1

Project Kick-Off

January 26, 2012

SAP Finance and

Procurement Implementation

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Agenda

Topic Presenter

Welcome Marvin Cruz

Project Mission and Business Drivers Marvin Cruz

Introductions George Silva, Douglas Le

Project Overview Teri Lyons, George Silva,

Douglas Le

ASAP Methodology Overview Vikas Pathak

Organizational Change Management Christa Crawford

Wrap-up / Next Steps Christa Crawford

Q & A All

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Key Stakeholders Remarks

• Ron Chandler, Chief Information Officer

• Mark Hovatter, Procurement Executive

• Michelle King, Senior Deputy Superintendent

• Megan Reilly, Chief Financial Officer

• Kelly Schmader, Chief Facilities Officer

• Bill Wherritt, Chief of Staff, Facilities Services Division

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Mission Statement Increased operational efficiency leads to an optimized learning environment

• ITD Mission Statement:

– We enable student achievement and operational efficiency through deployment of

appropriate technical solutions for our students and their families, all employees, and the

community.

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What is the Legacy Replacement Program?

• Massive overhaul of outdated Financial and Procurement legacy system (IFS)

– We are currently operating on 1990s technology. IFS (Legacy system) for

finance and procurement was implemented in 1993

– We are using software and hardware infrastructure that are no longer

supported

– Compliance with audit recommendation from the Los Angeles County Civil

Grand Jury (LACCGJ)

• Implementation of SAP Finance and Procurement Software

– Allows for the de-commissioning of IFS

– Establishes one District financial system of record: SAP

– Mitigates risk of catastrophic failure, inefficiency and cost related to the

maintenance of two financial systems: SAP + IFS

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Business Drivers

Legacy Replacement Program is a Necessity

• Compliance with Audit Recommendation

– The Los Angeles County Civil Grand Jury Report, dated June 30, 2010,

recommended that the District “.. implement Release III, Accounts Payable and

related modules of Business Tools for Schools (BTS) as soon as possible..”

– The District agreed to comply with this recommendation via correspondence

sent to the LACCGJ in November 2010

• Risk of catastrophic failure, inefficiency, and increased cost

– Relying and supporting IFS exposes the District to these issues

– Completing the SAP finance and procurement implementation (formerly called

Release III) will mitigate and/or eliminate these issues

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The Project Team

• LAUSD Project Team

• Phoenix Team

• SAP America

• Third Party Oversight

• Key vendors (such as Apple, Arey-Jones, McGraw Hill, Pearson)

8

Project Overview

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System Implementation – High Level

Completed

Planned

SAP Integrated

Solution

• Human Resources

• Payroll

• Procurement

• Finance

IFS Procurement

Finance (active)

Legacy HRS/Payroll

(decommissioned)

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Project Kick-Off

January 26, 2012

Current State

Human

Resource

Applicant

Tracking

Benefits

Administration

Payroll Time and

Attendance

Asset

Management

Budgeting

Cost

Accounting Inventory

Supply Chain

Management

Accounts

Payable

Contract

Management

Encumbrance

Processing P-Card

Vendor and Bid

Management

SAP

IFS

Other ITD

systems (e.g.

Transportation,

Facilities, Food

Services, ISIS,

MyData)

External

Organizations (e.g. STRS,

PERS, LACOE)

- Financial

reference

tables

- Job Cost

- Financial postings

- Budget data

Accounts

Receivable

Cash

Management General Ledger

Key

To be

Implemented

Partially

Implemented

Implemented

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Future State

Cost

Accounting

Asset

Management Inventory

Supply Chain

Management

Accounts

Payable

Contract

Management

Encumbrance

Processing P-Card

Vendor and

Bid

Management

Other ITD

systems (e.g.

Transportation,

Facilities, Food

Services, ISIS,

MyData)

External

Organizations (e.g. STRS,

PERS, LACOE)

SAP

Key

Human

Resource

Applicant

Tracking

Benefits

Administration

Payroll Time and

Attendance Budgeting

Cash

Management

General

Ledger

Implemented

Accounts

Receivable

Future State – July 2013

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An Example…

• The term “Requisition” in the legacy system will become “shopping carts”

in the new system. Requisition approval will be replaced by on-line

shopping cart approval for principals and department heads

• Schools and offices no longer have to differentiate between different

document types (RX, PD CSX, PD LVX, PD LVXC1, etc.)

• Schools and offices will have the ability to use a point-click functionality

to create shopping carts; one point of entry for schools and offices

“Shopping Cart”

IFS SAP

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Functional Scope - Procurement

Targeted Functionalities

• Supplier Relationship Management (SRM) • Shopping Cart (versus line-item

requisitions in IFS)

• Catalog Management

• Buyer Cockpit (e.g. E-commerce)

• Supplier Self-Service

• Accounts Payable • Electronic Invoicing

• Streamlined Goods Receipt

• Payment Process

• Operational and Statutory Reporting

• Full Warehouse Management • Receipt of stock

• Stock put-away

• Order fulfillment

• Physical Inventory

• Inventory Management

• Bar Coding Enablement

• Travel Management • Travel Request Form

• Employee Reimbursement Process

• Materials Management • Material Master

• Vendor Master

• Contract Management

• Purchase Order Processing

• Procurement Card (P-Card) • Interface between ProCharge II Software and SAP

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Functional Scope - Finance

Targeted Functionalities

• Grants • Grant Master Data

• Resource Related Billing (RRB)

• Indirect Cost Calculation (IDC)

• Availability Control (AVC)

• Account Receivable and Cash Receipts • Accounts Receivable – General

(excludes Grant receivables)

• Cash Receipts

• Fixed Assets • Capital asset inventory (Master Data)

• Asset valuation

• Asset reporting

• Projects

• Master Data, Project Definition, Work

Breakdown Structure (WBS)

• Multi-Year Funding Strategy

• Multi-Year Budget Plan

• Settlement to Assets Under

Construction

• Availability Control (AVC) • Budget consumption and availability

• Real-time information on budget values

• Real-time information on budget

consumption values

• Budget limits and tolerances

• Job Cost • Internal Order Master Data

• Internal Billing

• External Billing (A/R)

• Availability Control (AVC)

• Job Cost Budget

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Technical and Organizational Scope

• Technical scope

– SAP Components

• ERP Central Component (ECC 6.0)

• Supplier Relationship Management (SRM 7.0) with

Procurement for Public Sector (PPS 3.0)

• Supplier Self Services (SUS)

• Portal

• Master Data Management (MDM)

• Business Intelligence (BI)

• Process Integration (PI)

• GRC

– SAS (reporting platform)

– Custom development

– Security (roles and authorizations)

• Organizational scope

– All offices and schools

16 LAUSD and Phoenix teams

Project Steering Committee FI (Yumi T), Budget (Tony A); Procurement (Mark H);

Facilities (Bill W); ITD (George S, Doug L, Teri L);

LAUSD PM (Vikas P); PBC (Hanif S); SAP (TBD)

Project Management Team LAUSD PM (Vikas Pathak)

PBC PM (Hanif Sarangi)

Finance

Business

Advisory

Committee (see next slide)

ITD PMO LAUSD PMO

Marvin Cruz

3rd Party

Oversight

Team Vendor TBD

Executive Governance Committee Accountable: (CIO, CFO, COO, CFE)

Informed: (LD Sup, CAO, Asst Sup, Exec Dir, Ch. HR Officer, Personnel Director)

Champion the project

Ultimate responsibility of project success

Monitor the progress and organization

impacts of the project

KEY RESPONSIBILITIES

Manage project scope to keep project

on schedule

Commit required resources to the

project

Review project status and resolve

escalated issues

Support project management‟s efforts to

accomplish project objectives

Provide day-to-day direction, develop

and manage project plan and schedule

Identify, resolve, and escalate issues

Monitor all aspects of project progress

3rd Party Oversight

Provide independent monitoring and

oversight for the duration of project

Review project deliverables

Provide independent assessment

reports

LAUSD Core Team and Phoenix Team

Respond to 3rd party assessments, as

required

Manage project implementation

Perform activities to meet project

requirements

Procurement

Technical OCM (incl. Training)

Project Team Organization

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Implementation Strategy

• Phased rollout – build and test all functionalities simultaneously,

but rollout to central offices and schools will be in four phases

• Use ASAP, SAP‟s implementation methodology

• Adopt best practices built into the system

• Train as much as possible and do extensive knowledge transfer to

LAUSD team

• Avoid “customizing” the system, use SAP standard configuration

wherever possible

• Extensive demos – build functionality and play back

• Project staffed with experienced consultants with expertise in K-12

and Public Sector (at the peak periods Phoenix Business

Consulting will have 40 consultants onsite)

• Extensive involvement from LAUSD staff in blueprinting,

documenting business process procedures, testing, training end

users and go-live support.

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Project Implementation Schedule

Rollout 1

Rollout 2

Rollout 3

Rollout 4

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J

Project Preparation and Planning

Business Blueprint (Design)

Realization (Configuration, Development)

System Testing

Final Preparation

Go-Live and Rollout 1

System Stabilization

Rollout 2

System Stabilization

Rollout 3

System Stabilization

Rollout 4

System Stabilization

IFS Decommission

(Decommission includes year-end closing, historical data extraction, etc)

Q1 Q2 Q3 Q4

2012 2013Q1 Q2 Q3 Q4

20152014Q1 Q2 Q3 Q4 Q1 Q2

Financials + 4% Schools

32% of Schools

50% of Schools

14% of Schools

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ASAP Methodology

Overview

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Project Methodology (ASAP)

ASAP Methodology provides the links between

business and the system processes

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Phase 1 – Project Preparation

(Scoping & Planning)

Deliverables: Project Scope Defined

Implementation Plan & Rollout Strategy

Costs and Benefits Validation

Project Standards

Project Infrastructure

Implementation Workplan

Milestones & Key Decisions:

High Level Scope Defined

Project Team Staffed and Trained

Project Team Organization,

Responsibilities and Location

Roll-out Plan

Key Stakeholders for Communications

Identified

Implementation Plan in Place

Purpose:

Initial Planning and Preparation

Define the project goals, scope

and objectives

Identify, on-board and train

Team Members

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Phase 2 – Business Blueprint

Deliverables:

Complete and Documented Business Design Project Plan Update Sub Process Definition Document Sub Process Flows Business Activity Scripts Key Functional Specs Business Process Master List

Assessment of Organization and Business Process

Changes

Detailed Scope Document

Inventory of Reports and Conversions

Knowledge Transfer Approach

Master Data Design

Interface List

Testing Strategy

Data Cleansing Strategy

Milestones: Complete Design

Phase Quality Assessment

Communication Plan

Policies for To Be Finance

Organization

System Retirement

Objectives/Mandates/

Constraints

Training Approach

Purpose:

Align Business Requirements to the

SAP Business Model

Identify Additional Functionality

Requirements

Identify Data Input Requirements

Document Business Process

Documentation

Obtain Business Sign-off on

Requirements

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Phase 3 - Realization

Deliverables:

Test Data and Configuration

Business Process Procedures

Quality Assurance System Environment

Production System Environment

Develop and Test Interfaces, Conversions

and Reports

Evaluate and Enhance Security and

Controls

End-User Training Material and Plan

End-User Training System Environment

Data Conversion Plan

User Acceptance Test

Milestones:

Project Team Trained

(Realization)

Final Design and Configuration

Integration Test

End-User System Infrastructure

User Acceptance

Phase Quality Assessment

Readiness Review

Purpose:

Build and Test a Complete Business

and System Environment

Develop Training Material and End

User Documentation

Obtain Business Approval

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Phase 4 – Final Preparation

Deliverables:

Data Converted

Cut-Over Plan

End-Users Trained

End-User System IDs Created

System Support Organization in Place

Help Desk

Technical Support

Operational Production System Environment

Milestones:

Organizational Changes

Implemented

Go/No-Go Decision

Purpose:

Prepare System for

Production Release

Prepare the Internal and

External Organization for Go-

Live

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Phase 5 – Go-Live and Support

Deliverables:

Live Production Environment

Operational Help Desk

Cut-Over and Conversion Activities

Completed

Post Go-Live End-User Training

Lessons Learned

Milestones:

Go-Live

Project Close

Purpose:

Business Owns and Executes New

Business Processes and Systems

Monitor Business Process Results

Monitor Production Environment

Establish Center of Excellence for

Support and Enhancements

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Organizational

Change

Management

User & Project

Team Training

Attend Training

Develop Courseware

Prepare Training Facilities

Manage Registration

Process

Deliver Training

Workforce

Transition

Org Impact Assessment

Org. Impact Summary

Role Mapping

Leadership

Alignment/

Stakeholder Mgmt

Understand Stakeholder

Segments

Communicate

w/Leadership &

Stakeholders

Conduct Info Sessions

Communications

Establish Plan

Support Departments with

Effective Communications

Gather Feedback

Provide

Demos/Roadshows

Readiness

User Readiness

Functional Readiness

Site Readiness

Technical Readiness

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Wrap Up / Next Steps

• Business Blueprint is the next phase

– Blueprint sessions start February 13, 2012

– Design the „TO-BE‟ processes

• Complete project team training

• Complete project implementation plans

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Welcome to Team LRP!!!

“Coming together is a beginning.

Keeping together is progress.

Working together is success.”

- Henry Ford