SOURCE: Pennsylvania Treasury

Pennsylvania Treasury

December 11, 2014 11:33 ET

Treasury's Extensive IT Transformation Program Nears Completion on Time, Under Budget

Treasurer McCord Says Upgrades Will Improve State's Efficiency Well Into the Future

HARRISBURG, PA--(Marketwired - December 11, 2014) - The Pennsylvania Treasury is putting finishing touches on a comprehensive multi-year transformation and modernization of its Information Technology (IT) system, a massive infrastructure and application upgrade that will ensure reliable financial service to citizens of the commonwealth for years to come. The program will end on time and millions of dollars below a budget that was already lower than those of comparable efforts.

"Treasury's computer modernization is a once-in-a-generation opportunity that will fundamentally change the commonwealth's financial operations for the better. It will create new efficiencies for Treasury, and it will allow all agencies of state government to serve the people of Pennsylvania faster and more dependably," state Treasurer Rob McCord said.

In addition to safeguarding the reliability of commonwealth financial operations, Treasury also estimates that within five years, efficiencies will produce more in cost benefits than the sum expended on the project. Treasury will be able to improve its pre-payment auditing capacity to catch erroneous payments, take better advantage of early payment discounts, better manage cash and investments to realize increased gains, and redeploy some employees previously engaged in manual data entry and data review to areas of greater need.

Treasury handles almost all payments for the commonwealth, processing about 30 million transactions per year worth around $75 billion. It is also the custodian of state funds, and invests state money. Its IT system interfaces with dozens of state departments and agencies that operate about 30 unique electronic financial data systems.

When McCord took office in January 2009, he recognized that Treasury was performing essential commonwealth financial operations using patch-worked mainframe technology from the 1970s. The obsolete system was highly vulnerable to failure, costly to repair, and jeopardized timely payments to schools, hospitals, workers, suppliers, seniors, and other citizens.

The new system went live in June of this year, meeting the schedule established at the beginning of the project. Treasury staff worked diligently to resolve a few minor problems that occurred in the first few weeks after the cutover. The Treasury team's preparedness in anticipating problems in a project of such magnitude and complexity helped to address those issues swiftly.

"Our team at Treasury did an outstanding job planning this program and executing it in the most cost-effective manner possible, while causing minimal disruption to state government functions," McCord said.

Outside vendors and consultants estimated the cost at about $42 million, but Treasury was able to develop and carry out the upgrade for much less. While several million dollars must still be spent over the next few months on corollary equipment purchases and final configurations, Treasury can confidently predict the program will be fully implemented at 15-20 percent below the budgeted amount.

One key to Treasury's money-saving approach was to separate the procurement process into two parts -- one for the software and one for the vendor -- rather than committing to the preferred software of the implementation contractor. A transparent and robust Request for Proposal (RFP) process led to the selection of Oracle's PeopleSoft Enterprise Resource Planning (ERP), Governance Risk and Compliance software as best for Treasury's needs. A second RFP led to the selection of CherryRoad Technologies as its implementation partner. CherryRoad topped technical scoring and was the lowest cost bidder.

Treasury was able to train its project team on the new software, and was also able to have infrastructure components such as servers, networks, and workspaces in place before bringing CherryRoad on site, allowing the vendor and Treasury's team to be productive together from day one.

"I believe Treasury's design and implementation of its computer modernization will serve as a model for how to undertake a project of this scale in the future," McCord said.

"The Pennsylvania Treasury is using Oracle GRC and Oracle's PeopleSoft in innovative ways to expand upon its existing fiscal review processes, which seek to identify and prevent error, waste, and fraud -- ultimately increasing the annual savings Treasury realizes for taxpayers," said Bryan Howe, regional vice president, Oracle Public Sector.

"CherryRoad is honored to have partnered with the Pennsylvania Treasury in developing and successfully executing a high-quality solution that allows for more efficient government operations and continues to drive modernization in their ERP program," said Jeremy Gulban, president, CherryRoad Technologies Inc. "We are confident this solution will allow Treasury to be more flexible and agile in order to respond to changes and opportunities as they emerge and drive measurable business value for years to come."

The tight state budget during the severe national economic downturn precluded funding for a huge computer overhaul during McCord's first several years in office in 2009 and 2010, but McCord was able to obtain necessary bipartisan support from the Legislature and the Corbett Administration by 2011. The transformation program contained many projects, including networking, infrastructure, data center, and the ERP project to replace the failing mainframe platform. ERP project planning began early in 2011, and implementation work commenced in spring of 2012.

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