“Keeping your money in your pocket, where it belongs.”

FLAIR Study Proviso

Proviso language directed DFS to assess the advantages and disadvantages of the following options:

Enhancing FLAIR

Replacing FLAIR

Replacing FLAIR & CMS

Replacing FLAIR, CMS, People First , and MyFlorida MarketPlace

2

FLAIR Study Proviso – cont’d

The Proviso also required:

Preparation of an inventory of all agency business systems interfacing with FLAIR

Identification of any specific changes needed in the Florida Statutes and the state’s financial business practices to facilitate the recommended option

Preparation of a final report

3

FLAIR Risks and Challenges

Replacing a system that works well and has worked well for many years

Functionality gaps and shortcomings

Integration limitation and manual processes

Support challenges and limited talent pool

Technology anachronism

4

Chapter 1: Background • If the State of Florida was a country, its GDP would

rank among the 20 largest in the world • If the State was in the private sector, its $90 billion

budget would be in the “Fortune 25” • A strategic framework was developed that acted

as a common set of criteria to evaluate each of the required options. The framework included the relative alignment to: • CFO’s Mission • Key Risks & Challenges • Guiding Principles & Supporting Statutes • Vision • Solution Goals

• Status Quo – or “doing nothing” – isn’t an option 5

Chapter 1: Consequences of Limitations Agencies continue to develop and evolve

compensating systems to support their operations

Agencies reported a total of 424 systems that either perform a financial function or interface with FLAIR

Primary financial function gaps being addressed in agencies’ systems include:

AR/Receipting

Cost Allocation

Grant Accounting

Management Reporting

Asset/Inventory Management

Over 75% of agency systems are over five years old

6

Chapter 2: Options Analysis Analysis consisted of:

Interviews of Internal Staff, Other States, Selected State Agencies, Market Analyst, and Vendors

Establishment of minimum capabilities for all options

Alignment to Vision, Goals, and Objectives

Cost analysis for each option

Risk analysis for each option

Expected benefits for option

Other Considerations

Software Licensing

Funding Model

Project Governance Model

7

Chapter 2: Interviews What we learned from internal interviews:

Aspire strengths and weaknesses to consider Understanding of current FLAIR functions

What we learned from state agencies (DCF, DEP, DFS, DMS, DOR, and DOT):

The FLAIR interface is inconvenient, and agencies minimize their interaction with it

Integration with FLAIR is technically difficult, and the technology used causes limitations to agency functionality

Agencies have had to develop reporting capabilities and workaround solutions due to limitations in FLAIR

8

Chapter 2: Minimum Capabilities

MINIMUM CAPABILITIES

JUSTIFICATION FOR INCLUSION

MIS

SION

OF T

HE CF

O,

EXIS

TING

STAT

UTE O

R OT

HER

POLI

CY

LIMIT

ATIO

NS O

F EXI

STIN

G SY

STEM

GUID

ING

PRIN

CIPL

ES,

GOAL

S AND

OBJ

ECTI

VES

AGEN

CY RE

SEAR

CH

STAT

E RES

EARC

H

MAR

KET

RESE

ARCH

1. Single system of record for statewide financial transactions and cash balances

2. General Ledger (G/L) 3. Accounts Payable (A/P) 4. Basic Accounts Receivable (A/R) 5. Bank Reconciliation 6. Payroll Calculation, Verification and

Payment 7. Budget and Encumbrance Management 8. Real-time or near real-time transaction

processing 9. Warrants paid from multiple account

combinations 10. Electronic workflow and routing 11. Effective dating of transactions 12. Support for industry standard

communication / system integration protocols

13. Use of modern programming languages and database technologies

14. Multiple environments to support testing and migration

9

Chapter 2: Minimum Capabilities – cont’d

MINIMUM CAPABILITIES

JUSTIFICATION FOR INCLUSION

MIS

SIO

N O

F T

HE

CFO

, EX

IST

ING

ST

AT

UT

E O

R

OT

HER

PO

LICY

LIM

ITA

TIO

NS

OF

EXIS

TIN

G

SYST

EM

GU

IDIN

G P

RIN

CIPL

ES,

GO

ALS

AN

D O

BJE

CTIV

ES

AG

ENCY

RES

EAR

CH

STA

TE

RES

EAR

CH

MA

RK

ET R

ESEA

RCH

15. Minimize or eliminate use of the mainframe and take advantage of a multi-tier application architecture

16. Flexible database architecture that supports multiple fields

17. Ability to report on a standardized set of data

18. Storage of developed queries, views, and reports

19. Modern set of reporting tools for export and analysis of data

20. Self-service reporting

21. Asset, Project, Contract and Grants Accounting

22. Modern, user-friendly interfaces

23. Electronic document storage and attachments

24. Direct interface with productivity tools such as Microsoft Excel

10

Chapter 2 - Cost Comparison

COST CATEGORIES (IN MILLIONS)

OPTIONS CONSIDERED

OPT

ION

1:

ENH

AN

CE F

LAIR

OPT

ION

2:

REP

LACE

FLA

IR

OPT

ION

3:

REP

LACE

F

LAIR

AN

D C

MS

OPT

ION

4: R

EPLA

CE

FLA

IR, C

MS,

MFM

P,

AN

D P

EOPL

E FI

RST

Implementation Cost $467.4 $219.4 $224.6 $383.1

FLAIR Support Costs $225.1 $100.8 $98.4 $111.9

New FLAIR (ERP) Support Costs (including Upgrades) $131.5 $329.1 $344.6 $354.7

Solution Total Cost of Ownership $824.0 $649.3 $667.6 $849.7

Comparative score 2.5 3 2.9 2.4

11

Chapter 2 - Summary of the Option Analysis

REVIEW CATEGORY

OPTIONS CONSIDERED

OPT

ION

1:

ENH

ANCE

FLA

IR

OPT

ION

2:

REP

LACE

FLA

IR

OPT

ION

3:

REPL

ACE

FLA

IR A

ND

CM

S

OPT

ION

4: R

EPLA

CE

FLAI

R, C

MS,

MFM

P, A

ND

P E

OPL

E FI

RST

Alignment to Vision and Goals 1.6 1.8 2.8 3

Total Cost of Ownership 2.5 3 2.9 2.4

Achievement of Benefits 1.8 2.9 3 2.7

Risk 1.7 2.5 2.5 2.1

Combined Comparison 1.9 2.6 2.8 2.6

12

Chapter 3: Recommendation

The recommendation is to replace FLAIR and CMS with an ERP solution (Option 3)

Implementation of the core functionality will occur over seven years

Full implementation, including Assets, Contracts, Grants, and Projects will occur over twelve years

Implementation cost estimated at $224.6 Million

Risk should be closely managed by actively executing against critical success factors

13

Chapter 3: Recommendation

Critical success factors include: Establishing a comprehensive multi-tiered

governance model

Working to standardize business processes prior to implementation

Managing system customizations

Initially deploying a limited scope of core functionality

Utilizing a controlled pilot to validate the solution

Leveraging a phased rollout to agencies

14

Chapter 4: Implementation Strategy

When approved to move forward, the replacement of FLAIR and CMS will be a complex, multi-year project

The implementation framework in the report allows for flexibility to incorporate best practices of a system integrator

Includes a plan for knowledge transfer to state resources

Effective organizational change management will be a focus throughout the project lifecycle

15

Timeline and Key Activities Activities

Business Process Reengeneering

Procurement

Organizational Change Management (OCM)

Project Management Office (PMO)

Workforce Transition (WFT)

System & Data Strategy

Implement and Rollout ERP Soluiton

Add Expanded Functionality in All Agencies

Support Existing FLAIRSupport ERP FLAIRUpgrade ERP

FY26-27

FY27-28

FY28-29

Pre-DDI

DDI Phase 1: Implement ERP Solution

FY20-21

FY21-22

FY22-23

FY23-24

FY24-25

FY25-26

FY14-15

FY15-16

FY16-17

FY17-18

FY18-19

FY19-20

DDI Phase 2: Expand ERP Functionality

Operations and Maintenance

Intent to Award

Stakeholder Analysis

ProjectGovernace Framework

Technology Requirements

Functional RequirementsStandardize Processes

Organization Impact Assesment

ProjectCharter

16

Three main categories of procurement: Pre-DDI Support

Focus is to first create the right mix of state staff and consultants to work on the project

Leverage industry expertise in Business Process Reengineering (BPR), Organizational Change Management (OCM), Workforce Transition (WFT) and Project Management

Information Warehouse Review business reporting for the new financial system

Procurement of the ERP software and system integrator

17

Chapter 5: Procurement & Contract Mgmt

What’s Next? Proviso

22 FTE with $1.1M in Salaries and Benefits $7.8M in Special Category of which $2.1M in reserve Independent review of the FLAIR Study Recommendation

Pre-DDI planning has started! Overview of FY 14-15 activities

Setting up Project Management Office Planning, Business Process Analysis/Reengineering,

Governance Develop and implement Organizational Change Management

(OCM) plan Preparing for procurement of ERP software and systems

integrator (SI) Exploring opportunities to modernize FLAIR to facilitate

integration with ERP Overview of FY 15-16 activities

On-going business process analysis/reengineering and OCM activities

Procurement of ERP software and systems integrator (SI)

18

“Keeping your money in your pocket, where it belongs.”