IRIS Project Status Report

1. IRIS Project Status Report Information Systems Friday, December 10, 2004

2. Introduction – Replacement of Systems Challenges • The present administrative systems (FRS, HRS, FES, SIS) costly to maintain • Data and data structures not integrated across systems • Mainframe systems not user friendly and not state-of-art • Development of user friendly, easily navigated systems important in enhancing UK’s image to prospects, students, faculty, staff

3. Introduction – Replacement of Systems Goals • Improve business and service processes • Ensure high levels of faculty, student, staff and customer satisfaction • Enhance the university’s overall competitiveness

4. Introduction – Replacement of Systems Achievement of Goals • Selection of software partner • Use a phased approach for implementation of functionality • Implement core functionality in Phase I to replace FRS, MM, HRS and SIS

5. Introduction – Project Phases Project Methodology Phases We are Here

6. Introduction – Project Timeline Project Timeline • Project Preparation ended August 6, 2004 • Business Blueprinting began August 9 and will end December 17, 2004 • Blueprint for Review - November 30 • Blueprint Signoff - December 17 • Realization begins January 2005 • Go Live & Support (Starting with Financials, October 1, 2005)

7. Introduction – Business Blueprint Business Blueprint – Deliverables Business Blueprinting Components • Definition of Baseline Project Scope for IRIS Phase I • Timeline for Realization, Final Preparation & Go Live for components in Scope • SAP Organization Structures Business Process Requirements and Flow Charts • GAP Analysis • RICE List – Development Requirements for Custom Reports, Interfaces, Conversions, Enhancements • Glossary of terminology

8. Introduction – Business Blueprint Business Blueprint – Deliverables Business Blueprinting • All Blueprinting is subject to changes • from review session feedback • from issues encountered during configuration and testing

9. Materials Management • Materials Management

10. Introduction – Purchasing Review Session Project Scope – Materials Management • Phase 1 – October 1, 2005 • Purchasing • Accounts Payable • Procurement Card • Phase 1B – January 2006 • Hospital Inventory Management • Future Phases – TBD • e-Commerce / e-Procurement • Inventory Management in other areas (Physical Plant, Stores) • EDI Transmission of Purchasing Documents (Campus) • Expanded Use of Workflow

11. The Materials Management Blueprint Key Decisions Made • Support uniform or standard processes • Standard procurement approval process • No approval process will be required for hospital purchases of material master items • Procurement will be made using 5 basic SAP documents: Requisition, Purchase Order, Outline Agreements (Contracts), Request for Quotation, and Goods Receipt • Material Requirements Planning (Inventory Management System) will generate automatic Purchase Orders for the hospital

12. The Materials Management Blueprint – Key Decisions (Cont) • On-line receiving will be done by department • “Three-way match” (Purchase Order, Goods Receipt, and Invoice) will be performed on-line in SAP for commodities and equipment • “Two-way match” (Purchase Order and Invoice) will be used for certain types of purchases (e.g. rentals and leases) • Vendor File maintained by Accounts Payable, Hospital Accounting, and Purchasing

13. Materials Management – PurchasingBusiness Process Changes • The paper invoice transmittal process will be eliminated • The Requisition and Purchase Order processes will be standardized • Purchase Order transmittal to vendors will be automated where appropriate

14. Materials Management – PurchasingNew System Benefits • Integrated System (FI, CO, FM, GM, CM, HR) • All data in one system will reduce the effort required to maintain unnecessary batch processes, interfaces and shadow systems • Improved efficiency for end-users • Standardized requisition process • Reduced reliance on paper processes • Higher Data Quality • Improved access to document flow (REQ/PO/GR/Invoice/Check) • Authorized users will be able to view and monitor the status of their requisitions on-line

15. Materials Management – PurchasingNew System Benefits (Continued) • Streamlined Reporting Process • Real Time Reports – Drill Down Functionality • Fewer Printed Reports • Semi-automated/Automated Process • Auto – PO for hospital MRP Orders • Transmission of Purchasing Documents via EDI/FAX/Email

16. Accounts Payable • Accounts Payable

17. Accounts Payable Key Decisions Made • Central invoice receiving (Hospital and Campus) • Standard Invoice matching processes • Three-Way • Two-Way • An electronic non-purchase order invoice feed to Accounts Payable will be implemented to receive invoice data from departmental databases (e.g. Library) • Check printing outside of SAP • Vendor File maintenance

18. Accounts Payable Business Process Changes • Central Invoice Receiving (Hospital and Campus)

19. Accounts Payable - New System Benefits New System Benefits • Improved access to document tracking (REQ/PO/GR/Invoice/Check) • Improved Cash management • Improved Payment alternatives • Improved Check distribution/mailing • Streamlined Reporting Process • Semi-automated/automated Process • Logistics Invoice Verification (LIV) • EDI/FAX/Email

20. Procurement Card • Procurement Card

21. Procurement Card Key Decisions • Continue current interface process with the current card provider (Paymentnet) • Online application processing • Electronic approval of applications • Electronic approval of transaction

22. Procurement Card Business Process Changes • Online application process • Online transaction approval

23. Procurement Card New System Benefits • Improved card and cardholder information management • Improved data quality • Online approvals for applications and transactions • Improved efficiency for end-users • Improved communication methods

24. Finance • Finance

25. Finance Organization Structure • Phase One • Financial Module – General Ledger, A/P, A/R • Funds Management Module • Grants Management Module • Materials Management Future Phases • Project Accounting • Assets Accounting • Treasury Management • Enhanced Workflow and others

26. Finance Organization Structure • Summary • Defined SAP Organization Structure • Defined General Requirements and Business Process • Identified Required Development of RICE items • Finalized Project Scope • Gap Analysis of System to Requirements • Ready to Start a New Chapter - Realization

27. Finance Organization Structure • Issues • Training for more than 2000 Users • KMSF Integration Decision • Endowment Processing • Faculty Effort System Replacement • Complicated Reporting Needs • Challenge of Being First Modules to Go Live at UK • Phased SAP Implementation Impact on Interfaces

28. Funds Management • Funds management

29. Funds ManagementChallenges in Legacy System • Real time data not immediately available because of lag time for data entry • Lots of manual business processes – paper driven • Systems are not fully integrated – too many shadow systems • System allows unbalanced entries on transactions

30. Funds ManagementNew System Benefits • Provides electronic approval functionality within system • Provides real time data for planning and analysis (Departments can create their own budget versions and perform “what if” analyses) • Improves the efficiency of the budget update process, particularly budget transfers • Provides online reports with “drill down” capabilities • Ensures that entries are always balanced • Provides a fully integrated system among modules • Eliminates some paper processes

31. FundsManagementIssues • Keeping position data in HRS synchronized with SAP Financials until SAP HR is operational • Possible duplicate maintenance of faculty positions (affects effort reporting) • Training for more than 2000 Users • Phased SAP Implementation Impact on Interface

32. Funds Management • Phase 1 • Budget Execution and Reporting • Future Phases • Budget Preparation • Most Workflow Processes

33. Grants • Grants

34. GrantsHistoric Challenges and Barriers Grants • Post-Award Sponsored Project Management • Budgeting and Effective Dates • Cost Sharing • Sub-Award Information • Accounts Receivable • Invoicing/Reporting Processes Federal Appropriations • Budget for UK Fiscal Year • Account Number Changes Annually

35. GrantsNew System Benefits • Grants • Master Data – provides comprehensive information • Budgeting – budget for entire grant period • Invoices/Reports – printed automatically • Accounts Receivable – automatic posting, clearing and dunning Federal Appropriations • Federal Fiscal Year - budget on federal fiscal year • Carry-Over Funds – ability to report separately

36. Grants Issues Effort Reporting Decisions Concerning: • Commitment Postings • Availability Controls • Training • Departmental Reporting Needs

37. Endowments • Endowments

38. Endowments -New System Benefits • Offers solution based on SAP enhancement of endowment and investment processing which will be part of base system in a future release • Provides ability to aggregate multiple endowment funds in groupings such as by program, etc.

39. Endowments -New System Benefits • Links endowment funds to distribution accounts based on percentages and effective dates • Imposes no practical limit to number of distribution accounts • Provides ability to report endowment and distribution account information in a single view, tying the data together

40. Endowments -New System Benefits • Offers ability to enter extensive text to document purposes, restrictions, and other data, such as board action date, RCTF pledge date, and RCTF request number • Offers history of master data (shares, share value, etc) due to effective dating • Includes workflow for fund creation, including electronic signature, as future enhancement

41. Endowments -Solutions • Complete access to financial information • supporting endowments and distributions for • departmental, area, and administrative users Current processes + SAP improvements

42. Human Resources

43. Human Resources Blueprint • Components of Human Resources Blueprint • Personnel Administration • Organizational Management • Enterprise Structure • Benefits • Time Management • Payroll

44. Enterprise Structure, Organizational Management, Personnel Administration

45. The HR/Payroll Blueprint – ES, OM, and PA • Enterprise Structure (ES) • Enterprise Structure is used to represent the University as an organization. It is comprised of the Corporate or Organizational Structure, the Employee Structure and the Pay Structure. • Organizational Management (OM) • Organizational Management forms the basis for the entire personnel planning and development application. The administration of structural data facilitates analysis of the organizational structure as well as organizational customizing. • Personnel Administration (PA) • Personnel Administration is used to perform essential tasks such as hiring employees, performing organizational reassignments, and ensuring that the correct data is entered in the system when employees leave the University.

46. ES, OM, and PABusiness Process Changes • New Hire Process • Assignment Change Process • Elimination of Half-time Status • Employee ID will be system generated • Elimination of Annual Roll-over Process • Reduction of Multiple Assignments • Employees Paid on One Pay Cycle

47. ES, OM, and PA • Phase One • Organizational Management • Personnel Administration • Future Phases • Recruitment • Personnel Development • Workflow • Employee Self Service • Manager’s Self Service

48. Benefits

49. Benefits Business Process Changes • Single point of entry for employee data • Core Benefits (health, dental, life, vision) • Bi-weekly employee deductions will pull on first and second payroll • Eliminated requirements for: • Six-month assignment requirement for temporary employees • Thirty day waiting period for STEPS employees • Hospital employee eligibility will be consistent with campus • Health Care Flexible Spending Account Eligibility • Voluntary Benefit Eligibility • Use Accounts Receivable for Direct Bill

50. Benefits – Phase One • Core functionality of HRS and BMS • Administration of benefit plans • Determination of employee eligibility • Enrollment in benefit plans • Termination of benefit plans • COBRA administration • Direct Bill processing • Open Enrollment • Pre-paid deductions • Process Retiree benefits