Mint launches enterprise planning computer system

The U.S. Mint announced Wednesday it successfully installed a single computer system to handle all its major business operations. The implementation took just 12 months, compared to an average of 18 to 24 months for similar systems elsewhere.

One of the first enterprise resource planning (ERP) computer systems in the federal government, the Mint's system handles 15 management applications, including accounts receivable, accounts payable, asset management, billing, budgeting, purchasing, inventory, cost management and production planning. The packaged software also replaced a variety of aging computer systems and solved the Mint's year 2000 computer problem. The Mint says it is the first federal agency to successfully launch such a system.

Enterprise resource planning (ERP) systems combine business applications that have traditionally been run on separate systems into one integrated package. With ERP systems, data does not need to be keyed and re-keyed into various applications and later reconciled. Instead data entered in one application can be used by all applications. ERP systems hold greater risk for organizations initially, because agencies using these products are putting all their eggs into one basket. But many managers are willing to make a trade-off for the more reliable, easily accessible and useful data that ERP systems can generate about business operations.

U.S. Mint Director Philip N. Diehl said his agency was struggling to improve efficiency and customer service with its old computer systems.

"It was maddening at how soft the information was with the old systems in trying to make daily business decisions," Diehl said. "We argued over the reliability of information rather than over business decisions. We would spend an enormous amount of time trying to nail down the facts. When things went wrong, it was hard to learn from mistakes. It's very hard to be a learning organization when no one can agree on the facts."

The newly installed system from PeopleSoft Inc. provides the Mint with reliable facts, allowing management to focus on business strategies, Diehl said. For example, Mint managers now get reliable data on how much it costs the agency to manufacture collectible coins. Until now, the Mint could not accurately figure out its manufacturing costs. The system also gives the Mint solid inventory figures. Before, the Mint always overbought supplies to make sure it had enough inventory to meet operating needs.

U.S. Mint Chief Information Officer Jackie Fletcher said the agency will avoid having to re-enter data into its computers numerous times, since all the business applications work on one system.

Mint employees began working with PeopleSoft in October 1997. The Mint's parent department, Treasury, required the new system to be up-and-running by Oct. 1, 1998, the department's deadline for year 2000 compliance.

Typically, ERP systems take 18 to 24 months to install because they involve virtually every part and affect all the operations of an organization, said PeopleSoft President David Duffield.

"This was one of the fastest implementations in the history of PeopleSoft," Duffield said.

The system is cosidered commercial, off-the-shelf (COTS) software, but it must be tailored to the needs of each user. Mint officials said they avoided too much customization, however. Since the PeopleSoft system is designed for private-sector businesses, officials hope the standard COTS software will force agency employees to adopt private-sector-style business practices. The Mint calls its PeopleSoft system the Consolidated Information System (COINS).

Federal officials discourage agencies from investing in large-scale computer systems that get turned on all at once, following several big-budget busts at the IRS, the Federal Aviation Administration and other agencies. Instead, former Office of Management and Budget Director Franklin Raines and other officials have urged agencies to use an incremental approach to technology acquisitions, installing new systems step-by-step.

ERP systems, however, require a cross-your-fingers and flip-the-switch approach, since all parts of the systems are so interrelated.

"It is a higher risk approach," Fletcher said. "We had contingency plans."

If not for the Y2K deadline, Fletcher says the Mint would have taken the installation a bit slower to prepare the agency for the switch to the new system. To complete the project in a year, the Mint put 100 employees on the project full-time and called on other employees from various parts of the agency to consult on system plans. Diehl also put U.S. Mint Deputy Director John Mitchell directly in charge of the project.

Diehl said agency employees are "freaking out" as they adjust to the ERP system. But approximately 25 percent of the Mint's headquarters staff were involved in the installation, so a large number of employees have a "sense of ownership" with the system, Diehl said.

The 10-year life-cycle cost of the ERP system is $40 million. Diehl said the agency expects to get back $1.20 to $2.10 on every dollar invested through more efficient operations, Y2K cost avoidance, and better sales.