State of Michigan’s
Project SIGMA
Presented to State Association of
Accountants, Auditors and Business
Administrators (SAAABA)
Ruth Schwartz, CPA, Project Director
April 21, 2015
Topics for Today
• Project Overview, Targeted Improvements,
and Functionality
• Schedule, Team, and Accomplishments
• Phase 1, Budget Development
• Phase 2, Core Financials, Procurement,
Employee Time & Expense, and Labor
Distribution
• End User Benefits
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Project SIGMA
Statewide Integrated Governmental Management Applications
(SIGMA) is the State of Michigan’s Enterprise Resource Planning
(ERP) business process and software implementation.
SIGMA will integrate systems and provide end-to-end support in one
system for statewide administrative functions including financial
management, procurement, asset management, performance
budgeting, time and expenses.
It will ultimately be used by all 50,000 state employees, external
vendors, local units of government, and colleges & universities.
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Project SIGMA Overview
Key Rationale for SIGMA
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Eliminates operational risk related to critical financial systems that have outlived their
usefulness including MAIN and DCDS
Provides built-in best practices and business rules for government accounting that expands the
tools for existing staff, protects us with retiring staff, and attracts new talent
Provides sophisticated statewide controls while providing the flexibility Departments need to
operate efficiently
Provides timely management information that supports operational improvements and
performance reporting
Fiscally conservative business case
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Targeted Improvements
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Automate and Streamline Budget
Preparation
Reform Chart of Accounts /Uniform
Coding Block Usage
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Increase Accounting Detail Posted
from Agency Systems
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Support Treasury Functions:
Enhance Transparency &
Accountability Portal
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Debt Reporting
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Support for Investment Accounting
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Bank Reconciliation
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Warrant Writing
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MIDB Currency and Reporting
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Automate Interfaces with Banks
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Move to Vendor Supported,
Upgradeable COTS Solution
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Implementation of Positive Pay
Banking (if feasible)
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Automate and Streamline CAFR
Production
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Project & Grant Reporting,
Budgeting, and Processing
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Cost Allocation
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•
Automate Vendor File
Synchronization
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Reduce the Number of Applications
Supported and Interfaced
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Integrated Procurement
SIGMA’s Integrated System
MIDB
Budget
Development
Financial
Management
Inventory
Accounts
Payable
Time, Expense
Reimbursement,
and Labor
Management
Self Service
Purchasing
Fixed
Assets
Vendor
Self Service
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Self Service
For
Employees
Today
From…. !
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Tomorrow
..to this…. !
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Tomorrow, Continued
..and this! !
Forecasting
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Project Schedule
2013
• > 8000 Requirements
• Business Case
• RFP for software,
implementation
services, hosting and
managed services
2014
2015
Project start
7/2014
Budget
Preparation
8/2015
2016
2017
(13 months)
Phase 1: Budget
Development
Budget Dev
Implemented
8/2015
Load Budget
for FY17
(27 months)
Core
Financials
10/2016
Phase 2: Core Financials for All Agencies
Procurement
Added to Scope
12/2014
Core
Financials
Implemented
10/2016
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Ongoing Support
Phase Functionality
Phase 1 Budget Preparation
Phase 2 Core Financials
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General Ledger and Financial Reporting
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Vendor Tax Reporting and Backup Withholding
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FHWA Billing
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Statewide Budget Development
Legislative Tracking
Salary Benefit Forecasting
System
Budget Bill and Budget Book
Publication
Phase “1.5” Budget Preparation
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Agency cost accounting
structures added to budget
development
Foundation for performance
based budgeting (objectives,
measures, and metrics)
Solution upgrade
Integration with financials
Budget Control
Accounts Payable and Disbursements including Vendor Self
Service
Accounts Receivable
Asset Management, Inventory Management
Budget Control
Cash Reconciliation
Cost Allocation
Grant and Project Accounting
Employee Time and Attendance, Expense Reimbursement,
and Labor Distribution
Grants Management (Grantee and Grantor)
Positive Pay Banking
Procurement
Data Warehouse
Transparency and Accountability Portal
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Roadmap
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Strong Project Team
Staffed by
~ 200 Members
Co-located in the Victor Center
Consisting of:
SOM employees from 11 Agencies
3 Contract Partners:
• CGI – System, Integrators, Managed
Services
• ISG – Quality Assurance
• Advocate - PMO
Agency
Implementation
Leads & Teams
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Key Accomplishments To Date
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Validated all in scope requirements
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Managed environments available and in use
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Phase 1 design complete with no modifications
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Phase 1 system test and mock conversions over 50% complete, preparing for User
Acceptance Testing
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Phase 2 business process designs well underway
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Key design decisions:
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SIGMA budget structures
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Chart of Accounts (COA)
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Budget Bill Publishing approach
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Budget Fiscal Year
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Point of Sales and Cashiering
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Grants
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Project history conversion
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Key Accomplishments To Date
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Engaged stakeholders
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Collaborated with Office of Internal Audit and IT Investment Fund Project Assurance
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Multiple Agencies in 100+ validation, Core Design, and Business Process sessions
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Delivered 24 system overview sessions in open forums and received good feedback
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Agency Implementation Guide rolled out to Agencies week of 4/13
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Training for Phase 1 User Acceptance Testing this week
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Budget Development
Phase 1, 1.5, and 2
Key gains upon full project implementation
• Automate and streamline budget development processes
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Single data repository
Automated workflow
Integration with financials
Projections, what-if capabilities, modeling, trend analysis
Improved baseline economic processes
Eliminate duplicate data entry
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Michigan’s Budget Process
Michigan’s Budget Process is made up of 5 major processes
• Budget Development
• Executive Budget Book
• Budget Bills
• Legislative Tracking
• Budget Administration
Budget process begins with the Budget Instructions and ends
with the loading of the budgets to Financial
SIGMA Budget will be utilized to complete all 5 of the major
processes
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Budget Development
Phase 1, 1.5, 2, and Beyond
Phase 1
Phase 2 and Beyond
Phase 1.5
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Current Services
Baseline
Proposals for Change
Capital Outlay
Salary and Benefits
Forecasting
Publication of
Executive Budget
Book and Budget Bills
Tracking of Legislative
Changes
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Load enacted
budget to SIGMA
Financial
Statewide
Spending Plans
Work Projects
Foundation for
performancebased budgeting
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Post enactment budget
changes
The ability to develop
budgets at lower chart
of account elements
Integration with actual
revenue and
expenditure data
Trend analysis,
projections, and “WhatIf” scenarios
Performance-based
budgeting capabilities
Salary and Benefit Forecast (SBFS)
The Salary and
Benefit
Forecasting
(SBFS) tool
within SIGMA
Budget is
designed to use
position and
employee data to
develop highly
accurate
estimates of
personnel related
budget costs.
The following
Query is an
example of data
available as an
output from the
SBFS process.
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Current Services Baseline (CSB)
A CSB adjustment is a level
of funding appropriated
and/or the caseload or
workload actually funded in
the current fiscal year
appropriations. Adjustments
remove one-time items and
reflect non-discretionary
budget costs across the
budgeting horizon.
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Proposal for Change (PFC)
A PFC adjustment is a
discretionary initiative,
including a fee proposal,
which reduce or enhance a
department's enacted
budget. These adjustments
are ongoing, one-time, or
both upon submission and
are tracked through the
process by the type of
funding.
Form created at the department level.
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Upcoming Activities For
Phase 1 Go Live
Phase 1 Go Live Activities
Version Date: 4/15/2015
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Phase 2 Core Financials
Looking forward to:
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Standardized use of coding block/COA
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Automated Cost Allocation
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Data coding reduction options
Elimination of Administrative Revolving Funds (ARFs)
Integrated Time & Expense, Procurement, Fixed Asset and Inventory
modules
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Integrated Procurement functionality
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Improved Project and Grant budgeting, accounting, billing and reporting
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Increased Reporting and Workflow functionality
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Online queries
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Parallel and sequential
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Design Approach
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Standardized use of
coding block/COA
• Increased accuracy and effectiveness of the
COA
• Improved Transparency Portal reporting
• Flexibility, as agencies can use detailed
elements and still maintain centralized data
integrity
• Improved access to summary level data while
still providing drill down capability to detail
level data
• Increased accuracy and efficiency by the use
of additional detail COA elements that are
standardized across agencies
• Increased flexibility, as agency ledgers and the
central ledgers are based on single transaction
processing that updates affected ledgers and
balances
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COA Mapping R*STARS to SIGMA
Sample
COA elements to be
used in Phase 1:
• Department
• Fund
• Appropriation
• Object
• Revenue
• BFY (= AY)
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SIGMA Chart of Accounts
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Budget Fiscal Year (BFY)
• Work projects and capital outlay appropriations will remain available to
spend for the statutorily authorized length of time by using a unique
multi-year BFY code.
• Rolling this budget authority forward for qualifying encumbrances is a
recognized best practice in accounting, and provides greater online
transparency of total budget dollars spent.
• Unspent budget authority that is not a qualifying encumbrance, capital
outlay appropriation, or work project appropriation will continue to lapse
and not roll forward.
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Budget Control
A multi-level budget structure will track budget amounts for both
spending and revenues. COA Combination Validation pages are being
developed to supplement Michigan’s Budget Control needs.
Appropriated in Budget Bills
Tracking and Establishing
Control of work projects
Performance
Budgeting
• ‘Management budgets’ allow agencies more granularity than the
state-wide appropriation budget. Management Budgets…
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Allow monitoring expenditures and revenues with budget versus actuals.
Allow agency variation, but at a minimum, will include ‘Event Types’ to
record the initial budget amount and any adjustments for comparison to
the Spending Plan in SIGMA Budget.
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Budget Control Planned Defaults
• Severity Levels can be set as a default on most budget lines.
• Exceptions are made in SIGMA Financial by users with appropriate security.
Example of a potential Budget Control list is shown below:
Default
Severity
Formula
Budget Line /
Allotment
Line
Unobligated >= $0
Warning
Current Budget - Cash Expenditures - Accrued Expenditures >= $0
Override
Total Revenue - Cash Expenditures - Accrued Expenditures Encumbrances >= $0
No Action
Budget
Total Revenue - Cash Expenditures - Accrued Expenditures >= $0
No Action
Budget &
Allotment
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Budget
Budget &
Allotment
Integrated Procurement
functionality: Req to Check
Accounts Payable
Procurement
Receive/Invoice
•Vendor Creation
•Vendor
Modification
•Prevent
duplicate
vendors
Vendor File
Purchase
Requisition
•Accounting quick
codes
•Real-time budget
validations/posting
•Create award
documents right
from requisitions
•Minimized data
entry from
requisition
•Reusable
Templates
Award
Real-time Validations and GL Posting
• Validations against budgets in real-time
• Transactional documents post to GLs at
the time of entry
•Powerful search
on Award # and
other identifiable
fields
•Partial receipt
and invoice
•Reoccurring
payments
Workflow
• Workflow any
document, any field,
any value
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•3-way matching
•P-Card
reconciliation
•Travel
Reimbursement
Payment
Request &
Disbursement
Reporting
• Delivered Reports
• Ad-Hoc Inquiry Reporting
from Advantage BI
Procurement Functionality
Financials
• Workload management
Vendor
Self-Service
• Information governance
• Vendor web registration
• 2 or 3 way match
• Solicitation management
• E-mail bid notifications
• Automated Payment
• Bid evaluation and
award
• Vendor bulletin board
• Disbursements
• Single vendor/customer file
• Contract management
• Electronic response
• Financial transaction
inquiry
• Automated updates to
Inventory and Fixed Assets
• Invoice submission
• TBD- pre-encumbrances
Procurement
• Full lifecycle for
requisition to
disbursements
Business Intelligence
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• Encumbrances
Vendor Self Service
Invoice – PO Flip
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Invoice – Coming from Vendor
to Accounts Payable
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Three Way Match
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SIGMA for End Users
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Less manual, paper-intensive work
Greatly improved reporting and data analysis
Less redundant data entry
Less reconciliation across systems
Easier, more automated tracking and approvals
Streamlined business processes that work similarly across
departments
Export/Import capabilities, powerful inquiries, improved data
warehouse functionality
One system for budgeting, procurement, and accounting, with
expanded capabilities
Ease in moving from one agency to another and one job to another
Reduced training time for new hires
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Project Communications
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Website - https://stateofmichigan.sharepoint.com/teams/SBO/project_sigma
 Newsletter
Newsletter
 Frequently asked questions
 Presentations
 Project announcements
 Training
 Agency Implementation Guide
 Contact Us
Image from Website
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Questions?
Upcoming Town Hall Meeting
Thursday, April 30, 8:30-10:30
Capitol Commons Center - Conference Rooms A/B/C/D (Basement)
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