Financial Management SystemAgency Requirements Outreach

Briefing

November 14 and 17, 2006

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AgendaAgenda

Welcome and Introductions Background / Purpose of Study Project Governance Preliminary Findings Requirements Functional Scope System Requirements Validation Questions

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FMS Needs Assessment Update FMS Needs Assessment Update BackgroundBackground

FMS Needs Assessment performed in 2001 by Accenture. Overseen by steering committee made up of state agency

representatives, including Judicial, Legislative branches Recommended centralized system with two agency

copies. Project costs estimated between $24.5M – $36.5M Decision made not to move forward due to lack of funding

related to economic downturn. Began effort in April 2006 to revisit FMS needs in light of

changes in administrative philosophy, business practices, changes in technology, and improved economic outlook

RFP opened in July 2006 for consulting services to assist in update. Awarded in late August to Salvaggio, Teal and Associates who have performed similar work in six states.

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FMS Needs Assessment Update FMS Needs Assessment Update Purpose of StudyPurpose of Study

Update the system requirements for a new integrated FMS

Update the business case analysis associated with implementing a new FMS

Determine whether there is a compelling business case for procuring/implementing an integrated statewide FMS

Submit recommendations regarding:• Organizational best practices• Implementation best practices

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Financial Management System (FMS) – A comprehensive suite of integrated modules delivered by a single software vendor that provides end-to-end support for statewide administrative business functions (e.g., financial accounting, procurement, asset management).

FMS is a proposed solution that provides functionality similar to STARS, SOKI, Central Setoff System, and other agency administrative systems, but in a fully integrated manner.

FMS Needs Assessment Update FMS Needs Assessment Update What is FMS?What is FMS?

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Business Case Analysis Report

Sept

Oct Nov Dec

Project Start-

UpValidate the

Business Case

Key Deliverables

FMS Needs Assessment Update FMS Needs Assessment Update Key Activities and TimelineKey Activities and Timeline

Validate Functional / Technical

Requirements

Updated Needs Assessment

Organization / Implementation Best Practices

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Project Governance Project Governance Organizational StructureOrganizational Structure

EXECUTIVE SPONSORS

STEERING COMMITTEE

PROJECT DIRECTORDuncan Friend

PROCUREMENT TEAMChris Howe/Angela Hoobler, Manager

TECHNOLOGY TEAMCathy Jones/Jay

Coverdale, Manager

PROCUREMENT FOCUS GROUP

TECHNOLOGY FOCUS GROUP

PROJECT CONSULTANTSSalvaggio, Teal & Assoc.

ACCOUNTING TEAMBob Mackey/Martin Eckhardt, Manager

ACCOUNTING FOCUS GROUP

ELECTED OFFICIALS

AGENCY SUBJECT MATTER EXPERTS

AGENCY CFOsAGENCY CIOs

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Project Governance Project Governance Project SponsorsProject Sponsors

Duane Goossen• Secretary of Administration

Carol Foreman• Deputy Secretary of Administration

Denise Moore• Executive Branch Chief Information Technology

Officer

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Project Governance Project Governance Steering CommitteeSteering Committee

Chair - Carol Foreman, Deputy Secretary of Administration Mary Blubaugh, Board of Nursing Alan Conroy, Legislative Research Department Gary Daniels, Department of Social & Rehabilitation Services Elaine Frisbie, Department of Administration; Division of Budget Kathy Greenlee, Department on Aging Mike Hayden, Department of Wildlife and Parks Lynn Jenkins, State Treasurer Deb Miller, Department of Transportation Reginald Robinson, Board of Regents Howard Schwartz, Judicial Administrator Joan Wagnon, Department of Revenue Roger Werholz, Department of Corrections

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Project Governance Project Governance Stakeholder AgenciesStakeholder Agencies

Adjutant General Department on Aging Department of Agriculture Department of Administration Department of Health and Environment Department of Transportation Highway Patrol Department of Labor Department of Commerce Juvenile Justice Authority Department of Corrections Department of Revenue Social and Rehabilitation Services Kansas Health Policy Authority Judicial Branch Department of Wildlife and Parks State Treasurer

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Preliminary Findings Preliminary Findings Lack of IntegrationLack of Integration

Financial Accounting (STARS, SOKI) Purchasing (Procurement Manager Plus) Asset Management (various agency

systems) Budget Development (BMS, various agency

systems) Accounts Receivable (various agency

systems)

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Preliminary Findings Preliminary Findings Functional ChallengesFunctional Challenges

Procurement Grant and Project Accounting Fleet Management Inventory Management Time and effort reporting in SHARP Agency operating budget vs. appropriation

budget Real-time budget checking

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Preliminary Findings Preliminary Findings Functional ChallengesFunctional Challenges

Agencies need ability to establish lower level of detail in chart of accounts

Robust ad hoc reporting More efficient processing of employee travel

authorizations and payment Comprehensive accounts receivable

functionality including Set-Off capabilities Lack of enterprise Asset Management

system for assets and controllable items

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Preliminary Findings Preliminary Findings OtherOther

A number of agencies are either ready to seek replacement financial management systems or acquire a new system

Evaluation of Chart of Accounts Needed• Financial Accounting Coding Structure• Budget Coding Structure• Procurement Commodity Code Structure

Difficult to obtain “true” data on statewide spend

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CORE FINANCIAL

• General Ledger / Budgetary Control

• Accounts Payable• Accounts Receivable

& Cash Receipting• Cash Management• Cost Allocation• Grant Accounting• Project Accounting• Asset Management

PROCUREMENT/LOGISTICS

• Purchasing• Inventory Management• Fleet Management

HR / PAYROLL

• Automated Interfaces to/from SHARP

BUDGET DEVELOPMENT INTEGRATION

• Appropriation Budget• Agency Operating Budget

Common Database

FMS Needs Assessment Update FMS Needs Assessment Update Functional Requirements ScopeFunctional Requirements Scope

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Accounts PayableAccounts Payable

The Accounts Payable module will be used to process payments to vendors for goods and services. Major business functions included in this module are:• Vendor maintenance• 3-way matching process• Payment processing• 1099 processing• Payment cancellation• Vendor self-service• Employee travel authorization and payment processing

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Accounts ReceivableAccounts Receivable

Accounts Receivable provides proper recording of revenue against all segments in the Chart of Accounts to enable the State to report and monitor actual revenue against budgeted revenue. This area addresses the following functions:• Customer maintenance• Accounts receivable processing• Billing• Cash receipting• Dunning notices• Interest / penalty calculation

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General Ledger & Budgetary ControlGeneral Ledger & Budgetary Control

The General Ledger & Budgetary Control Module provides an integrated central repository of statewide financial data. All subsidiary functions (e.g., Accounts Payable) update the General Ledger with financial data. Budgetary Control is used to control spending to ensure that spending is in accordance with the Appropriations Bill. Major functions of this module include:• Chart of Accounts Structure• Basic Fund Accounting• Corrective or Adjusting Journal Entries• Interfund/Interagency Transactions

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General Ledger & Budgetary ControlGeneral Ledger & Budgetary Control• Month-End and Year-End Closing• State and Federal Reporting • Real-time Budgetary Control• Budget Maintenance and Monitoring• Budget Adjustments

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Cash ManagementCash Management

Cash Management provides an integrated central repository of deposit transactions for reconciliation of the various state bank accounts. In addition, payments issued are tracked to validate against the redemption of these items:• Issuance and redemption of payments

• Bank reconciliation

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Cost AllocationCost Allocation Cost Allocation aids management in making cost-

effective and informed decisions about projects and programs by assessing the entire monetary cost of resources used or committed to projects and programs. By providing financial allocation and distribution functionality, the FMS offers the ability to accumulate and measure the true cost of organizational activities. • Cost Allocation • Labor Distribution• Billing

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Project ManagementProject Management

Project management addresses the recording, tracking, and reporting of financial data for a variety of State projects and contracts. This module addresses the following:• Key processes for operating and capital projects, including

project development, execution, and the project close process.

• Tracking of project progress using work plans, tasks, resource assignment, controlled critical path, and deliverables.

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Grants ManagementGrants Management

Grant accounting enables the recording and monitoring of all grant activity. Grant accounting functionality includes:• Grant award• Grant billing and draw processing• Grant reporting• Sub-grantee accounting

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Asset ManagementAsset Management

Asset Management addresses the need for the State to track and account for all capitalized assets. Additionally, Asset Management performs the following:• The ability to produce reports in accordance with GASB 34

for inclusion with the CAFR.• Allows the agencies to track other items as needed,

including sensitive items and other controlled assets (e.g., guns, PDAs, digital cameras).

• Processing of surplus assets• Processing of lost and stolen assets

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ProcurementProcurement

Procurement includes the traditional solicitation process used for purchasing goods and services, as well as new eProcurement functionality: • Catalog procurement• Reverse Auctions• Vendor registration and other self-service • Commodity maintenance• Vendor performance management

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Procurement Best Practices -Procurement Best Practices -Traditional Procurement ProcessTraditional Procurement Process

Requisitioner initiates purchase requisition Approvals provided via automated workflow Solicitation initiated based on pre-defined

business rules:• Posted to State Procurement Web Site• Automatically “pushed” to vendors registered to service

specific commodity(s)

Solicitation responses received from vendors Responses tabulated, evaluated and awarded

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Procurement Best Practices -Procurement Best Practices -Traditional Procurement ProcessTraditional Procurement Process

All vendors submitting bids receive email notification of award

Purchase order created and issued Goods receipt entered Invoice receipt entered Automated three-way match performed

• If no exceptions, payment request generated

• If exceptions exist, they must be resolved

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Procurement Best Practices -Procurement Best Practices -Catalog ProcurementCatalog Procurement

Requisitioners procure goods and/or services from vendor catalogs at the State’s pre-negotiated prices via the Internet

Types of catalogs available may include: • Catalogs that reside inside the State’s firewall (e.g.

statewide or agency contracts)

• Catalogs that reside at the vendor’s site – requisitioners “punch-out” to vendor web sites to configure and price items; this information is then retrieved and used in building a requisition

• Catalogs for goods or services purchased from other organizations within State government

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Procurement Best Practices -Procurement Best Practices -Catalog ProcurementCatalog Procurement

Purchase order created and issued Approvals provided via automated workflow within

agency or across agencies Goods receipt entered Invoice receipt entered Automated three-way match performed

• If no exceptions, payment request generated• If exceptions exist, they must be resolved

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Procurement Best Practices -Procurement Best Practices -Reverse AuctionsReverse Auctions

Typically performed for certain types of purchases (e.g., bulk commodity purchases, big-ticket items)

State notifies prospective vendors of upcoming auction, including auction start and end dates / times • Vendors registered with the State to provide specified

commodity(s) are invited to participate in the auction

• Notice of auction posted to Division of Purchasing Web site

Vendors log in, view and accept terms and conditions, target bid price, specifications, and enter their respective bids in online, real-time mode

Vendors can view other bids and submit lower bids to stay competitive

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Procurement Best PracticesProcurement Best Practices

Market Place Examples

Catalog procurement =

Reverse auctions =

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Procurement Best Practices -Procurement Best Practices -Vendor Self-ServiceVendor Self-Service

Vendor registration Special certifications can be captured (e.g., Small

Business, Woman Owned, Minority Owned) Maintenance of basic vendor information (e.g.,

contact information) Maintenance of commodities serviced Automatic “pushing” of bid opportunities to vendors

that service specific commodities Inquiry into status of transactions with State

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Procurement Best Practices -Procurement Best Practices -Vendor Performance ManagementVendor Performance Management

Track contacts with problem vendors (phone calls, written contacts regarding problem orders/delivery of goods and services)

Automatically track and report/inquire on vendor performance, including:• Orders• Delivery• Returns• Bid history• Payment history• Complaints and resolution

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InventoryInventory

Inventory Management addresses the need for selected agencies to purchase, store and distribute, and replenish goods within a warehouse or “central stores” operation. Additionally, this module provides the following functions:• Ability to provide inventory data for inclusion with the

CAFR• Allows the agencies to effectively manage inventory cost

and quantities• Provides a mechanism to allocate inventory costs to

programs and organizations• Provides “reordering process” or replenishing inventory

when specific reorder points are met• Provides for full integration with Procurement module• Supports the use of bar coding technology

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Fleet ManagementFleet Management

Fleet Management addresses the need for the State to manage and efficiently maintain its investment in vehicles and other motorized equipment. Additionally, Fleet Management performs the following:• Reduces vehicle downtime to the State through the use of

effective preventive maintenance• Provides the ability to manage vehicle assignments and

the proper allocation of the cost within the organization

• Provides the ability to track and manage fuel cost

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System Requirements Validation – System Requirements Validation – ObjectivesObjectives

It is essential that a comprehensive set of detailed requirements be developed as they will:

• Identify the system requirements necessary to support the State’s business processes

• Be included in Request for Proposal and used as a checklist against which to evaluate vendor offerings

• Become part of the contract entered into with the selected vendor(s)

• Monitored during implementation to ensure all requirements were met, and that work was not performed to develop functionality that did not support the documented requirements

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Requirements from 2001 Needs

Assessment Study

STA Requirements

Toolkit

Baseline Requirements

Draft Requirements

Final Requirements

Focus Group

End User Community

Functional and Technical Requirements Development Process

Project Team

System Requirements Validation – System Requirements Validation – Process UsedProcess Used

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System Requirements Validation – System Requirements Validation – AccomplishmentsAccomplishments

Focus Group Kick-Off Meeting on 10/09/06 with75 agency participants

Over 130 participants representing 25+ agencies in various Focus Groups to-date

Requirements cover 14 functional areas Final draft requirements are almost complete. Will be

posted to the web for review by all state agencies by late next week (Nov. 17).

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Requirements from 2001 Needs

Assessment Study

STA Requirements

Toolkit

Baseline Requirements

Draft Requirements

Final Requirements

Focus Group

End User Community

Project Team

System Requirements Validation – System Requirements Validation – Where We Are?Where We Are?

• Conduct statewide stakeholder meetings – Early October (Human Resources, Payroll, Financial, Budget Development) and 9-28/10-6 (Purchasing)

• Stakeholders download requirements and response templates• Stakeholders email the response template back to us by 10/14

• Conduct statewide stakeholder meetings – Early October (Human Resources, Payroll, Financial, Budget Development) and 9-28/10-6 (Purchasing)

• Stakeholders download requirements and response templates• Stakeholders email the response template back to us by 10/14

Attend Agency Requirements Outreach Briefing (November 14 or 17)

Download and review requirements applicable to your agency’s business functions

Email completed Feedback Response Template by 12/04/06

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System Requirements Validation – System Requirements Validation – Process for Obtaining Agency Feed backProcess for Obtaining Agency Feed back

Download the following files from the FMS Web site (the URL is http://da.ks.gov/ar/fms/):• Functional requirements• Requirements Feedback Template (Excel file)

Enter your recommended additions, changes, and deletions to the requirements in the Requirements Feedback Template

Save the template using the following naming convention:

Abbreviated Agency Name + Your Last Name Example: KDHE Smith

Email the completed template as an attachment to: Noelle Jones at noelle.jones@da.state.ks.us

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System Requirements Validation – System Requirements Validation – FMS Web SiteFMS Web Site

http://da.ks.gov/ar/fms/

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System Requirements Validation – System Requirements Validation – Sample Functional RequirementsSample Functional Requirements

Business RequirementsVendor

Response Comments

Vendor Files

PU 19.00

System provides the ability to track and to report/inquire on vendor performance including delivery, complaints (including complaints about discrimination allegations) and resolution.

PU 20.00

System provides the ability to search for a vendor by commodity code/number/description and by vendor number/name. (Attach vendor to commodity).

PU 21.00System can infer default vendor information from the vendor master file when creating requisitions and purchase orders.

PU 22.00

System provides the ability to automatically carry forward a vendor number to the next transaction (i.e., requisition to PO and PO to invoice), optional on requisition.

PU 23.00

System provides the ability to assign status codes to vendors (i.e., inactive) and this status can vary by agency or facility (i.e., a vendor can be blocked from use by certain agencys/facilities but not blocked for other agencys/facilities).

PU 24.00System maintains pricing information, quantity breaks, freight terms and shipping information for each vendor.

PU 25.00System tracks vendor by performance / history, date added / deleted or inactivated and reason.

PU 26.00System provides the ability to classify one-time vendors and to check whether already on file based on multiple criteria (e.g., FEIN, SSN, etc.).

PU 27.00System can delete or deactivate vendor from vendor listing by date with reason. Historical data would be retained.

PU 28.00

System rates vendor at each event point based on user-defined criteria and these ratings are displayed at each point in the procurement process.

PU 29.00Vendor numbers (numeric and alphanumeric) can be system generated or assigned manually.

Reference Number

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System Requirements Validation – System Requirements Validation – Vendor Response CodesVendor Response Codes

SF = Standard functionality NR = Provided in Next Release MI = Minor Modification MA = Major Modification to Source Code

Required RQ = Provided through Reporting or Query Tool CD = Custom Development TP = Third Party Software Required NA = Cannot Meet Requirement

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System Requirements Validation – System Requirements Validation – Requirements Feedback TemplateRequirements Feedback Template

Name: Date:

Agency:

Business Requirements

Add/ Change/ Delete Comments

Reference Number

State of KansasFMS Requirements Validation

Requirements Feedback Template

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System Requirements Validation – System Requirements Validation – Adding a RequirementAdding a Requirement

Name: Date:

Agency:

Business Requirements

Add/ Change/ Delete Comments

Reference Number

State of KansasFMS Requirements Validation

Requirements Feedback Template

To add a requirement:

•Enter the reference number of the requirement you would like the new requirement to follow

•Enter the requirement

•Enter an “A” in the Add/Change/Delete column

•Provide additional explanation in “Comments” column if needed

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System Requirements Validation – System Requirements Validation – Changing a RequirementChanging a Requirement

Name: Date:

Agency:

Business Requirements

Add/ Change/ Delete Comments

Reference Number

State of KansasFMS Requirements Validation

Requirements Feedback Template

To change a requirement:

•Enter the reference number of the requirement you would like to change

•Enter the requirement as changed

•Enter a “C” in the Add/Change/Delete column

•Provide additional explanation in “Comments” column if needed

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System Requirements Validation – System Requirements Validation – Deleting a RequirementDeleting a Requirement

Name: Date:

Agency:

Business Requirements

Add/ Change/ Delete Comments

Reference Number

State of KansasFMS Requirements Validation

Requirements Feedback Template

To delete a requirement:

•Enter the reference number of the requirement you would like to delete

•Enter the requirement to be deleted

•Enter a “D” in the Add/Change/Delete column

•Provide additional explanation in “Comments” column justifying why the deletion is required

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System Requirements Validation – System Requirements Validation – Guidelines for Reviewing RequirementsGuidelines for Reviewing Requirements

Do not attempt to document your existing systems/ processes – describe your future requirements

Focus on what the system must do – not how. System design will be completed after product selection

Ensure that the requirements are documented in clear and concise statements (single requirement -- don’t blend multiple requirements together)

Focus on requirement content, not “wordsmithing” Remember that considerable work has already been put

into validating the requirements by the Focus Groups We need all Requirements Feedback Templates

returned to Noelle Jones by December 4th

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Questions?Questions?