Transportation's financial system checks out

It took six to nine months after they converted until they got over the shock.'

'Larry Neff, Transportation

Rick Steele

Focus on business processes made DOT's ERP a center of excellence

The graveyard of failed enterprise resource planning projects is littered with critical analyses by the Government Accountability Office and agencies' inspectors general.

From the Veterans Affairs Department's late, lamented Core Financial and Logistics System to the Interior Department's bungled Financial and Business Management System, agency officials have spent plenty of time explaining to Congress and the public why millions of dollars were wasted on yet another doomed project.

But what often is overlooked by auditors and headline-hungry congressmen are the successful ERP projects'and there have been quite a few in recent years.

Slowly, agencies are learning from past mistakes. One such success story is the Transportation Department's implementation of the Oracle Federal Financial 11i e-Business suite.

Starting in 1997, DOT began moving from an internally developed legacy system to a commercial application with no customization. A year ago, Trans- portation was named as a center of excellence for the Financial Management Line of Business initiative.

Avoid customization

Officials said they succeeded by changing business processes to fit the capabilities of the software, instead of changing the software to match the agency's 'unique' needs, said Larry Neff, Transportation's deputy chief financial officer. Neff has been involved with the implementation of the Oracle product, named Delphi, since 2000.

An ERP system connects all back-end management systems, including financial, human resources and procurement, and gathers and presents data in a usable way.

The move to the new system was gradual, which turned out to be crucial in making sure it went smoothly across the agency.

'We realized it was not going to be perfect at first, so we didn't try to do all the business process reengineering up front,' Neff said.

Transportation did things right, said Wayne Bobby, a vice president in Oracle's public-sector group. DOT stuck with its vision, implementing the same software for all Transportation agencies.

'Some things went easy, but some were like pulling teeth, like getting some of these agencies to come on board,' Bobby said.

Today, the system produces financials for the entire department or for individual agencies.

Transportation brought Delphi into production at its smaller agencies first to gain experience with implementation be- fore deploying to its larger agencies. The Federal Railroad Administration was first on board in 2000. The last arrival, the Federal Aviation Administration, went live in late 2003.

By the time the implementation team, led by then-deputy CFO Tom Park, deployed Delphi throughout Transportation agencies, they had performed the process 14 times.

'We had 14 sets of books on a single instance of the software, a real key to the economy of scale,' Neff said.

Managing change and cleaning data from legacy systems were the biggest challenges in putting the system in place. Change management also was important to keeping the project on track. And the buy-in throughout all levels of the organization was critical to spurring business managers to change, Neff said.

A key to change management was fostering support from the business line owners. Transportation and Oracle worked closely with the business units to ensure that the requirements the business owners submitted actually met their business needs.

For example, the team created two or three test labs for each agency implementation to determine if the software worked. The business managers then signed off on the system or requested changes. The teams kept testing the system until the business managers were satisfied.

'It took six to nine months after they converted until they got over the shock,' Neff said.

Even with all the collaboration and change management, Transportation officials faced delays. Data clean-up forced the department to push back FAA's implementation.

Neff also said another success factor was requiring the vendor to maintain the software. So whenever there are upgrades, the vendor adopts the change throughout the product. Otherwise, 'we'd have to go through and rewrite a lot of it, which gets very expensive over time,' he said.

While the technical aspects of an ERP implementation are challenging, Neff said agencies shouldn't overlook the people factor.

He said that in the early years of implementation, Transportation and other departments using Oracle set up an informal group that would meet to share solutions to problems and war stories.

When the system was newly implemented in each agency, Transportation provided desk-side help for about six weeks.

'It gave people a comfort factor to know there was someone there, that they could grab their arm and say, Help me!' Neff said.

Neff's team recently added enhancements, including a new financial-statement component to meet the accelerated deadline for year-end financial statements. Agencies must submit them by Nov. 15, 45 days after the end of the fiscal year. Agencies in the past took up to several months to file those reports with the Office of Management and Budget.

'We now produce financial statements at 8 a.m. on the first of every month,' he said.

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