22-10-2012, 01:39 PM
Business Systems Infrastructure Project Phase1 – Inventory and Assessment
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Project Overview and Summary Findings
North Carolina State government is a large, multi-faceted organization with broad and diverse responsibilities.
It must provide a variety of services to its citizens and be accountable for multiple and complex programs.
The State is experiencing continuing challenges from budgetary constraints, public desires for expanded
services, and taxpayer demands for more effective and efficient operations.
With an annual budget of $26 billion and over 265,000 employees, the State would be a Fortune 50 company,
if it were a private organization. An absolute prerequisite for the State to meet the public’s expectations for
cost-effective operations and accountability for program performance is the superior management of its fiscal
and personnel resources. Robust financial and human resource systems, employing modern technology and
linked together electronically, are necessary for meeting this need.
The State’s current core business systems are not up to this task. They are old, rely on outdated technology,
do not communicate well with each other, and are difficult to change for new operational requirements.
Moreover, they do not provide information needed for management decision making under today’s much
more demanding needs. They are at risk of failure due to old age, loss of vendor support, and are supported
by a workforce that is rapidly reaching retirement age.
These concerns prompted the State to identify the need for further analysis of its current business systems
and determine the feasibility of developing and implementing a new financial business infrastructure. The
need for an infrastructure inventory and analysis was further reinforced by the Report of the Governor's
Commission to Promote Government Efficiency and Savings on State Spending, which recommended that
the State move this specific process forward in an effort to reduce duplication, redundancy and inefficiencies.
In the 2001 session of the General Assembly, legislation was enacted to authorize a State Business
Infrastructure Study. Session Law 2001-491 directed the Office of the State Controller (OSC) to determine the
feasibility of developing and implementing a new business infrastructure for the State. Session Law 2002-126
directed the Legislative Research Commission to conduct a State Human Resources and Retirement
Systems Information Technology LRC Study. After some delay due to funding constraints, these two studies
were combined under the direction of the OSC with assistance from the Office of State Budget and
Management (OSBM), the Office of Information Technology Services (ITS), and the Office of State Personnel
(OSP).
Project Approach
In addition to the core business systems infrastructure review, agency program and systems staff were also
interviewed / invited to provide information regarding their interfaces to the State’s core business systems.
The interviewees were chosen because of either their leadership roles in support of the current core systems,
or because they represented a cross section of current or future end users. The interviewees were asked to
comment on their understanding of the current system environment. They were also asked to comment on
the system’s viability, functional/business requirements that are not being met, the risks of keeping the
current set of software/hardware solutions, and opinions on the various options for the future. A list of
interviewees by role and agency is provided in Appendix F, Interviewee List. The inventory and assessment
effort was scheduled to be completed over a nine-week timeframe. Given the short duration of the project, a
mix of in person interviews, telephone, and electronic survey mechanisms were utilized to gather, validate,
and document the required information from subject matter experts across the many departments and
agencies impacted.
The current core system functionality and technology were compared to Public Sector “best practices”.
Industry best practices were gathered from State and Federal entities that have successfully transformed or
are in the process of transforming their business systems infrastructure with information technology solutions
that have taken advantage of economies of scale, reduced the cost of doing business, and incorporated e-
Commerce initiatives. The results of this comparison were used to identify business and technical “gaps” in
current core systems capabilities. Finally the team also addressed the continued viability of each of the core
systems. This Executive Summary provides an overall assessment for core systems. Each of the subsequent
sections of this report provides a more detailed assessment for each of the core systems that were reviewed.
Current System Environment
The State’s core business systems are made up of disparate applications that are linked through a series of
batch interfaces, require redundant manual data entry, and can not easily communicate with each other.
Because these systems are not integrated, multiple versions of the same data are stored throughout these
systems. For example, the same vendor master data is stored in three different systems. In addition, the
central chart of accounts data is maintained in more than five systems.
System Operating Costs
Included in the table below is an estimate of the annual operation and maintenance costs for the core
systems excluding the three systems in various stages of replacement and the recently implemented e-
Procurement system. A number of costs are not included in the operations costs. Any costs associated with
the agency’s use of systems that duplicate or provide similar functionality are not included. The study
identified a majority of these agency systems but did not collect any agency related costs. Infrastructure and
capital costs like PCs, printers, and imaging equipment, in addition to data processing supplies and
miscellaneous expenses were generally not captured. Lastly, FTE costs were captured only for personnel
directly responsible for supporting the systems. FTEs associated with the use of the system (e.g. data entry,
system inquiry, manual processing costs in data preparation, etc.) are not generally captured.
Conclusion
The core administrative systems of the State of North Carolina are largely mainframe legacy systems that
employ hierarchical databases or indexed flat files to store data. The systems are not integrated. In some
cases data is exchanged between systems through a series of batch interfaces. In other cases, the same
data is manually entered into more than one system. The lack of integration often requires that the same data
be entered and stored in more than one system. For example a vendor file and a valid accounting code file
must be stored in both NCAS and e-Procurement. Also the current approach for BSIP is to manually enter
into e-Procurement, purchase orders that have already been created in BSIP.
The lack of system integration combined with dated technology makes it very difficult for managers to
generate meaningful reports. Systems of the generation represented by the State’s core business systems
were designed primarily to process large volumes of transactions. These systems generally do very well with
editing, posting transactions, and producing reports of the data captured. However, because of the way the
data is stored, it is labor intensive and costly to develop meaningful management reports. In many cases, the
data for reporting is only available at a highly summarized level, because the detail data is only available in
agency subsystems. This presents challenges in developing enterprise wide reports.
While the core business systems provide much of the functionality that is required by the State’s central
control agencies, they lack some of the functionality required by the State’s operating agencies. Although
NCAS is functionally rich in many areas, it does not provide sufficient functionality to support the agencies’
grant, project and accounts receivable accounting requirements. In the HR function, the Employee Leave
Tracking System only provides sufficient functionality for use by eight State agencies. As a result, agencies
have developed their own systems to provide the functionality necessary to meet their business requirements.
These agency systems range in size and complexity from PC spreadsheets to “State of the Art” COTS
packages (e.g. BSIP).