The promise of enterprise system (ES) software is compelling—to enable an organization to integrate the data used throughout its entire organization. A central database is at the heart of an ES, drawing data from and feeding data into applications supporting the diverse functions of the organization. With a single database, the flow of information throughout the organization should be dramatically improved compared to fragmented legacy systems. But implementing an ES also allows, even forces, an organization to streamline its management structures. For some organizations, this means imposing more structure than existed before implementing an enterprise system; while for some organizations, the result is to break down existing hierarchical structures, freeing employees to be more flexible (Davenport, 1998).
The state encountered both successes and failures with early attempts at integrated systems. By the end of the 1980s, the state owned many disparate legacy systems located in various departments, each having little budget for support, maintenance, training, or documentation. Compounding the problem was the state's budgeting process and legislature's role in allocating funds. As Whit Kling, deputy undersecretary at the Division of Administration, explained, "We decided we should move forward on integrated financial planning systems in 1990. At the time, the steering committee determined that replacing the Human Resource systems should be our first objective, but legislature was not able to allocate the funds required to make this happen. We went back to the board in an attempt to promote a more comprehensive approach and we returned with a proposal for a comprehensive financial package (including, for example, general ledger, account payables and receivables, purchasing, and contracts). This was approved by state legislatures, but at funding levels lower than originally proposed."
In 1991, the state began the formal process to replace its existing legacy systems. As a result of their planning process, the state embarked on the journey to develop and implement the Integrated Statewide Information Systems (ISIS). ISIS represents a comprehensive financial information system that meets the common accounting, management and information needs of all departments and branches of state government, including the central fiscal control agencies. Deputy Undersecretary Kling added, "As was envisioned in the 1970s, ISIS will substantially expand the amount, timeliness and credibility of financial information available to all end users."
The Integrated Statewide Information System (ISIS) is composed of multifunctional applications; it is the umbrella under which the applications are maintained. The ISIS umbrella consists of an advanced government purchasing system, advantage financial system, contract financial management system, budget development system, travel management system, and human resources and payroll processing systems.
The state elected to implement ISIS in seven phases, each phase representing a logical grouping of work to be accomplished. As of the writing of this case study, the first three phases have been completed and completion of Phase IV, Human Resources and Payroll, is near.
Phase I: AGPS (purchasing) and CFMS (contract management) interacting with the state's existing system (FACS)
Phase II: GFS implementation including Consumable Inventory Management, AGPS and CFMS converted to interact with GFS
Phase III: Budget Development (BDS), Executive Information System (EIS), Decision Support System (DSS), and Financial History
Phase IV: Human Resources and Payroll
Phase V: Advanced Receivables Management
Phase VI: Debt Management and Investment Management
Phase VII: Moveable Property Inventory
Surviving the first three phases required tremendous change in the organization. Previously, for instance, there was no interface between purchasing, contracts, payroll and the financial system. With ISIS, people from different parts of the organization were forced to talk to each other and to understand each other's business. In general, this was not a very popular concept.
The state of Louisiana purchased the SAP R/3 System Human Resources suite of modules including Employee Self-Service and the Accounts Payable module for payroll payables. The ISIS HR System was targeted to replace four central legacy systems: personnel (CS02), position-control (AM45), time entry (UPS) and the payroll (UPPY). The benefits anticipated from the new system included:
Standardization of Best Business Processes and Data Integration
Improve Data Access
Improve Real-Time Data and Business Analysis
As stated in the ISIS HR Project Vision, "Louisiana has chosen to implement a cutting-edge human resources system that would improve the way government agencies and departments do business. This technology will allow State Government to transform its current payroll, personnel and position management systems into a single, integrated system that will propel the employee administration process into the future" (http://www.state.la.us/osis/hr/index.htm).
The state elected to split ISIS HR (Phase IV) into two major parts. Part 1 included HR organizational management and personnel administration. Part 2 included HR time management, payroll payables, compensation management, benefits management, and employee self-service.