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Chicago Transit Authority | Needs Assessment Case Study

Background of Organization:

The CTA operates the second largest public transportation system on the North American continent. The CTA's service area is composed of the 220 square miles of the City of Chicago, plus 38 suburbs, with a total population of 3.7 million persons. The CTA projected 440.0 million trips for the Year 2000. The CTA's bus service includes 1,878 buses making 21,000 weekday trips over 131 routes, and its routes cover 1,935 miles, with over 12,200 bus stops. In addition, train service includes 1,190 train cars that complete over 1,900 weekday trips on seven routes. The infrastructure for doing this includes 289 miles of track, including yard track, with 142 stations. To supplement bus and train service, the CTA contracts with four carriers and nineteen taxicab companies that provide door-to-door service for riders with disabilities.

The financial and human resources management systems for the CTA are responsible for tracking $841.1 million in operating expenses and for paying 11,290 employees. In the year 2000, labor expenses accounted for $613.10 million of the total operating expenses. The remainder of the budget funds materials, fuel for revenue equipment, provisions for injuries and damages, the purchase of security services, and other operating expenses.

Description of the Problem:

While the CTA maintains its position as the second largest public transportation system in the United States, it faced many significant challenges, such as rebuilding the system to keep pace with customer demand while providing more comfortable and reliable service; sustaining the momentum in ridership increases; and improving the product for existing customers while attracting new riders to the system. The CTA wanted to adopt a clear, strategic plan for information technology. However, there was still a significant amount of decentralized information technology planning and investment occurring throughout the organization. Based on several meetings that GFOA consultants had with CTA management and staff, it appeared that a lack of a thorough IT strategic plan, the high demand for IT resources, and difficulty attracting and retaining quality IT personnel had all hampered the CTA's efforts to realize the benefits of enterprise-wide solutions.

GFOA's Solution:

The CTA engaged GFOA to provide consulting services related to the procurement of an Enterprise Resource Planning System for its financial and human resources management information systems. These services included conducting a needs assessment for the financial and human resources areas. This project was conducted in three phases:

Phase I-Project Definition: In this Phase, GFOA consultants met with the CTA's senior financial and IT managers to examine the major strengths of the current financial software and provide CTA managers with an overview of the ERP market. As importantly, a "vision" of the expected functionality of a system over the next several years was discussed. This phase helped determine individuals to be interviewed, major "shadow" systems to be evaluated, major system problems, and other information that facilitated project planning.

Phase II-High-Level ERP Needs Assessment: GFOA compared the CTA's then current systems with the leading software products available in the market today. GFOA consultants examined several functions at CTA including: General Ledger, Budget Preparation, Purchasing, Human Resources, Payroll, Grant Accounting, Capital Investment, Accounts Receivable/Billing, Fixed Assets, Inventory, Accounts Payable, and Treasury Management. This examination included the distribution of surveys and facilitated sessions with the end users from many departments.

Phase III-Communication and Reporting of Results: GFOA staff presented a report to the CTA's ERP Steering Committee to discuss its options. The results of GFOA's field research indicated that there was significant dissatisfaction among end-users of the major systems. Many of the problems were prevalent across the different functions. The following is list of some of the key findings from the GFOA inquiry:
  • Information was fragmented across several standalone systems. None of the standalone systems were integrated with the financial management system.
  • There were redundant record keeping and data integrity issues that resulted from multiple points of data entry.
  • End users had difficulty obtaining the data they need without the intervention of IT personnel.
  • The then current system was not user friendly and it did not promote process and/or productivity improvements.
  • Excessive accounting activities conducted/high overhead costs existed due to a lack of system integration across CTA departments.
  • The then current system had weak audit capabilities and did not have drill down capability.
  • The present system does not have the functionality that managers and end-users desire. In addition, the CTA consisted of disparate departments with unique requirements.
  • Decentralized Information Technology Investments has reduced coordination of systems development and increased overall costs.
  • There were varying levels of buy-in among departments due to their experience with system implementations in recent years. As a result, users may resist new technology.
  • The CTA had disparate departments with unique requirements.

Based on the assessment of the current system and IT environment, the results of the ERP market research, and the cost estimates collected, GFOA presented four possible courses of action for consideration by the CTA:
  1. Retain the Current Systems: Retain the then current systems and periodically upgrade them;
  2. Data Warehousing: Establish a data warehouse for CTA users to access;
  3. A Best of Breed Solution: Use a phased-in approach to application implementation that may or may not rely on different vendors;
  4. Procure a New ERP System: Pursue a competitive process to procure an enterprise financial and/or human resource/payroll system best suited to address the needs of CTA.

Of the four options delineated above, GFOA recommended that the CTA procure a new ERP System because:
  • ERP systems unquestionably provide the greatest functionality to three key CTA constituencies: CTA staff involved in IT operations, financial management, and department line managers overseeing core services and administrative functions;
  • ERP systems will position the CTA to better meet the needs of its external customers, for example, by preparing it for e-Commerce applications, such as purchasing, that reduce the "transaction costs" for citizens and others dealing with government;
  • The CTA has a core team of IT, finance and human resources professionals who are committed to overseeing the fundamental changes implied by the fourth option; and
  • The CTA has the ability to learn from and manage the risks associated with the implementation of an ERP system.

     

GFOA also believed that ERP system procurement was inevitable, for yet another reason - the viability of the CTA's then current product, which was in mainframe and was not actively supported by the vendor.