successful asset management business models · pdf file · 2012-02-09successful...
TRANSCRIPT
SUCCESSFUL ASSET MANAGEMENT BUSINESS
MODELS AND BARRIERS TO THEIR
IMPLEMENTATION
LESSONS LEARNED THROUGH INTEGRATION OF ASSET
MANAGEMENT AND FINANCIAL PROGRAMS AT
LOUISIANA DEPARTMENT OF TRANSPORTATION AND
DEVELOPMENT
by
Michael Bridges, P.E.
Undersecretary – Office of Management and Finance
Louisiana Department of Transportation
and Development
1
Presented at the
TRB 91st Annual Meeting
January 22, 2012
Contents 2
• LADOTD ERP Implementation
• Maintenance Management and Linear Asset
Management
• TAM Implementation Plan
ERP (LaGov) Project 3
LADOTD became the pilot agency on a state-wide
ERP system in November of 2010
IBM was the integrator
SAP is the solution (Agile Assets was used for MMS)
Approximate cost $100 million
LADOTD Goals for ERP Effort 4
Replace legacy DOTD financial systems
Integrate project functionality (AASHTOWare® Trns.port®)
Fully integrate financial, maintenance, and project systems
Improve efficiency
Simplify Work Order process
Establish a Master Project Number
Enable Predictive Modeling for maintenance activities
Remove reliance on legacy support
Keys to Success 5
Keep software as close to out-of-the box as
possible so that updates can be made without
another full implementation
Dedicate the necessary resources both internal and
external
Full Executive level support
Realization that the work is not done upon go-live
6
DOTD ERP Steering Committee Dedicated Resources
CORD Construction Orders
PC System/Clipper
TJAR Transportation Job
Applicant Reporting
Standalone System
Lotus
APPS Automated Personnel &
Payroll System
VSAM/COBOL/CICS
WORD & SORD Work & Shop Orders
PC System/Clipper
MOPS Maintenance Operations
Engineering Unit Application
PIMS-Mainframe Purchasing & Inventory
DLI/COBOL/CICS
ISIS Integrated Statewide
Information System
(DOA)
DAJR
DAILY JOURNAL
VSAM/Sequential/COBOL
DB2
VSAM file updated/cleared
each business day/.
Daily Journal updates FMSP
database with Payroll
Expenditures only.
FMSP Financial Management
OPERATING Funds
DLI/COBOL/CICS/DB2
ADDS Automated Data Disbursement
VSAM/COBOL/CICS
PMFS Project Management Finance
CAPITAL OUTLAY Funds
VSAM/COBOL/CICS/DB2 TOPS Tracking Of Projects
Engineering Unit Application
AREC Accounts Receivable
Standalone System
VSAM/COBOL
EQMS/EQNT Equipment Management
DLI/COBOL/CICS/DB2 Monthly expenditure
Updates from Daily Journal
WENS -Mainframe Weight Enforcement
VSAM/COBOL/CICS
DAJR & PMFS report EXPENDITURES daily. PMFS also draws the warrant.
PIMS sends
Requisition data
& receives
Purchase Order
Information
ISIS SAP
Sends
Personnel
Information
To DOTD
FinForms Financial Forms Entry
Standalone System
Lotus
ENCM Encumbrance
Monthly Directly from DAJR
Sequential/COBOL
GLED General Ledger
Daily Directly from DAJR
Sequential/COBOL/DB2
PCST Project Cost
Monthly Directly from DAJR
Sequential/COBOL
REIM Reimbursement
Monthly directly from DAJR
Sequential/COBOL
OGB
Louisiana State
Office of Group
Benefits
LASERS
Louisiana State
Employee’s
Retirement System
PIMS-Intranet
Standalone System
FAID Federal Aid
DLI/COBOL
Billing Info Monthly from
PMFS (Progress)
DAJR (Incident)
PRCO Property Control
VSAM/COBOL
Daily Updates from DAJR
RINS Retired Insurance
VSAM/COBOL/CICS
T
12/14/2004mel
La. Department Of Transportation and Development
Information Services Financial Applications Unit
FINANCIAL SYSTEMS OVERVIEW
LEGACY SYSTEMS
7
8
9
System Interface Diagram
10
AASHTOWare® Trns.port® Interfaces
E
F F
I
C
I E
C
Y
Time In Months
0 1 2 3 4 5 6 7 8 9 10 11 12
System
Production critical
issues minimized
Stable operational
environment
User efficiency
levels plummet
Users need time to really
learn the system.
User
Process As users learn the system
business processes evolve and are modified to reflect a new
way of doing business.
Level 2 and 3 problems addressed
Stabilization Period 11
“The Valley of Despair”
“The Mountain Top”
LaGov Statistics
(11/15/10 thru 12/31/2011) 12
Transaction Types Value
FHWA Reimbursement processed through LaGov $1,188,622,717.32
Vendor Payments:
Payments (Total Dollars) $2,169,697,899.97
Payments (Total Invoices) 117,675
Construction Payments:
Payments (Total Dollars) $1,571,865,702.82
Payments (Total Invoices) 4,267
Maintenance Work Orders Completed 131,610
Major Wins 13
FHWA RASPS billing
Daily instead of 3-5 times per month
FHWA Authorizations
Two-way electronic interface
Simplified FHWA ER and FEMA PW reimbursements
Simplified Project Structure
Each aspect of the project lifecycle has its own identifier
Transparency / Data Visibility
All phases of a project are grouped under a single project structure
GASB34 for Asset Settlement
Linear Asset Management capabilities
FHWA RASPS Billings
Federal billings were a manual process that required each part to be prepared separately (3 Progress, 1 incidental and 1 indirect) a month
Due to complexity of the manual billing processes, it was not unusual for a billing to lag weeks behind incurrence of the costs.
Typical legacy unbilled was $40M
All billings are combined
(progress, incidental, and indirect
costs)
Billings are processed daily
The billing process requires little
manual intervention, running
without much attention
Typical unbilled amount in LaGov
is around $4M and is usually
resolved within a few days
14
Legacy LaGov
FHWA FMIS Authorizations
Authorization of federal
projects was a manual process
Project data was housed in
multiple systems, forcing the
authorization process to be
supported by hard-copy
documentation, often resulting
in extended processing times
Authorization is automated
through a direct interface to
FHWA’s FMIS system
Because all information
related to authorization
resides in one system, the
processing of authorizations
and tracking of status is
greatly facilitated
15
Legacy LaGov
Emergency Funding Reimbursements
Data related to emergencies
was stored in multiple systems
and was not consistently
captured
Reporting difficulties resulted
in instances of delayed or
denied reimbursement of
funds
LADOTD is compliant with
federal reporting requirements
The level of detail required is
captured upon initial data entry
Information necessary to
complete the required
documentation for FEMA and
FHWA emergency
reimbursements is readily
accessible
16
Legacy LaGov
Most DOTD efforts to restore transportation infrastructure and services after an emergency event
are reimbursable by FEMA or FHWA.
Project Structure
Project management focused on the individual aspects of a project (phase)
Each phase had its own unique identifier making the ability to capture and report total project cost difficult
Project identifier contained key information about the type and location of the phase and could vary between the multiple phases
All phases of a project are grouped together under a single project structure, providing cradle-to grave oversight
The ability to report on total project costs is inherent in the structure; all information related to revenue and expenditures is available
Key information is identified at the top level, remaining consistent for all phases
17
Legacy LaGov
Transparency/Data Visibility
Multiple standalone systems made data retrieval and analysis difficult
A system designed for data entry required restricting access which resulted in limiting staff who could report
Tools for reporting were difficult for non-technical staff to use
Because similar data resided in multiple systems, data inconsistencies were less visible
LaGov is a single integrated system with common data storage
There is a common reporting tool for accessing / analyzing data
Anyone with access to LaGov can display and report most information (confidential data is restricted)
Data is available to a larger number of staff creating a more collaborative work environment and empowering the information worker
18
Legacy LaGov
Vendor Management
Multiple standalone systems
had unique vendor
databases; managing all
transactions of a vendor was
not possible
Vendors had to call to check
on the status of payments
Vendors can establish an
online account to manage
their own records and check
the status of payments 7 days
a week / 24 hours a day
19
Legacy LaGov
Eliminated/Reduced Check Printing
Operations
LADOTD had dedicated staff for the printing and preparation of checks on a daily basis including:
Operation of check folding equipment
Manually stuffing of related documentation with check
DOTD staff distributed checks for vendors who wanted to pick up their payments
Vendors are encouraged to
adopt electronic funds
transfer (EFT), reducing the
number of checks printed
EFTs are run nightly
For those not utilizing EFT,
checks are printed twice a
week by the State central
group (OSUP)
20
Legacy LaGov
GASB 34 Asset Settlement
DOTD was unable to achieve the GASB 34 requirement of segment level accounting
GASB 34 financial statements contained values for all of the DOTD infrastructure as a whole
DOTD experienced difficulty calculating the impairment loss under GASB 42 for infrastructure damaged by hurricanes and other disasters
The entire DOTD infrastructure inventory has been re-valued at the segment level
DOTD fully meets GASB 34 requirements for asset accounting through the institutionalization of asset settlement in LaGov
Costs for assets under construction are captured for all segments in a project for reporting and settlement
21
Legacy LaGov
Automated Payment Processing
There were no capabilities to
hold payments (manual) or
schedule payments (for
example, terms Net 30)
Payment scheduling can be set to match the contract terms when a purchasing document is issued, i.e., before the vendor begins work or ships goods
The system supports cash management processes through the use of multiple date fields, separating payment date from invoice dates, thereby providing the ability to hold payments until due
22
Legacy Lagov
Warehouse Management
Warehouse operations were
manual, supported by multiple
spreadsheets to track data
Managing the shelf life of
products was manual
Inventory is scanned as it is received and as it is issued and automatically identified to the correct storage bin location
The system supports oldest inventory consumption first, thereby managing stock with limited shelf life
Utilizing Materials Replenishment Planning (MRP) which automatically generates stock replenishment documents based on quantity thresholds
23
Legacy LaGov
Asset Management
Legacy systems did not
support strategic prioritization
of maintenance funding
based on condition of the
infrastructure
Prioritizing annual funding
investment in infrastructure
and the distribution of
maintenance dollars was a
manual process
The ability to set levels of service (LOS) for infrastructure segments is key to achieving optimum use of maintenance dollars
Handheld devices are implemented to ease data entry and ensure more accurate data capture to support decision making
The ability to track staff, equipment and resources to an asset means improved accountability to taxpayers
24
Legacy LaGov
Asset Management System 25
Completed as part of the ERP implementation with go-live November 2010
Application is Hosted off-site by software vendor
MMS integrates with SAP to obtain master data and provide transactional data
12 data Interfaces including human, equipment, material resources, resource usage, security
Portal / Single sign on
Two Linear Referencing Methods (LRM)
Control Section/Logmile
Route/Milepost
MMS handles planning, scheduling, execution and management of work on Linear Assets (roads/bridges) and Point Assets (signals/signs/etc).
Inventory Data 26
Assets
Highways (Control Section or route/log mile)
Bridges
Signals
ITS (in development)
Sound Walls (in development)
Signs, guardrail, lighting, culverts (future development)
Condition
Pavement Condition Data
Bridge Condition Data
Field Data Collection
350 hand-held devices used by field personnel to edit and create work orders, record location for daily work performed
Time/Work Accomplishments /materials/equipment used uploaded at the end of the day
GPS used to identify the location the work was perform
Easy to use
50% of 142,000 work orders since go-live were entered in the field.
The remainder are uploaded to the PDA and tracked in the field
27
Challenges Remaining 28
Data accuracy
System fixes and enhancements
Huge change management issues
Training, training, training
Organizational changes
Implementation of Transportation
Asset Management at LADOTD 29
TAM at the LADOTD 30
LADOTD has many mature TAM Systems
Bridge Management System
Pavement Management System
Highway Priority Program
Strategic Plan
Others
LADOTD does a very good job with the overall maintenance and operations of its infrastructure system
However, there is no written TAMP to insure that all these systems support the agency goals and objectives or to measure the progress towards their accomplishment.
TAM Implementation Action Plan 31
Identify an executive champion
Get top level executive support
Administer TAM Assessment Questionnaire from Vol. 1
Conduct NHI course on TAM
Organize TAM steering committee
Conduct NHI follow-up course(s)
Facilitate the development of a TAMP
Execute the TAMP
Measure outcomes and revise TAMP at periodic intervals
Secretary
Multimodal Planning
Management and Finance
Engineering Operations
Project Delivery Steering
Committee
Asset Management
Sub-Committee
Project Finance Sub-Committee
Organizational Changes to Support TAM
Asset Management Sub-Committee 33
1. Strategic Planning
2. Finance
3. Planning (Highways)
4. Planning (Multi-Modal)
5. Statewide Maintenance
6. District Representative
7. IT
8. Bridge Design
9. Road Design
10. ITS
11. Data Collection
