| Baton Rouge: Commissioner of Administration Angele Davis, Treasurer John Kennedy, and state Sen. Mike Michot announced today that they have reached consensus on a plan to restructure the implementation of LaGov, Louisiana state government's Enterprise Resource Planning (ERP) project by agreeing to start with a pilot program at the Department of Transportation and Development (DOTD).
As part of the plan announced today, the state will move forward on schedule to "go live" in October of 2010 to address the critical needs of the Department of Transportation and Development (DOTD), whose aging operational and financial legacy systems are increasingly problematic and pose the greatest risk of failure. Using DOTD as a pilot, the state will be able to monitor its progress, address any implementation issues, and apply lessons learned to mitigate risks that may be involved for a rollout of the ERP system statewide.
This "DOTD pilot/statewide phase-in" plan will also allow the state to retain the benefit of investments already committed to the project, achieve some near-term savings by deferring certain costs in the current fiscal year and next, and test the efficacy of the new system at DOTD.
Commissioner of Administration Angele Davis said, “Today’s announcement is a reaffirmation of the state’s efforts to utilize technology to streamline government and improve services and efficiency. This is a win for the Louisiana taxpayer, because when this project is fully implemented, the state will experience extraordinary savings in avoided system costs and process-improvement benefits.”
Sen. Mike Michot, chairman of the Senate Finance Committee and the Streamlining Commission’s IT Integration Advisory Group, said, “This plan is consistent with the will of the legislature, as evidenced by the investments already committed to the project. Our focus remains the same, but we will use the DOTD pilot to assure a smooth transition to full implementation of ERP statewide, thereby bringing Louisiana government toward the forefront of technological advancement for effective service to our citizens.”
The LaGov project aims to increase government efficiency by replacing more than 40 financial and administrative systems and by redesigning more than 125 business processes statewide, and, according to a cost-benefit analysis, is estimated to bring $286 million in total savings from avoided system costs and process-improvement benefits within ten years of “going live” statewide. As part of that savings, it is estimated that $38.6 million, or 13.5 percent, would come from employee reduction costs associated with improved technology. Just over $52 million in project development has been spent to date.
The existing timeline for the project would have brought all statewide agencies online in the summer of 2010, with the Budget Development system and DOTD’s systems coming online in the fall of 2010. Under this new plan, the state will begin with a rollout of DOTD’s more vulnerable systems first and on the existing schedule of October 2010 as a way to mitigate possible risks of going live statewide all at once.
DOTD was chosen for the pilot because their systems have the most immediate needs and because they are not on the current statewide financial system, and DOTD has an existing, established process to work with the current legacy systems. Because all other agencies need to come up at the beginning of a fiscal year, following the DOTD pilot phase, they would be rolled out, along with the Budget Development system, at the start of FY 13.
The DOTD functions that would go live as part of the pilot plan include: General Ledger and Budgetary Control; Accounts Payable; Accounts Receivable and Billing; Revenue Accounting; Cost Allocation; Grants; Projects; Procurement; Contract Management; Warehouse Inventory; Asset Management; Materials Management; Fleet Management; Facilities Management; DOTD/LINEAR ASSETS (LA); FHWA Billing; and AASHTO Integration.
Background on LaGov
Louisiana state government has more than forty financial and other administrative systems that would be replaced by the LaGov ERP system. Most of these systems do not “talk” to each, and as a result, a significant amount of time is spent on low-value activities that could be eliminated by the implementation of an integrated ERP system, such as:
Entering the same data into multiple systems;
Reconciling data among multiple systems and making adjusting entries to keep the systems in sync;
Tracking transactions spread over multiple systems in order to determine the state of the transactions (e.g., avoid maintaining tracking data in spreadsheets, using paper logs, etc.); and
Obtaining and consolidating data from multiple sources in order to generate needed information—a slow and often inaccurate process.
When fully implemented, LaGov will replace the state's many existing finance and logistics systems and make them fully integrated with the other core systems – such as HR and Payroll. This streamlining of business systems will empower state executives and employees to make decisions by providing instantaneous access to accurate, enterprise-wide and real- time information. As a result, LaGov will:
Improve the quality and timeliness of information by eliminating manual reconciliation associated with maintaining duplicate data in multiple systems.
Provide better control of operational expenditures by streamlining and automating the budget development process for the agencies and OPB by eliminating redundant entry and manual spreadsheet reconciliation.
Enhance transparency and accountability by having all agencies' information in one integrated system.
Reduce risk by replacing obsolete technology and aging systems, addressing functional weaknesses in existing systems, reducing the proliferation of stand-alone systems.
Improve efficiency and effectiveness by supporting web-enabled self- service for State employees and vendors conducting business with the State.
Enable informed decision-making because LaGov's real-time data and reporting functionality will provide the leadership of the State of Louisiana with the tools to make informed decisions for the State, as an enterprise.
Manage and expedite agency cash flow by simplifying our ability to implement control measures to capture operational expenditures when using the LaGov Financial System.
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