Financial and Cash
Management Task
Force
Strategic Business Plan
January 30, 2009
Financial and Cash Management Task Force
Strategic Business Plan
Table Of Contents
1
2
Executive Summary ................................................................................................................ 4
Introduction............................................................................................................................. 6
2.1
External Reports on Project Aspire................................................................................. 7
2.1.1
Council on Efficient Government Report to the Governor..................................... 7
2.1.2
Gartner’s Evaluation of Project Aspire................................................................... 8
2.2
Deficiencies in Governance ............................................................................................ 9
2.3
Customization of Business Processes ........................................................................... 11
2.3.1
Business Process Design Document ..................................................................... 12
2.3.2
Functional Specification Documents .................................................................... 12
2.3.3
Functional Requirements ...................................................................................... 13
2.3.4
Analysis of Customizations .................................................................................. 13
2.4
Funding Challenges ...................................................................................................... 16
2.4.1
Implementation Costs ........................................................................................... 16
2.4.2
Operational Costs.................................................................................................. 16
3
Strategic Business Plan ......................................................................................................... 17
3.1
Establish Enterprise Financial Governance .................................................................. 17
3.1.1
Legislature............................................................................................................. 19
3.1.2
Governor and Cabinet ........................................................................................... 19
3.1.3
Enterprise Financial Business Operations Officer (Officer)................................. 19
3.1.4
Enterprise Financial Business Operations Council............................................... 20
3.1.5
Enterprise Financial Integration Sub-Council ...................................................... 21
3.1.6
Enterprise Business Owners ................................................................................. 22
3.1.7
State Agencies/User Groups ................................................................................. 23
3.2
Develop Strategic Enterprise Financial Business Operations Plan (Plan).................... 24
3.3
Standardization of Enterprise Financial Business Processes ........................................ 25
3.4
Implementation of Successor Financial and Cash Management System...................... 27
3.4.1
Develop Business Case for Successor System...................................................... 27
3.4.2
Establish Funding for Successor System .............................................................. 28
3.4.2.1 Funding Option #1 - General Revenue ............................................................. 28
3.4.2.2 Funding Option #2 – Internal Service Trust Fund ............................................ 29
3.4.2.3 Other Considerations ........................................................................................ 30
3.4.2.4 Recommended Funding Approach ................................................................... 31
3.4.3
Establish Project Governance ............................................................................... 32
3.4.3.1 Project Sponsor ................................................................................................. 33
3.4.3.2 Steering Committee .......................................................................................... 33
3.4.3.3 Project Director................................................................................................. 34
3.4.3.4 Project Managers .............................................................................................. 34
3.4.3.5 Escalation Process............................................................................................. 35
3.4.4
Proceed with Procurement .................................................................................... 37
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Financial and Cash Management Task Force
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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 is chaired by the Chief Financial Officer (CFO) 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.
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’s financial business operations
• 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 also referred to as “functional owner subsystems” in Section
215.93, Florida Statutes. The Sub-Council’s primary purpose is to assist the Council with
the development of the Strategic Enterprise Financial Business Operations Plan and
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•
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.
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
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•
•
•
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
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-ofdate, 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 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:
1
DFS Press Release dated May 17, 2007
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•
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.
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 objective 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.
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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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.
2.1.2 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-toend 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
3
Project Aspire Evaluation, Final Report, Engagement No. 221698841, prepared by Gartner, May 17, 2008
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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.
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’s business operations 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 Systems4
ENTITY
LAW
Financial
Management
Information Board
(FMIB)
Section 215.91,
Florida Statutes
Florida Financial
Management
Information
Systems (FFMIS)
Coordinating
Council
Section 215.92,
Florida Statutes
4
RESPONSIBILITY
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
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
Referred to as “functional owner subsystems” in Section 215.93, Florida Statutes
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MEMBERS
•
•
Governor
Cabinet
•
•
Chief Financial Officer
Agriculture
Commissioner
Secretary, DMS
Attorney General
Director, Office of
Policy and Budget,
EOG
•
•
•
Financial and Cash Management Task Force
Strategic Business Plan
ENTITY
Agency for
Enterprise
Information
Technology
(created - July
2007)
LAW
Section 14.204,
Florida Statutes
RESPONSIBILITY
•
•
•
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
MEMBERS
•
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
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.
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Diagram 1
For governance to become effective there must be one individual with the proper authority, from
the Governor and Cabinet, to make timely 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
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
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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:
Table 2
Summary of Functional Specifications
Core Business Function
Accounts Receivable &
Billing
Asset Management
Project & Grant
Management
Procurement to Payment
Recording to Reporting*
Treasury
Technical and Misc
TOTAL
CUSTOMIZATIONS
Number of
Functional
Specifications
Enhancement
Interface
Report
18
11
4
3
14
25
11
12
2
8
1
5
109
64
39
11
280
37
20
16
7
114
48
26
12
4
104
24
18
11
62
*The Recording to Reporting core business function included payroll processing for the State.
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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.
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.
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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.
Interface
20
13
55
26
44
102
20
15
7
20
10
26
25
11
5
5
35
11
17
22
9
280
114
104
Number of
Customizations
Cause of Customization
State Law
Federal Law
FFMIS
Agency need
Enterprise need
Replicating existing functionality
Other
Report
Enhance
The top three causes for customization were: replicating existing functionality, FFMIS, and
enterprise need. The table below summarizes the findings for the primary causes by the type of
customization.
Table 3
Customization by Cause and Type of Customization
1
5
1
55
62
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.
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Other
2
8
Replicating
Existing
Functionality
5
2
Enterprise Need
14
25
FFMIS
2
Federal Law
18
Agency Need
Accounts Receivable &
Billing
Asset Management
Project & Grant Management
State Law
Core Business Function
Number of
Customizations
Table 4
Customizations by Cause and Core Business Function
4
9
2
1
2
4
1
6
2
3
2
2
Financial and Cash Management Task Force
Strategic Business Plan
Other
Replicating
Existing
Functionality
Enterprise Need
Agency Need
FFMIS
Federal Law
State Law
Core Business Function
Number of
Customizations
Table 4 (cont)
Customizations by Cause and Core Business Function
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
280
20
13
55
26
44
102
20
CUSTOMIZATIONS
*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:
¾ Budget control/execution requirements associated with the Recording to
Reporting core business function
¾ Cash management/treasury requirements associated with the Treasury core
business function
¾ Procurement accounting requirements associated with the Procurement to
Payment core business function
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
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•
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, 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 have been funded through the
appropriations received from the General Revenue Fund or the Insurance Regulatory Trust Fund.
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
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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:
• 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
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•
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 timely 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 Enterprise 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.
Diagram 2
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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 also have the authority to enforce enterprise financial business
process improvements for the entities within the executive branch of government. The Governor
and Cabinet will be designated as the head of a new office, Enterprise Financial Business
Operations Office (Office). The Office will be administratively housed within the Department of
Financial Services and directed by the Enterprise Financial Business Operations Officer. The
Office will not be subject to control, supervision, or direction by the Department of Financial
Services.
The Governor and Cabinet as head of the Office will be responsible for:
• Adopting an annual “Strategic Enterprise Financial Business Operations Plan” including
the rules, policies and procedures that support the standardization of enterprise financial
business processes
• Enforcing the implementation of enterprise financial business process improvements
• Requesting funding from the Legislature for modifications to or the replacement of
enterprise business systems
• Requesting law changes from the Legislature that support the standardization of
enterprise financial business processes
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 timely
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:
• Recommend rules, policies, and procedures that support the standardization of enterprise
financial business processes
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•
•
•
•
Govern the development, adoption, and implementation of the annual Strategic
Enterprise Financial Business Operations Plan
Approve the Business Case for funding requests to modify or replace 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 authority to sponsor change management activities (e.g.,
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
The chair may include representatives from state agencies, consultants, or industry subject matter
experts as needed.
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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 members 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
• Provide annual risk assessments of the enterprise business systems’ security and data
security and plans that address internal controls in the high risk areas
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•
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 governance structure also provides the Officer with the authority to make timely decisions
for the enterprise so that the Enterprise Business Owner’s business operations are not impeded.
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 Enterprise 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 Enterprise 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 Enterprise 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.
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State agencies will have the responsibility to:
• Adhere to the enterprise financial business processes and enterprise reporting
requirements established in the Strategic Enterprise Financial Business Operations Plan
• Adhere to the rules, policies, and procedures issued by the Enterprise Financial Business
Operations Office
• 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 Enterprise
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
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•
•
•
•
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.
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 (e.g., 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 financial 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.
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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:
• 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, e.g.
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, reengineering 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
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The State must document each enterprise financial business process (e.g., 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 (e.g., To-Be).
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
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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:
• 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, ranging from 0.3% to 7.3%, 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.
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Fund Type
Revenue Source
Fund Type
Revenue Source
Table 5
Summary of Funding Option # 1
IMPLEMENTATION COSTS
General Revenue Fund
GRSC Increase Temporarily
OPERATIONAL COSTS
General Revenue Fund
GRSC Increase Permanently
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.
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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
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
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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.
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 system.
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 Office pursue approval from the Legislature for
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funding option 2, the Internal Service Trust Fund, for 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
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 authority 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
• Promotes the escalation of enterprise-wide issues to the Enterprise Financial Business
Operations Council and Officer (e.g., 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.
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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.
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 (e.g., 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.
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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
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 (e.g., 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.
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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 deadlines
• Escalating issues regarding the Project’s approach, methodologies, and scope, changes to
schedule, need for additional resources to the Project Director
• 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 decisionmaking, and the timely resolution of issues has 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 (e.g., 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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