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Slide 1: Welcome Robin Cody Chief Information Officer San Francisco Bay Area Rapid Transit District (BART) Session Title: Realizing Successful Transformation Within Politically Charged Environments: A Case Study
Slide 2: Topics / Overview Old Culture New Technology Business Process ati ransform sT Busines on $40 Million 5 Year Payback am t Progr en vancem Ad usiness Financial B Obstacles Business Case Cultural Change Change Example Key Strategies Scorecard April 21-23, 2008 Renaissance Washington, DC 2
Slide 3: Service Map April 21-23, 2008 Renaissance Washington, DC 3
Slide 4: BART’s Evolution TRACK FACTS $577 Million Operating Sources $191 Million Capital Budget 66.5% Of The Operating Budget Is Labor ($323.5M) Electric Bill = $40M / Year 60% Of Operating Expenses Comes From Farebox 3,265 Employees (90% unionized) 105 Miles Of Tracks / 43 Station 389,073 Average Daily Passenger Trips 46,392 Station Parking Spaces 1,398 Bicycle Lockers Train Maximum Speed = 80 MPH Maximum Train Length = 10 Cars 211 Police Officers BART’S SUCCESS Established In 1957 By The California State Legislature 9-member Elected Board Of Directors First Fully Automated Rapid Transit System In The World Revenue Service Began In 1972 The 8th Wonder Of The World (Trans Bay Tube) Top 10 Public Works Projects In The 20th Century 2004 Voted # 1 Transit System In North America $1.6 Billion Original Investment Equals $15 Billion In Today’s Dollars BART’S IMPACT 4 Bay Area County Span 26 Cities Served BART Carries 50% Of Peak Period, Peak Direction Transbay Traffic Without BART, Another 75,000 Cars Would Be Added To A.M. Peak Direction Bridge Traffic One-Third Of People Traveling Between Central Contra Costa And Oakland Use BART! 50% Of Downtown Oakland Workers Use BART 70% Of East Bay Travelers Are Destined For San Francisco And San Mateo Counties 1940’s, 1950’s, 1960’s, 1970’s, 1980’s, 1990’s, & 2000’s April 21-23, 2008 Renaissance Washington, DC 4
Slide 5: Regional Rail Sacramento Davis To Eureka Santa Rosa and Napa Suisun/ Fairfield Roseville To Carson City Richmond Berkeley Emeryville Colma Oakland San Francisco Airport Airport Extension Extension Millbrae Martinez BART Jack London Square Pittsbur g/ Bay Point San Joaqu in Route To Stockton, Bakersfield Dublin/ Pleasanton Fremont/ Fremont Centerville Warm Springs Extension Santa Clara/ Great America To Gilroy, Santa San Jose Cruz, Salinas and Monterey April 21-23, 2008 Renaissance Washington, DC 5
Slide 6: BAP Objectives “It’s Hard To Envision The Future When You Haven’t Caught Up To The Past!” Change How We Do Business Implement Operational Standards & Procedures Eliminate Legacy Hardware & Software Enhance Staff Skills And Prepare For Change Achieve Our Commitments To Our General Manager April 21-23, 2008 Renaissance Washington, DC 6
Slide 7: Facing Our Obstacles Business Drivers Old Environment Inefficient With Lessons Learned From Other’s Manage Transit District Expand The District Market & Sell Services Manage Customer Service Operate Trains And Stations Maintain Fleet And Facilities Manage Funding And Finance Manage Human Resources Manage Procurement And Inventory Manage Information Technology Low Productivity! Old Manual Processes Outdated Applications Lack Of Information New Obstacles Business Case (ROI) True Costs & Benefits Determining True Needs Championed From Top Adequate Resources Proven Technology Finding COT Solutions Procurement Processes CBA’s & Leadership Negotiating H/S/M Lack Expert Personnel Turfism-Silos Old Culture’s Couldn’t Support Drivers High Cost Of Support System Integration System Expansion Remote Computing eBusiness April 21-23, 2008 Renaissance Washington, DC 7
Slide 8: Phased Transformation Phase I 2001 - 2002 Prepare Phase II 2003 Select / Validate om c p ed t le Focus p om c ed t le Redesign Phase III 2004 - 2009 Business Transformation Design Configure Deploy BUSINESS ANALYSIS       SOFTWARE SELECTION  SYSTEMS INTEGRATION           Current State Assessment Analysis of BAP Options Investment and Funding Options Tactical Planning Software Select Planning 300 Employees – Readiness Survey     PeopleSoft – Timekeeping / Payroll, Human Resources, General Ledger and Financials MRO – Maintenance & Inventory Management Optram – Linear Asset Tracking 200 Employees – 2600 Requirements Definitions 80 Employees Assisted Source Selection Committee by participating in Software Demonstrations Change Management Business Process Reengineering Software Configuration And Implementation Data Migration System Testing Technical Staff Training Post Production Support 10 Employees Helped Develop Problem Statement 30 Employees Assisted Source Selection Committee Union Leadership Assisted Source Selection Committee April 21-23, 2008 Renaissance Washington, DC 8
Slide 9: Success Rate ERP / EAM Implementations Why Implementations Fail: 42% Leadership 27% Organizational & Cultural Issues 23% People Issues 84% 16% Fail Finish 4% Technology Issues Other 4% Source: Organization Dynamics, Jim Markowsky *Standish Group Survey - 1999 April 21-23, 2008 Renaissance Washington, DC 9
Slide 10: Championed From The Top Aligned Leadership & Collective Action Are Required Enterprise High INCREASED RISK OF FAILURE Organizational Degree of Change Across Verticals Across Departments Department Level Unit Level Low Low “Sponsorship” & Good Management May Be Sufficient Risk of Failure High April 21-23, 2008 Renaissance Washington, DC 10
Slide 11: Industry Assessment Transit & Industry Administrative Best Practices Of “High Performance Organizations” Limited Importance Impacts Can Be Delayed. 4 Criteria Marketing/ Graphics Document Control/Records Management Project Management & Collaboration Centralized Access Network Standards Etc. Integrated Timekeeping, Payroll And HR Mgmt. Integrated Maintenance, Materials, Inventory & Procurement Mgmt. Integrated Financial Mgmt. Etc. Moderate Importance Can Be Deferred For A Brief Period. 20 Criteria Extreme Importance Fundamental To Day To Day Administrative Operations. 25 Criteria Reflects Those Functional Activities The Administrative Operations Must Do Well As Core Competencies April 21-23, 2008 Renaissance Washington, DC 11
Slide 12: BART’s Assessment BART Current State Business Process And Applications Functionally Deficient, But Meets Most Current Business Needs 8% Does Not Address Current Business Practices 4% Integrated Timekeeping, Payroll And Human Resources Mgmt. Integrated Maintenance, Materials, Inventory And Procurement Mgmt. Integrated Financial Mgmt. Functionally Deficient, Meets Limited Business Needs 88% Most Of The Fundamental Day-to-day Business Processes And Corresponding Applications Do Not Meet Business Needs And Growth Expectations April 21-23, 2008 Renaissance Washington, DC 12
Slide 13: Consolidated Cost Statement Start Up INVESTMENT COSTS (out of 2003 2004 pocket) Hardware $2,000,000 $0 Software $2,750,000 $0 Implementation Costs Includes Functional Implementation, Technical Services, Change Management And Project Management $7,186,000 $10,118,500 Training TOTAL $524,625 $1,704,625 $12,460,625$11,823,125 Steady State 2005 $0 $0 2006 $0 $0 2007 $0 $0 2008 $0 $0 2009 $0 $0 Total $2,000,000 $2,750,000 $608,000 $264,813 $872,813 $0 $0 $0 $0 $0 $0 $0 $0 $17,912,500 $2,494,063 $25,156,563 TOTAL COST OF OWNERSHIP One Time: Hardware $2,000,000 $0 Software $2,750,000 $0 Implementation Services $7,186,000 $10,118,500 Training $524,625 $1,704,625 Internal Staffing (SOFT COSTS) $0 $0 $608,000 $264,813 $479,304 $100,000 $495,000 $0 $0 $0 $0 $0 $100,000 $495,000 $595,000 $0 $0 $0 $0 $0 $100,000 $495,000 $595,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $2,000,000 $2,750,000 $17,912,500 $2,494,063 $3,385,041 $600,000 $2,970,000 $32,111,604 $1,276,458 $1,629,279 $100,000 $0 $495,000 Recurring: Hardware Maintenance Software Maintenance Total $100,000 $100,000 $495,000 $495,000 $595,000 $595,000 $13,737,083 $14,047,404 $1,947,117 April 21-23, 2008 Renaissance Washington, DC 13
Slide 14: Consolidated Benefits Statement Start-up FY2003 FY2004 $ $ $ $ Steady-State FY2007 150,280 $ Integrated HR/Payroll/Timekeeping Employee Self Service Improvement In Timekeeping & Payroll Payroll Run Processing Improvement In Check Adjustment Process & Accuracy Of Pay-Checks Integrated Financial Management Invoice Processing Report Writing Budget Analysis Savings In Cabinet Sq. Footage Integrated Maintenance Mgt Average Labor & Maintenance Cost Per Car Hour Integrated Procurement & Inventory Mgt Contract Processing Capital Allocation TOTAL BENEFIT CUMULATIVE TOTAL BENEFIT FY2005 150,280 $ 1,283,531 $ FY2006 FY2008 150,280 $ FY2009 150,280 2,567,061 150,280 $ 1,283,531 $ 2,567,061 $ 2,567,061 $ $ - $ - $ 177,837 $ 177,837 $ 355,674 $ 355,674 $ 355,674 $ $ $ $ - $ $ $ $ - $ $ $ $ 234,123 $ 125,627 $ 133,455 $ 57,951 $ 326,967 $ 276,380 $ 350,320 $ 91,454 $ 458,129 $ 304,018 $ 514,971 $ 128,392 $ 630,312 $ 501,631 $ 772,456 $ 169,115 $ 646,070 551,794 811,079 214,012 $ - $ - $ - $ 1,402,656 $ 2,875,445 $ 2,947,331 $ 3,021,015 $ $ $ $ - $ $ $ $ - $ $ $ $ 257,449 2,424,000 4,844,254 4,844,254 $ 589,043 $ 2,515,000 $ 7,163,469 $ 12,007,723 $ 1,347,731 $ 3,083,609 $ 2,590,000 $ 2,670,000 $ 11,291,701 13,847,470 $ 23,299,424 $ 37,146,894 $ 3,527,648 $ 2,803,000 $ 14,647,633 $ 51,794,527 April 21-23, 2008 Renaissance Washington, DC 14
Slide 15: BAP Program Scope Phase I Phase II Base Agreement GL, Payroll, Timekeeping, Enterprise Portal Option A Option B Maintenance & Materials Management Option C Human Resources Financials Financial Management General Ledger Enterprise Portal Payroll/Time & Labor Time and Labor Payroll Human Resources Base Benefits Benefit Administration eProfile / ePay Resume Processing eRecruit / eBenefits e-Development Pension Admin. April 21-23, 2008 Renaissance Washington, DC 15
Slide 16: The “Danger” Zone Cost Program Management – Scope, Schedule, Budget & Quality Phase 1 Planning Project Kickoff Goals & Objectives Management Plans Team Structure Orientation Training Plans Project Plan Phase 2 Design BPR “Reality” Fit/Gap Analysis Integration Interface Analysis Functional & Technical Specifications Prototype Development Change Assessment Phase 3 Development Phase 4 Testing Final Configuration Production Setup Data Conversion Testing Phase 5 Deployment Phase 6 PP Support Configuration Customization Interfaces Security Reports Life-Cycle Development Unit Testing Costs End User Training Migrate Production Data Go-Live “Perceived” System Procedures System Performance Production Support DANGER ZONE “Influ e User Acceptance nce” PP Support Procedures WAKE-UP ZONE PP Procedures Acceptance Signoff Training Go-Live Readiness Infrastructure Plans Change & Communications Management April 21-23, 2008 Renaissance Washington, DC 16
Slide 17: Program Organization GM / BAP Program Executive Dorothy Dugger Executive Managers Program Director Beth Tripp Business Process Reengineering and Customization Subcommittee Deputy Program Director Robin Cody Executives BPRC Subcommittee JV / BART Teams Program Management Team (PMT) Program Manager – Sreeni Malireddy System Integrator Legend MAXIMUS Project Manager Pat Brown Nazgol Khamneipur / Bill Carrick / Scot t Wates Jane Wong / Michael Kilpatrick / Ed Dutkowski Amit Kedia Ravi Misra Kevin Scott Randy Franklin Maximus      BART      Maximus BART Maximus       BART Business Analysis BPR & To-Be Design Functional Specifications Testing & User Acceptance Training & Change Management Support Functional Teams Customizations Interfaces / Integration Conversions Infrastructure Design & Development (desktops, applications, OS’, networks, security, etc.) Technical Cut-Over Communications Change Management Organizational Impact Training Design & Development Training Rollout Labor Relations Strategies Technology & Testing Organizational Readiness April 21-23, 2008 Renaissance Washington, DC 17
Slide 18: Organizational Readiness Who Should Be Trained? What’s The Content?  What  How  What Will Effectiveness Be Measured? Are The Delivery Methods?  What Are The Key Messages? Should They Be Training Communicated?  What Are The Appropriate Channels Of Communication? Communication Management  When Business Process Reengineer’g Processes Will Change?  How Will They Change?  Who’s Impacted?  How Will The Transition Be Accomplished? Strategic Questions  Who’s Elements Of Change Change Management Stakeholder Management Workforce Planning  How Results Impacted By The Technology?  What’s Driving The Change?  What’s The Extent Of The Change?  How Do We Change Behaviors? Will The Positions Change (Number, Type & Description)?  What Capabilities Are Required?  How Will The Workforce Be Re-Tasked?  Who Are The Stakeholders?  How Do We Communicate With Them?  How  When Will The Relationships Be Managed? Should They Be Engaged? April 21-23, 2008 Renaissance Washington, DC 18
Slide 19: BPR & CM Framework Contract Requirements 3 Performance Metrics 3-2 Enterprise Perf. Metrics (EPM) 1 As Is’ Update Requirements 3-1 ROI Analysis 6 Wha t Change Impact Assessment 7 How Org Impact Assessment Labor Relations Strategy 2 BPR Update Requirements 5 To Be’s Update Requirements 8 Update Job Descriptions 7-1 2-1 4-1 8-1 Develop Desk Procedures 4 Fit / Gap Gap BPRC Fit Approved Declined 9 Training Material Development April 21-23, 2008 Renaissance Washington, DC 19
Slide 20: Cultural Change Change Management Qualitative Not Subjective Organizational Readiness Platform For Collaboration Training The “Cultures” Values Describes Metrics People People And Process Unleash ROI! Technology And People Improve Effectiveness! Policies Process Programs Technology Structure Politics Process And Technology Enable Capabilities! Business The “What” and “Why” Strategic Process Re-engineering Explains Plans Leverage Industry Best Practices Management Procedures Not A “Spectator” Sport Leverage Software Best Practices Operating Rules Allow For Grieving Strong Technical Architecture Improves Process / Consistency Understanding Your Board Integrated Accountability Promotes Solution Leadership Understanding Your Open Source Standards Eliminates Duplication Understanding Your Labor April 21-23, 2008 Renaissance Washington, DC 20
Slide 21: The Sides Of Resistance Beneficial Practice Mutual Consent Clause Identify Your Biggest Impacts Include Unions In Decision Making Union Leadership Make Everything Transparent Keep Bargaining Units Separate Establish Your End-Game Involve Labor Relations Early & Fully Spend Your Energy On Solutions Decide To Change / Commit Try To Eliminate Uncertainty Know When And What To Communicate Negotiate Don’t Let The Unions Divide Your Board Inform Your Board Often And Fully Don’t Pick The Wrong Battles Don’t Try To Control The Uncontrollable Management Don’t Play New Game By Old Rules Embrace The Future / Promote The Vision! Understand The Rationale For Change Expect Stress To Rise Beware Of Bureaucracy Don’t Choose Your Own Pace Of Change Don’t Expect Someone Else To Reduce Your Stress April 21-23, 2008 Renaissance Washington, DC 21
Slide 22: Example: Automating Time & Labor Rules 5 Collective Bargaining Agreements 100’s Of Special Pay Rules Paper Time Sheets No Management Responsibility / Visibility Clerical Data Entry No Controls April 21-23, 2008 Renaissance Washington, DC 22
Slide 23: Automating Time & Labor Rules Management Makes Big Ass Problems (BAP) for All Several of the proposals that BART Management wants to implement through BAP, will result in greater inefficiencies. In response, we have proposed several common sense solutions to BART Management regarding such issues as pay stubs, job duties, time clocks, etc. Each time we present a possible solution to these issues, BART Management systematically ignores or minimizes our concerns. These continuous refusals by BART Management to find common sense solutions will force us to take whatever actions are necessary to resolve our concerns. We, the undersigned SEIU 790 BART Chapter workers, demand that BART Management agree to the following: 1. No transfer of duties to inappropriate classifications 2. Maintain paper paycheck stubs for all employees 3. Do not expand use of time clock April 21-23, 2008 Renaissance Washington, DC 23
Slide 24: Original T&L / Payroll Process Steps Employee Punches Manual Time Clock If Manual Check Created, Start The Process Over Again Payroll Adjusts Checks (800 / month) Supervisor Verifies Card For Correctness Tries To Resolve With Employee (Vacation, Sick Holiday, OT, etc.) If Over – Keeps; Under Requests Adjustment And Manual Check 98% Underpaid Employee Reviews Check For Accuracy Timekeeper Adds Time Reporting Codes Prepares Total Hours By Earning Code And Writes On Back Of Card Direct Deposits Sent, Checks Printed And Distributed Payroll Is Run, Direct Deposits / Checks Supervisor Verifies Time Card Approves Or Returns To Timekeeper For Correction Cards Couriered To / From IT For Payroll Processing Data Entry Service Creates Tapes For Input Timekeeper Signs-Off On Timecard RLDS Charges Entered Manually. Cards Batched, Headers Created Payroll Reviews And Batches For Data Entry April 21-23, 2008 Renaissance Washington, DC 24
Slide 25: New T&L / Payroll Process Steps Employee Swipes Time Clock Payroll Adjusts Checks (100 / month) Employee Reviews Check For Accuracy Direct Deposits Sent, Checks Printed And Distributed Payroll Is Run, Direct Deposits / Checks Supervisor Approves Payable Hours Time Administration Is Processed System Check Exceptions; Wage / Time Types, Rates Shift Differentials, etc April 21-23, 2008 Renaissance Washington, DC 25
Slide 26: Checklist Of New Process Results  Better Accountability Of Absences And Reported Time  Better Data Going In / Out Of System  Integrated Time & Labor And Payroll System  Less Time Errors And Less Time Abuse  90% Less Payroll Errors And Adjustments  26 Payrolls Instead Of 54    Trained 3200 People Eliminated 52 Jobs with “No Layoffs” 50+ Grievances & No Lost Arbitrations April 21-23, 2008 Renaissance Washington, DC 26
Slide 27: Intermediate Financial Scorecard Projected Cost Business Case $25,156,563 District Added: $5M for PM $5M for Training $5M Backfills Total Expected Cost $40 Million Added Costs To Improve Success Rate ROI Business Case $51,794,527 7 Year ROI 2 Year Steady 5 Years Of Improvements    Conservative Exec Workshop GM Buy-In Phase I Time & Labor Payroll / HRIS Phase II Finance / Supply Chain Projections Inv. Turns: 30% AP: 25% IT Budget: 25%    Inv: $2.8M AP: $.7M IT: $.8M Projected: 70% Received: 67% Equals: $4.9M    47 Positions Ops: OT (18%) Ops: (3%) Goal: Realistic And Achievable Reduce Labor By 1% ($3.2M) Equals: $8.1M In Sum: Potential Of $12.4M/yr. April 21-23, 2008 Renaissance Washington, DC 27
Slide 28: The Steps Of Our “Key” Strategies Change Manage m ent Project Manag ement Leadership End Agreements It Is NOT Brings Utilization Negotiated SW “Buy-In” Know ResourceGame Vision BetterYour Creates The Problem Defines The Playing Field Inclusion A Technology Leadership RFPPositions Must Change People’s DraftedVacant ROI Behavior Understand Risks & Mitigation Anticipates AlignsExpertise Freeze Needed ProvidesSI the Organization Leadership Minimizes The Risk Negotiated SW Agreements Establish Enemy In The Higher Quality Product Tent Keep Information Transparent Get Your Expectations Accountability Understand Labor Get Help Stakehold Business e rs Case Leadersh ip April 21-23, 2008 Renaissance Washington, DC 28
Slide 29: BAP Phase II Program Scope Phase I Phase II Base Agreement GL, Payroll, Timekeeping, Enterprise Portal Option A Option B Maintenance & Materials Management Option C Human Resources Financials Maintenance Work Orders / Requests Preventive Maintenance Job Plans / Labor Equipment Tracking Project Manager Mobile MAXIMO Optram – Linear Assets Materials Purchase Requisition’s Purchase Order’s Receiving / Invoicing Inventory Control Storerooms / Items Issues Transfers Financials Receivables / Payables Asset Management PS EPM Analytics Budgeting Grants / Projects Purchasing eProcurement April 21-23, 2008 Renaissance Washington, DC 29
Slide 30: Lessons Learned To Date Organizational Readiness  Communications  Training  Change Management Project Team Quality  People – BART & SI  Heavy Staff Turnover  Contract Resources Implementation  Implementation Methodology  Project Plan Ownership  Late Deliverables Phase II Improvements  Better Project Outreach  Dedicated Labor Relations  Managers Involvement Phase II Improvements  Screened Leads  Minimize Turnover  SI Employees (Quality) Phase II Improvements Project Management Plan (PMP) Implementation April 21-23, 2008 Renaissance Washington, DC 30
Slide 31: What The Phase II Future Holds     & More Efficient Business Processes More Productive Workforce Integrated, Flexible and Expandable Systems Technology Investment Aligned With Business Objectives, Such As:  Labor Improvements Strategy  Inventory Reductions  Increased Fleet Availability  Material Cost Reductions  Purchasing Cost Reductions an ce t Me rm ric r fo s& Pe Go Ex ec ut Results Skills & Capability Rolls & Accountability i on als Process Organization  Leaner, Meaner Organization  Work Smarter, Not Harder April 21-23, 2008 Renaissance Washington, DC 31
Slide 32: “BAPtized” Union’s April 21-23, 2008 Renaissance Washington, DC 32
Slide 33: Thank You! Robin Cody Chief Information Officer San Francisco Bay Area Rapid Transit District (BART) Contact Information: 510.464.6318 rcody@bart.gov April 21-23, 2008 Renaissance Washington, DC 33