Department of Finance & Administration
Dave Goetz, Commissioner

History of ERP in Tennessee

ERP systems began in the private sector and were designed for companies that wanted to integrate their manufacturing processes with other business activities such as inventory, distribution and accounting. The number of ERP implementations in the private sector grew steadily throughout the 1990s. In the mid-to-late 1990s, ERP vendors began to focus on the public sector by adding features such as fund accounting capabilities. Organizations at every level of government have adopted ERP systems – from the United States Department of Defense to the City of Los Angeles. Numerous states have also made the switch to ERP, including Michigan, Florida, Pennsylvania, Kansas, Connecticut, Oklahoma, Illinois, Indiana, Massachusetts, and New Mexico.

Simple popularity, of course, doesn’t mean that the benefits of a new technology will outweigh its costs. Everyone in state government has experienced plenty of innovations that seemed like a great idea, but just didn’t live up to expectations. In order to make the best decision for the future of State workers and citizens alike, several agencies including Finance and Administration, Personnel and General Services, formed a working group in April 2002 to discuss various options for replacing the State’s core administrative systems. This group identified ERP as a possible solution for replacing these aging “legacy” systems. The group then began an intensive study of the benefits and risks of making the switch to an ERP system, bringing in Salvaggio, Teal & Associates, an unbiased, independent consulting firm which specializes in helping governments to evaluate, acquire and implement ERP systems.

The results of the ERP Automation Assessment Study, which was completed in 2003, were eye-opening. The data suggested that moving to the new system could result in decreased operating costs due to improvements in business processes made possible by ERP and the reduction of costs associated with the old systems. In Accounts Payable, for example, the study estimated that a reduction in the amount of time spent processing non-TOPS invoices could result in a savings of up to $20 per invoice. Similarly, administrative services departments could see a savings of up to $30 per purchase order just from time saved processing manually-generated purchase orders.

Based on its findings and with strong support from the executive branch, the group decided that an ERP system would help address the challenges that the State faces in the coming years. A full-time project team completely dedicated to the implementation was formed to analyze State business processes, to identify the functional and technical business requirements, and to develop a request for proposal for an ERP solution. The MAXIMUS company, which specializes in public sector ERP implementations, was selected as the prime contractor for ERP software and related implementation, support, licensure and maintenance services for the Edison Project.

It is important to remember, however, that Project Edison is much more than an IT project. The goal is to fundamentally change the way that the State of Tennessee does business by adopting the best practices that the new technology makes possible. To this end, the project team has consulted a group of some of the State’s most experienced administrative staff. These Subject Matter Experts (SMEs) have helped to ensure that Edison meets the State’s current and future business needs. The ERP implementation is one of the largest, most complex and most far-reaching efforts that the State of Tennessee has ever undertaken. The future success of the project depends on the continued input and support of SMEs, liaisons and agency and departmental leaders.

To review the State of Tennessee's Enterprise Resource Planning RFP click HERE