Who’s looking out for you? quality assurance for public sector ERP implementations
Implementing enterprise resource planning systems can be a lonely and intimidating path, particularly for government project managers responsible for overseeing the installation of multimillion dollar systems. In recent years, GFOA’s Research and Consulting Center has expanded its ERP procurement consulting practice to include quality assurance services. Although GFOA claims no expertise in implementing any one particular software package, we have been able to help a variety of different public sector organizations implement various ERP applications. This article describes typical quality assurance services and the factors that public sector organizations have considered before seeking this type of assistance.
WHY QUALITY ASSURANCE?
GFOA’s quality assurance services began when one of its ERP selection clients required assistance monitoring the implementation contract GFOA had helped negotiate. The contract was a complex one, involving multiple companies and installation phases, and the project team had limited experience with modern ERP applications. GFOA staff helped the project manager review deliverables and monitor warranty items, and provided objective input during the design phases. Since then, GFOA’s quality assurance engagements have ranged from periodic contract compliance review to project management.
There are a number of reasons why organizations seek quality assurance services. Contract monitoring can be overwhelming for project managers preoccupied with day-to-day project activities and administrative functions. Some organizations like “objective” parties to deliver difficult messages, particularly when big changes in business processes are being proposed. Finally, some clients have viewed GFOA’s involvement in an ERP implementation as an “assurance policy” that certain minimum public sector requirements will be met in the overall business solution.
Below we discuss why our clients have availed themselves of quality assurance services.
Contract Compliance. It is easy for project managers to become too comfortable with implementation consultants during an ERP implementation. After all, consultants and project team members are almost inseparable during an implementation. This leaves government customers exposed, particularly when they are uncomfortable raising compliance issues with the implementation consultants. It is often more advantageous for ERP customers to use a third party to raise contract obligations during an implementation.
Review of Deliverables. The ERP industry has developed standard implementation methods to ensure the quality of the software installation, to maximize profits during implementation, and to assist inexperienced consultants. Unfortunately, some implementations are so heavily templated that some activities are viewed by consultants as mere exercises. The customer never realizes this because ERP installation is an infrequent experience. In one very unusual case, a consultant applied the wrong template to a particular software module so that the design resembled a commercial solution rather than a solution properly fitted for the government. The consultant had followed the template correctly, but did not have the public sector expertise to recognize that it was the wrong solution. Fortunately, a quality assurance consultant from the software firm caught the error before the module had been installed. To mitigate the risks of such errors, organizations often use an objective quality assurance resource to provide periodic reviews of deliverables.
System Design Assistance. Since state and local government ERP implementations are still considered an untapped market, few implementation consultants have deep public sector experience. “Encumbrances,” “modified accrual,” and “fund accounting” are concepts typically misunderstood by consultants with limited exposure to local government. As a result, system design sometimes reflects the consultant’s last public sector engagement. While functional requirements in the implementation contract and software license are supposed to prevent this practice, these requirements often are not detailed enough to ensure proper utilization of the software. GFOA consultants have been used on several occasions to review design documents and to challenge design decisions.
Change Management Assistance. Business process change is a significant challenge to organizations implementing ERP applications. Standard functionality in these applications assumes that the customer will imitate most public sector organizations or follow generally accepted public sector requirements. Implementing anything outside of these boundaries requires customizations that are expensive to develop and maintain. As such, governments tailor business processes to fit the application. Since these process changes can be drastic, organizations often seek objective guidance on how to manage them.
Steering Committee Guidance. Most ERP implementations are overseen by a customer steering committee comprised of decision makers empowered to influence business policy. Participation in the committee does not require day-today involvement in the implementation process but does require that participants have enough knowledge about the project to make informed decisions. ERP implementation teams have used GFOA consultants to provide objective information to these decision makers. In a recent case, a government sought advice from GFOA accountants regarding the treatment of an accounting transaction. Debate over the issue was threatening the project schedule, and the government wanted to know how much flexibility they had in their design proposal. In this case, it was determined that the solution proposed by the implementation consultant was the best solution.
Project Management. In rare cases, GFOA consultants actually serve as the project manager for an ERP implementation. In one case, a government could only afford to provide a part-time technical project manager and a part-time functional project manager; it could not spare a day-to-day project manager for a multiyear implementation. Although the government agreed that contracting project management is rarely successful, it was confident that GFOA understood the organization well enough to make it work. Once an internal project manager is identified and trained, GFOA will be weaned off the project. Although GFOA accepted this engagement, we do not actively seek such projects, since we believe these duties are best left with the customer.
RECIPE FORA SUCCESSFUL ENGAGEMENT
This section discusses three key ingredients for a successful quality assurance engagement.
Regular Involvement. Some clients have chosen to use GFOA and other quality assurance consultants only on a periodic or as-needed basis. This strategy typically does not work, because the consultants cannot acquire the project background experience necessary to provide informed advice. If a client wants a quality assurance consultant to participate in a project on a limited basis, GFOA recommends that quality assurance activities occur during logical breakpoints, such as project preparedness, design, or functional requirements testing. Quality assurance should happen early enough to remedy problems before it is too late.
Project Team Partnership. Quality assurance consultants are not always popular with implementation consultants, or even the ERP customer, for that matter. For example, one project manager felt like GFOA consultants were second guessing their work. However, the project team needs to recognize that the quality assurance consultant’s duty is to identify risks and make recommendations that are in the best interests of the organization.
Role Expectations. One software firm maintains that providers of quality assurance services should have experience configuring their software. But the role of a quality assurance consultant is not to install or configure software. The quality assurance role is to monitor implementation activities and provide objective analysis for business decisions.
More and more ERP engagements are utilizing quality assurance consultants as an additional layer of security during the implementation of these complex systems. While quality assurance tasks vary, the most successful ERP engagements insert quality assurance consultants at critical points in the implementation. In some rare cases, governments have used quality assurance consultants to actually manage their ERP implementations. A quality assurance consultant can be a valuable ally during implementation. The key is to find one with industry-specific expertise who is objective and not afraid to challenge decisions. GFOA will continue to be active in this type of work and will disseminate its findings to the membership in Government Finance Review and other outlets.
COPYRIGHT 2004 Government Finance Officers Association
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