Enterprise Resource Planning Technical Assessment. Schools District of Manatee County. August 17, 2018

Transcription

1 Enterprise Resource Planning Technical Assessment Schools District of Manatee County August 17, 2018 George Kosmac Deputy Superintendent Operations (Retired) Seminole County Public Schools Page 1

2 Purpose of Assessment The purpose of this assessment is to provide the Superintendent with a third party technical assistance review of the recent PeopleSoft Enterprise Resource Planning (ERP) system implementation. The specific focus, given the ERP system is now operational, is to identify any outstanding project deliverables including program functionality, documentation, user training and business processes. Also included are recommendations to address any deficiencies or areas for improvement. Pervasive Issues Throughout the duration of the implementation, which began in March of 2016, staffing of the ERP project was insufficient. Subject matter experts from District departments were often not made available to participate in the design/configuration of the new system. Decision making was delayed thus contributing to schedule delays and cost increases. Ciber, the implementation vendor, experienced significant staffing turnover during the project. Time was expended for replacement Ciber consultants to learn the District processes. In some cases the replacement consultant changed the system design of the prior Ciber consultant causing restart of the configuration task. This staffing turnover resulted in schedule delays and cost increases. Note that these problems were identified very early in the project implementation but nevertheless were not significantly addressed throughout the project. The initial Ciber agreement provided for eight weeks of ERP post production support (four weeks for Campus Solutions). That time, however, was apparently consumed by continuing development, testing and repair of PeopleSoft modules. It appears that the District may have been short changed on post production support for these reasons. Assessment Approach Interviews of key District and Vendor personnel were conducted over a three day period beginning August 10 th, Personnel from Finance, Purchasing, Payroll, Human Resources, Benefits, Information Technology, Manatee Technical College, Ciber, Agitech, Audit Committee Chairman, and CRI participated. Finance Current Operational, but development/testing of significant functionality remains to be conducted. The monthly book close process has not yet been run awaiting additional modification. The first payroll is not yet posted. Functionality to create the CAFR Page 2

3 has not been developed/tested. Calendar year-end process for W-2s and 1099 s have not been developed/tested and the District end-of-year processes have not been developed/tested. Project Costing, Maintenance and Workflow design all have experienced problems. No full bank reconciliation has yet been run. The e-supplier module has not been activated. Internal Accounts module is not fully implemented. The Finance areas most in need of attention are 1) General Ledger and its integration with Payroll and Maintenance, 2) Project Costing and Grants, and 3) Commitment Control (Budgets). The General Ledger design was plagued by high turnover in Ciber staff. Eight (8) different consultants were cycled through this functional position which caused confusion and great delays to the project. Training and communication are viewed as the most areas in need of improvement. Apparently, excellent training was provided in 2016 by Trans America Training Management in the initial phases of the project. However, this occurred when the project schedule called for an early 2017 Go-Live. As the implementation date was pushed to July 2018, that training was not reinforced and thus essentially lost. Job Aids (summary of instructions/checklists) were the primary documentation vehicle for users to run the system. In the Finance area some of those Job Aids were reported as simply incorrect. Other needed documentation was written by Finance staff. Concern expressed about needed PeopleSoft support once Ciber personnel depart. Purchasing Operational Purchase orders are flowing with some small issues outstanding (P-cards). Business processes are insufficient and useless. Additional training of end users (school bookkeepers) are needed as there appears to be some indiscriminate approving of purchase orders. Concern expressed about needed PeopleSoft support once Ciber personnel depart. Human Resources Operational Page 3

4 System appears to be functioning well and is a major improvement over the prior JD Edwards system. Training provided by District staff was not professional in its delivery and it was very rushed, however the Helpdesk in the Information Technology Department is effective. HR personnel are working diligently to process new hires, however, the Department is handicapped by the loss of two experienced employees to the Business Analyst positions in the Information Technology Department. Concern expressed about needed PeopleSoft support once Ciber personnel depart. Payroll/Time Reporting Operational, but several errors have been discovered. Two payrolls have been processed using PeopleSoft with generally fair results. However, multiple off-cycle payroll runs were needed to address errors (largely data entry related) for several hundred employees. Errors exist for employee 403 B deductions and FICA calculation. The payroll Confirm process has failed in the prior payroll runs. A paysheet customization is required to automate data entry (millage adjustments, etc.) as the current manual mode requires many hours of manual data entry by Payroll staff. More training is needed for bookkeepers and department Payroll staff. Two Ciber consultants have been assisting District staff in the execution of the last two payroll runs. (One consultant for Payroll and one for Time & Labor). It is perceived that their presence is essential for payroll runs. Concern expressed about needed PeopleSoft support once Ciber personnel depart. Benefits Operational, but several deliverables still pending. Interface file development was very late in the development cycle and as a result one major interface feed to the Florida Blue vendor remains outstanding. Open Enrollment functionality is still in the testing phase. Reports are needed for FRS deductions. Documentation is adequate at this time, but Open Enrollment will require work in this area. Concern expressed about needed PeopleSoft support once Ciber personnel depart. Page 4

5 Campus Solution (MTC) Fully Operational, but some minor glitches System is working well however process automation is not fully working. State Reporting functionality is well tested. However, the July DOE mandated changes, which are minor, need to be made before transmitting to DOE at the end of August. Although Ciber personnel ended support at MTC on July 31 st, they are making the DOE changes for a $0 change order. As to documentation, Ciber provided the templates and MTC personnel complete the documentation. There was no formalized training as the staff was so few in number that they were individually trained by Ciber. Concern expressed about future PeopleSoft support as Ciber personnel have already departed MTC. Information Technology Project Management Overall ERP project is now in production and outstanding defects are being addressed by Ciber. Major concern that PeopleSoft support provided by Ciber is ending on August 24 th with no approved plan to extend such support. Identified defects as of August 10 include: 1) General Ledger has not been closed as balances have not been extracted from JD Edwards, 2) 403 B deductions out of Payroll are not being made for a subset of the employees, 3) While 35 General Ledger reports have been developed additional reports are needed, 4) FICA deductions in payroll are not being correctly calculated although the cause has been identified, 5) Benefit plan lump sum payments are not having all 5 deductions taken, 6) the Travel and Expense module is still in the testing phase, 7) the Open Enrollment module is still in the testing phase, 8) the Workflow functionality is not operating correctly for GL and Commitment Control (Budgets)although it is working in other areas, 9) Internal Accounts checks are not printing, 10) the Hyperion module has not been implemented. See the attached Defect report for more information on these and other defects. The project was behind schedule at the outset when it determined that the Lee County PeopleSoft implementation could not be cloned for the District. That was a significant setback to the schedule as configuration and development had to be developed from scratch. Staffing of the project with District personnel was Page 5

6 seriously deficient and the departure of several key employees (i.e., JDE programmer who was to address the conversion) compounded the problem. User documentation was developed in the form of job aids as significant cost to the District. Ten (10) days of training were provided to employees who were to use the system. Some employees are continuing to have difficulty using the system even with repeated instruction. DOE State Reporting is operational as DOE Survey 8 has been extracted from PeopleSoft. (Unclear if it has been transmitted). Survey 2 and 3 (the District s revenue generating surveys) are tested. Questions remain as to the payment to Ciber for this functionality. The Project Director indicated it was to be a zero cost item although it was identified as a Ciber change order of $326,000. The change order was not Board approved. (Note that this zero cost conflicts with an earlier cost proposal). Ongoing Ciber support is a major concern, particularly with the cancellation of the Managed Support RFP. Three near-term options have been developed to address functional/technical support: 1) Retain eight (8) Ciber consultants in critical functional areas for a period of two months to have coverage for several additional payroll runs and address defects in other areas. Cost is estimated at $270,000. 2)Retain 16 Ciber consultants for a period of two months to cover critical and additional functional areas of support. 3)Retain 17 Ciber consultants for up to one year. Consultants stay would be staggered based on the functional need. Cost is estimated at $1.5 million. In all three proposals, Ciber consultants could be terminated with two week notice. Information Technology The PeopleSoft ERP went live in July on various dates: HR 7/1, Absence Management 7/8, and Finance 7/16. Various deliverables remain outstanding. Benefit Administration module requires a significant amount of configuration. User testing is underway for all remaining modules, month-end, year-end, etc. A number of workflow bugs/modifications remain to be addressed. It was determined that not all legacy data would be converted from JDE to PeopleSoft, but rather the historical data in the JDE system would be preserved seven (7) years. The DOE State Reporting module is in operation and surveys 5 and 8 were extracted from PeopleSoft and transmitted to DOE. State Report is mentioned in the appendix Page 6

7 of the original contract with Ciber (in the form of a one line definition of State Reporting). Business Processes were 80% to 85% complete. Ciber Successful implementation of PeopleSoft Customizations of the PeopleSoft ERP for Manatee was at a medium level compared to implementations for other organizations. While it was directed by the District that customizations be minimized, the departments apparently requested custom features be implemented and these were then approved and developed. Data conversion and extract from JDE was a time-consuming task and was hampered by the loss of Manatee programmers who had JDE knowledge. Consequently, Ciber was charged with providing data conversion development. They discovered that JDE was so heavily customized, that data conversion mapping had to be traced back from screen shots on the various panels. All legacy data was not transferred to PeopleSoft and for those that were, the cleanup of the data was performed by IT Business Analysts. DOE State Reporting development for K12 was completed in April, 2018 with design having been done in January/February timeframe. The District had requested this in a change request, however the resolution on payment was being negotiated by a high level individual in Ciber and the District. A difficulty prior to Go-Live was that Finance was apparently revising the Chart Fields (used to categorize transactions and budget data) on a frequent basis. This hampered preparations for Go Live. Currently (as of 8/15/2018) there are twelve consultants actively working on the Manatee account. Proposals were developed for extending the Ciber PeopleSoft support for periods from 2 months to 12 months in duration at costs ranging from $270,000 to $1.5 million. In all cases, the same consultants currently on the project would be providing this ongoing support. Documentation related to the implementation of PeopleSoft are all contained in the Ciber Sharepoint server. The District is responsible for end user training. As to business processes, over one half of them have been developed and that work exhausted the change request approved to perform this work. No further work was being done by Ciber on business processes. Outstanding invoices include two months of consultant labor of approximately $680,000 per month plus travel and living expenses. Per diem rates are $36 plus hotel plus airfare and car rental. Agitech Page 7

8 Agitech serves as the System Administrator for the PeopleSoft system. Agitech has provided System Administration support of the project since October They believe they have provided high quality and responsive support to the ERP project team. Campus Solutions developers appeared to be more collaborative than the HR/Finance developers in that Campus Solutions consultants shared the project plan, task lists and schedules. CRI CRI, the internal auditing firm for the District, is represented on the PeopleSoft implementation project. The current auditor for the PeopleSoft ERP implementation joined the project just prior to system testing which was the end of the 2017 calendar year. Documentation was often requested, but little was received. The District oversaw the project budget. No access was provided to PeopleSoft testing environments so it was not possible to independently determine what was working or not. It was reported that GL Balance, Open Enrollment and Hyperion were not completed as of the Go Live date. It was reported that Ciber invoices reflected DOE State Reporting development. Business processes were to be developed from Job Aids, but the functional departments did not participate in this effort. Fairly high level flow charts were the result and the number of business processes were rather limited. Weekly phone calls were held with the CIO, Project Director and Chairman of the Audit Committee. Recommendations It is clear from the interviews conducted for this report that perspectives on various aspects of the ERP operation vary widely among users and vendors. For example, Campus Solutions (MTC) appear to be functioning well, but Finance is having serious problems. Existing identified problems will need to be fixed promptly. However, it is likely that new problems will continue to surface as time progresses and these problems will need to be addressed. The following are recommendations for the Page 8

9 District to begin getting a better handle on the implementation and operation of PeopleSoft. Technical Evaluation It is recommended that the District s contracted ERP vendors, Ciber and Agitech, evaluate the overall ERP technical operation within a two week timeframe or earlier and report their findings to the Superintendent. This evaluation is to include the identification of defects, process failures and the state of each module. This is most critical given Ciber s contract is scheduled to end on August 24 th. Near term support/transition - It is recommended that the District contract with Ciber for a period of two additional months to ensure personnel are comfortable with using and operating the PeopleSoft modules. A proposal for eight Ciber personnel has been developed to address this need. It will help insure that additional payrolls are run without problem, financial aid is processed, openenrollment is staged and financial reports such as the CAFR and monthly/quarterly reports are accurately produced. Any defects/bugs would be identified and repaired under this support agreement. Ciber has confirmed that the same individuals currently supporting the District would provide this support. Long-term ERP support It is recommended that the District contract with a single vendor for long-term support of application functionality and administrative support functions. To ensure consistency of personnel, a flat monthly fee approach should be considered, with a provision for out-of-ordinary work requests. A time and materials only approach should be avoided. A termination clause should be included, with appropriate notice, should the service level be deemed unsatisfactory by the District. DOE State Reporting It is recommended that any and all payments to Ciber for development and support of K12 DOE State Reporting be identified. No Board approved purchase orders for this software exist, however, invoices in the amount of $107,000 appear to have been paid in 2018 for this software (see attached). Should this be accurate, the breakdown in District controls should be researched and corrected. District individuals have said this software is a zero cost deliverable, but Ciber management has confirmed the District is to be charged $326,000. Ciber Billing It is recommended that the Ciber consultant labor invoices for a recent month(s) be validated as the number of on-site consultants appears to be quite high. For the most recently available HR/Finance invoice, May 2018, thirtyeight (38) different consultants were invoiced, twenty-seven (27) of which were onsite, based on the $170 per hour billing rate. As onsite consultants are generally working with District staff, the staff can validate their presence and time. A similar situation exists for Campus Solutions (MTC) consultants where eight (8) individuals were apparently onsite per the June 2018 invoice. ERP Monthly Audit Report It is recommended that the District obtain a monthly ERP report from the District s internal auditor to include by department/module: overall operating status, issues and concerns. Monthly costs for contracted support of the ERP and any change requests or out-of-ordinary costs should be included in Page 9

10 the report in addition to areas for improvement as determined by the auditor. This report should be independent of any status reports from the District or Vendors. It appears that an independent report on the project was previously prepared but was stopped in November, Missing change requests From the nonconsecutive numbering of Ciber change requests, it is unclear if all change requests have been captured. It is recommended a list of all change requests be compiled, including those canceled or pending, and presented to the Superintendent. Training It is recommended that the District contract with a professional training organization to train key user personnel in the Departments. Training was conducted by the Trans America Training Management in 2016 and was highly rated by several individuals. PeopleSoft provided training is also available although it can be costly. Should sufficient numbers of individuals need training, on-site training should be considered. Such training can be valuable in grasping the full capabilities of PeopleSoft, especially now that employees have had some exposure to the system. The District should also consider establishing a small dedicated training team to train new employees on PeopleSoft and other enterprise-wide systems. Trainers would conduct group training and also provide individual training at the end user location. Business Processes It is recommended that business processes be completed for all areas. Ciber was contracted to provide business processes, however, the funds allocated apparently allowed about 50 percent of the total business processes to be developed (per Ciber). District staff said however, that 80 to 85 percent of the processes are complete. Also, review of the existing business processes by Department administrators should be conducted as most interviewees commented the processes were incomplete and/or inaccurate. User Documentation It is recommended that consistent end user documentation be provided to the Departments. Currently, documentation other than Job Aids have been developed by the end user s themselves. While this may be good initially, standardized user guides should be developed for the end user departments. Data conversion While significant funds have been expended for data conversion, not all JD Edwards system data was ported to PeopleSoft. Consequently the JD Edwards system will need to be retained for historical purposes, reportedly for seven (7) years. Once the ERP system becomes stable, it is recommended that the conversion of additional historical data to PeopleSoft be performed in order to eliminate the need for the JD Edwards system, thus allowing integrated views of District data and saving maintenance costs. PeopleSoft Modules Once the overall ERP system becomes stable, it is recommended that the PeopleSoft modules be re-examined for usefulness. If these modules are found to be of little need, Oracle maintenance for these modules can be dropped. The annual PeopleSoft maintenance fees can be steep and it is unwise to be paying for annual maintenance on modules that the District does not use. Page 10

11 Business Analysts It is recommended that the District evaluate the ongoing need for the BAs currently in the Information Services organization to remain in that organization. It may be appropriate for some or all of these individuals to be reassigned back to the end user organization where they were originally assigned. This may better improve communication between the end user organization and Information Services and most importantly provide a quick infusion of expertise into the user organizations. It will also be helpful if Information Services maintains several dedicated staff to build custom reports for the end user organizations. Many end users will eventually be capable of building their own reports, but in the interim a skilled reports generating function would be an asset to the District. Conclusion As noted in the feedback from various District departments, many Ciber deliverables remain to be completed even after an enormous expenditure of District funds. It is imperative that Ciber complete all PeopleSoft modules defined in the Task Orders and approved change orders and furnish the District with a 100 percent operational and defect-free system, regardless of their contract end date of August 24, Page 11