Finance & Administration Committee Action Item III-A
May 13, 2010
TITLE:
Financial Systems Integration Project
PURPOSE:
To obtain Board approval to initiate and award, under GSA or through competitive procurements, contracts to implement the Financial Systems
Integration Project for better integration and optimization of current applications, subject to the Board`s annual approval of the operating and capital budget and the receipt of the funds.
DESCRIPTION:
WMATA implemented PeopleSoft`s Enterprise Systems (Financial and Human Resource) in 2005 expecting to have fully integrated, cost-effective business systems that provide timely and accurate information in a centralized, usable format; eliminating unnecessary manual touch points and incorporating best business practices. That goal was not fully realized. Although the system overall is functional it requires manual intervention and data corrections to ensure data integrity and the current processes do not line up with best business practices to allow the efficiencies supported by an enterprise system. This lengthens the time it takes to perform transactions including procurement, payable, revenue and receivable as well as project management and reporting and analytical activities. Since 2005 Metro has undertaken a series of projects to update the necessary hardware, infrastructure and system change management processes to support this enterprise system. In February 2010 an assessment of the Financial system components was completed. The findings in this first phase were that the system itself is functional but in need of upgrade and overall integration and
re-architecture of certain modules for optimal system performance. An assessment of the Human Resource Components is currently underway and scheduled for completion in September 2010. This request relates to the implementation of the assessment recommendations for the financial components. It will allow Metro to perform the upgrade and the re-integration and re-build required to optimize the financial applications of this enterprise system. This will also allow Metro to correct control weaknesses identified in its single audit reports that relate to the manual intervention required as a result of the lack of integration and of certain modules in the current system configuration.
FUNDING IMPACT:
Washington Metropolitan Area Transit Authority
Board Action/Information Summary
Action Information MEAD Number:100641 Resolution: Yes No
RECOMMENDATION:
To approve the initiation and award, under GSA or through competitive
procurements, contracts to implement the Financial Systems Integration Project for better integration and optimization of current applications, subject to the Board`s annual approval of the operating and capital budget and the receipt of funds.
Action for Multi-Year Funded Contract
Capital Improvement Program Financial Systems Integration
Budget: ARRA- Financial Systems Integration (CL_FNSY) FY 2010 Metro Matters -Information Technology UCN (CE_ITUP) $5,000,000 $21,046,484 This Action: $4,743,200 $4,256,800 Prior Approval: $256,800 $13,394,469 Remaining Budget:0 $3,395,215 Remarks:
Additional funding for this project is included in the proposed FY2011 capital program. The budget and funding beyond FY2010 are subject to
approval by the Board
Operating Budget Impact:
Positions: The goal is that although there will be some realignment there should not be an increase Annual Expense: This process should streamline processes including procurement, payment and receivable processes.
Fi
i l S t
I t
ti
Financial Systems Integration
Project (FSI)
Finance and Administration Committee
May 13 2010
Purpose
Purpose
Approval to:
• Initiate and award contracts to implement the
p
Financial Systems Integration project for better
Enterprise Systems Background
Enterprise Systems - Background
2010 Need: Upgrade and better integration for
2010 Need: Upgrade and better integration for
Approach to Integrating Financial Systems
Approach to Integrating Financial Systems
Assess Current State – Completed Finance, Starting HR – Focus On Business Process Technology
Business Process, Technology, Operations
2010 ‐
2011
Plan/Organize – Build Internal Metro Team, Select Integration Partner,
Engage All Parties
Execute Change – Upgrade And I t t S t U d t /St th
2011 –
2012
Integrate Systems , Update/Strengthen Policies, Train Workforce On New
2010 PeopleSoft Suite Current Modules
Financials
Human Capital
2010 PeopleSoft Suite – Current Modules
Financials
Human Capital
Financial Management
A G l A
Payroll
Time & Payroll Compensation Accounts
Receivable GeneralLedger Accounts Payable Cash
Management CommitmentControl Billing
Labor Payroll & Benefitsp
Human Resources
Fixed
Assets Procurement StrategicSourcing
Supply Change Management
Recruitment Training RelationsLabor Performance
Management ManagementAbsence
Workforce Administration Contracts Project Costing
Management Management
Customer Relationship
Enterprise PerformanceBudget Analytics WarehouseData
Customer
Service ContactCenter
Financial Systems - 2010 Assessment Findings
y
g
T h i l C
biliti
Technical Capabilities
• Hardware, infrastructure, change management procedures are
adequate
Di
t
d
d d
t ti
d i
t
• Disaster recovery procedures and documentation needs improvement
Automation
• Budgets, cash management, procure-to-pay processes are manually
intensive due to complexity
Data Value and Data Integrity
• System inefficiencies cause manual intervention and data corrections in
budgets, cash management, general ledger and grants management
Integration
• Lack of integration and comparison to best business practices highlight
Lack of integration and comparison to best business practices highlight
a need to improve finance operational processes
Operational Challenges and Remedy
Operational Challenges and Remedy
Challenge
Remedy
• Constant reorganization • Plan reorganizations to maintain consistent processes, reporting and information
standards
Challenge
Remedy
• Focus on technical management
and solutions • Focus on business process and functional use of PeopleSoft solution • Severe issues with data value
• Complex budgeting and cost
• Establish data standards at source of transaction
• Decentralize capital cost tracking at • Complex budgeting and cost
tracking process
• Significant workflow and data i
• Decentralize capital cost tracking at
operational units enforcing accountability • Establish clear roles and responsibilities for
t d i t t l f ti issues
• Highly manual, inconsistent
Procurement and payables process
procurement and inventory control functions • Simplify capital request and approval
(MEAD) process and automate manual p y p
interactions between inventory and accounting systems
Enterprise Solutions Group Organization
Enterprise Solutions Group - Organization
Key Requirements for Success:
- Consistent executive leadership
- Cross-functional participation from Finance, HR, IT and Operations departmentsp p
- Execute project based on IT governance methodology and IG recommended standards
- Dedicated project team augmente
d with skilled contracted
Considerations in Selection of Implementer
Considerations in Selection of Implementer
• Speed of implementation
Unless the implementer is in place by June 2010, there is a high risk that the project rollout will be delayed into FY2013 prolonging closure of
the project rollout will be delayed into FY2013, prolonging closure of existing audit issues
• Contractor track record of success in PeopleSoft re-architectureContractor track record of success in PeopleSoft re architecture projects
Seek references from other government entities in similar states of crisis
• Knowledge of Metro culture and challenges
Funding
Funding
• Funding requirement in FY2011 for FSI project to
meet the July 1, 2012 implementation date is $12
million
– Includes $4.7 million of ARRA funding
– $3 0 million is for the Metro staffed project organization
– $3.0 million is for the Metro staffed project organization
– $9.0 million is for outside contracts
Recommendation
Recommendation
Approval to:
• Initiate and award contracts to implement the
p
Financial Systems Integration project for better
Glossary of Terms
Glossary of Terms
ERP Systems (Enterprise Resource Planning) - a way to integrate data and
ERP Systems (Enterprise Resource Planning) a way to integrate data and
processes of an organization into one single system. Most ERP systems use a common database to store data for various functions found throughout the organization
Stand-Alone Application- a computer system that is operational, is not connected to any other system and functions independently
System Integrator - a person or company that specializes in bringing together various System Integrator a person or company that specializes in bringing together various subsystems into a whole and ensuring that those subsystems function together as one COTS Product - commercial, off the shelf, ready-made software
Business Process - a collection of related, structured activities that produce a specific service or product (serve a particular goal) for particular customers. It often can be visualized with a flowchart as a sequence of activities.
visualized with a flowchart as a sequence of activities.
PS-Maximo Integration - the flow of data between Metro’s accounting, procurement and inventory management system
Glossary of Terms (cont )
Glossary of Terms (cont.)
Procure to Pay - the process of obtaining and managing all raw materials needed for running Operations. This cycle starts with the source selection, followed by
procurement of goods and services. Demand for items are converted to procurement requirements through purchase orders and confirmation of goods receipt. The
incoming materials are then inspected and posted into inventory as part of managing the warehouse. The last activity in this cycle is payment of the suppliers which
consists of receiving entering and checking vendor's invoice for correctness consists of receiving, entering and checking vendor s invoice for correctness.
z
Future State of Financial Systems
z
Future State of Financial Systems
Area Current Issues Desired State
Area Current Issues Desired State
General Ledger - Fixed
Assets On out-dated mainframe, no integration with any other system
Becomes part of enterprise financial system, retire
mainframe
other system mainframe
General Ledger
-Allocations High volume and complex Streamlined process, spread across organization General Ledger- Monthly
closing Compensate for poor data quality with highly manual, labor intensive process
Integrates with revenue systems, labor cost and receipts; improve data
labor intensive process receipts; improve data
quality with control accounts
Position Budgeting Budgeting is performed at Integrates with HR position
Position Budgeting Budgeting is performed at
FTE rather than by positions
Integrates with HR position management to properly reflect budgeted positions and retire the exchange of PCN process
z
Future State of Financial Systems (cont )
z
Future State of Financial Systems (cont.)
Area
Current Issues
Desired State
Grants management Managed by spreadsheets
and manual, ad-hoc process
End-to-end grants management by
implementing four unused modules of current financial system
Capital projects Reliant of General Ledger
f f ll j t t Capture and report on all cost b i l ti th j t for full project cost; no
easy way to calculate work-in-progress
by implementing the project costing portion of the system properly
Accounts payable Every process requires Best practice methods
Accounts payable, Accounts receivable, cash, revenue
Every process requires manual intervention and multiple corrections
Best practice methods
understood and implemented; workforce uses systems
accurately Purchasing
integration with Inventory system
Interface issues cause
errors in both systems Clear ownership established for all source transactions and automation corrected in the
h i t
