F–7 STANDING COMMITTEES Finance and Asset Management Committee
F–7/202-19 2/14/19
Finance Transformation Update and Introduction of New Leadership: Assistant Vice President for Finance Transformation INFORMATION This item is for information only. Brian McCartan, Vice President, Finance, will introduce the new Assistant Vice President for Finance Transformation and offer a project update of the UW Finance Transformation (UWFT) program, currently in its Readiness Phase. UWFT’s multi-year mission is to transform the University’s aging legacy financial systems, policies and processes and to deliver a modern, cloud-based system (Workday) that will improve how the UW tracks, spends, collects, manages and reports financial information. This transformation is a necessary step in ensuring strong financial management and responsible stewardship of the University’s finances. BACKGROUND The University of Washington’s current financial systems are based on a forty-five-year-old COBOL based mainframe system. The lack of capacity of this system has resulted in the development of over 800 side financial systems through campus including UWM. The resulting University financial environment was characterized as “the most fragmented and decentralized” ever analyzed by the Gartner Group. A benchmark study, conducted with the Hackett Group, confirmed Gartner’s assessment and identified resulting cost inefficiencies as a result of this fragmented financial system.
In the summer of 2017, the University of Washington engaged Deloitte Consulting to partner in a six-month Enterprise Resource Planning (ERP) sourcing strategy to identify the scope, software, estimated program timeline, costs and schedule for a transition to a modern financial system. This work provided the University with a roadmap for this transformation, and the confidence to move forward with Workday Financials as the software. (This included a fit-gap analysis that concluded that Workday has a 97-percent fit with UW Academy requirements and 94-percent fit with UW Medicine high-level requirements.)
The UWFT program is currently in the Readiness Phase of the Financial Transformation Project – an eighteen-month period of time that relies on broad stakeholder input to inform and more specifically define the scope, schedule, budget and funding plan for this transformation. As the project approaches design
STANDING COMMITTEES Finance and Asset Management Committee Finance Transformation Update and Introduction of New Leadership: Assistant Vice President for Finance Transformation (continued p. 2)
F–7/202-19 2/14/19
and implementation, the program will present the Board of Regents with a detailed scope, schedule and budget for the full implementation.
The challenges experienced with the 2017 completion of the HR/Payroll Modernization (HRPM) program and the stabilization of the newly formed Integrated Service Center (ISC) remain fresh in the minds of the majority of UWFT Stakeholders. The UWFT program team is incorporating these lessons learned to help inform the structure of the program and ensure it operates differently from what the UW and other institutions have experienced with large-scale implementations. Top among these lessons learned were to:
• Focus on business transformation, not simply technology; • Engage the right people at the right time; • Focus on end-to-end processes; • Value voice, collaboration and the courage to course-correct; • Maintain UW commitment and momentum when turnover occurs; • Focus on reporting early; and • Focus on the operating model early.
The program is actively engaging with stakeholders across the institution throughout this multi-year effort and adhering to the Readiness Timeline and budget. Attachments
1. Building Towards Financial Transformation 2. Biographical Sketch: Edward J. (Ed) Lofthus
BUILDING TOWARDS FINANCIAL TRANSFORMATIONSince the Roadmap for Administrative Systems Modernization in 2008, UW has been on a path towards Financial Transformation, which each stepping stone building on the last
Roadmap for Administrative
System Modernization
Finance Systems Needs Assessment
Finance Systems Strategy and
Readiness
Finance Transformation
Readiness
Finance Transformation
Implementation & “Go Live”
2008
2010-2013
Present
2014-2017
ARIBA Extension
HRP Modernization
Initial Hackett Benchmarking (Procurement)
Visioning Workshop
ERP Sourcing Strategy – Maturity Model Workshops
Gartner Assessment
HCM Workday Go-Live
Workday Selected for Finance
Deloitte TCO
Benchmarking and Data Gathering
Operating Model Design
Foundation Data Model and Prototyping
IT System design
System Configuration
Data Conversion
Integration and Reports Development
Business Processes and Roles
Operating Model deployed
Unit Readiness confirmed
IT support model
Training & Testing
ATTACHMENT 1F-7.1/202-19 2/14/19 Page 1 of 6
THREE KEY STAGES FOR UWFT PROGRAM
ReadinessDesign/
Implementation
Stabilization/
Operation
We are here
F-7.1/202-19 2/14/19 Page 2 of 6
ScheduleGiven other initiatives –
what is optimal schedule?
What is the trade off between big bang and
phasing?
Budget/FundingWhat are the final costs? How do we allocate these? How can we reduce
annual operating costs to pay for the program?
Scope
How to organize UW financial work to maximize efficiency and drive down annual cost?How to integrate Workdayinto UW technology Environment?
2017 Conceptual Estimate
Schedule3 year “Big
Bang”
$200M, Funding
TBD
ScopePhase 1:
Financials, Procurement
Phase 2: Budget/ Planning
Baseline Project
Schedule Set
Cost Set Funding Set
Scope Set
FT Governance Structure
University wide engagement
CURRENT WORK FOCUSED ON VALIDATING/STRENGTHENING PRIOR PLANNING
3
F-7.1/202-19 2/14/19 Page 3 of 6
PROGRAM TARGETING HIGH DEGREE OF TRANSFORMATION
Incre
asi
ng
Va
lue
to
Org
an
iza
tio
n
Risk Mitigation
Technology Enabled
Improvements
Business Transformation
ERP System Replacement
Automation and Complete
Consolidation of Services
Low degree on transformation
Increasing Focus on Transformation and Innovation
Medium degree of transformation
Medium – High degree of transformation
High degree of transformation
Digital Technology Enabler
ERP & All Process
Redesign
ERP & Select Process Redesign1
2
3
4
F-7.1/202-19 2/14/19 Page 4 of 6
> Benchmarking study and data gathering activities completed
> Senior leadership alignment
> Robust project governance structure up and running
> Core program team in place
> Building project management structure
> Determined initial direction on operating model (how finance work will be organized)
> Launched working groups on new data structure, business process design and IT systems environment
> Strong UW stakeholder engagement
> Monthly program newsletter distributed to over 3,000 stakeholders
PROGRESS TO DATE
F-7.1/202-19 2/14/19 Page 5 of 6
Project Organization Detailed benchmark of
current state Business Processes Operating Model Data structure (FDM) Readiness phase trending
under budget
UWFT PROGRAM STATUS
OVERALL PROGRAM STATUS: YELLOW
Complex current IT environment
Staff hiring
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BIOGRAPHICAL SKETCH
Edward J. (Ed) Loftus is the new Assistant Vice President for UW Finance Transformation,
effective Monday, January 7, 2019. Loftus was formerly Executive Director of Business
Planning, Systems and Budgets at Bucknell University, where he was responsible for leading an
organization of approximately 300 FTEs in planning, budgeting, auxiliary operations and
administrative systems. In this role, Loftus led Bucknell University through a successful and
fully integrated, single deployment implementation of Workday for HR/benefits/payroll and
finance. This implementation replaced a twenty-year-old system and involved extensive change
management, hundreds of integrations and a well-resourced stabilization effort. In addition to the
Workday launch, this position also acted as an internal consultant and advisor regarding
implementation of the University’s strategic plan and its various corollary efforts, and involved
working closely with both academic and administrative leaders across campus in designing and
leading cross-functional organizational initiatives. Throughout his eleven-year tenure at
Bucknell, Loftus leveraged his expertise in finance and budgeting, including leading the creation
and implementation of an integrated model for campus healthcare, developing and reporting to
the Board and University governance committees on multiple financial models in support of the
University’s strategic aspirations, and playing a key role in defining and designing long-range
budget planning for the University.
ATTACHMENT 2F-7.2/202-19 2/14/19
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