State of Wisconsin
Procurement Analysis Project
Desired Future Situation &
Detailed Recommendations
January 2001
Advanced Data Concepts, LLC
CONTENTS

INTRODUCTION

RECOMMENDATIONS

–
GAP ANALYSIS
–
IMPERATIVES
–
SYSTEM OPTIONS
ORGANIZATIONAL & POLITICAL
CONSIDERATIONS

IMPLEMENTATION GAME PLAN

BEST PRACTICES PROCESS MAPS

APPENDICES
–
GLOSSARY
–
CASE STUDIES
–
E-PROCUREMENT VENDOR LISTING
–
SUPPORTING CHARTS
– Data Warehouse Project - Development & Implementation
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
2
PROJECT OBJECTIVES, DEFINED BY THE INTERAGENCY GROUP, DROVE
INTENSIVE SET OF INTERVIEWS AND ANALYSES
INTRODUCTION
OBJECTIVES
OBJECTIVES
•
•
•
Identify and realize efficiencies from
common business needs
Reengineer procurement/purchasing
processes and implement performance
metrics
Define and understand successful
procurements
DESIGN GUIDELINES
•
•
•
PHILOSOPHY
•
•
•
•
•
Identify and accommodate different
business requirements and needs
Make it easy and timely
Provide timely and accurate information
to all participants
Leverage the State’s scale and scope
Use technology effectively throughout the
procurement cycle
Make purchasing a strategic asset
Provide quality goods and services for the
best possible price
Encourage participation of other units of
government and vendors
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
3
ADVANCED DATA CONCEPTS COMPLETED AN INTENSIVE TEN WEEK EFFORT TO
ANALYZE THE STATE’S PROCUREMENT OPERATIONS
INTRODUCTION
State of Wisconsin Management Team
A
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Current Situation Analysis
•
•
•
•
Data Collection
Interviews (10 agencies)
Surveys (all others)
Document
•Process
•Systems
• Validate
• Best Practices
Desired Future Situation
Model
• Reengineered
Business Processes
• Performance
Metrics
• Data Model
• Vendor Analysis
Detailed/Global Recommend.
• Detailed
Requirements
• Data Schema
• Vendor
Management
• Impact
• Cost
• Implementation
time
• Politics
A
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State Agencies and UW Campuses
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
4
RECOMMENDATIONS TO FACILITATE WISCONSIN MOVING FROM ITS CURRENT
STATE TO A DESIRED FUTURE STATE HAVE BEEN DEVELOPED
INTRODUCTION
In November 2000, ADC provided
SBOP with a picture of the current
procurement situation in the State
of Wisconsin
 This document now answers the
questions:
– What is the Desired Future
State?
– How do we get there?

© 2000 Advanced Data Concepts, LLC
State of Wisconsin
5
EMBRACING THE FOLLOWING STRATEGIC FRAMEWORK WILL DRIVE
PROCUREMENT & OPERATIONAL EXCELLENCE
INTRODUCTION
Purchasing as a Strategic Asset
Buyer/Supplier Management
Strategic Planning
• Continuous Learning &
Innovation
• Review Buying and
Supplier Behavior
• Strategic Sourcing
• Key Performance
Indicators
Business Process ReEngineering
• Best Practices
• Imperatives
• Organization Impact
• Commodity Code
Standardization
• Human Capital
Development
Technology Architecture
• Enterprise Application
Solution
• E-Procurement
• Data Warehousing
• N-Tier / Client-Server
Architecture
Vendor Management
• VendorNet
• E-Procurement
• Supplier Performance
Measurement
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
6
THIS PROJECT RESULTED IN SEVERAL MAJOR RECOMMENDATIONS
INTRODUCTION
 THE FOLLOWING IMPERATIVES MUST BE ADDRESSED TO REALIZE
IMPROVEMENT OPPORTUNITIES IN THE PROCUREMENT CYCLE.
– Leverage Large Volume Purchases - achieve maximum
vendor discount
– Expand Use of Cross-Functional Teams - develop
sourcing strategies for high volume and complex purchases
– Approval Process - decrease approvals to one per
transaction (requisition and purchase order)
– Commodity Coding - standardize on UN/SPSC naming
convention
– Purchasing Card Reporting and Management - report on
P-Card purchases by commodity and dollar amount
– Purchasing as a Strategic Asset – establish purchasing as
an integral part of the strategic planning process
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
7
THIS PROJECT RESULTED IN SEVERAL MAJOR RECOMMENDATIONS
INTRODUCTION
 KEY IMPERATIVES CONTINUED …
– Expand Training Program - provide a continuous
improvement program for SBOP and agency procurement
staff
– Standardization and Consolidation - institute a
standardization program to achieve cost savings
– VendorNet Official State Bidders List - eliminate all bidders
list but VendorNet
– Vendor Data Rationalization - WISMART the only vendor
table for State
– Key Performance Indicators - for Staff, Vendors and
Customer Satisfaction
– Develop Data Warehouse - for the analysis of statewide
purchasing activity and spend data
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
8
THIS PROJECT RESULTED IN SEVERAL MAJOR RECOMMENDATIONS
INTRODUCTION
 SYSTEMS SOLUTIONS
– Near-Term, Immediate:
 Begin development of Data Warehouse to capture data for the analysis of
statewide purchasing activity and spend data [Also listed as an Imperative]
 Conduct detailed feasibility study to determine best approach for dedicated
statewide procurement solution that automates the requisition to payment
process
 Enhance in-house purchasing system (e.g., PurchasePlus)
 Purchase procurement software package (e.g. PurchasingNet, Compusearch
Software – Prism, Dynamic Software, MRO Software, …)
– Medium-Term:
 Utilize E-Procurement – use reverse auctions and/or strategic sourcing for
new purchases where feasible
 Chief Information Officer – centralize technology initiatives under leadership
statewide executive
– Long-Term:
 Adopt the implementation of an Enterprise Application System (EAS); also
referred to as an Enterprise Resource Planning (ERP) System
 Includes consideration of upgrading WisMART (AMS Advantage 3.0 Software) and
migrating all agencies to WisMART in conjunction with retaining newly deployed
statewide procurement system
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
9
WE HAVE TRIED TO ENSURE THAT RECOMMENDATIONS ARE
CONSISTENT WITH THE INTERAGENCY GOALS
INTRODUCTION
 Please
reference exhibit on the following
page.
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
10
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
RECOMMENDATIONS
GAP ANALYSIS
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
GAP ANALYSIS
GAP ANALYSIS

ADC created 85 process maps
that outline the current situation
in ten agencies, including the
University of Wisconsin

Gap analysis charts, on the
following pages, identify
changes required to migrate
current processes to best
practices
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
13
GAP ANALYSIS – P. CARD
GAP ANALYSIS
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RECOMMENDED ACTION
FS
AGENCY
Expand Use of P-Card
Extend to All Small Dollar Purchases
Expand Use to Statewide Contracts
Add Language in Bids Accepting P-Card
Payments
Add Requirement for Bidders to Identify
Reporting Level
Negotiate With Statewide Vedors to Provide
Level Three Reporting
Negotiate With Visa to Obtain Level Three
Reporting
Reconcile Level Two Information With
Commodity Codes for Reporting
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
14
GAP ANALYSIS – SIMPLIFIED BID
GAP ANALYSIS
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RECOMMENDED ACTION
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Automate
Obtain Quote Before Requisition Entered
Automated Validation of Account Codes
Online, Real Time Requisition Approval
Reduce Number of Approvals
Eliminate Evaluation Committee
System Generates Purchase Order (PO)
On-Line PO Approval
Electronically Transmit PO to Vendor
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
15
GAP ANALYSIS – SEALED BID
GAP ANALYSIS
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RECOMMENDED ACTION
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AGENCY
Automate
Requisition Entered by End-User
1
Automated Validation of Account Codes
Online, Real Time Requisition Approval
Reduce Number of Approvals
System Calculates Lowest Bidder
System Generates Purchase Order (PO)
On-Line Purchase Order Approval
Electronically Transmit PO to Vendor
1. UW's PeopleSoft software will allow full automation, including end user requisitioning, automated account validation and online PO
approval when the system-wide implementation is completed.
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
16
GAP ANALYSIS – DIRECT CHARGE
GAP ANALYSIS
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RECOMMENDED ACTION
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AGENCY
Continue Current Process
Eliminate Requisition
Reduce Use of Direct Charge
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
17
GAP ANALYSIS – REQUEST FOR PROPOSAL (RFP)
GAP ANALYSIS
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RECOMMENDED ACTION
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AGENCY
Continue Current Process
Maximize Automated Processes
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
18
GAP ANALYSIS – STATEWIDE RELEASE
GAP ANALYSIS
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RECOMMENDED ACTION
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AGENCY
Continue Current Practice
Automate
Eliminate Pre-Approval
Reduce Number of Approvals
End-User Enters Requisition
1
Automated Validation of Account Codes
On-Line Requistion Approval
System Generates Purchase Order (PO)
On-Line Purchase Order Approval
Electronically Transmit PO to Vendor
1. UW's PeopleSoft software will allow full automation, including end user requisitioning, automated account validation and online PO
approval when the system-wide implementation is completed.
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
19
GAP ANALYSIS – ACCOUNTS PAYABLE
GAP ANALYSIS
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RECOMMENDED ACTION
D
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AGENCY
Continue Current Process
On-line Receiving & Invoicing
Automated 2/3 Way Match
Implement Enterprise Procurement
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
20
GAP ANALYIS – REQUEST FOR BID (SBOP)
GAP ANALYSIS
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RECOMMENDED ACTION
FS
AGENCY
Leverage Large Volume With Accurate
Spend Data
Use Standards Committee(s)
Develop Sourcing Strategy
Develop Performance Standards for
All Contracts
Inititate E-Procurement Solutions
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
21
GAP ANALYSIS - VENDOR NET (STATE BIDDRS LIST)
GAP ANALYSIS
AGENCY
RECOMMENDED ACTION
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No Registration Fee
Registration Required to Bid
Vendors With Current Contracts
Required to Register With VenorNet
Develop Performance Standards for All
Contracts
Charge Fees for Automated Services
Capability to Accept Online Payment
Enhance Search Engine
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
22
RECOMMENDATIONS
IMPERATIVES
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
IMPERATIVES REPRESENT FOUNDATIONAL RECOMMENDATIONS THAT MUST BE
ADDRESSED BY THE STATE TO ENSURE SUCCESS
IMPERATIVES

Imperatives have been identified in the
following areas:
– Leverage Large Volume
Purchases
– Cross-Functional Teams
– Approval Process
– Commodity Coding
– Purchasing Card
Reporting and
Management
– Purchasing as a Strategic
Asset
© 2000 Advanced Data Concepts, LLC
– Expand Training Program
– Standardization and
Consolidation
– VendorNet State Bidders
List
– Vendor Data
Rationalization
– Key performance
Indicators
State of Wisconsin
24
LEVERAGING LARGE VOLUME PURCHASES
IMPERATIVES
Desired Future State

Leverage large volume purchases to
achieve maximum vendor discount
Business Case for Action



© 2000 Advanced Data Concepts, LLC
Currently not all agencies consistently
utilize statewide contracts therefore
lessening volumes
– Usage on statewide office supply
contract $4 to $5 million
– UW utilizes different office supply
contract; year to date expenditures
approximately $5 million
– DWD did not utilize statewide office
supply vendor for a three year period.
Combination of this volume would result in
the state leveraging lower costs from the
office supply vendor and insuring states
customer service requirements would be
met
State has no official purchasing
classification system and spend data
cannot be aggregated for evaluation
State of Wisconsin
25
LEVERAGING LARGE VOLUME PURCHASES …
IMPERATIVES
Recommendation(s)





SBOP must identify and manage
classification system that would allow the
aggregation of purchasing spend data by
commodity
Aggregated commodity spend data must
be used to identify the largest volume
commodities
Items within the largest volume
commodities must be standardized so that
number of items is reduced while item
volume is increased
SBOP must obtain data from
municipalities and school districts that
utilize their contract. This information
must be included in quantity and spend
estimates provided to vendors in
solicitation
Solicitations methods must require vendor
to offer maximum cost saving and
customer services
© 2000 Advanced Data Concepts, LLC
Approach




A standard commodity code must be
adopted
Baseline spend data must be gathered on
all commodities purchased statewide
Standards committees must be formed to
consolidate items in commodities with
multiple items purchased in large
quantities
As new leveraging opportunities are
uncovered, SBOP must determine the
procurement method that will result in the
highest savings. For example:
– Strategic Sourcing solicitations
– Reverse auctions
– Discounts based on quantity
thresholds
– Rebates based on quantity
thresholds
– Discounts in return for contract
extensions
State of Wisconsin
26
USING STANDARDS COMMITTEES/ CROSS-FUNCTIONAL TEAMS
Desired Future State

Standards Committees are used to
leverage large volume purchases and to
develop a sourcing strategy
Business Case for Action




© 2000 Advanced Data Concepts, LLC
According to Purchasing Online, a supply
chain magazine, the use of crossfunctional teams is the best of the best
practices in supply management
In his book, Balanced Sourcing, Timothy
Laseter indicates that using multifunctional teams is a winning sourcing
strategy
Wisconsin currently uses standard
committees to develop RFB/RFPs
Standards committees are not used
consistently by agencies or SBOP staff
members
State of Wisconsin
27
USING STANDARDS COMMITTEES/ CROSS-FUNCTIONAL TEAMS
Recommendation(s)



SBOP should increase the use standards
committees to develop RFB/RFPs
SBOP should use cross-functional teams
to develop sourcing strategies on all highvolume state-wide commodities. The
strategy may include:
– Standardization
– E-commerce opportunities
– Strategic vendor partnering
opportunities
– Volume discount sourcing
These teams should set client goals and
objectives and be held responsible for the
success and/or failure of the initiative.
© 2000 Advanced Data Concepts, LLC
Approach


Identify staff in agencies to participate in
cross-functional teams
To ensure team success, they will need
– Organizational resource availability
– Supplier participation and
involvement
– High level of internal and external
decision-making authority
– Effective team leadership
– Performance evaluation and rewards
State of Wisconsin
28
APPROVAL PROCESS
IMPERATIVES
Desired Future State

Approvals done on-line via automated
workflow:
– Requisition would be entered on-line
by program end-users
– One approval for requisitions
– Purchase Orders would be created
by copying information from
requisition
– One approval for purchase orders
– One approval for releases against a
master ageement
© 2000 Advanced Data Concepts, LLC
Business Case for Action




Five of the nine agencies reviewed have
manual requisitioning and purchase order
processes
Many departments require multiple
approvals (manual or online) of
requisitions and purchase orders
Manual budget checking in nonautomated agencies add to required
approvals and slows processing
Routing paper requisitions and/or rekeying
information into multiple systems
– increases processing time
– reduces customer satisfaction
State of Wisconsin
29
APPROVAL PROCESS …
IMPERATIVES
Recommendation(s)




Implement an automated purchasing
system with online budget verification
The automated purchasing system should
accommodate decentralization to the end
user level
The system should maintain an online
vendor file, accessible to all users
System should have automated workflow
© 2000 Advanced Data Concepts, LLC
Approach


Non-automated agencies should
streamline paper process
Non-automated agencies should
implement an automated purchasing
system
– Automated requisitions include:
• commodity codes
• commodity description
• accounting string(s) - preencumbrance
– System creates purchase orders by
copying requisition information,
releasing pre-encumbrance and
performing an encumbrance against
accounting string(s)
State of Wisconsin
30
COMMODITY CODING …
IMPERATIVES
Desired Future State
 Create a standardized naming
convention that:
– Allows the standardized coding
of purchases
– Allows the compilation of
aggregate purchase information
in a unified framework permitting
search and analysis
– Integrates procurement card
statement categories with all
purchase transactional data
Business Case for Action
 State Bureau of Procurement
(SBOP) is required by statute to
report on Purchases throughout the
state
 No Statewide naming convention
exists for purchasing data
 Base line spend data by purchase is
necessary for:
–
–
–
–
–
–

© 2000 Advanced Data Concepts, LLC
Standardization
Workload management
Performance measure development
Strategic sourcing
E-Procurement
Negotiating better pricing agreements
with vendors
Currently base line spend data
cannot be produced on a timely and
accurate basis
State of Wisconsin
31
COMMODITY CODING …
IMPERATIVES
Recommendation(s)


Select UN/SPSC classification system as
State’s commodity coding system
– Code maintains good hierarchical
groupings
– Allows reporting on a contractible
group
– Identifies all buyable products and
services and places them into a
logical hierarchical classification
– Has a pilot commodity coding project
with Visa
Set SBOP staff as the state-wide mangers
of the code
– Will determine code classifications
– Make decisions about adding new
code
– Liaison to code management
company for developing new code
when required
© 2000 Advanced Data Concepts, LLC

Approach

SBOP should:
– Work with IT to determine most
efficient way to disseminate code
throughout enterprise
– Develop procedures for code
application and maintenance
– Develop a cross functional groups to
facilitate code implementation
through all agencies
– Provide all changes to code
– Determine how items should be
classified in response to agency
question
– Develop a continuous training
program on use and value of
commodity code
End user to add commodity code
description to system requisition

State of Wisconsin
32
PURCHASING CARD REPORTING AND MANAGEMENT
IMPERATIVES
Desired Future State



Report on P-Card purchases by
commodity and dollar amount
Maximize the utilization of P-Cards
throughout state agencies
Utilize P-Cards for ordering on
statewide contracts
Business Case for Action


Utilization of P-Cards for low dollar
hi-volume purchases is a best
practice
According to the study on corporate
procurement practices conducted by
the Hackett Group:
–
–

© 2000 Advanced Data Concepts, LLC
P-Cards, when used with other best
practices, can reduce the cost of a
transaction from $9.50 to $1.87.
P-Cards can reduce the cost of
making a payment by 85%.
The state is expected to expend
$50+million dollars using P-Cards
this fiscal year however individual
purchases cannot be identified or
aggregated by commodity
State of Wisconsin
33
PURCHASING CARD REPORTING AND MANAGEMENT …
IMPERATIVES
Business Case for Action


Vendors that accept Visa report purchases
using Merchant Category Codes (MCCs)
– codes are tiered
– merchants that are coded at level two
provide data on dollars spent via a
general classification code
– merchants coded at level three can
provide more itemized expenditure
information and a commodity code
can be added to each record
– Currently Visa has a pilot program
with Dun & Bradstreet to utilize its
UN/SPSC commodity code
Identification of P-Card purchases will
allow:
– Required oversight and reporting of
state purchases
– Identification of commodities where
volume discounts are likely
– Identification of commodities for EProcurement initiatives
© 2000 Advanced Data Concepts, LLC
Recommendation(s)




Require current bank/Visa to provide level
3 reporting for companies that currently
have it
Include level 3 reporting as a requirement
in all supply bids where the volume is
expected to exceed $1million
Request that all current suppliers on high
volume contracts, with 2 years or more left
on their contract become level three
vendors
Cross reference current level 2 reporting
to commodity codes and develop reports
State of Wisconsin
34
PURCHASING CARD REPORTING AND MANAGEMENT …
IMPERATIVES
Approach




SBOP obtain level 3 reports from bank for
all level 3 vendors
Require P-Card acceptance and level 3
reporting on large volume procurements
expected to exceed $1 million
Since only 1000 vendors provide level
three information this information will not
be available from most vendors. To
capture some purchasing detail SBOP
should:
– Use ProCard (reporting software) to
develop a report that will cross
reference level 2MCCs to commodity
codes by department
– Report information monthly to
agencies
It is noted that some level 2 MCC
information will not correspond to an
individual commodity code group
© 2000 Advanced Data Concepts, LLC

MCC Code 5200 Home Supply
Warehouse as an example is used for
companies like Home Depot and Menards
that supply a wide variety of items
– Given the variety of items sold by
these companies level three reporting
is not likely to yield the required detail
– Spend data from these vendors
should be given a special category.
– Items bought here cannot be
captured for inclusion in aggregated
spend data
– Dollars in this category should be
used to negotiate discounts at Home
Supply Warehouse stores such as
Menards and Home Depot
State of Wisconsin
35
PURCHASING AS A STRATEGIC ASSET
IMPERATIVES
Desired Future State
 Purchasing is a strategic asset to the
State of Wisconsin and an integral
part of the strategic planning process
© 2000 Advanced Data Concepts, LLC
Business Case for Action
 SBOP is statutorily charged with
reporting the state purchasing
activities
 Accurate spend data enhances the
ability of SBOP to develop
commodity management strategies,
leverage purchasing volumes and
improve sourcing
 Strategic sourcing and EProcurement could save the State
$90 million dollars (10% of $900
million) over the first two years based
on research conducted by research
organizations such as the Gartner
Group
 Strategic sourcing and EProcurement can improve the quality
of goods and services
State of Wisconsin
36
PURCHASING AS A STRATEGIC ASSET …
IMPERATIVES
Recommendation(s)





Identify a commodity for immediate
strategic sourcing initiative, such as
telecommunications including cell
telephones and pagers
Conduct a pilot E-Procurement initiative
Identify a commodity such as food and
food service and identify contracting
improvement opportunities
Utilize cross-functional teams comprised
of end-users, buyers, SBOP staff and
management for:
– continuous improvement in
commodity and supplier strategies
and relationships
– E-Procurement opportunities
– strategic sourcing
– standardization's and consolidations
analysis of services across agencies
Develop on-going training for SBOP and
agency procurement staff
© 2000 Advanced Data Concepts, LLC
Approach

Purchasing can be established as a Strategic Asset
through a set of specific pathways designed to
achieve incremental and significant cost savings by
improving procurement - Buy for Less, Buy Better
and Consume Better
–
Buy for Less where savings are 5 to 15%:
•
•
•
•
–
Buy Better typically results in savings of 5-15%:
•
•
•
–



Improved coordination/forecasting accuracy
Streamlined bidding processes
Longer-term commitments to suppliers
Consume Better savings are expected to exceed 5%:
•
•
•
•
•
•

Volume consolidation
Supply base optimization
Enhanced negotiation and contracting skills
Leverage State clout
Optimize lifecycle costs
Outsource non-core activities
Increase use of cross-functional teams
Reduce complexity/simplified specifications
Increase standardization
Rationalize requirements
Identify staff in agencies to participate in crossfunctional teams
Implement a data warehouse
Benchmark current pricing
Develop an effective communication program
–
workshops
– email
– intranet
State of Wisconsin
37
PURCHASING AS A STRATEGIC ASSET …
IMPERATIVES
Management's View of Purchasing:
A Historical Perspective
1970s &
earlier
1980s
1990s &
beyond
View
Clerical
Function
Commercial
Activity
Strategic
Business
Function
Organizational Position
Low on org. chart, often a subset
of accounting or operations
Reports to Management
Integral part of the strategic
planning process
Performance Measures
Focused on the past, quantitative efficiency
and control of expenditures
Focused on present, qualitative effectiveness,
measures such as cost savings/cost reduction
Focused on proficiency, gaining present and
future competitive advantage through
integrated resource management & reduction
of purchase and ownership costs
© 1994 Solutions Consulting Group
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
38
EXPAND TRAINING PROGRAM
IMPERATIVES
Desired Future State

State provides a continuous improvement
program for procurement staff providing
40-80 hours of training for SBOP staff and
20-40 hours of training for agency staff on
an annual basis
Business Case for Action





© 2000 Advanced Data Concepts, LLC
Best-in-Breed organizations provide
continuous improvement training for its
procurement staff
SBOP conducts in-house training directed
primarily at agency procurement personal
New SBOP procurement staff receive
entry-level training
Staff not required to attend refresher
courses
Long term staff may not have received any
training within the last ten years
State of Wisconsin
39
EXPAND TRAINING PROGRAM …
IMPERATIVES
Recommendation(s)





SBOP should continue with its in-house
training of new staff for entry level
knowledge
Develop “brown bag lunches” once a
month at various agencies
Develop web-based training for self-paced
learning of all State staff involved in
Purchasing
SBOP should provide outside training
– National Association of Purchasing
Managers (NAPM)
– National Institute of Governmental
Purchasers (NIGP)
– Pool of training consultants
SBOP should encourage its staff to
become certified as a C.P.M., or a CPPO,
or CPPB
Approach



–
–
–


University
NAPM
Outside Consultants
SBOP should identify classes given either by
NAPM or NIGP for:
–
–

© 2000 Advanced Data Concepts, LLC
SBOP should update training to include
initiatives implemented by this assessment,
develop and disseminate a schedule to all
agencies
Develop the “brown bag lunches” series given
once a month at various agencies. Recruit
agency staff to lead the discussion on trends
and best practices in the purchasing field as it
relates to their agency
Identify resources to develop web-based
training, such as:
Mid-Level Purchasing and Supply Training
Senior-Level Purchasing and Strategic
Supply Training.
These classes can be taught off or on-site.
SBOP should develop a RFP for procurement
training services and identify a pool of
consultants that can provide purchasing
training
State of Wisconsin
40
STANDARDIZATION AND CONSOLIDATION
IMPERATIVES
Desired Future State

Institute a standardization program (tool to
Business Case for Action

achieve cost savings)



© 2000 Advanced Data Concepts, LLC
Neither state nor agencies limit the type of
items purchased to increase the volume of
a selected item or commodity
Examples of state contracts providing too
much variety:
– copier contract 15 types of copiers , 6
to 8 brands per type
– printer contracts 25 types of printers,
4 to 12 brands per type
– hand & electric tool contract offers
access to all items on eight vendor
catalogs
Standards committees have no cost
savings goals and are encouraged to
develop requirements for many of items
rather than consolidation to as few
different types as possible
Agencies provide no guidelines for staff
regarding types of supplies which they are
allowed to purchase therefore staff may
use several varieties of the same item.
State of Wisconsin
41
STANDARDIZATION AND CONSOLIDATION …
IMPERATIVES
Recommendation(s)



Set cost saving goals for specific
commodities
Develop multi-agency standards
committee with goals of reducing number
of items in commodity
Rebid expiring contracts within targeted
commodities using reduced items listing
and include requirements for analyzing
cost savings.
Approach



© 2000 Advanced Data Concepts, LLC
SBOP should work with agencies to
develop statewide, internal support for
cost reduction/cost savings programs.
SBOP should obtain baseline spend data
on statewide purchases
– Until this data can be obtained from
internal reporting vendors should be
asked to provide usage
– Evaluate commodities to determine
where standardization is warranted
– Develop cross function, multi-agency
team to work on standardizing
designated statewide contracts
Agencies should also develop agency
wide teams to target standardization and
consolidation opportunities within the
agency
State of Wisconsin
42
VENDORNET STATE BIDDERS LIST
IMPERATIVES
Desired Future State

VendorNet the only State Bidders List
Business Case for Action






© 2000 Advanced Data Concepts, LLC
PRO C 35 has established VendorNet as
the State’s bidders list
VendorNet is a real-time, interactive, bid
posting Internet application
VendorNet is a precursor of EProcurement initiatives
Currently, VendorNet has a base of 1,600+
vendors
Many of the State agencies continue to
maintain their own bidder lists
It is a common practice for agencies to
send copies of bids and RFPs to nonVendorNet vendors
State of Wisconsin
43
VENDORNET STATE BIDDERS LIST …
IMPERATIVES
Recommendation(s)










Allow all vendors to register on-line with
VendorNet
Registration required for bid to be responsive
All vendors that have a current contract must
be on VendorNet
Do not charge vendors to register with
VendorNet
Charge fee for automated services, such as
receiving bid notification electronically or
downloading bid documents
Fee structure is based on:
– number of commodity classes
– in-state vs. out-of-state vendor
Change legal notice requirement from
newspaper advertisement to electronic
notification
Enhance VendorNet ability to accept online
payment
Enhance VendorNet to calculate bid
tabulation
Enhance search engine capabilities
© 2000 Advanced Data Concepts, LLC
Approach




Change Wis.Stats. 16.004;
16.701>Wis.Adm.Code Chapter Adm 9 to
indicate that vendors must register with
VendorNet to bid with the State and/or
receive contracts. Vendors must pay a fee to
be notified automatically of all agency
requests for bids/proposals over $25,000.
SBOP should work with agencies to ensure
all current agency vendors are on VendorNet
SBOP should develop a two-year strategic
plan to ready all its vendors for EProcurement
– At the end of 2-years, change Wis.
Stats. 16.75 to identify legal notice as
electronic notification
SBOP should implement enhancements to
VendorNet application/environment to
include:
– on-line payment
– calculate bid tabulation
– increased search engine capabilities
State of Wisconsin
44
VENDOR DATA RATIONALIZATION …
IMPERATIVES
Desired Future State


WISMART the only vendor table for State
Vendor List cleansed and rationalized
within WISMART.
Business Case For Action


Multiple Vendor lists, files and databases
across the State inhibits the State’s ability
to effectively manage Vendors and monitor
their performance.
No coding standards for Vendor
Information (e.g., identification, address
standardization, multiple locations, etc.)
Approach
Recommendation(s)

Standardize Vendor Information.
© 2000 Advanced Data Concepts, LLC


Define rules and standards for Vendor
identification and coding.
Combine, cleanse, and rationalize multiple
Vendor lists in use across State.
State of Wisconsin
45
KEY PERFORMANCE INDICATORS - VENDORS
IMPERATIVES
Desired Future State



RFPs and contracts resulting from RFPs
should contain clear vendor performance
standards
SBOP should monitor vendor performance
on statewide contracts
Central purchasing staff within agencies
should monitor performance on agency
initiated contracts
© 2000 Advanced Data Concepts, LLC
Business Case for Action



Failure of vendors to meet performance
criteria means
– agency is paying for a quality level
that will not be achieved
– terms and conditions which are key
to cost savings may not be honored
Customer (end-user) satisfaction will be
low
Performance criteria that is not
quantifiable or unclear leads to differences
in the expectations of the vendor and the
end user and results in disputes
State of Wisconsin
46
KEY PERFORMANCE INDICATORS – VENDORS …
IMPERATIVES
Recommendation(s)


All RFPs and contracts resulting from
them should contain measurable
performance standards
Performance standards at a minimum
should identify:
– the specific service (s) that must be
performed
– expected outcomes or deliverables
– provide quantifiable test methods by
which outcomes or deliverables will
be judged
– quality measures that must be met
– time frame of delivery requirements
– any performance/cost reduction
relationships
– minimum vendor capabilities
Approach




Contract value and complexity should
dictate the contract monitoring frequency
for SBOP and agency staff
On Statewide contracts SBOP should
work in tandem with lead agencies to
identify vendor performance standards
At contract start up, purchasing staff and
vendor should review performance
requirements included in contract
Procurement staff should be assigned
specific contract administration duties that
include:
– determining vendor compliance with
contract terms and conditions
– determining the level of customer
satisfaction with vendor services
– working with Accounts Payable to
insure that invoices reflect contract
terms and conditions
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
47
KEY PERFORMANCE INDICATORS - STAFF
IMPERATIVES
Desired Future State




SBOP and Agency purchasing staff will
have clear goals and objectives for
performance
Goals, objectives and performance
standards will reflect purchasing as a
strategic asset
Staff goals and objectives will be tied to
the overall goals and objectives of the their
department
Staff will be given performance standards
that identify a satisfactory level of
performance that are specific and
measurable
© 2000 Advanced Data Concepts, LLC
Business Case for Action


Currently criteria for doing a good job is
defined by evaluating transaction data
(how many bids or RFPs handled, timely
renewal of expiring contracts, attendance,
on time arrival, etc.)
To achieve an overall goal of purchasing
as a strategic asset, goals, objectives and
performance standards must be based on
activities that add value to the
procurement process
– Samples of typical performance
appraisal questions for transactional
purchasing and performance
indicators of purchasing as a
strategic asset are listed on the next
slide
State of Wisconsin
48
KEY PERFORMANCE INDICATORS – STAFF …
IMPERATIVES
Recommendation(s)




SBOP and agencies should identify goals
and objectives that enhance the
purchasing performance as a strategic
asset ( goals related to cost savings
require accurate baseline spend data)
Staff should be apprised of organizational
goals and objectives and (in tandem with
supervisors) set goals for performance
that support agency goals.
Specific and measurable performance
standards should be gleaned from goals
and objectives that clearly identify
satisfactory performance
Incentives should be developed that will
reward successful completion of employee
goals and objectives
© 2000 Advanced Data Concepts, LLC
Approach





SBOP Management and Human
Resources department must identify
incentives (over and above standard
increases) that can be offered to
employees that successfully complete
goals and objectives.
SBOP and agency management must
develop a strategic plan for department
procurement that identifies departmental
goals and objectives
Supervisors, in tandem with employees,
must set goals and objectives that support
agency goals.
Supervisors must develop employee
performance standards and measures.
Goals and objectives must support
purchasing as a strategic asset as
opposed to a transactional activity.
State of Wisconsin
49
KEY PERFORMANCE INDICATORS – STAFF …
IMPERATIVES
Comparison of Performance Indicators for Transactional vs. Strategic Procurement
Performance Indicators must be specific, measurable and time limited. Listed below are sample questions that are
used to determine performance in a transactional purchasing environment and measurable performance indicators that
are used when purchasing is a strategic asset
Typical performance appraisal questions in
a Transactional Purchasing Environment
Performance Indicators for Activities where
Purchasing is a Strategic Asset
For the current evaluation period what activities did the
employee perform?
– Sourcing
Within the upcoming fiscal year employee will meet the
following performance standards
– Sourcing
• How many bids and Requests for Proposals were
completed?
• Were the bids or requests for proposal completed within
department time frames?
• How many standards committees did employee chair?
• Was an RFP developed as a result of the Standards
committee?
– Purchasing Process
• How many purchase requisitions and purchase orders
did the employee process?
• Customer Services
• How did the end user rate the employee?
– helpful
– courteous
– Contract Administration
• Did the employee assist in the resolution of vendor/
end-user disputes?
• Cross functional teams chaired by employee will meet a
minimum of 85% of the cost saving goals for target
commodity
• The aggregate of purchases managed by employee will
result in 1% cost savings over the aggregate of those
same commodities in the previous fiscal year.
• Employee will have 0% of re-bids due to unclear
specifications, terms or conditions
– Purchasing Processes
• Employee will evaluate the processes of 3 agencies to
determine if there are opportunities for streamlining
– Customer Services
• Purchasing staff will collect and deploy to a minimum of
3 end users market intelligence that will result in
improved end user buying decision
– Contract Administration
• Employee will audit vendor reports and invoices
quarterly to determine if contract terms and conditions
are being met
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
50
KEY PERFORMANCE INDICATORS - CUSTOMER SATISFACTION
IMPERATIVES
Desired Future State

Business Case for Action

SBOP mission statement incorporates its
customer service initiatives



© 2000 Advanced Data Concepts, LLC
SBOP currently receives customer
feedback from interagency meetings and
surveys to agency purchasing staff and
vendors
monthly meetings of Purchasing personnel
– too large for meaningful customer
feedback and dialogue
– does not include agency end users
Current surveys are information gathering
tools not specifically targeted to determine
customer satisfaction
SBOP is considering charging agencies
for value added services
– internal customer’s perceptions of
SBOP’s service overall service and
value will have a great impact on
their acceptance of this funding
philosophy
State of Wisconsin
51
KEY PERFORMANCE INDICATORS - CUSTOMER SATISFACTION …
IMPERATIVES
Recommendation(s)




SBOP should develop a mission statement
that includes its customer service goals.
Mission statement should be incorporated
into policies and procedures
SBOP should conduct easy to answer
“pulse” surveys, assessments of specific
purchasing initiatives, for both vendor and
internal customers
Implement Customer Advisory Boards
much like users groups that exist in the
software industry. They provide feed back
on both SBOP and agency practices.
Utilize feedback from surveys and
Customer Advisory Boards to develop
performance standards for SBOP staff
© 2000 Advanced Data Concepts, LLC
Approach




Develop mission statement and internal
communication plan for incorporating
customer service principles of mission
statement into SBOP culture.
Determine areas requiring feed back and
develop survey schedule and topic. Staff
should be assigned to this initiative.
Purchasing advisory teams, comprised of
like size agency end-users, procurement
staff and vendors should be developed to
provide SBOP feedback on its polices,
procedures and services.
Incorporate customer service performance
standards as evaluation criteria in
employee performance appraisals
State of Wisconsin
52
RECOMMENDATIONS
SYSTEM SOLUTIONS
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
MIGRATE FROM MANUAL FRAGMENTED SYSTEMS TO AUTOMATED
INTERGRATED SOLUTIONS
SYSTEM SOLUTIONS

Current Situation
– Highly manual; many
hand-offs
– High “touch”; labor
intensive
– Significant non-valueadded activities
– Multiple systems;
heterogeneous
environment
© 2000 Advanced Data Concepts, LLC

Desired Future Situation
– Fully automated, endto-end
– Low “touch”;
exception-based
processing
– Integrated workflow
– Leverage N-Tier
Systems Architecture
State of Wisconsin
54
DESIRED SYSTEM MUST CONTAIN FEATURES CONSISTENT WITH INDUSTRY
BEST PRACTICES ACROSS THE PROCURMENT CYCLE
SYSTEM SOLUTIONS
Process
System Characteristics
Process
System Characteristics
Create Requisition
Requisitions created on-line (no paper).
Create Purchase Order
Once Vendor is selected, Purchase Order can be created
automatically from Requisition.
Commodity Codes and Item Descriptions required for
each line item on Requisition. System provides
Commodity and Vendor search capabilities.
Integration with Vendor e-catalogs where applicable.
System automatically validates accounting strings and
funding sources, and pre-encumbers funds.
Route Requisition for Approval
Based on Requestors profile, Requisition is automatically
routed to Supervisor for approval, if necessary.
Approve Purchase Order
If necessary, PO is routed to Purchasing Manager for
approval. Once approved, Purchase Order is ready for
distribution.
Approve Requisition
“In-Box” functionality used to notify Approvers of
Requisitions awaiting approval. Once approved,
Requestor is notified of authority to proceed.
Distribute Purchase Order
Once approved, Purchase Order is automatically
distributed to Vendor via fax, e-mail, etc.
Develop Requirements (Formal &
Informal)
System allows for the development of specifications that
accompany the requisition.
Record Receipt of Goods
As goods are received, they are recorded in the system
and matched against the Purchase Order line items.
System calculates the lowest bidder by line item, by
group or by entire bid from manually entered quotations.
Create Formal Bid
Formal Bids are developed on-line. System assists in Bid
creation by automatically generating standard language,
terms and conditions.
Record Receipt of Invoice
As Invoices are received, they are recorded in the
system.
Post Formal Bid
Once completed, Bids are posted automatically to
VendorNet.
Perform 3-Way Match
System automatically performs 3-way match between
Purchase Order, Delivery Receipt and Invoice.
Receive and Record Bid
Quotations
As Quotations are received, they are entered into the
system.
Authorize Payment
Upon successful 3-way match, payments are
automatically authorized and an EFT to Vendor initiated.
Select Vendor
Once all quotations are entered into the system, the
system can analyze the quotations and recommend the
most appropriate Vendor. Requestor can approve
selection or override selection and choose an alternate
Vendor.
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
55
DESIRED SYSTEM FLOW MUST MINIMIZE MANUAL PROCESSESS, MAXIMIZE
AUTOMATION AND MANAGE BY EXCEPTION
SYSTEM SOLUTIONS
Requestor
Create
Requisition
Develop
Requirements
(Formal &
Informal)
Create Formal
Bid
Purchasing
System
Supervisor
Receive and
Record
Quotations
Create
Purchase Order
Record Receipt
of Goods
Post Formal Bid
Bid
(VendorNet)
Route Requisition
for Approval
Select Vendors
Generate
Purchase Order
Distribute
Purchase Order
Perform 3-Way
Match
Authorize
Payment
Approve
Requistion
Purchasing
Manager
Approve
Purchase Order
Accounts
Payable
Record Receipt
of Invoice
Quote
Vendor
Purchase Order
Deliver Goods
Invoice
EFT
Legend
Manual
Process
On-Line
Process
System Process
© 2000 Advanced Data Concepts, LLC
Electronic
Document
Paper
Document
State of Wisconsin
56
MAJOR SYSTEM RECOMMENDATIONS
SYSTEM SOLUTIONS
 SYSTEMS SOLUTIONS
– Near-Term, Immediate:
 Begin development of Data Warehouse to capture data for the analysis of
statewide purchasing activity and spend data [Also listed as an Imperative]
 Conduct detailed feasibility study to determine best approach for dedicated
statewide procurement solution that automates the requisition to payment
process
 Enhance in-house purchasing system (e.g., PurchasePlus)
 Purchase procurement software package (e.g. PurchasingNet, Compusearch
Software – Prism, Dynamic Software, MRO Software, …)
– Medium-Term:
 Utilize E-Procurement – use reverse auctions and/or strategic sourcing for
new purchases where feasible
 Chief Information Officer – centralize technology initiatives under leadership
statewide executive
– Long-Term:
 Adopt the implementation of an Enterprise Application System (EAS); also
referred to as an Enterprise Resource Planning (ERP) System
 Includes consideration of upgrading WisMART (AMS Advantage 3.0 Software) and
migrating all agencies to WisMART in conjunction with retaining newly deployed
statewide procurement system
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
57
SEVERAL SYSTEM SOLUTION OPTIONS EXIST
SYSTEM SOLUTIONS
Option
1. a) Maintain Existing Environment
b) Deploy Data Warehouse
2. a) Deploy a Purchasing Software
(WISMART Agencies)
b) Deploy Data Warehouse
3. a) Upgrade WISMART (v3.0)
b) Migrate DHFS/DOC and DWD
to WISMART
c) Deploy Purchasing Software
(WISMART Agencies)
4. a) Upgrade WISMART (v3.0)
b) Migrate all Agencies to
WISMART
c) Deploy Purchasing Software
(all Agencies)
5. Deploy EAS Solution
© 2000 Advanced Data Concepts, LLC
Degree
of
Change
Low
Complexity
Timeframe
Cost
Benefits
Low
1Q00
Low
Medium
Low
1Q00
Low
High
Medium
2002
Medium
High
High
2002
High
 Accurate reporting of
Spend data
 Accurate reporting of
Spend data
 Automated purchasing
 Accurate reporting of
Spend data
 Automated purchasing
 Eliminate FMS and
associated costs
 Accurate reporting of
Spend data
 Automated purchasing
 Single Accounting System
Very
High
Very High
1Q00
Very
High
 Fully integrated
purchasing, accounting
and financial management
State of Wisconsin
58
RECOMMENDED NEAR TERM SOLUTION
SYSTEM SOLUTIONS
Option 2. State should pursue this option
as the near-term solution:
– Data Warehouse enables State to capture,
report and analyze spend data.
– Deploying Purchasing Software into the
WISMART agencies automates the majority
of manual purchasing functions within the
State Agencies.
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
59
INVESTMENT REQUIREMENTS OFFER ANOTHER PERSPECTIVE FOR
EVALUTING SYSTEM OPTIONS
SYSTEM SOLUTIONS
Rengineer Current Environment, Maintain Existing Systems and
Develop Data Warehouse
Enterprise Procurement System (In-House or Purchase Software
Package)
Upgrade WisMART (AMS Advantage Software), Adding Procurement
Functionality As It Becomes Available (e.g., E-Procurement)
Migrate to EAS/ERP for Purchasing, GL, AP, AM
50
50
20
3
5
0
Implementation Costs (Millions)
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
60
TWO KEY DIMENSIONS THAT DIFFERENTIATE ALTERNATIVE SOLUTIONS
ARE IMPLEMENTATION TIME (SPEED) AND DEGREE OF CHANGE (FOCUS)
Fast
Maintain Existing System
and Deploy Enterprise
Procurement Software
To Agencies
No Feasible
Alternatives
Slow
SYSTEM SOLUTIONS
Maintain/Upgrade AMS
Advantage Software
and
Deploy Enterprise
Procurement Software
Deploy EAS/ERP
Solution
SPEED
Procurement
Integrated
Financial Mngt.
FOCUS
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
61
DEPLOYING A DATA WAREHOUSE IS AN IMPERATIVE FOR A COMPREHENSIVE
ANALYIS OF STATEWIDE PURCHASING ACTIVITY
SYSTEM SOLUTIONS

What’s a Data Warehouse?
– An information source containing data from
multiple, heterogeneous, independent and possibly
non-synchronous systems, which is stored to
optimize retrieval and reporting of data across the
enterprise.
– Typically subject-oriented allowing users access to
operational data to track and respond to business
trends and facilitate forecasting and planning
efforts.
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
62
HOW DO DATA WAREHOUSES DIFFER FROM OPERATIONAL SYSTEMS?
SYSTEM SOLUTIONS

Typically operational and transaction processing systems store data in its
most atomic (non-redundant) format to alleviate performance issues and
ease database maintenance.
– Data stored in such a state is referred to as Normalized.

Normalized data can be difficult to extract and analyze when large
amounts of data are required across a broad range of information types.
– This difficultly is compounded when multiple systems and/or databases need
to be accessed.
– Large data extracts also degrade performance, which is not advisable in online, operational environments.

Data Warehousing addresses theses issues by focusing on structuring
information into specific subject areas of interest (e.g., Purchasing).
– Data is the restructured into relevant Facts (e.g., Spend Data) and Measures
(e.g., Total Spend Amount) that can be accessed by various Dimensions
(e.g., Agency, Time [Month/Year], Vendor, Commodity, etc.) for analysis.
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
63
DATA WAREHOUSE ARCHITECTURE
SYSTEM SOLUTIONS





Each “interfaced” agency would be responsible for generating an
extract for the Data Warehouse.
Remaining agencies purchasing activity would be captured via an
extract from Purchase Software / WISMART.
A “DW Load” process would then consolidate, cleanse and load
the combined purchasing data to the Data Warehouse.
Various Data Marts could then be generated to support the
required reporting and analytical needs.
Desktop and Browser-based query, reporting and OLAP tools
(e.g., Business Objects) would provide access to the Data Marts.
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
64
DATA WAREHOUSING ARCHITECTURE
SYSTEM SOLUTIONS
Purchasing
Software/
WISMART
WISM
ART
ETL
DWD
RAPIDS
FARS
ETL
DOT
TIPS
EAPS
ETL
DOA, et.al.
Data Marts
Spend Data
Strategic
Sourcing
DW Load
DHFS
DOC
UW/System
FMS
FMS
ETL
FMS /
Proteus
FMS
ETL
PeopleSoft
P/S
ETL
Financial Data
Warehouse
Vendor
Performance
Note: An automated extract of Detailed Purchasing
Activity from DHFS and DOC may not be available until
Purchasing function is automated.
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
65
AN ENTERPRISE APPLICATION SYSTEM IS THE LONG-TERM
RECOMMENDED SOLUTION
SYSTEM SOLUTIONS
Enterprise Application System (EAS) is:
“An integrated technology bundle (some combination of
software, hardware, and services) designed to integrate
multiple facets of a business through the interchange of
information from various vertical business process areas
and related databases. These solutions effectively
enable agencies to retrieve and disseminate mission
critical data from throughout their organizations,
providing managers with real-time operating information.”
Source: “Enterprise Application Solutions in the Public Sector”, Dataquest Perspective, VMPS-WW-DP-9903, Garter Group, April 1999.
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
66
BASED ON DISCUSSIONS WITH GARTNER GROUP …
SYSTEM SOLUTIONS

One-third of State Governments have or are moving
towards EAS solutions
– Within 2 years, remaining States will enter RFP process for
EAS solutions

Governor Councils mandating EAS solutions
– Most will pursue single-vendor solutions
– Fluidity in E-Commerce market space will likely drive “best-ofbreed” solutions


70% of existing State legacy environments are
American Management Systems sites
Public Sector EAS providers:
– Leaders: Oracle, PeopleSoft, SAP
– Others: JD Edwards, Lawson, Baan
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
67
PROCUREMENT IS ONE COMPONENT OF AN OVERALL EAS SOLUTION
SYSTEM SOLUTIONS
1. Core Business (ERP)
• Finance and Accounting
• Controlling
• Human Resources
• Asset Management
• Materials Management
• Maintenance Management
• Treasury
3. Business Line-Specific
• Administration and Finance
• Social Services
• Criminal Justice
• Public Safety
• Transport
• Health
• Public Works
2. Extended
• Case Management
• Fleet Management
• Claims Processing and Settlement
• Procurement
• Licensing
• Logistics
• Customer Interaction Systems
• Real Estate
• E-Business / EDI
• Tax and Revenue
• Reporting / Decision Making
• Project Management
• Sales and Distribution
Source: G2R/Dataquest (April 1999)
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
68
RISING EAS SPENDING UNDERSCORES THE GROWTH OF THIS
APPROACH IN THE PUBLIC SECTOR ENVIRONMENT
SYSTEM SOLUTIONS
2,492
2500
2000
Avg. Annual
Growth Rate:
23.4%
2,011
1,627
1500
1000
1,318
1,071
871
500
0
1999
2000
2001
2002
2003
2004
Total U.S. Public Sector EAS Spending Forecasts, 1999-2004 (in Millions)
Source: G2R/Dataquest (April 1999)
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
69
AN EAS/ERP IS THE RIGHT LONG-TERM SOLUTION AND MUST EXTEND BENEFITS
BEYOND PROCUREMENT TO JUSTIFY BUSINESS CASE FOR INVESTMENT



Pursuant to Executive Order No. 408 and specifically Section 14.019 of
the Wisconsin Statutes, the Secretary of the Department of
Administration is to create an internet-based “service center” giving
citizens access to core state government services which includes portals,
e-procurement, e-records and e-signatures.
Electronic Government requires a well designed front-end web portal,
tight integration with back-office administrative systems (finance,
purchasing, human resources, etc.), and reengineered business
processes to successfully manage the new business model.
Enterprise Application Systems or ERP serve as the most
comprehensive foundation for the successful implementation of
electronic government initiatives. Such systems not only provide the
technical capability to make this happen, but also force the necessary
degree of organizational change required.
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
70
AN EAS/ERP IS THE RIGHT LONG-TERM SOLUTION AND MUST EXTEND BENEFITS
BEYOND PROCUREMENT TO JUSTIFY BUSINESS CASE FOR INVESTMENT

Software consolidation
– State will minimize costs associated with maintaining a large number of
disparate systems (e.g., over 12 different financial and purchasing systems
currently in use)



Real Time update
Better management through seamless integration with finance, human
resources, payroll, manufacturing (Badger Industries), and other
functions. Examples include:
– Cut financial period closing times
– Capability to properly link cross-functional business process and
adapt to organizational changes
Leverage EAS/ERP built-in “best business practices”, research and
development, best-of-breed pre-configured solutions (e.g., Eprocurement, Citizen Relationship Management) and industry groups
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
71
THE STATE CAN REALIZE THE FOLLOWING BENEFITS FROM AN INTEGRATED
E-PROCUREMENT & PURCHASING SOLUTION
SYSTEM SOLUTIONS








Reduce transactions to lower procurement costs
Faster cycle times
Reduced maverick or unauthorized buying
Increased control over the supply chain
Improved integration of the procurement function with
back-office systems
Proactive management of key procurement data
Higher quality purchasing decisions
Elevation of procurement to a position of strategic
importance
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
72
E-PROCUREMENT HAS THE POTENTIAL TO CREATE NEW EFFICIENCIES BY PROVIDING
IMPROVED QUALITY, LOWERING COSTS, REDUCING CYCLE TIME AND TRANSACTION COSTS
SYSTEM SOLUTIONS
Procurement Today:
Managed per
transaction
Hands-Free
Procurement: Managed
by exception.
Search large catalogs
Personalized views; named
shopping carts
One to multiple levels of
management approval
Transactions automatically
approved based on rules
PO
transmission
Fax, e-mail, EDI direct to
suppliers; supplier
retypes the order
Order is sent through a
supplier clearinghouse
Payment
authorization
Dependent on three-way
match of PO with invoice
and receipt
Immediate; based on
shipment notice
Sporadic; not linked to
supplier performance
Continuous; integrated in
real time; drives
optimization of process.
Online product
selection
Requisition
approval
Analysis
Forrester Research, Inc - Jan. 2000
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
73
CENTRALIZED MANAGEMENT ENHANCES OPPORTUNITIES FOR SUCCESS IN
STATEWIDE ENTERPRISE TECHNOLOGY INITIATIVES
SYSTEM SOLUTIONS



Gartner Group indicates majority of States currently
have or are in process of recruiting a Chief Information
Officer.
Given Wisconsin’s push toward E-Government and EProcurement, a Statewide CIO will be crucial to
achieving the State’s vision.
IT Organization and System changes necessary to
support the vision require CIO-level authority to direct
and coordinate their implementation.
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
74
ORGANIZATIONAL &
POLITICAL CONSIDERATIONS
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
BUY-IN MUST BE DEVELOPED EARLY AND REAFFIRMED OFTEN; UNDERSTANDING
AND MANAGING CHANGE IS CRITICAL TO ORGANIZATIONAL SUCCESS
ORGANIZATIONAL & POLITICAL CONSIDERATIONS





Major organizational change for State of Wisconsin implies
significant potential disruption to existing ways of doing
business
Willingness to accept change cannot be assumed
A success implementation must have sponsorship at the
highest levels of the organization
Middle management and staff must also internalize and buy
into the vision
The buy-in process must start before the project begins
– Agency staff must be deeply involved in implementing the new
business imperatives and systems solution
– An effective communications process is a necessary vehicle to
obtain staff input and share information
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
76
TRADITIONAL INTERNAL BARRIERS TO CHANGE
ORGANIZATIONAL & POLITICAL CONSIDERATIONS
BARRIERS TO IMPLEMENTATION

Inadequate definition of change
COMMON SYMPTOMS



No architecture to manage change




Not aligned with the culture




No understanding or management of
resistance

Inadequate sponsorship




Poor execution of roles



Too much change already on the plate




© 2000 Advanced Data Concepts, LLC
Implementation breaks down at lower levels
Organization questions management’s knowledge of “the details”
Vague directives from senior management
No follow-up
Unclear role definition
Organization ignores directions as being inconsistent
Change viewed as temporary or reversible
Employees exhibit dysfunctional behavior
Line management frustration
Middle managers kill initiatives
Management loses credibility
Partial implementation or implementation breaks down completely
Successes are not repeatable
Organization grinds to a halt
Activities fall through the cracks
Complaints of overload and burnout
Strategy de jour syndrome
State of Wisconsin
77
BARRIERS TO CHANGE EXIST AMONG THE AGENCIES
ORGANIZATIONAL & POLITICAL CONSIDERATIONS

De-centralization has created information silos
– Agency vision instead of State vision
– Lack of structured interagency communication

Independent spirit of agencies
– Agencies are operating with a variety of processes and
procedures within the framework of the statutes and
procedures set forth by DOA


Agency staff highly invested in maintaining solutions
developed by them for their particular agency
Lack of centralized leadership in Information
Technology
– No comprehensive IT strategy to support business goals

Limited financial resources
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
78
THE CHALLENGE GOING FORWARD IS TO IMPLEMENT THE RECOMMENDATIONS TO
REALIZE THE GREATEST BENEFIT AND AVOID “ORGANIZATIONAL STONEWALLING”
ORGANIZATIONAL & POLITICAL CONSIDERATIONS
Characteristics of Effective Implementation Planning

Focused and manageable implementation projects

Fast-paced planning with deliverables and due dates

Top management team leadership

Target improvements by implementation project
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
79
FIRST STEP... ESTABLISH STRONG EXECUTIVE SPONSORSHIP
ORGANIZATIONAL & POLITICAL CONSIDERATIONS

The extensive nature of the business change,
broad number of agencies and stakeholders
impacted, and the balance between central
coordination and local control requires strong
executive sponsorship
– Create common agreement around a common
enterprise view that transcends interagency conflict
and “stonewalling”
– Continuously communicate the value and
importance of the initiatives
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
80
SECOND STEP... CREATE FIVE TASK FORCES, WITH CROSS-FUNCTIONAL
REPRESENTATION FROM THE AGENCIES, FINANCE, AND IT
ORGANIZATIONAL & POLITICAL CONSIDERATIONS
VENDOR DATA MANAGEMENT
(RATIONALIZATION OF VENDOR DATA)
STANDARDS
(PROCESSES, COMMODITIES, …)
© 2000 Advanced Data Concepts, LLC
DATA WAREHOUSE
(DESIGN & IMPLEMENTATION)
ENTERPRISE PROCUREMENT SYSTEM
(EVALUATION & SELECTION)
State of Wisconsin
81
THIRD STEP… ADDRESS POLITICAL CONSIDERATIONS
ORGANIZATIONAL & POLITICAL CONSIDERATIONS



Change Wis.Stats. 16.004;16.701>Wis.Adm.Code Chapter Adm
9 to indicate that vendors must register with VendorNet to bid with
the State and/or receive contracts
Change Wis.Stats. 16.75 to identify legal notice as electronic
notification
The State should establish a centralized CIO position to provide
consistent direction to the agencies
– Centralized leadership in Information Technology would support the
States business strategies and goals while insuring that technology
decisions remain aligned with IT strategies

Develop incentives (financial or others) to reward agencies and
staff for participating in new statewide procurement initiatives
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
82
IMPLEMENTATION GAME PLAN
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
Implementation Timeline and Preliminary Cost Estimates
IMPLEMENTATION GAME PLAN
MAJOR INITIATIVE
I
Q2-2001
Q1-2001
Q3-2001
Q4-2001
Data Warehouse:
- Design - $250 - 300K
- Development $100 - 150K
Design, Development, & Implementation
$500,000 - 625,000
- Implementation $75 - 100K
- Training $50 - 75K
Hardware & Software
$550,000 - $700,000
- Hardware: Servers - $75K
- Software: DB License $100K, DB Tools $125K
- Software: Query Tools $250-$400K
II
Procurement System Evaluation & Selection
- In-house Solution vs. Package Software
$80,000 $100,000
- Consider AMS Advantage Upgrade
III
To Be Determined - based on number of agencies
and scope of services
Reengineering Procurement Processes
- Imperative Implementation
- Process Gap closure
IV
$200,000
Vendor Data Rationalization
- Reconcile and Cleanse Vendor Data
- Migrate to Single Master Vendor File
V
Implement UN/SPSC Commodity Code System
$50,000
- Implementation Assistant to SBOP
VI
$300,000
Strategic Sourcing - Phase I
- Commodity/Service Selection $50-$75K
- Market Analysis $30-$60K
- Specification Development $100-$150K
- Agreement Management $25-$50K
VII
E-Procurement (Pilot)
DOA
VIII
Establish Implementation Committee(s) &
Communications Program
DOA
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
84
BEST PRACTICES PROCESS MAPS
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
BEST PRACTICES PROCESS MAPS FOR THE DESIRED FUTURE STATE
HAVE BEEN DEVELOPED
BEST PRACTICES PROCESS MAPS

Process Maps illustrating “Best Practices” in procurement have
been developed in the following areas:
–
–
–
–
–
–
Direct Charge Process
Purchase Card Process
Simplified Bid Process
Statewide Contract
Sealed Bid
RFP Services
– Quarterly Procurement Plan
– Accounts Payable
– Statewide Contract RFB /
RFP
– VendorNet Registration
– Special Services
Process Maps are presented on the following pages of this section of the report.
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
86
State of Wisconsin
Procurement Analysis Project
APPENDICES
GLOSSARY OF TERMS
 AM - Account Management
 AP - Accounts Payable
 Baseline Spend Data - Spend information for a commodity for a designated
time period to base future cost savings
 Bidders List - A listing of all vendors who wish to do business with the State
of Wisconsin.
 Browser - A software application used to locate and display Web pages.
 Browser-based Query - The ability to request information from Web
databases.
 Data Marts - A database, or collection of databases, designed to help
managers make strategic decisions about their business.
 Data Warehouse - A collection of integrated subject-oriented databases
designed to support the decision-support-system function.
 “DW Load” - Data Warehouse Load
 EAPS - Encumbrance Accounting and Payment System
 EFT - Electronic Fund Transfer
 FARS - Financial Accounting Reporting System
 FMS/Proteus - Financial Management System/ Purchasing and Cost
Accounting System
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
88
GLOSSARY OF TERMS
 GL - General Ledger
 OLAP - Online Analytical Processing, a category of software tools that
provides analysis of data stored in a database.
 Process Maps - a graphic description of a process showing the sequence of
process tasks, for a specific purpose from a selected viewpoint.
 N-Tier - A special type of client/server architecture consisting of well-defined
and separate processes, each running on a different platform.
 Client/Server Architecture - A network architecture in which each computer
or process on the network is either a client or a server. Servers are powerful
computers or processes dedicated to managing disk drives, printers, or
network traffic. Clients are PCs or workstations on which users run
applications.
 RAPIDS - Purchasing System for DWD
 RFB/RFP - Request for Bid / Request for Proposal
 TIPS - Transportation Interactive Procurement System
 UN/SPSC - United Nations Standard Products and Services Codes system is
an open, global standard that provides a logical framework for classifying
products and services of all kinds throughout the world. It is structured as a
five-level hierarchy. At each level, a two-character numerical value classifies
each item more specifically.
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
89
GLOSSARY OF TERMS
 Vendor Table - A list of all vendors who have done or are currently doing business with the
State of Wisconsin.
 WisMART – Wisconsin State Management Accounting and Reporting Tool
WISCONSIN STATE DEPARTMENTS
 DHFS - Department of Health and Family Services
 DOA - Department of Administration
 DOC - Department of Corrections
 DOT - Department of Transportation
 DWD - Department of Workforce Development
 SBOP - State Bureau of Procurement
 UW/System - University of Wisconsin
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
90
SELECTED CASE STUDIES
CASE STUDIES
 State
of Georgia
 State of Washington
 State of Pennsylvania / State of Ohio
 Dell Computer
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
91
STATE OF GEORGIA
CASE STUDIES


Georgia’s Department of Administrative Services (DOAS)
implemented PeopleSoft Inc. ERP software, on time, 18 months,
and on budget, at $52 million 1999
“Big bang” approach – went live with ERP system throughout the
entire organization at once
– Modules include financials, purchasing and human resources
– Provides better compliance with Generally Accepted Accounting Principles
(reduce audit time by 50%)
– Enabled the consolidation of old, non-integrated mainframe applications

Success factors:
– Strong support from Governor’s Office
– Extensive planning
– Effective communications through project Web page, e-mail, instant
messaging, and face-to-face meetings
– Needed to add temporary employees to help oversee the project
– Extensive training of existing staff
– Effectively managed regulations, boards, commissions and agencies to
minimize turf wars and maximize cooperation
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
92
STATE OF WASHINGTON
CASE STUDIES






Selected AMS’ E-Procurement solution, called Buysense, which allows
the state to purchase goods and services online. (July 2000)
AMS’s Buysense is powered by software from Ariba, Inc. and can be
implemented in three to four months.
In pilot study, a transaction made through Buysense reduced transaction
cycle time by over 60%.
State officials intend to leverage embedded tracking technology to
increase the number of purchases at government discount rates.
When fully implemented, the state expects to have 10,000 users making
more than 500,000 transactions annually totaling approx. $150 million in
expenditures
Deal is structured such that AMS’ revenue will come from transaction
feeds charged to both the State and vendors. Supplier will pay a
percentage of the value of the transaction, <1%, and the state will incur a
purchase order fee of $3.30, but will drop to as $2.50 as transaction
volumes increase toward target of 500,000 by the fourth year.
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
93
PENNSYLVANIA & OHIO
CASE STUDIES



Have successfully utilized “Reverse Auctions” to
realize cost savings.
Pennsylvania has claimed savings of $11 million in
2000.
Ohio is the first state in the U.S. to conduct
competitive, Internet auction of $250 million in interim
Treasury funds.
– Using new competitive live auction system, BidOhio, has
generated tax savings of over $3 million with the last 12
auctions.
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
94
DELL COMPUTER
CASE STUDIES
 Implemented
packaged E-procurement
suite from Ariba
 Established electronic catalogs for
suppliers
 Routing about $10 million per month
worth of requisitions, representing a
broad range of non-production
commodities
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
95
E-PROCUREMENT VENDOR LISTING
E-PROCUREMENT VENDORS
Full
Capabilities
May Survive
Will Survive
Vendors
Some
Capabilities
No
Capabilities
Comments
Ariba
Market leader known for usability; trailing
Commerce One with supplier links
Commerce
One
Leads with supplier links; backing away from
pushing own requisitioning tool
Oracle
Good workflow; good potential base with direct
materials, will play to installed base
SAP
Less aggressive than Oracle but same key
characteristics; will play to installed base
Clarus
Build-in analysis tool; direct buyer-to-supplier
links
Sun-Netscape
Good support for exchanging trading info; no
supplier clearinghouse connections
Intellisys
SupplyNet hosted catalog service acts as a
clearinghouse for suppliers
PeopleSoft
Links to Commerce One’s MarketSite; similar
direct material potential to Oracle, SAP
Concur
Partnered with Nortel to deliver worldwide as
British Telecom did with Commerce One
Fewer than 10 customers; built-in analysis tool;
links to Commerce One’s MarketSite
Rightworks
Source: Forrester Research, Inc
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
96
E-PROCUREMENT DEPLOYMENT STRATEGIES
SYSTEM SOLUTIONS
What is your Internet
procurement system?
Commercial
Service
10%
Supplier
Solution
3%
Commercial
Product
22%
With which applications is your
procurement system integrated?
No Integration
Other
Financial
Human Resources
Browser
Home Built-System
65%
ERP
0
10
20
30
40
50
60
70
80
% of Respondents
Data Source: Forrester Research, Survey of 40 Companies
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
97
Building Blocks
SYSTEM SOLUTIONS
ERP Systems and N-Tier Architectures form the foundation of
E-Government and E-Procurement offerings.
E-Government
(G2C) Services
E-Commerce
(G2B/Trade Exchanges)
Enterprise Resource Planning
N-Tier Architecture/Internet Enabled
Government Finance Officers Association, October 2000
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
98
N-TIER SYSTEMS ARCHITECTURE IS REQUIRED TO SUPPORT THE
STATE’S DIGITAL GOVERNMENT INITIATIVES
SYSTEM SOLUTIONS

EAS solution providers have, or are in the process of migrating
their product offerings to n-tier architectures.

E-Procurement (G2B) and E-Government (G2C) solutions
leverage n-tier architectures.

Tiered architectures provide increased performance, flexibility,
maintainability, reusability and scalability, while hiding the
complexity of distributed processing from the user.

Classical distributed, client/server architectures typically consist
of three (3) tiers: Presentation, Application, and Data (see
appendix x).
– Internet adds variations on the Presentation and Application tiers to
support web browsers (i.e., thin clients) and web servers, resulting in
the “n-tier” characterization.
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
99
N-Tier Systems Architecture
SYSTEM SOLUTIONS
Tier 1i - Presentation
(Thin Client / Browser)
Vendors
Local
Government
Agencies
Internet
Remote
State Agency
Users
eCatalogs
Invoices
EFTs
Tier 2i - Web Servers
Internet
Supplier
Systems
State
Agencies
WI
Intranet
Tier 2 - Application Servers
Tier 3 - Database Servers
WI WAN
Accounting
Purchasing
State
Agencies
Tier 1 - Presentation (Fat
Client / WinTel)
© 2000 Advanced Data Concepts, LLC
Financial Data
Warehouse
Spend
Data Mart
Strategic
Sourcing
Data Mart
Vendor
Data Mart
State of Wisconsin
100
State of Wisconsin
Procurement Analysis Project
Purchasing Data Warehouse Project
Development & Implementation
January 2001
Advanced Data Concepts, LLC
DATA WAREHOUSE IMPLEMENTATION METHODOLOGY
IMPLEMENTATION GAME PLAN
PROJECT
ORGANIZATION
DATA MODEL
ANALYSIS
SOURCE SYSTEM
ANALYSIS
SUBJECT AREA
BREADBOX
ANALYSIS
TECHNICAL
ASSESSMENT
SPECS
PROGRAMMING
POPULATION
DATA WAREHOUSE
DATABASE DESIGN
TECHNICAL
ENVIRONMENT
PREPARATION
Adapted from Building the Data Warehouse
by W. H. Inmon
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
102
DATA WAREHOUSE IMPLEMENTATION TASKS
IMPLEMENTATION GAME PLAN

PROJECT ORGANIZATION
– Establish Purchasing Data Warehouse project steering
committee
• Responsible for managing project priorities
• Manage expectations of agencies as to benefits they will derive
from the data warehouse
• Expedite resolution of major issues
– Establish project office
– Organize project team and define key roles
• Project Manager, Architect, Senior Business Analysts
• Database Administrator(s)
• IS Manager(s) responsible for supporting the project and
development
– Determine enterprise communications strategy
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
103
DATA WAREHOUSE IMPLEMENTATION TASKS …
IMPLEMENTATION GAME PLAN

DATA MODEL ANALYSIS
– Identify major subject areas (e.g., strategic sourcing, vendor
analysis, commodity spend, etc.)
• keys, attributes, relationships among data attributes, etc.
–
–
–
–

Separate primitive from derived data
Entity Relationship Diagram (ERD)
Midlevel Data Model (data item set)
Physical Data Model
BREADBOX ANALYSIS
– Sizing (gross estimates) of the purchasing decision support
environment; projecting how data the data warehouse will hold
– Develop projections for one-year and three-year horizon for the
purchasing data warehouse environment
– Determine levels of granularity - the level of detail held in the units of
data in the data warehouse
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
104
DATA WAREHOUSE IMPLEMENTATION TASKS …
IMPLEMENTATION GAME PLAN

TECHNICAL ASSESSMENT & PREPARATION
– Review both the methods for loading the data warehouse and its access
within acceptable performance requirements
• ability to manage large amounts of data
• ability to organize data according to data model
• ability to both receive and send data to a wide variety of technologies supported in
the various agencies
• ability to allow data to be accessed flexibly
–
–
–
–
–
Determine timing requirements for data loads
Determine security requirements
Define amount of disk space storage needed
Estimate volume of processing anticipated
Profile nature of traffic – short or long bursts – coming out of the technology
that controls the data warehouse
– Identify required network links
– Define technical and online analytical processing (OLAP) tools
• Business Objects, Crystal Reports, Cognos PowerPlay
• DBMS technology and operating system
• Performance monitors
– Ensure that facilities are available when needed
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
105
DATA WAREHOUSE IMPLEMENTATION TASKS …
IMPLEMENTATION GAME PLAN

SUBJECT AREA ANALYSIS
– Reconfirmation of the scope based on the data to be included
– Definition of what data is to be populated
– Evaluate the business questions:
• What business questions need to be answered by the data warehouse
• Which business questions will not be answered by the data warehouse

SOURCE SYSTEM ANALYSIS
– Identify the source data for purchasing data mart
– Data integration – key structure/key resolution as data passes from
the operational environment to the DSS environment
– Mapping of data from the operational environment to the decision
support environment
– Develop meta data (data dictionary for all data elements)
– Determine how time variancy will be created from current value data
© 2000 Advanced Data Concepts, LLC
State of Wisconsin
106
DATA WAREHOUSE IMPLEMENTATION TASKS …
IMPLEMENTATION GAME PLAN

DATA WAREHOUSE DESIGN
– Develop data schema (star schema and facts tables) based
on previously defined data model and source system analysis
– Physical denormalization of data where applicable (e.g.,
where performance improvements are desired)
– Creation of data artifacts to ensure that relationships are
preserved (even if source system no longer retains the
needed data)
– Define performance improvement opportunities through the
use of derived, summarized, and aggregated data
– If the volume of warehouse warrants, consideration should be
given to partitioning the data and distributing portions of it to
remote sites
– Identify indexes
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DATA WAREHOUSE IMPLEMENTATION TASKS …
IMPLEMENTATION GAME PLAN

PROGRAMMING SPECIFICATIONS
– Some of the major issues associated with developing the
formalized interfaces include:
• Determining if two sets of programming specifications may be
needed – one for the initial load and one for the ongoing
operation
• Time stamping of operational data
• How updates are made to the data warehouse

POPULATION
– Execution of the programs
– Frequency of population
– Purging of data
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DATA WAREHOUSE IMPLEMENTATION - TIMING
IMPLEMENTATION GAME PLAN
Activities
Est. Costs
I Project Organization
$3,600
II Data Model Analysis
$48,000
III BreadBox Analysis
$12,000
IV Technical Assessment
$33,000
January
February
March
April
May
June
July
1
Week
4 Weeks
2 Weeks
4 Weeks
& Preparation
V Subject Area Analysis
$9,000
VI Source Systems Analysis
$12,000
VII Data Warehouse Design
$48,000
VIII Program Specifications
$125,000
IX Programming (Code & Test)
$125,000
X Rollout and Training
$75,000
© 2000 Advanced Data Concepts, LLC
1
Week
1
Week
4 Weeks
4 Weeks
8 Weeks
2 Days / Agency
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DATA WAREHOUSE IMPLEMENTATION - INVESTMENT
IMPLEMENTATION GAME PLAN

Cost Considerations
 Hardware and Software – data storage, OLAP tools,
hardware, and related licensing fees
 Development costs are variable and depend heavily on the
state of existing operational purchasing systems
 Development may require the acquisition of new hardware
and/or software environment
 Ongoing maintenance will require process
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DATA WAREHOUSE IMPLEMENTATION – RISK MANAGEMENT
IMPLEMENTATION GAME PLAN
Risk Area
TECHNICAL
 New client/server platform
 New extract and query tools
 Lack of experience with data
warehousing database design
 Unknown data volumes/capacity
Techniques to Mitigate Risk
 Trained, dedicated technical
support
 Vendor partnership to share risk
 Tool training
 Vendor consulting
 Proof-of-concept project
 Warehouse design training
 Use consultants
 Proof-of-concept project (start with
one agency and rollout to others)
SCOPING
 Undocumented source system data,  Structure analysis tool, data prepoor quality of source data
verification
 Legacy application system
specialist
 Initiate metadata repository and
data rationalization
 Data quality program and data
stewardship
 Data subject scope unclear
 Facilitated work sessions with user
sponsors to agree on subjects,
priorities
 Track scope change requests
 Stovepipe perspective
 Global enterprise data model
 Identify related information needs
 Mixed operational and data
 Establish operational database and
warehousing requirements
data warehouse
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DATA WAREHOUSE IMPLEMENTATION – RISK MANAGEMENT …
IMPLEMENTATION GAME PLAN
Risk Area
ORGANIZATIONAL
 Multiple uncoordinated data efforts
 Limited experience of data
warehousing team with business
 No user participation on project
 IS-initiated project
MANAGEMENT/ADMINISTRATIVE
 Delivery dates determined before
scooping
© 2000 Advanced Data Concepts, LLC
Techniques to Mitigate Risk
 Common architectural framework
 Assign single accountability
 Increase analysis and design time
estimates
 Stop project until users assigned
 Obtain business sponsor/support
 Negotiate reasonable subject scope
 Identify incremental deliverables
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