise-wide focus and was not guided by effective, strategic governance”1; therefore, the Chief Financial Officer (CFO) suspended the project on May 17, 2007. The Legislature’s recognition of the need to address the challenges encountered by Project Aspire and concern with the longevity of the current accounting and cash management systems created the Financial and Cash Management Task Force, Section 17.0315, Florida Statues. The Task Force was charged with preparing a strategic business plan that:

• Identifies problems and solutions with the current law and current administration with respect to the existing state accounting system.

• Provides solutions to known failures identified in external reviews and audit reports of the previous project.

• Recommends business processes, requirements, and a governance structure that will support a standardized statewide accounting and cash management system.

• Evaluates alternative funding approaches for the equitable distribution of common accounting infrastructure costs across all participating users.

1 DFS Press Release dated May 17, 2007



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The Task Force is headed by the Chief Financial Officer and includes the Executive Director for the Agency for Enterprise Information Technology, the Director of the Office of Policy and Budget in the Executive Office of the Governor, the Chief of Staff for the Department of Management Services, and a former Director of the Department of Revenue, who has been recognized nationally for his expertise in organizational design and performance measurement.

2.1 External Reports on Project Aspire The Task Force has focused their efforts on providing solutions to the issues raised in the external reports prepared by the Council on Efficient Government and Gartner, Inc.

2.1.1 Council on Efficient Government Report to the Governor2 The Council on Efficient Government was tasked by the Governor in February 2007 to conduct a review of three large state projects: MyFloridaMarketPlace (MFMP), PeopleFirst, and Project Aspire. The object of the report was to review the status of the projects, identify key findings, identify key lessons learned, and make recommendations for improvements to future project planning and execution. The report provided findings in several areas for Project Aspire that are restated below:

Executive Sponsorship The CFO acted as the Executive Sponsor. The Board of Directors was created to act as the governing body. However in 2004 various representatives on the Project’s Board of Directors disengaged and left the project. Top level sponsorship was no longer actively participating in the creation of the new system. Loss of executive project sponsorship from the three bodies of government was a major issue negatively impacting the project’s success. Business Process Standardization A major challenge has been the lack of standardization of business rules among state agencies and the resistance to change to a uniform process. Attempting to replicate existing functionality by modifying the new software added additional risk to the project. The lack of standardization has caused complexities within the proposed system that have ultimately led to a heavily over-customized system. Use of Best Practices The State did not incorporate third party advice to change existing internal business processes and not over-customize the best of breed software selected. The project team did not follow industry best practices to enforce standardization in order to minimize customization.

2 Report to the Governor on MyFloridaMarketPlace, People First and Project Aspire, Report No. R08-002, prepared by Council on Efficient Government, January 17, 2008



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2.1.2 Gartner’s Evaluation of Project Aspire3 Gartner, Inc. was hired by the Department of Financial Services in February 2007 to provide an independent, objective third-party evaluation and assessment of Project Aspire with a focus on steps needed to successfully complete the project, as well as long-term issues of maintainability/upgradeability. Some of the findings are restated below:

Finding # 1 – Lack of an executive governance process There is a lack of an executive governance process to provide discipline, executive guidance, and decision-making, consequently resulting in:

• Software that has been customized beyond normally acceptable limits • Process standardization not being addressed • Expectations of financial leaders are not consistent • Key stakeholders at the senior level have not been engaged in the implementation

Finding #2 – No statewide enterprise resource planning (ERP) vision and strategy The scope of the Project Aspire is limited to financial management with the State, consequently resulting in:

• Complex interfaces and product modifications that are required to enable end-to-end processing of financial transactions with MFMP, People First, FLAIR-Payroll Subsystem, and Legislative Appropriations System and Planning and Budgeting System (LAS/PBS)

• High and increasing cost and effort levels to develop and maintain integration • Aspire is also dependent on funding of other State initiatives which, if not

adequately funded, may negatively impact the interface work being completed for Aspire

Finding #3 – External environment changes affect long-term viability External environment changes may critically affect the long-term viability of the PeopleSoft application.

• A comprehensive statewide ERP and Enterprise Architecture strategy would better align the technical solution with business objectives and investment

• The mapping of business requirements to the technical solution was unclear and dated

• Opportunity to follow best practices and reduce customizations of the technical solution through business process re-engineering

Gartner’s recommendation was to establish governance and funding processes and develop a statewide ERP strategy before moving forward with a System Integration (SI) partner.

3 Project Aspire Evaluation, Final Report, Engagement No. 221698841, prepared by Gartner, May 17, 2008



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The issues identified in the Council on Efficient Government report go hand in hand with the issues identified in the Gartner report. Both reports identified the lack of authoritative governance, proper strategic vision for the State and an inability to standardize business processes.

2.2 Deficiencies in Governance The State of Florida has several governance entities established in law that perform oversight, and/or decision-making, or set policy for business processes or business systems. The table below provides an overview of each entity and their role as defined in law. These entities should be taken into consideration when developing the recommended enterprise governance structure.

Table 1 Florida’s Governance Entities for Enterprise Business Systems

ENTITY LAW RESPONSIBILITY MEMBERS Financial Management Information Board (FMIB)

Section 215.91, Florida Statutes

Adopt policies and procedures that : • Strengthen and standardize fiscal

management and accounting practices • Improve internal financial controls • Simplify the preparation of objective,

accurate, and timely fiscal reports • Provide the information needed in the

development, management, and evaluation of public policy and programs

• Governor • Cabinet

Florida Financial Management Information Systems (FFMIS) Coordinating Council


Approval and oversight of: • Information subsystems' designs prior to

the development, implementation, and operation of the subsystems and subsequent proposed design modifications

• The exchange of unified and coordinated data between information subsystems

• Resolution of problems between functional owners

• Chief Financial Officer • Agriculture

Commissioner • Secretary, DMS • Attorney General • Director, Office of

Policy and Budget

Agency for Enterprise Information Technology (newly created - July 2007)


• Develop strategies for design, delivery, and management of the enterprise information technology services established in law

• Establish policies for the management of enterprise information technology services

• Provide oversight on the implementation of enterprise information technology services

• Executive Director

The governance entities discussed in this section have been established in law for the purpose of providing oversight and establishing policies for the enterprise. However, the State’s inability to



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re-engineer/standardize business processes and improve enterprise reporting indicates that there are deficiencies in the governance process. Historically, the State’s governance entities have been unsuccessful at establishing and/or enforcing enterprise financial business operations policies that provide consistency and standardization across the enterprise business systems. This has resulted in the core business functions being governed independently with a focus primarily on technical modifications to each enterprise system as displayed in the diagram below. The ineffectiveness of the FMIB and FFMIS Coordinating Council has led to decisions being made outside the current governance process. Decisions are currently being driven by user needs and are not focused on standardization and re-engineering of the end-to-end business processes that cross the State’s enterprise business systems.

Diagram 1

For governance to become effective there must be one individual with the proper authority, from the Governor and Cabinet, to make decisions and be accountable for the enforcement of enterprise financial business operations policies. This individual should also be responsible for establishing a strategic vision for the State’s enterprise financial business operations and continually looking for improvements that will enhance financial or program reporting or gain efficiencies in daily operations. Decisions must be focused on improving the end-to-end



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enterprise financial business processes for the State and involve input from the enterprise business owners and state agencies.

2.3 Customization of Business Processes An organization’s resistance to changing its business processes is one of the key factors to the failure of many ERP system implementations. Executive leadership and the project team must continually monitor for the tendency to recreate/build the existing processes instead of implementing the business processes provided by the system. If the State is to proceed with replacing the current financial and cash management systems, then executives must understand the challenges that Project Aspire faced with implementing standardized business processes. An analysis has been performed using the Business Process Design document, Functional Specification documents, and Functional Requirements from Project Aspire to determine the core business functions and functional requirements that resulted in the highest number of customizations and the cause for each customization.

2.3.1 Business Process Design Document A business process is defined as a series of tasks or procedures that yield a specific result. The delivered software for Project Aspire was divided into six core business functions. The delivered software was designed to provide standard business processes that are either performed entirely within a core business function or may cross the core business functions. During the design phase, the project team in collaboration with state agencies developed business processes that incorporated both delivered processes inherent in the software and customizations to meet the State’s functional and business processing requirements. The project’s Business Process Design document outlined the six core business functions and provided 221 process flow diagrams associated with the core business functions.

2.3.2 Functional Specification Documents A functional specification document clearly and accurately describes the design for a customization that is to be built for the software being implemented. During Project Aspire’s requirement confirmation and design phases, a functional specification document was developed for each enhancement to the software, interface to other systems or custom report that was to be built. Each functional specification document was reviewed and approved by project management, assigned a number and added to the Application Design Master List (ADML). The project’s final ADML had a total of 280 approved customizations. Of the 280 customizations, 114 were software enhancements, 104 were system interfaces and 62 were for custom reports. The customizations are grouped by core business function and summarized in the table below:



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Table 2 Summary of Functional Specifications

Core Business Function Number of Functional Specifications

Enhancement

Interface

Report

Accounts Receivable & Billing

18 11 4 3

Asset Management 14 11 2 1 Project & Grant Management

25 12 8 5

Procurement to Payment 109 37 48 24 Recording to Reporting* 64 20 26 18 Treasury 39 16 12 11 Technical and Misc 11 7 4 TOTAL CUSTOMIZATIONS

280 114 104 62

*The Recording to Reporting core business function included payroll processing for the State.

2.3.3 Functional Requirements A functional requirement is defined as the fundamental actions that must take place in software in accepting and processing the input of data and the processing and generating of the output of data. In preparation for the procurement of a software package to replace the financial and cash management systems (Project Aspire), the Department of Financial Services, with assistance from consultants and state agencies, developed 1,110 functional requirements that were used for the selection of software. Additional functional requirements were identified during Project Aspire’s requirements confirmation and design phases, bringing the total to 1,180 functional requirements.

2.3.4 Analysis of Customizations An analysis was performed by the Task Force’s Business Process Workgroup to determine the causes for the customization. Although workgroup members could select one or more causes from a list of seven causes, only one cause could be selected in the analysis database as the “primary cause.” The primary cause is the one cause that significantly initiated the customization. In order to provide consistency in evaluating customizations, each workgroup member had to apply pre-established criteria. The following defines the seven causes and how the workgroup members applied criteria to determine the primary cause:

1) State Legal Requirement – the State Constitution, Statute or the Florida Administrative Code had to specifically require the action. For example, Section 215.422, Florida Statutes, has specific statutory requirements regarding the timeliness of voucher processing.



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2) Federal Legal Requirement – the U.S. Constitution, U.S. Code or the Code of Federal Regulations had to specifically require the action. For example, the Internal Revenue Code has specific requirements regarding 1099 reporting of vendor payments.

3) Florida Financial Management Information Systems (FFMIS) – it would have to be a requirement of one of five subsystems listed in Section 215.93, Florida Statute. For example, there are certain requirements within these subsystems that were required to be carried over into the new system for the new system to operate effectively. These systems include:

• MyFloridaMarketPlace - procurement subsystem • PeopleFirst - human resource subsystem • LAS/PBS - budgeting and appropriation subsystem • FLAIR - financial subsystem • CMS - cash management subsystem.

4) State Agency Need – at least one state agency had a business need that was not in the functionality of delivered software. Changes of this type would involve specific agency business systems interfaces.

5) Enterprise Need – the CFO and/or state agencies collectively had business needs that were not included in the functionality of delivered software

6) Replicating Existing Functionality - there was a business need that was not being met in functionality of delivered software and alternative processes could not accomplish the same results.

7) Other – there was a technical limitation in system’s functionality to accomplish a prescribed task.

Reports detailing the results from the analysis are provided in Appendix A of the Strategic Business Plan. The top three causes for customization were: replicating existing functionality, FFMIS, and enterprise need. The table on the next page summarizes the findings for the primary causes by the type of customization.

Table 3 Customization by Cause and Type of Customization

Cause of Customization Number of Customizations

Enh

ance

Inte

rfac

e

Rep

ort

State Law 20 15 5 Federal Law 13 7 5 1 FFMIS 55 20 35 Agency need 26 10 11 5 Enterprise need 44 26 17 1 Replicating existing functionality 102 25 22 55 Other 20 11 9

280 114 104 62



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The top three core business functions with the highest number of customizations were Procurement to Payment, Recording to Reporting, and Treasury. The table below summarizes the findings for the primary causes by core business function.

Table 4 Customizations by Cause and Core Business Function

*The Recording to Reporting core business function included payroll processing for the State. The Task Force’s Business Process Workgroup also reviewed the 1,180 requirements from Project Aspire to determine if a requirement could be directly linked to the 280 customizations. The Workgroup identified 253 of the 1,180 functional requirements as having a direct relation to the customizations to the delivered software. The top three functional requirement areas with the largest percentage of requirements that could be directly linked to customizations were:

Budget control/execution requirements associated with the Recording to Reporting core business function

Cash management/treasury requirements associated with the Treasury core business function

Procurement accounting requirements associated with the Procurement to Payment core business function

Core Business Function

Num

ber

of

Cus

tom

izat

ions

Stat

e L

aw

Fede

ral L

aw

FFM

IS

Age

ncy

Nee

d

Ent

erpr

ise

Nee

d

Rep

licat

ing

Exi

stin

g Fu

nctio

nalit

y

Oth

er

Accounts Receivable & Billing

18 2 4 9 2 1

Asset Management 14 5 2 2 1 2 2 Project & Grant Management 25 2 8 4 6 3 2 Procurement to Payment 109 5 2 21 9 8 57 7 Recording to Reporting* 64 5 3 18 6 7 23 2 Treasury 39 1 13 12 11 2 Technical and Misc. 11 1 1 1 4 4 TOTAL CUSTOMIZATIONS

280 20 13 55 26 44 102 20



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The 253 requirements should be included in the scope of re-engineering enterprise financial business processes in an effort to minimize customization in a successor financial and cash management system. The purpose of the analysis was to identify causes for the customizations so that the enterprise governance entities could use the information in an effort to standardize the enterprise financial business processes. Enterprise governance should examine the causes of customizations to determine if:

• State laws should be changed to support standardization • Changing business processes will improve the integration between the enterprise systems • Agencies and enterprise business owners should justify the reasons for not conforming to

the standard business processes Enterprise governance would then have sufficient information to make decision on the enterprise financial business operation policies needed for the State going forward.

2.4 Funding Challenges There is no direct benefit to the private sector for the implementation or maintenance of a financial and cash management system for the State. This makes it difficult, if not impossible, to justify a service fee to the citizens or vendors for the services provided by the system. A more logical approach is to examine options for funding within the State’s existing funding sources with the cost shared equally by the entities that are using the current system or will be using the replacement system. There is a cost impact for the on-going maintenance of the current system and the implementation of a new system; therefore, making it important to examine funding options that will support both.

2.4.1 Implementation Costs Implementation costs include, but are not limited to, initial hardware and software purchases, contractual service costs, state personnel to support the project, as well as travel and training during the go-live phase. Acquiring funding for the implementation costs is a challenge due to the high cost estimated to be spent in the first few years, typically $80 to $100 million. Establishing a reliable funding source for implementation is critical to the project’s success. To accommodate the spike in expenditures, many organizations look at financing as an option to handle the immediate cash flow needs for the project. The Department of Financial Services projected a total of $80,000,000 would be financed over 7 years for the Project Aspire. Contract deliverables and other implementation costs represented approximately $48 million of the overall funding for the project. The remaining $32 million was used to cover software, hardware, and overhead costs. A master equipment financing agreement was executed in October 2003. The project requested a total of seven draws between October 2003 and June 2006 totaling $71,219,824. The loan payments were paid through the appropriations received from the General Revenue Fund or the Insurance Regulatory Trust Fund.



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2.4.2 Operational Costs Operational costs can be defined as the day to day costs, such as personnel and hardware and software licensing costs, incurred in running the systems that will support the State’s accounting infrastructure. The State’s accounting infrastructure is currently comprised of FLAIR and the Cash Management Subsystem (CMS). The FLAIR system supports the accounting and financial management functions for the State’s Chief Financial Officer, which includes budget posting, receipt and disbursement of funds, payroll processing, and the accounting information for the State’s Comprehensive Annual Financial Report. The CMS supports the functions of the State Treasury, which includes the receipt of state funds, payment of state disbursements, and the investment of available funds. CMS is comprised of 16 applications that facilitate the Treasury’s functions, some of which interface with FLAIR. The operational costs for FLAIR are currently funded by the General Revenue Fund. Revenue for the General Revenue Fund is derived from taxes, charges and miscellaneous income obtained from the state and local level. The costs for funding the FLAIR system are $12,062,802 for fiscal year 2008-2009. The operational costs for CMS are currently funded by the Treasury Administrative and Investment Trust Fund. Revenues for this trust fund are generated from the administrative fees charged to investment participants in the Treasury Investment Pool. The costs for funding CMS are $452,361 for fiscal year 2008 – 2009.

3 Strategic Business Plan The Task Force is recommending the following steps be taken in order to successfully implement a successor financial and cash management system:

• Establish enterprise financial governance • Develop a Strategic Enterprise Financial Business Operations Plan • Standardize the enterprise financial business processes • Develop a business case for a successor system • Establish funding for a successor system • Establish project governance • Proceed with procurement

3.1 Establish Enterprise Financial Governance What is governance? Governance, by definition, is to control and direct the making and administration of policy. The enterprise financial governance model will provide a process for making strategic enterprise financial business decisions and the establishment of policies that impact all the agencies within the executive branch of government. The effectiveness of the enterprise financial governance model will be determined by executive leadership’s commitment, resolve, and oversight. The enterprise financial governance structure should:



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• Be transparent and accountable • Have clearly defined roles and responsibilities • Have the authority to make decisions • Have a clearly defined escalation process that identifies when issues need to be raised to

the decision-making group • Have a clearly defined decision-making process that supports a proactive approach for

new ideas and reactive approach for resolving issues • Make decisions in a reasonable time frame • Include aspects of information technology and business policy decision-making for the

enterprise

The State needs to change from governance that is system-centric to governance that is focused on standardizing end-to-end business processes for the core business functions: financial reporting, cash management, purchasing, human resource management, and budget administration. The recommended enterprise financial governance structure will be responsible for making decisions on the standardization of enterprise financial business processes, developing an annual Strategic Enterprise Financial Business Operations Plan for the State, and establishing policies and procedures that enforce standard enterprise financial business processes. The State’s enterprise financial governance structure must have clearly defined roles, responsibilities, and an understanding of the relationships between each role. There is a need for three levels of governance that (1) allows business owners to make day-to-day decisions that do not impact the enterprise, (2) establishes an Enterprise Financial Business Operations Council that provides recommendations for the enterprise financial business operations, and (3) establishes one individual with the decision-making authority for the enterprise financial business operations. Below is a diagram depicting the recommended enterprise financial governance structure and a detailed explanation for each entity’s/individual’s role and responsibilities.



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Diagram 2

3.1.1 Legislature It is important to acknowledge the role of the State Legislature in any governance structure. The Legislature makes final policy and funding decisions for the State. In support of the new enterprise financial governance structure, the Legislature may consider/request recommendations from the Governor and Cabinet before making decisions on funding and/or laws that have an impact on the enterprise financial business processes of the State and/or the enterprise business systems that support the enterprise financial business processes.

3.1.2 Governor and Cabinet It is the role of the Governor and Cabinet to make recommendations to the Legislature on law changes and funding requests that support the enterprise financial business operations for the State. The Governor and Cabinet will enforce the State’s annual Strategic Enterprise Financial Business Operations Plan that is prepared by the Enterprise Financial Business Operations Council and approved by the Officer.



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3.1.3 Enterprise Financial Business Operations Officer (Officer) The Officer will be appointed by the Governor and Cabinet. The Officer’s role is to make decisions on the State’s enterprise financial business processes and enterprise reporting needs, propose law and funding recommendations that support improvements to the enterprise financial business processes to the Governor and Cabinet, and set priorities for the State’s projects to enhance or implement enterprise business systems. The Officer will chair the Enterprise Financial Business Operations Council and have the authority to:

• Adopt policies that support the standardization of enterprise financial business process • Govern the development, adoption, and implementation of the annual Strategic

Enterprise Financial Business Operations Plan • Approve the Business Case for funding requests to enhance or implement enterprise

business systems • Approve the Project Charter and project governance structure for projects to enhance or

implement enterprise business systems • Monitor compliance with the Strategic Enterprise Financial Business Operations Plan

and the status of enterprise projects and report regularly to the Governor and Cabinet

The Officer will also have the ability to sponsor change management activities (i.e., workshops for agency personnel, speak at agency leadership meetings, etc) that promote the enterprise financial business process improvements for the State.

3.1.4 Enterprise Financial Business Operations Council The Enterprise Financial Business Operations Council’s role is to prepare the State’s Strategic Enterprise Financial Business Operations Plan annually and advise the Officer on issues that impact the State’s end-to-end enterprise financial business processes and enterprise reporting needs. The Officer will chair the Council. The Council will include, at a minimum, the following nine members:

• Cash Management Business Owner or designee • Financial Management Business Owner or designee • State Purchasing Business Owner or designee • Human Resource Management Business Owner or designee • Budget Execution Business Owner or designee • Agency for Enterprise Information Technology, Executive Director or designee • Representative from the Florida Association of State Administrative Service Directors • Attorney General’s designee • Agriculture Commissioner’s designee



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The chair may include representatives from state agencies, consultants, or industry subject matter experts as needed. The Council will be responsible for:

• Reviewing the State’s enterprise financial business processes, designing and recommending enterprise financial business process improvements and working with the respective business process owners to implement the improvements on an on-going basis

• Recommending and implementing data management standards that support the State’s enterprise reporting needs

• Recommending policies that support standardization of enterprise financial business processes and enterprise reporting needs

• Preparing the State’s Strategic Enterprise Financial Business Operations Plan annually The council must be adequately staffed and have a commitment from the business owners to support the weekly or monthly enterprise financial governance process required for the on-going enterprise financial business operations of the State.

3.1.5 Enterprise Financial Integration Sub-Council The Enterprise Financial Integration Sub-Council’s role is to provide technical advice to the Enterprise Financial Business Operations Council and Officer. The Sub-Council has the expertise to identify system impacts for proposed enterprise financial business process changes and provide suggestions on process improvements that leverage new technologies or result in system integration efficiencies. The Sub-Council will be chaired by the AEIT Executive Director or his/her designee and will include, at a minimum, the following six members:

• Representative for FLAIR • Representative for CMS • Representative for MyFloridaMarketPlace • Representative for People First • Representative for LAS/PBS • Representative for state agencies’ Chief Information Officers

The chair may include representatives from state agencies, consultants, or industry experts as needed. The Sub-Council will be responsible for

• Reviewing the State’s current enterprise business systems and document the integration points between the systems

• Estimating the life cycle costs for maintaining these systems and the overall enterprise architecture currently in the State



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• Provide annual risk assessments of the enterprise business systems’ security and data security and plans that address internal controls in the high risk areas

• Assisting with the development of an Enterprise Data Management Plan The Sub-Council must be adequately staffed and have a commitment from applicable Chief Information Officers to support the assignments from the chair of the Sub-Council.

3.1.6 Enterprise Business Owners The State’s enterprise business owners’ role is to support enterprise financial governance and make decisions on the daily operations of their core business function. Many daily operational decisions do not have an impact on the end-to-end enterprise financial business processes and need to be handled timely. The recommended governance structure is designed to allow the State’s enterprise business owners to manage their daily operations in a timely manner and only escalate the issues that have an impact on the end-to-end enterprise financial business process. The enterprise financial business process flows developed for the Strategic Enterprise Financial Business Operations Plan will identify the integration between each enterprise business owner that has a step in the enterprise financial business process flow. Decisions that have an impact on another enterprise business owner’s step in the end-to-end enterprise financial business process must be escalated to the Enterprise Financial Business Operations Council for review and final decision by the Officer. Enhancements to Current Enterprise Systems or New Enterprise Systems Enterprise business owners may also sponsor projects to implement an enterprise application or enhance an existing enterprise application when the need arises. Projects that have an impact to the end-to-end enterprise financial business process must be approved through the enterprise financial governance process. If the enterprise business owner is requesting additional funds for the project, a business case must be prepared and submitted to the Enterprise Financial Business Operations Council to be reviewed and approved by the Officer. The recommended funding will be reviewed by the Council and Officer with the final decision on proceeding with a request to the Legislature being made by the Governor and Cabinet. The project charter and project governance structure must be reviewed by the Enterprise Financial Business Operations Council and approved by the Officer. The State’s enterprise business owners and the core business function they are responsible for are listed below:

• Financial Management - Director, Division of Accounting and Auditing, Department of Financial Services

• Cash Management - Director, Division of Treasury, Department of Financial Services • Human Resource Management - Director of People First, Department of Management

Services • Purchasing - Chief of State Purchasing Operations, Department of Management Services • Budgeting - Director, Office of Policy and Budget, Executive Office of the Governor



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Enterprise business owners will be responsible for:

• Supporting the Enterprise Financial Business Operations Council in the review of the State’s enterprise financial business processes and recommending improvements on an on-going basis

• Supporting the Enterprise Financial Integration Sub-Council in identifying and documenting integration points between the enterprise business systems and recommending data security/integrity improvements on an on-going basis

• Adhering to the Strategic Enterprise Financial Business Operations Plan approved by the Officer

• Providing open forums with the user community to raise issues • Escalating issues to the Enterprise Financial Business Operations Council that have an

impact on the end-to-end enterprise financial business processes • Preparing a Business Case and submitting it to the Enterprise Financial Business

Operations Council for review and approval by the Officer when seeking additional funds for the enhancement or implementation of an enterprise business system

• Preparing a Project Charter and submitting it to the Enterprise Financial Business Operations Council for review and approval by the Officer for projects to implement or enhance an enterprise business system

• Establishing a project governance structure that has been reviewed by Enterprise Financial Business Operations Council and approved by the Officer and ensure regular communication with the Council and Officer during the life of the project

The State’s business owners play a key role in the escalation of issues to the Enterprise Financial Business Operations Council and the adherence to the State’s Strategic Enterprise Financial Business Operations Plan. Their commitment to the enterprise governance process is a critical element to its success.

3.1.7 State Agencies/User Groups The state agencies’ roles are to provide input to business owners on enterprise financial business process improvements and enterprise reporting needs. The state agencies also have a need to request changes to business processes to support the programs and services they provide to the citizens of Florida. There are instances where the state agencies in collaboration with the Enterprise Business Owner have established user committees to evaluate requests and set priorities. The recommended governance structure supports the continued efforts of the state agencies and user community to raise issues and set priorities for their requests. It will be the responsibility of the business owner to escalate requests that have an impact on the end-to-end enterprise financial business process to the Enterprise Financial Business Operations Council. State agencies will have the responsibility to:



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• Adhere to the enterprise financial business processes and enterprise reporting requirements established in the Strategic Enterprise Financial Business Operations Plan

• Adhere to the IT standards and data management requirements established in the Strategic Enterprise Financial Business Operations Plan

• Raise issues in the appropriate user group forums and/or to the appropriate business owner

State agencies perform the majority of the steps in the enterprise financial business process flows and therefore are considered stakeholders. The recommended enterprise governance structure supports their need to raise issues to the business owners as well as provide representation in the enterprise decision-making process by having a representative on the Enterprise Financial Business Operations Council. The Agency Administrative Service Director that is selected by the Florida Association of State Administrative Service Directors will be the conduit of the agencies to the enterprise decision-making process.

3.2 Develop Strategic Enterprise Financial Business Operations Plan (Plan) Enterprise financial governance must establish a Strategic Enterprise Financial Business Operations Plan that documents the State’s current enterprise financial business processes and the current enterprise business systems that support the enterprise financial business processes. The Plan will establish annual goals for improvements in enterprise financial business processes, enterprise reporting, and enterprise data management. The Plan will also identify the enterprise financial business operations policies that will be issued or requested in support of the improvements. The Plan must provide information in the following areas:

• Enterprise financial business processes – Creation of business process flow diagrams outlining the high-level process steps for enterprise financial business processes that must be followed by all the state agencies. The diagrams should also identify the enterprise business system(s) performing these functions and the integration points with other enterprise business systems.

• Recommended enterprise financial business process improvements – Recommendations for enterprise financial business process improvements that should be implemented over the next fiscal year. The recommendations should include any associated system impacts, life cycle cost impacts, and enterprise reporting impacts. The recommendations should be prioritized based on the impact on existing resources (e.g., budget and workload).

• Enterprise reporting needs – Documentation on the current enterprise reporting associated with each enterprise financial business process. The documentation should include recommendations on new enterprise reporting that are to be implemented over the next fiscal year.

• Enterprise financial business operations policies – Recommendations on policies needed to support the enforcement of enterprise financial business processes, enterprise reporting needs, and enterprise financial business process improvements.



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• Enterprise data management plan – Documentation of current data management in all enterprise business systems that includes lists of data fields with data definitions, assignment of responsibility for the maintenance of the data, current measures/policies for maintaining data security, measures for maintaining data integrity between systems, and identification of data redundancy between systems. A risk assessment on access to confidential data and a plan for addressing improvements to internal controls for areas that have been identified as high risk must be included. Provide recommendations on data management improvements that include the associated enterprise business system impacts and life cycle cost impacts. Recommendations for improving data management should be prioritized based on the impact to existing resources (e.g., budget and workload).

• Enterprise Technology Architecture Plan – Documentation of the enterprise hardware, software, and IT environments (i.e., network, web-portals) that support the enterprise financial business processes and enterprise reporting. The plan should include recommendations on improving access control, system performance, and/or hardware/software purchases that would improve the State’s ability to perform enterprise financial business processes and/or enterprise reporting needs.

• Current Life Cycle Costs – Identification of the life cycle costs to maintain the current enterprise business systems and IT environments. This information will serve as a baseline for evaluating future recommendations for business process and reporting improvements for the enterprise. It is important to note that the life cycle costs will not include any maintenance costs associated with agencies’ business systems that may perform the same business processes as an enterprise business system.

By focusing the scope of enterprise governance on oversight of enterprise financial business processes and the establishment of a Strategic Enterprise Financial Business Operations Plan, the State will be in a better position to re-engineer/standardize business processes, improve the State’s enterprise reporting, and take advantage of new technologies that support the enterprise financial business processes.

3.3 Standardization of Enterprise Financial Business Processes As noted in Section 3.1, the State needs to change from governance that is system-centric to governance that is focused on standardizing end-to-end business processes for the core business functions: financial reporting, cash management, purchasing, human resource management, and budget administration. The recommended enterprise financial governance structure will be responsible for making decisions on the standardization of enterprise financial business processes. Enterprise financial business processes are business processes that can be automated, that cross multiple agency boundaries, and that have an impact on the State’s financial records, and should be standardized. Enterprise financial governance will establish operational policies consistent with law for the standardization of the following enterprise financial business processes:



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• Personnel Hiring to Separation Financial Business Process • Procurement to Payment Business Process • Asset Acquisition to Disposal Business Process • Revenue Billing to Clearing Receipts Business Process • Budget Administration Business Process • Financial Recording to Reporting Business Process

The State’s enterprise financial business processes can be broken down into specific steps that can be measured, modeled and improved. Some of these steps can also be completely redesigned or eliminated altogether. Re-engineering identifies, analyzes, and redesigns an organization's core business processes with the aim of achieving dramatic improvements in critical performance measures, such as cost, quality, service, and speed. Re-engineering recognizes that an organization's business processes are usually fragmented into sub processes and tasks that are carried out by several specialized functional areas, i.e. Enterprise Business Owners or State Agencies. Often, no one is responsible for the overall performance of the entire process. Re-engineering experts maintain that optimizing the performance of sub processes can result in some benefits, but cannot yield dramatic improvements if the process itself is fundamentally inefficient and outdated. For that reason, Re-engineering focuses on redesigning the process as a whole in order to achieve the greatest possible benefits to the organization and their customers. The major components of a Business Process Re-engineering Life Cycle include:

• Identification of current business processes

• Review, update and analysis of “As-Is” processes

• Design of “To-Be” processes • Test and implementation of “To-Be”

processes

Diagram 3

The State must document each enterprise financial business process (i.e. AS-IS), review the steps within the process that have the highest number of variations on how it is being executed, and make decisions on how to eliminate the variations to gain a more standard approach to the execution of the step (i.e. To-Be).



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Based on the analysis of customizations developed for Project Aspire, the Task Force recommends that the State focus its initial efforts on re-engineering the following enterprise financial business processes:

• Procurement to Payment Process • Personnel Hiring to Separation Financial Business Process • Financial Recording to Reporting Business Process • Revenue Billing to Clearing Receipts Business Process

The standardization of these enterprise financial business processes would better position the State for a successful implementation of a successor financial and cash management system.

3.4 Implementation of Successor Financial and Cash Management System Once the State has established an effective enterprise financial governance process and made sufficient progress in the implementation of standard enterprise financial business processes, the process for selecting and implementing a successor financial and cash management system should begin. Several key activities will have to be completed before the project can begin:

• Develop a business case on how best to proceed with a successor system and submit it to the Enterprise Financial Business Operations Council for review and approval by the Officer

• Determine an approach for funding and submit it to the Enterprise Financial Business Operations Council and Officer for review with the Governor and Cabinet giving final approval to proceed with a request to the Legislature

• Prepare a Project Charter and a project governance structure and submit it to the Enterprise Financial Business Operations Council for review and approval by the Officer

• Procure the implementation services and software if needed

3.4.1 Develop Business Case for Successor System A business case provides a case for change by examining total lifecycle costs, benefits, risks and implementation requirements. It is also a reference for the procurement and implementation of a project or program. Critical parameters such as cost, schedule, quality, and current environmental issues are documented in a manner that demonstrates the capability for timely delivery of the project or program. The State will need to examine the best alternative for proceeding with a successor system. The options would be (1) to use software currently owned by the State, (2) procure new software, or (3) build a custom application. Each option should be evaluated to determine the one that will provide the best support for the enterprise financial business processes, enterprise reporting needs, and integration with the other enterprise business systems. The Business Case will need to include a justification of the option selected and, at a minimum, provide details on the following:



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• Key objectives and benefits expected from the project • Scope of the project • Risk assessment • Key stakeholders and potential impact • Estimated cost and funding requirements • Project timeline

The business case will need to be reviewed by the Enterprise Financial Business Operations Council and approved by the Officer before proceeding with a funding request.

3.4.2 Establish Funding for Successor System The funding options provided below look at alternative approaches for cost sharing by state agencies for both implementation and operational costs for a successor system.

3.4.2.1 Funding Option #1 - General Revenue Agencies are currently being assessed a service charge on certain income and certain trust funds in order to share the cost of general government, pursuant to Section 215.20, Florida Statutes. The funds collected from the general revenue service charge (GRSC) are being deposited into the General Revenue Fund. This funding option considers the GRSC as the revenue source for raising additional revenue to cover the costs of a successor system. A service charge of 7, 3 and/or .3 percent is charged on all income of a revenue nature deposited in all trust funds unless specifically exempted within Section 215.22, Florida Statutes. The assessed percentage would need to be higher in order to cover the initial implementation costs for the successor system. In order to utilize this funding option, the State would need to acquire the cash to cover implementation costs upfront. This could be accomplished through the establishment of a credit line with a financial institution or through a lease-purchase arrangement with the vendor, which supports the recovery of these costs. Once the cash flow is sufficient in the General Revenue Fund based on the GRSC increase, the credit line or lease-purchase arrangement could be satisfied.

Table 5 Summary of Funding Option # 1 IMPLEMENTATION COSTS

Fund Type General Revenue Fund Revenue Source GRSC Increase Temporarily

OPERATIONAL COSTSFund Type General Revenue Fund Revenue Source GRSC Increase Permanently



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There are some concerns with this funding option:

• Many of the trust funds have been exempted from the service charge resulting in an inequitable structure for cost sharing

• State agencies that are funded primarily through the General Revenue Fund would not share in the costs

• A law change is required to increase the fee • Need to evaluate the trust funds’ ability to support the fee increase

This funding option takes advantage of an assessment already established for general government services. However, it is not currently an equitable cost sharing approach due to the number of trust fund exemptions that have been granted and lack of any assessment on the General Revenue Fund.

3.4.2.2 Funding Option #2 – Internal Service Trust Fund Generally accepted accounting principles define an internal service fund as a state trust fund established to finance and account for services and supplies provided exclusively to other governmental units, typically on a cost-reimbursement basis. This funding option considers cost sharing by the state agencies to cover centralized services that will be provided by the successor system. The internal service trust fund would be used to administer the receipt and disbursement of fees collected from agencies. The funds required to cover the implementation costs could be obtained by one or both of the following actions:

• Increase the GRSC and transfer the additional funds from the available funds within the agencies

• Assess a flat fee to state agencies

To cover the ongoing operational costs, state agencies would be assessed a fee based on a cost sharing methodology approved by the Legislature.

Table 6

Summary of Funding Option #2 IMPLEMENTATION COSTS

Fund Type Internal Service Trust Fund Revenue Source – Option #1 Transfer from General Revenue Fund

(requires increase to GRSC) Revenue Source – Option #2 Flat assessment to all agencies

OPERATIONAL COSTS



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Fund Type Internal Service Trust Fund Revenue Source Usage fee assessed to all agencies

There are some concerns with this funding option:

• A clear methodology has not been established for cost sharing, which is critical • State agencies would need an appropriation for the transfer of funds to the internal

service trust fund • A law has not been enacted to enforce the cost sharing for state agencies

This funding option would require more effort to develop a methodology and institute law changes to support the cost sharing approach. However, this methodology can provide a more equitable approach than funding option 1. The following are some cost sharing methodologies that could be implemented in assessing a usage fee to all agencies:

• Number of transactions processed within the financial system • Number of payments issued by the Chief Financial Officer • Number of full time equivalent (FTE) positions in an agency

3.4.2.3 Other Considerations It is the intent of the Task Force that the enterprise financial governance structure be established with a focus of standardizing enterprise financial business processes before making decisions on the appropriate funding option for a successor system. There are additional considerations that should be included when making the final decision on a funding option: impact to the Statewide Cost Allocation Plan, availability of federal funds, and cost for the remediation of agency business systems. Statewide Cost Allocation Plan The Statewide Cost Allocation Plan (SWCAP) is the mechanism by which the State identifies, summarizes, and allocates indirect costs in a logical and systematic manner. The SWCAP includes financial and billing rate information for central services directly charged to agencies or programs, in addition to other indirect costs incurred by agencies. A SWCAP is required for the State to obtain reimbursement from the federal government, when allowed under the terms of an award, for the costs of central support services provided to operating departments. The State will have to adjust the SWCAP if a funding approach is chosen that assesses a user fee to state agencies for the successor system. A detailed analysis would need to be conducted to ensure that the selected funding approach does not result in a considerable reduction to the federal reimbursement received by the State for SWCAP.



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Federal Grant Funds Another point of consideration would be the possibility of obtaining federal grant funds to cover some of the implementation costs of a successor system. The federal government offers many grants in the public sector to promote efficiency in the area of technology. A new financial management system could enhance financial reporting and therefore produce more detailed reports to the federal government for grants already awarded to the State. Research should be conducted on federal grants or programs that would provide funding for new technologies in support of the grant or program. The Department of Homeland Security, Social Security Administration, and Department of Justice are among the federal agencies that currently provide grants that support improvements to information technology in their applicable program areas. Agency Business System Remediation There are approximately 400 agency business systems that send or receive FLAIR data. These business systems need to be evaluated and decisions need to be made on how to proceed with remediation or elimination of these systems when implementing a successor system. Agencies that can not support these changes within their existing funds would need to request additional funding from the Legislature. The State would be required to accommodate these requests at the same time it is providing additional funds for the implementation of the replacement financial system. The challenge has always been the inability to assess the impacts to agency business systems until the later stages of the implementation. In support of Project Aspire, the Legislature appropriated funds for agency business system remediation and required the State’s Chief Information Officers Council to establish procedures for the review and approval of funding requests submitted by agencies. A similar process could be established when proceeding with the implementation of a replacement financial and cash management systems.

3.4.2.4 Recommended Funding Approach It is the intent of the Task Force that the enterprise financial governance structure be established and sufficient steps taken to standardize enterprise financial business processes before proceeding with a successor system. When it is the appropriate time to select a successor system, the Task Force recommends that the Officer implement funding option 2, the Internal Service Trust Fund, for funding the implementation and maintenance of the successor system. Funding option 2 appears to be the most equitable funding option since all agencies share in the cost of the replacement system.

3.4.3 Establish Project Governance Project governance is the decision-making process that will be used for a project. It clearly defines the roles and responsibilities and the process that is to be followed for decision-making. Key stakeholders are identified and incorporated into the governance process so that there is



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transparency on the risks and issues associated with the project and to ensure decisions can be made timely. Project Aspire had a Project Sponsor, Board of Directors, and an Executive Committee that participated in the governance process. However, over the life of the project, several participants in the governance process disengaged. The Council on Efficient Government’s report stated that “loss of executive project sponsorship from the three branches of government was another major issue negatively impacting the project’s success.” The proper level of executive level sponsorship and oversight has been incorporated into the recommended enterprise financial governance structure which has a permanent commitment that extends beyond the life of the project. The Enterprise Financial Business Operations Council will monitor the project and the Officer will address project issues that have an impact on other enterprise business owners, will change the scope of the project, or require additional funding. The Officer also has the ability to establish a third-party independent monitor that provides regular reports on the status of the project and any issues that are not being addressed properly by the project. The third-party independent monitor should understand best practices for project management and the warning signs for potential failure for the project. The Task Force is recommending a project governance structure that:

• Promotes transparency of information on the risks and issues associated with the project • Establishes the roles and responsibilities for the decision-making process • Identifies the individual(s) with the appropriate skills and authority for the role and

associated responsibilities in the project governance structure • Provides for decision-making on the daily/weekly issues that do not have an enterprise-

wide impact on the enterprise • Promotes the escalation of enterprise-wide issues to the Enterprise Financial Business

Operations Council and Officer (i.e., impact other enterprise business owners, changes the scope of the project, or requires additional funding)

The recommended project governance structure establishes a Project Sponsor, Steering Committee, Project Director, and Project Manager(s). The roles and responsibilities are outlined below.

3.4.3.1 Project Sponsor The Project Sponsor must have the ability to influence key stakeholders and can assist state agencies in overcoming resistance to the project. The Project Sponsor will ultimately be accountable for the decisions being made by the Project Director and Steering Committee. The Project Sponsor should be at the executive level, preferably the Chief of Staff, for the Department of Financial Services.



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Prior to the start of a project, the Project Sponsor will be responsible for preparing the business case, project charter, project governance document and submitting them to the Enterprise Financial Business Operations Council for review and approval by the Officer. During the life of the project, the Project Sponsor will be responsible for:

• Providing regular oversight on the Project Director’s performance • Monitoring the status of the project • Resolving project issues that have been escalated from the Project Director and do not

have an impact to the enterprise • Escalating enterprise issues (i.e., impact another enterprise business owner, changes the

scope of the project, requires additional funding) to the Enterprise Financial Business Operations Council for review and decision by the Officer

• Chairing the Steering Committee

The Project Sponsor’s commitment is primarily to attend the monthly or weekly meetings with the Steering Committee and maintain regular communication with the Officer and Project Director. The Project Sponsor also participates in presentations that promote the benefits of the project and the business process changes needed to make the project a success.

3.4.3.2 Steering Committee The Steering Committee’s primary role is to provide oversight on the project and Project Director and provide direction when needed. The Steering Committee should be chaired by the Project Sponsor and comprised of key stakeholders associated with the business processes that are to be implemented in the successor system. It is likely that several of the enterprise business owners will be impacted by the implementation of a successor system and therefore be appointed to the Steering Committee. If an enterprise business owner does not believe the Project Sponsor is escalating enterprise issues to the Officer, they will have the ability to raise the concerns to the Officer when attending the Enterprise Financial Business Operations Council meetings. It is also recommended that representatives from the state agencies with the highest risk associated with implementing the business processes be included on the Steering Committee. Their appointment to the Steering Committee will help mitigate the risk and identify issues that the key stakeholders may not be aware of. The Steering Committee will be responsible for:

• Providing recommendations on how to address the issues escalated by the Project Director on a weekly or monthly basis

• Monitoring the performance of the Project Director and raise concerns to the Project Sponsor when needed

• Monitoring the progress and health of the project and raising concerns to the Project Sponsor when needed



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The Steering Committee is expected to provide continual support to the project during its life cycle and address issues in a timely manner. It is recommended that the Steering Committee sign a “Memorandum of Understanding” agreement to codify their responsibilities and commitment to the project.

3.4.3.3 Project Director The Project Director’s primary role is to ensure that the project stays within the defined scope, on the expected timeline, and performs within available resources (i.e., funding, staff). The Project Director is accountable for the decision made by the Project Manager(s). The State has very few individuals that possess the skills needed to be an effective project director for a project of this size and complexity. It is recommended that the Department of Financial Services recruit a Project Director that has a proven history of managing similar projects. The Project Director will be responsible for:

• Allocating resources and assigning responsibilities to Project Managers • Resolving issues raised by the Project Managers regarding assignments, competing

resources and adjustments to due dates on the Project Schedule • Escalating issues regarding changes to the software/scope, requests for additional

resources, changes to the project’s approach and methodologies outlined in the Project Charter, or changes to the project’s timeline to the Steering Committee

• Monitoring and assisting the Project Managers • Utilizing appropriate project management tools and techniques in efforts to monitor,

assess and support the project with a focus on removing or minimizing obstacles

The Project Director should be dedicated full time to managing the Project’s progress and use of resources and maintaining communication with the Steering Committee and Project Sponsor.

3.4.3.4 Project Managers The Project Manager has been assigned a specific endeavor that has a beginning and ending date. The Project Manager’s primary role is to manage the project staff and assignment of tasks needed to complete the endeavor. There are typically 3-5 Project Managers that support a project of this size and complexity. A Project Manager will be responsible for:

• Managing their tasks within the project’s plan and ensuring the staff levels are adequate for the tasks that are to be performed

• Adhering to the Project’s approach and methodologies outlined in the Project Charter • Monitoring the quality of work from project staff • Resolving issues with the assignments, allocation resources, adhering to dead lines • Escalating issues regarding the Project’s approach, methodologies, and scope, changes to

schedule, need for additional resources to the Project Director



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• Utilizing appropriate Project Management tools and techniques in an effort to initiate, plan, execute, control, and close their project

3.4.3.5 Escalation Process The need for transparency on issues, involvement of the appropriate individuals in the decision-making and the timely resolution of issues have been major challenges for previous projects. The escalation process is key to addressing these challenges and ultimately the success of the project. The diagram below depicts the escalation process that has been included in the responsibilities assigned to the Project Manager(s), Project Director, Project Sponsor, and Officer.



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Diagram 4



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3.4.4 Proceed with Procurement The business case will identify the approach that will be taken for implementing a successor system (i.e., use existing software, purchase new software, build a custom application). The Department would need to procure implementation services regardless of the approach selected for developing the successor system. There are two work products that can be used for the procurement process: business process flow diagrams and functional requirements. Enterprise Financial Business Processes The enterprise financial business processes provide a foundation of how the software/application should be implemented. It is recommended that the process flow diagrams be included in the “Statement of Work” for the procurement so that vendors have a clear understanding of the business processes the State wants to implement. Functional Requirements If the decision is made to procure new software, then the State’s functional requirements should also be included in the “Statement of Work” for the procurement. The functional requirements should be used to evaluate software options and select the one that best fits the State’s needs. If the decision is made to build a custom application, the functional requirements can be used as a check point/measurement to ensure the application is being built to meet the needs of State.



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4 Appendix A

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