I. Overview of the ERP Project and Purpose of the RFP 

A. Introduction

The Governor and Comptroller of Connecticut have launched a project to replace the State's core financial and administrative systems with a public sector version of an off-the-shelf enterprise resource planning (ERP) software package. Today, there are a number of separate systems that perform these core functions, which include accounting, accounts payable, purchasing, payroll, time and attendance, and personnel. The computer systems supporting these core business functions are technologically out-of-date, have limitations in their capabilities, and are not integrated. Additionally, there are many redundant agency-level systems that are not compatible with the core systems. The State intends to move aggressively to replace the current aggregation of systems with an integrated, enterprise-wide solution utilizing a robust ERP package that will be used by both the central and operating agencies to perform basic financial and administrative functions.

This document will define the approach for procurement of services, software and hardware that will be followed, the scope of the work to be performed, the requirements the vendor must address, how to respond to this RFP, how the responses will be evaluated, and the administrative requirements that must be followed.

B. Project Approach

This project will have two phases. The first phase of this project, the Requirements Definition/Software Selection Phase, will be to select the ERP solution that best meets the State's needs. The selected vendor will assist the State in:

• Defining software and hardware requirements for an ERP system

• Defining an approach for addressing business process change within the ERP implementation

• Developing an RFP for an ERP system

• Evaluating and selecting software

• Conducting contract negotiations

• Managing the Requirements Definition/Software Selection Phase of the ERP project

• Develop a detailed project plan for the implementation phase of the project and a corresponding cost estimate to complete the implementation.

The second phase of the project, the System Implementation Phase will include the work activities required to complete the implementation of the new system and to bring it into stable production mode. In this RFP we are requesting vendors to propose a general implementation methodology or approach and to define the major tasks required to implement the ERP system.

The State will need the assistance of a consultant in both the Requirements Definition/Software Selection Phase and the System Implementation Phase of this statewide ERP project. The approach to the acquisition of consulting services, software, and hardware is as follows:

1. The State issues an RFP (this one) to select a consulting partner to provide the State consulting services for Phase 1, Requirements Definition/Software Selection, and to provide implementation services and serve as prime contractor for Phase 2, System Implementation.
   Note: The State will not entertain proposals in response to this RFP from vendors of ERP software packages.
   
2. In the Requirements Definition/Software Selection Phase, the consultant selected will work with the State to draft a single RFP for an ERP system solution, including software and required hardware. The consultant will assist the State in selecting the software package. The State reserves the right to accept or decline the hardware proposal.
   
3. The consultant will assist the State in negotiating required contracts for software and hardware.
   
4. Once Phase 1 is completed, the State and the consultant will most likely enter into negotiations for a contract for services for the implementation phase, for which the consultant would be prime contractor. However, the State reserves the right to elect not to enter into negotiations with the consultant from the Requirements Definition/Software Selection Phase to be prime contractor for the System Implementation Phase.
   
5. Should contract negotiations not yield an agreement, or if the State elects not to enter into negotiations with consultant who assisted on Phase 1, the State will issue an RFP to procure implementation services. From the respondents the State will select a consultant to be the prime contractor for the implementation phase.

C. Project Objectives

Connecticut plans to address both the business and technology needs of state government through the implementation of an ERP solution.

The following are the major business objectives of the ERP project:

1. Streamline the State's core administrative and financial processes through business process re-engineering in conjunction with theimplementation of the ERP package.
   
2. Standardize business processes and practices to conform to state statute, statewide policies, regulations or procedures, and collective bargaining agreements.
3. Eliminate administrative activities that add no value, such as redundant keying and reconciliation of data.
   
4. Address the business requirements of the operating agencies, both large and small, as well as those of the central administrative agencies/offices.
   
5. Capture and make available to agency heads, fiscal officers, personnel administrators, and program managers the information needed to effectively manage programs and measure their success - information that has often been hard to access, out-of-date, inaccurate or unavailable.
   
6. Provide agencies, and specifically system users and functional managers, with the necessary technology, tools, and training to enable them to extract the data they require to meet their business needs.
   
7. Greatly enhance the ability to report statewide expenditures by service area or program through implementation of statewide account coding standards for classifying agency programs and projects.
   
8. Make information more readily available, as appropriate, to all state agencies, local governments, the general public, and the business community.
   
9. Provide employees, retirees, and fiduciaries direct access, as appropriate, to personnel, payroll, time and attendance, benefit, and retirement information.
   
10. Enable the State to more efficiently conduct business with its vendors and service providers through expansion of electronic commerce.
    
11. Improve the State's ability to budget and measure program success based on performance metrics.
    
12. Improve the State's ability to conduct business, human resources and technology planning based on reliable, timely financial and HR data.
    
13. Facilitate State compliance with the Governmental Accounting Standards Board's new financial reporting requirements for state and local governments (Statement 34).
    
    The following are the major technology objectives of this project:
    
14. Replace the current core HR and financial systems based largely on out-of-date technology with a proven, public-sector ERP package that utilizes current, mainstream technology.
    
15. Simplify and integrate the State's core system infrastructure. Reduce the number of separate information systems, and the interfaces that connect them, running on different computers, written in different programming languages, and utilizing separate databases.
    
16. Eliminate agency-level systems that perform basic administrative and financial functions that can and should be performed by the core systems.
    
17. Use the ERP system as a business backbone, or foundation upon which to automate additional business functions in the future in an integrated fashion.
    
18. Limit customizations to the software to hold down implementation costs, to support standardization of business practices, and to preserve the ability to upgrade to new versions as they are released.
    
19. Take advantage of the strengths of the internet to the extent appropriate based on the State's technical infrastructure plan and the capabilities of the ERP software package selected.
    
20. Where necessary, provide standard interfaces between the ERP system and agency program-specific information systems that are consistent with the State's Enterprise-Wide Technical Architecture (which is currently being defined).

D. Project Scope

The precise scope of the project and the phasing of implementation have not been finalized. The functions that comprise the base scope for the integrated ERP system and are viewed as the top priority for inclusion in the system are the following:

 The following functions probably fall within the scope of the ERP project, but are viewed as somewhat lower in priority and may not be included in the first ERP implementation effort (or what is defined as Phase 2 in this RFP):

Three other functions have been or are being considered for inclusion in the ERP system:

• Cash management and treasury functions - It is still to be determined if these will be in scope

• Retirement and pension plan administration - not planned for inclusion in the first ERP implementation, but will define requirements and evaluate capabilities of ERP software

• Budget development - not in scope, but will need to interface with the ERP system

Many of the above functions have a central or statewide component administered by a central administrative agency (such as statewide personnel functions like job classification specification conducted by the Department of Administrative Services) as well as components carried out routinely by the line agencies as a part of the conduct of their day-to-day business (such as new hire processing). It's envisioned that to the extent practical, central agency and line agency administrative and financial functions will be performed by the new ERP system.

The scope of the system will include all executive branch agencies and the constitutional officers (Comptroller, Treasurer, Attorney General, and Secretary of the State). It has not yet been determined if higher education (University of Connecticut, the University of Connecticut Health Center, the Connecticut State Universities, and the Community/Technical Colleges) and the legislative and judicial branches will be within the full scope of the ERP implementation. However, the payroll checks for these entities are and will be produced by the statewide system. These entities will also be required to provide human resource and financial data to the ERP system.

To further assist the proposer in sizing the scope of the project, the following statistics are presented:

Connecticut State Budget - Fiscal Year 2000: $12.3 Billion
Approximate number of full time state employees: 58,000
Number of employee bargaining units: 30
Number of large state agencies: 25
Number of small state agencies: 36 (less than 150 employees, most with less than 75)
(above agency numbers do not include higher education or the legislative and judicial branches)
Number of existing applications (most agency-specific) performing HR, payroll, and financial functions: approx. 135

 E. Project Governance and Agency Roles

The project is headed by an executive steering committee. This committee is chaired by the Comptroller, and its members are the Chief Information Officer, representing the Department of Information Technology, the Commissioner of the Department of Administrative Services, and the Secretary of the Office of Policy and Management. The committee will approve all major project decisions, resolve or decide issues that are raised to it, and monitor project status. All decisions will be made unanimously.

The work in this Requirements Definition/Software Selection Phase will be performed by a joint State/consultant team. The vendor will be in charge of day-to-day project management and be responsible for producing the deliverables specified in their proposal. Overall project management, including vendor management and quality assurance, will be the responsibility of a team of three project directors, who have already been assigned, representing the lead agencies on the project (which are the Office of the Comptroller, the Department of Administrative Services, and the Department of Information Technology).

Working with the project directors on system requirements and business process issues will be two advisory committees, one for human resources and one for finance. The HR Advisory Committee will be made up of designees from agencies with statewide HR or payroll responsibilities plus representatives of four to six line agencies, yet to be determined. Similarly, the Finance Advisory Committee will be made up of designees from agencies with statewide financial responsibilities plus four to six representatives from line agencies, also yet to be determined. It is envisioned that these committees will likely have subcommittees, including subject matter experts from the user agencies, addressing specific business process issues. It is hoped that some of the most knowledgeable and capable users in the finance and HR/payroll arenas will be made available virtually full-time to participate on these subcommittees.

Each state agency has been asked to assign liaisons to the project. Large agencies have been asked to assign three liaisons - one representing the personnel and payroll functions, one representing the finance functions, and one representing IT. The smaller agencies have been asked to assign a single liaison with knowledge of their financial and administrative operations. The project team will work through these liaisons to gather agency requirements, and to identify and resolve business process issues.

The organization of the project team, other than what is described above, has not been finalized. One likely aspect of the project team organization is that there will be separate teams working on finance, HR/payroll and technical infrastructure. The project team structure for the Requirements Definition/Software Selection Phase will be decided by the project directors, with input from the consultant selected.

A chart depicting the project governance structure is presented on the next page.Follow this hyperlink for a text version of the following chart.

 F. Possible ERP Project Timeframes

The following is a high-level view of possible project timeframes:

Note: These dates represent a tentative timeframe for the entire ERP project. The State has not yet finalized a project timeline. The vendor is expected to propose a timeframe for the Requirements Definition/Software Selection Phase. The planned timeframe for the System Implementation Phase will ultimately be determined by the State with input from the vendor selected.

G. Project Strategies

The State has identified a number of strategies that will be employed in conducting this project. Proposers should keep these strategies in mind, and consider their interrelationships, when developing their response to the Scope of Work section. The strategies that have been identified to date are listed below.

1. The State believes it is in its best interest to select and deploy an ERP system following an aggressive schedule, but not so aggressive as to significantly increase risk or sacrifice quality.

2. Business process improvement is a major objective of this project. A three-step approach is envisioned for addressing process improvement:
   • First, define the State's business requirements
   • Second, select the package that goes the farthest in meeting them.
   • Third, improve business processes following the best practices supported by the software selected.

3. An extension of strategy 2 is that when confronted with the need to either change existing business processes or modify the software, it is the State's intent to change business processes (exceptions might be requirements dictated by legislation, union contracts, or true productivity issues).
   

4. The State plans to engage consultants to assist in both the Requirements Definition/Software Selection Phase and the System Implementation Phase to take advantage of the experience and expertise of a qualified vendor to help ensure the success of Connecticut's ERP project.

5. A joint State/consultant team will complete the work of the Requirements Definition/Software Selection and implementation phases of the project with the mutual goal of a successful system implementation. The State's goal is to build the capability of its employees to maintain the system after it has been implemented and its stability has been assured.

6. The State recognizes that the handling of business process change and change management are critical success factors for an ERP project and the State intends to work with the consultant selected to define an approach that addresses the State of Connecticut's requirements.

7. The requirements definition and selection process must have significant input and participation from the State's line agencies, which will be using the system to perform their day-to-day financial and administrative functions.

8. The State plans to utilize information collected through previous core system requirement studies and through the statewide Year 2000 effort as a baseline for the start of this requirement definition effort.

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