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Weekly UpdatesAfter an enterprise resource planning computer system goes live, the government must transition from a project mode of operation to ongoing maintenance and support, where members of the project team begin to refocus on their former job duties and a sustainable long-term strategy for maintaining and optimizing the ERP investment is developed. As part of making this transition, many governments struggle with the question of where in the organization to place "ownership" of the system. In other words, who in the organization will decide what system improvements are made, how maintenance issues are prioritized, and how resources will be dedicated to these and other tasks associated with ongoing ERP system upkeep and development. Many governments wonder if the finance department, the IT department, or perhaps another department is best suited to this role. This article describes how Oakland County, Michigan, resolved this issue by forming an intra-organizational network of the most important stakeholders to make joint decisions on the future of the county's ERP system, without sacrificing accountability for results.
ABOUT OAKLAND COUNTY
Oakland County, Michigan, is located 20 miles north of downtown Detroit and serves a population of about 1.2 million people. In 2007, Oakland County's general fund budget was about $490 million and the total budget for all funds was about $822 million. Oakland County makes extensive use of IT, not only for its own operations but also as the provider of IT services for a number of jurisdictions located within the county's boundaries. Oakland has been recognized for its progressive use of IT and was designated as a top-10 Digital County by the Center for Digital Government.
OAKLAND COUNTY'S ERP BACKGROUND
Oakland County had been using its ERP vendor's human resources and payroll functionality successfully for five years. Based on this experience, it decided to upgrade its HR functionality and implement the vendor's financial and supply chain applications. Oakland took a two-phased approach to this project:
* Phase 1. Human resources upgrade (including some new functionality and self-service applications), time and labor, computer-based training, and user portal.
* Phase 2. Financial management, supply chain management, and budgeting.
Oakland County's approach to ERP project governance was consistent with what is generally recognized as "best practice." The executive committee was composed of department leaders and other executives who were sponsors of the project. The oversight committee was made up of the project's day-today management group and the leaders of each of the teams that were responsible for the ERP functional areas included in the project.
POST GO-LIVE GOVERNANCE OF ERP
After go-live, Oakland faced the question confronted by others who have implemented ERP: who owns the system? Initially, Oakland designated two formal structures for governing its ERP system: a post-go-live committee and a leadership group. The county is currently considering adding a third structure: a reinstituted executive committee. Each of these structures is described below.
Post Go-Live Committee. After go-live, the most immediate concern facing the county was stabilization of the new ERP system. This involved resolving issues remaining from implementation and addressing new issues raised by the user community after go-live. The post-go-live committee (PGLC) has taken responsibility for this. The PGLC meets on a biweekly basis. Its membership is essentially the same as the oversight committee that existed during implementation, which eased transition between project and post-go-live ERP governance. The PGLC serves as a collection point for issues (through the functional team leaders who interact with their user communities), maintains a record of the issues, prioritizes the issues with a Microsoft Access-based issues log, and manages their resolution.
Because many issues require a technical resolution, the PGLC must work with the county's IT department. First, the functional team leaders consult with IT staff assigned to the PGLC and an IT project manager to document the issue. IT then proposes a resolution approach for review and approval by the PGLC. Assuming it is approved, IT implements the resolution and the team leaders test the resolution and provide their feedback to the IT staff.
The issues addressed by the PGLC are funded by the ERP system's regular maintenance budget allocation from the county's IT department. The PGLC committee can be said to "own" ERP as it relates to dealing with day-to-day issues of system tuning and maintenance, as well as longer-term enhancements.
Leadership Group. For more significant changes to the ERP system, such as implementing entirely new functionality, the county maintains what it calls a "leadership group" Leadership groups are committees of users organized around different functional areas and are a permanent feature of the county's organization-wide IT governance structure. For instance, there are leadership groups organized around courts / law enforcement, finance and administration, and governmental services (e.g., human services, community development). The leadership groups are constituted and led by representatives from business departments, but also include representatives from IT to help resolve any technical issues that might come up during the groups' deliberations. Leadership groups review proposed new projects or major enhancements to applications that fall within that group's responsibilities. The finance and administration leadership group is responsible for ERP, so it could be said to "own" ERP from a more strategic perspective.
To illustrate how the process of making a major addition to the ERP system would work, we will consider the addition of new supplier relationship technology to the ERP solution. The process begins with the submittal of a project request to the leadership group by project sponsors (typically someone within the leadership group and in this example would likely be from the finance and/or purchasing departments). In Oakland County, all project requests require a detailed business case to be completed. The business case allows the leadership group to compare the supplier relationship technology with other possible uses of technology funds for improving finance/administrative operations. The leadership group evaluates all proposed projects against a defined set of criteria and recommends a set of projects for final budgetary approval, based on the amount of funding available for that year.
Executive Committee. Finally, Oakland County is currently exploring a renewed role for an executive committee. After go-live, the executive committee was disbanded, but the county is considering reinstituting the committee to:
* Manage the disengagement of the third-party implementation consultant. The executive committee would oversee the transition to make sure that knowledge is transferred to the county's functional leads so that the county is prepared to take complete ownership of the system.
* Manage resource allocations and direct IT efforts as they relate to ERP. The executive committee would supplant the PGLC to some extent so that the PGLC members can concentrate more heavily on their primary duties in their home departments and less on system support issues. The PGLC would still have a role in communicating with system users and identifying new issues.
* Establish a long-term ERP system administration approach. As the county transitions away from initial implementation to ongoing support and maintenance it needs to identify a long-term system administration approach (e.g., running reports, security, monitoring jobs, etc.). The PGLC was involved in these tasks immediately after go-live, but as the PGLC members' project-related duties subside and they begin to refocus on their jobs within their home departments, the executive committee must identify dedicated resources to perform system administration duties so that these responsibilities are not neglected.
* Strategically plan for ERP system upgrades and new module implementations. The executive committee would plan and propose new projects to the leadership group. This would include performing return-on-investment analyses to justify proposed projects and serving as the official sponsor of projects as they are considered by the leadership group or the County Board of Commissioners, during final budget approval.
In other words, the county would use the executive committee to assign accountability for the organizational changes that need to occur for the county to realize enhanced value from its ERP investment. Oakland is recognizing the need for this committee because the PGLC is focused on day-to-day system issues and its membership does not have the executive authority necessary to hold the organization accountable for the sometimes significant costs and organizational changes (e.g., business process design and employee behavior) that need to occur to secure optimum return from an ERP investment. The leadership group members may have the necessary authority, but the leadership groups are focused more on resource allocation for the technologies they are responsible for. As a result of this focus, the leadership group tends to react to proposals brought before it by county departments, rather than proactively managing the value realized from a particular technology within its portfolio.
CONCLUSION
Oakland County has taken what could be termed a "post-bureaucratic" approach to assigning ownership over its ERP system by not assigning ownership to a single functional department, but rather by locating ownership within an intra-organizational network of the important stakeholders, formalized through the committee structures described above. The diagram below recaps how the committee structures function.
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