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Project Background Systems & Processes Benefits Other States Resources
   STAR Project

STAR Project

The State Transforming Agency Resources (STAR) Project will connect the State’s 120+ IT software and systems into one comprehensive system. This is more efficient and cost-effective than having each agency purchase, maintain and support its own administrative systems.   More Info....


More Resources for You

The STAR Project will give employees modern, professional tools to support the important work you do for the citizens of our state.  More Info....


Future Risks

The State’s IT systems have been neglected for far too long and will no longer be able to be supported in the near future.  More Info....


Other States

Many other states have successfully implemented a statewide enterprise resource planning initiative.  More Info...




Cost Benefit Analysis

Our current systems are outdated and do not provide enough data to make business decisions, which impacts the State’s ability to do business. A 2005 analysis performed by Salvaggio, Teal & Associates (STA) listed factors that are still relevant today:


  • The State currently has no enterprise-wide procurement, asset management, or human resources systems in place.  Therefore, the State does not have the ability to track the entities that purchase goods and services from State contracts.
  • Aging and obsolete systems are difficult to modify to meet business needs.  This also exposes the State to the increased challenge in hiring and retaining staff with appropriate knowledge of those systems.
  • The current systems do not meet agency business needs, making the State’s business processes less efficient and effective.  STA said that “agencies continue to spend significant amounts of money on systems with functionality that is contained in ERP systems – money that could be spent toward the implementation of a single, statewide ERP system.  For example, DHFS [now DHS] and DOC spend approximately $1 million per year to maintain and support their shared Fiscal Management System.”

The 2005 STA study also identified 95 process improvement opportunities including potential process/integration efficiencies, functional enhancements, cost savings, and reduced cycle times. 


In January 2013, the State requested that Information Services Group, Inc. (formerly STA) refresh the cost estimate of the project, as well as update and confirm the State’s implementation scope and phased timeline.  ISG has successfully applied its Business Case Analysis (BCA) methodology in assisting the following states in evaluating the extent to which investing in a statewide ERP system would be business justified:  Arizona, Kansas, Louisiana, Minnesota, Tennessee, Texas, Virginia, Washington, and West Virginia.


Below are excerpts of the 2013 ISG report that further explain the State’s ERP project scope:


“An ERP system is a suite of fully integrated software applications that are used to perform administrative business functions such as financial management, procurement, human resource management, and payroll. What distinguishes ERP systems from a collection of stand‐alone, best‐of‐breed applications is the integration that enables more efficient processing and eliminates redundant data entry and system reconciliation tasks.

“The functionality provided by ERP systems is usually provided in major functional groupings, or modules, that typically address the major administrative functions within state government.  Certain additional ERP features cross all functional modules such as: automated workflow, electronic approvals, security, reporting, business intelligence, and data warehousing.

“The PeopleSoft ERP software acquired by the State in August 2006 addresses the functionality necessary to accomplish the ERP project objectives defined by the State.  Following are the functional areas included in the scope of the State’s planned ERP initiative:


Financial Management

· General Ledger & Budgetary Control

· Accounts Payable and Travel

· Accounts Receivable and Billing

· Grants Management

· Project Management

· Cost Accounting/Allocation

· Asset Management

· Cash Management

· Federal Highway Administration Federal Aid Billing


Budget Development

Data Warehouse/Business Intelligence

Human Resources / Payroll

· Position Control

· Classification and Compensation

· Personnel Administration

· Payroll Administration

· Time Reporting / Employee Leave Accounting

· Recruitment and Applicant Services

· Benefits Administration

· Learning Management

· Employee Self‐Service

Procurement & Logistics*

· Solicitations

· eProcurement

· Vendor Self‐Service

· Contract Management

· Warehouse Inventory Management

*Final procurement scope to be determined



To create the 2013 cost estimate, ISG considered the following categories: 

(1) ERP software license and team training

(2) selection, oversight, and staff augmentation services

(3) integrator consulting services

(4) third party interface assistance

(5) state team members

(6) technical infrastructure

(7) project facilities and equipment

(8) contingency


ISG estimates the total cost of the project to be $138,671,461 including a 20% contingency.  While this appears to be a reasonable estimate based upon the assumptions, for planning purposes, we expect the total cost of the ERP system to be higher due to additional or unanticipated infrastructure, software or implementation costs that frequently occur in IT projects of this size, scope and complexity in any business sector.  The 2013 ISG study says:


Budgeting for contingencies is a necessary part of planning an ERP project. Of their very nature, ERP projects span multiple fiscal years and contain elements of risk that may be unknown at the time of project initiation. For a project of the scope and timeline of the planned ERP initiative, unexpected events will occur that will have a direct or indirect cost impact to the project. 

Over a ten year period (the timeframe STA used in its 2005 report), the State expects to spend $253,452,172 on implementing a new system and ongoing IT operating costs.  In turn, the State will realize a total savings of $353,100,025 from the elimination of existing systems. 

ERP Cost/Savings Analysis

Net Savings Over 10 Years is $99,647,853

Savings from Eliminating Existing Systems and Procurement Savings (based upon 2005 STA report)



10 Year Cost of Ownership (Source: ISG)

(incorporates $138,671,460 project implementation cost plus maintenance and labor)



Net Savings Over 10 Years


That leaves a net savings of $99,647,853 for the ten year period.  Not only will the State ultimately save money from implementing an ERP system, we will now have one efficient, modern enterprise-wide system that is consistent and complete across state agencies.  This new system will provide the State with key data related to procurement, human resources, accounting and fiscal management to drive business decisions.