21st Century Project - Business Case Benefits Study

The Business Case Benefits Study established baseline measurements and benchmarks for core human resource processes in support of the 21st Century Project. Activity-based costing was used to determine the existing cost of the processes studied. Keys to the study are cost savings and workload efficiencies anticipated under a commercial off-the-shelf (COTS), Human Resources Management System.

The Controller's Office engaged with KPMG LLP to conduct the study. The BCBS project team was comprised of 21st Century Project and KPMG staff, who worked with subject matter experts (SMEs) at selected departments to conduct the study. The study included the following processes:

Employee Self-Service
Time and Attendance
Position Management
Cost of Producing a Payment
Resolving Overpayments

department selection

The study represented a valid sampling of departments, and was representative of the state employee population. Due to cost, workload, and project timeframes, it was not possible to include all state departments in the study. A number of selection criteria were considered before selecting departments to include in the study:

Number of employees
Size of department (small, medium, and large)
Collective bargaining representation
Centralized versus decentralized human resources
Payment frequencies (semi-monthly, biweekly)
Diverse funding sources
California Leave Accounting System (CLAS) participation
Homegrown and non-Controller's Office systems
Headquarters/facilities
Remote locations and offices in other states

The following departments agreed to participate in the study:

Air Resources Board
Board of Equalization
Department of Aging
Department of Corrections
Department of Developmental Services
Department of Food and Agriculture
Department of General Services
Department of Mental Health
Department of Motor Vehicles
Department of Transportation

Baseline Measurements

Our project team worked with SMEs at each department to map the five core business processes. This was initially done with the Board of Equalization, in order to create a template that will be used for all participating departments.

Mapping sessions involved sequentially documenting all activities that comprised each core process. Touchpoints, activities performed, and detailed steps for each activity were defined. Activities unique to each department were considered and documented.

Once a process was mapped, SMEs examined the process model for accuracy. Once validated, KPMG LLP creatd a cost model for each process. Each department was asked to complete costing surveys to help determine the overall cost and number of staff hours and transactions processed. This data will be used to determine a cost for each department and to estimate the statewide cost of doing business today.

Benchmarking

Activities and costs documented through process mapping and activity-based costing were compared to industry best practices for each core business process studied. The statewide processes and costs for doing business today were compared to costs and efficiencies that could be realized using a COTS industry-standard Human Resources Management System..

Deliverables

The Business Case Benefits Study provided valuable information that was used to identify potential cost savings, workload efficiencies, and recommended business practice changes when implementing a new Human Resources Management System. Information from the study was used in the Special Project Report that was reviewed and approved by the Department of Finance in April 2006.

Deliverables included initial benchmarking and cost analysis reports for each business process studied. These included the cost of doing business today and projected efficiencies based on industry best practices.

After selecting SAP and BearingPoint as the System Integrator, the initial benchmarking and cost analysis reports were revised based on review of the system integrator's work and implementation plan. Projected costs and efficiencies for operating under SAP were documented.