Projects that are truly transformational drive radical step changes in an organization’s ability to drive business outcomes and results. They invariably require a holistic approach in strategy development that includes significant integration of organization, process and technology to be truly effective. If any one of these “big three” elements is relegated to an afterthought, these projects often fail – when all three are delivered in harmony, great things usually happen.

Enterprise Transformation Projects

TRANSFORMING

GOVERNMENT IT

A Top 10 State
IT Optimization

Opportunity

IT Optimization was this State’s IT initiative to change the way the State does business. Over the last five years this Large State has refocused IT dollars previously spent on infrastructure and IT operations, directing these funds to investment. Our client reinvested in applications and services that make our client the most attractive state in which to live and do business in the country.

 

At the start of their journey, more than 80 cents of every IT dollar was focused on infrastructure and IT operations – duplicative servers, storage, networks and datacenters and 19 cents of every dollar was focused on applications and services that support Agency missions to the public.

 

The State has increased the Federal participation in its IT programs for the 4th year in a row. More than 28% of investments have some form of Federal funding.

 

Stonyhurst was instrumental in has effectively moving the pendulum -  with nearly 50 cents of every dollar pointed at public facing investments. Over the course of the next few years the target is to move this to more than 80 cents of every dollar that will result in IT being an enabler of public good.

Our Role

Stonyhurst is proud to be the lead strategic advisor and change agent at the core of this nationally acclaimed initiative. Our work included development of the initial strategic direction, base lining and benchmarking of spend and savings, Enterprise-wide communications and evangelism as well as ongoing program optimization and multi-year planning/forecasting.

Results

More than $150M of savings to the State in the first 30 months of implementation of the program. Our client was one of only five states to be rated an "A" in the 2016 Digital States Survey which measures practices, policies and progress made by state governments in their use of digital technologies to better serve their citizens and streamline operations.

 

REINVENTING ERP IMPLEMENTATIONS IN THE PUBLIC SECTOR

A Top 20 State
 
Department of Transportation
 
Opportunity

This State was faced with an aging financial system that had not been updated in many years, and as a result was unable to keep up with regulatory, reporting and business requirements or take advantage of advances in technology over the past 10 years. In addition, our client had just entered into a highly complex infrastructure outsourcing relationship that had not been as yet stabilized to the point of being able to support the environmental and uptime requirements of a multi-million dollar ERP (PeopleSoft) implementation. The State needed a pragmatic implementation strategy that was designed to drive a successful systems implementation independent of the broader changes occurring related to infrastructure consolidation.

Our Role

Stonyhurst practitioners collaborated with the State to develop an innovative build-operate-transfer model with the selected system integrator of choice as part of a total replacement of it's legacy systems that supported the Agency - Finance, HR/Payroll, Timekeeping, Capital Planning and Project Management and other systems operational in the Department of Transportation.

Stonyhurst practitioners led the sourcing of the software selection and systems integrator and negotiated a highly complex design/build/run contract for both DOT (the initial implementation) as well as the State as a whole under a $70M+ initial development and $20M+ managed service.

Results

As part of this agreement, the Systems Integrator implemented the system in a State-located data center, and operated the system through its multi-phase deployment cycle. Upon go-live of the system, the State continues to operate and maintain the system under a unique managed services model.

Based on the success of this model, the initial implementation for the Department of Transportation has been extended to include the entire State as and Enterprise offering.

 

MEDICAID AS A CLOUD SERVICE

A Top 10 State

Medicaid Information Technology System

Opportunity

In June 2004, the Centers for Medicare and Medicaid Services (CMS) approved our State client's  plan for the new Medicaid system and selected our client as an early adopter state for their new Medicaid Information Technology System, or MITS. In 2005, the Department of Job and Family Services identified approximately 3,000 business requirements that were needed to support the business needs of  ever-evolving Medicaid program. This system went live in the fall of 2010 under conditions that could best be described as "turbulent". While meeting the needs of the State, the operational situation with the system and future roadmap considerations required a herculean effort on the part of the State and the Vendor to stabilize, operate and enhance the system in light of evolving parameters associated with administering Medicaid Statewide.

Our Role

Stonyhurst partnered with the State to perform a strategic assessment of the vendor's performance to date, the roles/responsibilities between the parties, joint delivery commitments and the operating and investment model for the system. Based on this assessment, several outcomes were implemented for the betterment of the system, the State and the vendor, and to providers and patients across the State. They included:

  • Restructuring of the relationship between the State and the Vendor;

  • Defining a multi-year, release based roadmap that was grounded in reality and available funding;

  • Implementing ITIL/CoBIT quality processes and technical tools to manage releases, code and environments; and

  • Replacement of the vendor delivery team, almost in its entirety to reset the relationship between the parties.

Results

Following the recalibration of the delivery profile and the relationships of the parties, Stonyhurst led a structured negotiation effort to codify the new operating arrangement and dramatically restructure the existing contract around capacity and success-based metrics, Service Level Agreements, and technology refresh provisions. The State now enjoys "Medicaid as a Cloud-based Service" as opposed to having to update, enhance, operate and maintain these highly complex and life critical  systems.

The total contract value is in excess of $220M, and since being executed has exceeded all expectations of quality, timeliness and performance and serves an example for all States in how to best operate and maintain Medicaid systems nationally.

 

MOVING MAINFRAME SYSTEMS TO THE CLOUD

MOVING PROCESSES INTO THE 21st CENTURY

Top 10 State: Department of

Commerce, Liquor Control Commission

Liquor Distribution System

and 3rd Party Logistics (3PL)

Opportunity

The State Department of Commerce developed and deployed a Microsoft Dynamics AX based application suite, to replace a four decades-old mainframe based liquor management system. The AX system is the technical support platform for operating the Division of Liquor Control. The division's infrastructure must couple with State liquor agencies and warehouses, and with liquor vendors and brokers in order to ensure that the general public has access to a wide variety of spirits throughout the state. The development of this suite was started in late 2013 and had been supported operationally by the state since its go-live in 2015.

​The expansion of the AX system deployment was in part necessitated by the recent exponential growth and dynamic product changes occurring in the spirits business—changes that were unforeseeable just a few short years ago. Since 2011 when the State began discussions to modernize the Division of Liquor Control's technical infrastructure, the number of brands and additional brand variations available in liquor agencies has grown from 2,179 to 2,899 with no real end in sight. That increase of more than 33 percent in four years is only one indication of the rapid changes in the spirits industry.

Our Role

Stonyhurst engaged the State to work with outside experts to assess the overall health, scalability and maintainability of the AX-based Liquor Distribution System and came to the conclusion that an optimization, re-hosting (to the cloud) and technical upgrade was warranted to support the explosive growth in the State's liquor business. Additionally, in concert with the expiration of statewide warehouses and the States desire to modernize operational processes across the entire supply-chain (supplier, distributor, warehouses, agencies and within Commerce), Stonyhurst developed an innovative contracting approach, led the overall implementation, as well as performed a central role connecting all stakeholders through an optimization and re-implementation of the system. Following this implementation, the State re-engaged Stonyhurst to develop a managed services strategy, execute a sourcing effort and oversee the transition of maintenance, operations, upgrades of the system as well as moving it to a public cloud infrastructure based on Dynamics365. 

 Results 

Successfully deployed system to more than 465 liquor agencies Statewide inclusive of replacement of all retail devices, implementation of web service based APIs, system and acceptance training, defect management and agency “hyper-care” support functions for the State’s $1.2B+ liquor enterprise. The project was delivered on time, on budget and on quality in conjunction with new operating processes and a 3PL provider to manage the distribution of spirituous liquors across the State.

The new system moved from more than 65% customized to less than 6% customized inclusive of replacement of retail terminal/point of sale devices, replacement of warehouse/logistics providers, inventory management devices and other “broken” facets of the legacy system not addressed in the last forty years. The system has been re-optimized and went live for all contract Liquor Agencies Statewide in early June 2017 on the most current version of AX, hosted as a cloud service and managed by a Microsoft Gold certified AX provider.

 

OPTIMIZING THE VALUE OF ERP FOR STATE GOVERNMENT

A Top 10 State

Statewide ERP (HR/Payroll, Finance, Procurement and Business Intelligence Platform

 

Opportunity

In 2008, this Top 10 State had just completed the replacement of mainframe-based State Financial, HR and Procurement systems with a modern, PeopleSoft-based system. The State determined that stabilizing the system and increasing the rigor in which it was operated, maintained and upgraded was paramount to ensure the operations of the State were on a rock-solid basis. Additionally, the State had a strategy to streamline operations through the centralization of financial, HR and procurement functions within a Shared Services Center.

Our Role

Stonyhurst practitioners were engaged (2008) to develop an innovative Public Sector Managed Service RFP that encompassed a structured statement of work, detailed roles and responsibilities between the State and vendor, inclusion of Application Operations (AO) and Infrastructure Operations (IO), service level agreements and a defined technology roadmap.

As part of the work, we were asked to develop a strategy and sourcing approach to implement the Shared Services Center for the State that involved a highly complex RFP that included technology, process, change management as well as agreements with the State's bargaining unit as it relates to job/role descriptions, training, throughput and quality measures.

In 2014, the State and Stonyhurst reevaluated the contract arising from the 2008 work and determined that it was prudent to re-compete the work at the conclusion of the initial contract and in light of then current State priorities and funding mandates. Stonyhurst developed a leading edge procurement strategy that directly aligned with the State's priorities and drove an intensely competitive procurement for the ongoing Managed Service as well as the Upgrade to the State's financial systems.

Results

On the initial 2007 work (contract value $75M+) , the State successfully went live on a Managed Service that:

  • Reduced operational labor rates and associated costs by more than 39% - equating to a savings of more than $25M over the duration of the contract;

  • Moved to a predictable operating model based on ITIL v3 and service level agreements;

  • Obtained robust infrastructure and application operations inclusive of critical security, backup and disaster recovery capabilities;

  • Eliminated all audit findings material or otherwise associated with the operation of the system;

  • Performed a comprehensive technology refresh as part of the contract; and

  • Successfully implemented the Shared Services Center - driving efficiencies across those Agencies who leverage it.

Subsequently, on the 2014 re-compete the State:

  • Was able to upgrade the Financial elements of the ERP for less than 60% of the budgeted/quoted cost; and

  • Realized an additional $40M of savings over the then current incumbent provider over the contracted term.

.

 

PUTTING THE "ENTERPRISE" IN ERP, DRIVING ENTERPRISE VALUE

Top 10 State

Enterprise ERP Extension to Include the Department of Transportation and Advanced Functionality

Opportunity

This State looked to Stonyhurst to support a bold initiative many years in the strategy formulation and planning phase which is designed to retire more than two dozen systems (many mainframe-based and including the oldest application in the State) associated with capital planning, project management and overall financial and HR management of one of the largest departments of transportation in the country.

 

Our Role

Stonyhurst engaged with DOT and State ERP experts to design an innovative RFP designed to migrate legacy DOT systems and processes to the OAKS asset in a series of distinct phases with defined outcomes in an ambitious program to deliver the following scope areas:

  • Financial Management

  • Human Capital Management

  • Procure to Pay

  • Capital Program Delivery

  • Facilities Management

  • Business Intelligence (BI) and Management Reporting

  • Systems and Process Interfaces and Data Conversions

  • Organizational Change Management

This procurement contained a Statement of Work approaching 1,000 pages with more than 4,500 functional requirements across more than a dozen business areas within the DOT. Stonyhurst led a multi-agency evaluation team (40 evaluators and SMEs) and multiple rounds of clarification with offerors to drive the most appropriate implementation partner decision for the State. In addition, Stonyhurst led parallel negotiations (to conclusion) with the two highest ranking offerors to drive parity and fairness among the offerors.

Results

The DOT has launched a two release project - release 1: essentially core financials/HR, and release 2: targeting legacy

DOT systems and processes and "Transportation Unique" requirements. In addition, key Procure-to-Pay, Talent Management and HR  processes and technology will serve as a strong foundation for work anticipated in 2017 with regard to a next generation procurement solution for the State that all agencies can utilize as an Enterprise asset. Total project value is in excess of $32M.

 

© 2019 Stonyhurst Consulting LLC.   

Middleburg, Virginia 20117              

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