ERP: Driving Efficiencies Across the State
Across governments, there is an increasing need to meet agency demands and enhance delivery, while also improving productivity. This is an enormous challenge complicated by highly fragmented technology landscapes, disparate business processes and decentralized governance.
The State of Illinois is currently facing many such administrative challenges. This is not unexpected since it has operated for decades with antiquated systems that lack reporting and analytical capabilities. Agencies have historically operated in silos, with a lack of interoperability. This disparate IT environment consists of over 400 solutions that create duplicative processes hindering the efficiency of the State.
In order to better address these challenges and meet the increasing needs of the State of Illinois, Governor Bruce Rauner made IT modernization a priority. The Enterprise Resource Program (ERP) was established in 2015 to improve the State’s ability to streamline administrative processes across finance and human capital management. The goal of the ERP program is to create transparency into the State financials and drive efficiencies across all the State; additionally, the Program will streamline all core human capital functions, and establish the organizational structure required to support the delivery.
What is Enterprise Resource Planning (ERP)?
The readers of this magazine are very likely familiar with ERP. For those who are not, Enterprise Resource Planning is an integrated system that provides IT enablement for the core operations and financial processes of an enterprise or government organization.
The benefits of implementing an ERP include:
1. Improved financial reporting and transparency: Transparency generated by a singular, up-to-date data base coupled with prompt reporting for planning
2. Increased compliance with regulations, both internal and external: Integration of processes facilitates increased transparency and greater compliance with internal and external controls
3. Improved budget forecasting: Data consistency and granularity across functional areas
4. Enhanced data-based decision making: Greater visibility into data facilitates more informed decision making
As with any large system implementation, the launch of an ERP system comes with its share of challenges.
1. ERP systems cover different business processes with many stakeholders across multiple areas of a government organization
2. Systems involve high complexity due to breadth and depth of provided functionalities
3. Implementation of the system involves legacy integration, heavy customization and modifications
Why is the State Implementing ERP?
The State of Illinois and its agencies are unable to perform many basic administrative functions including generating timely and accurate financial statements. Illinois has ranked several times as the slowest or second to slowest US State in releasing its CAFR over the last 5 years. Agencies have used over 260 financial systems in the past, many of which were older than 10 years and over 80percent of those systems were not GAAP compliant. Specifically, the State has faced administrative challenges around:
1. Funding and transparency: Negative Auditor General reports put significant funding at risk at a time of budgetary challenges
2. Lack of control: Difficult to manage and monitor financial, procurement and personnel activity in real time
3. Redundancy of IT systems: 400+ overlapping IT solutions with manual and duplicative processes
4. Operational risks: Outdated and sub-optimal IT solutions that are difficult and costly to maintain
To address these challenges, the State has implemented SAP, the world’s most used ERP software solution across private and public sector organizations. The SAP software offers several modules across finance and HR, in addition to other functions that can be configured to meet an organization’s specific needs.
Vision of the Program
The vision of the ERP program is to rapidly implement industry-leading software that will deliver a modern, integrated IT platform across finance, human capital management, and procurement for all agencies within the State of Illinois. The program specifically aims to address the challenges faced by the state and:
1. Drastically improve the efficiency of administrative and citizens’ services
2. Consistently deliver financial statements in a timely manner
3. Enable statewide transparency, access to information and swift decision-making
4. Enable State operations to receive a clean audit from the Auditor General
5. Be a catalyst for statewide transformation of all administrative services
What has Been Achieved to Date?
The ERP program was established in 2015, and completed the system design in 7 months. Since standing up the program, the State has successfully designed and piloted the new ERP software platform across three pilot agencies–Illinois Department of Employment Security (IDES), Environmental Protection Agency (EPA), Department of Veterans Affairs (DVA)–and the Illinois Office of the Comptroller. Since the go-live, pilot agencies have been actively using the SAP systems.
What Can We Expect in the Future?
Moving forward there will be 54 agencies going live on the ERP platform through 2019; 10 of these agencies are going live in 2017. Additionally, the State is expected to kick off Human Capital Management (HCM) in 2017, and Enhanced Analytics in the future.
Through this streamlined platform, the State will not only address current administrative challenges within Finance, but also automate standard HR processes and provide analytics to improve decision making.
Illinois is facing this huge challenge with cautious optimism. Much has been accomplished and there is still a long journey ahead.