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Annals of Reengineering
In the January/February issue of the Newsletter, I outlined the background of the Human Resource Practices Design team (HRPD) and the project teams charged with developing some of its recommendations into new programs for MIT. The March/April article about Reengineering summarized the continuation of the SAP rollout to departments, labs, and centers (DLCs). It seems appropriate to end the academic year with updates on the two HRPD projects that are furthest along, and to provide some additional information about the implementation of SAP.
The Recognition and Rewards project team of HRPD has designed a series of options for showing appreciation to employees who make a significant contribution to the Institute. The multi-level program they are recommending was designed to build on and formalize current MIT recognition and rewards practices. The team reviewed input from more than 1,000 MIT employees from a broad range of areas on campus prior to writing its report. They also collected information about how other organizations reward employees.
Designed to operate at both the local and the Institute level, the proposed program provides the flexibility and consistency that employees stressed as important. The team’s report includes a cost analysis and recommendations for program administration, implementation, and evaluation. The report has been given to Vice President for Human Resources Joan Rice, who is HRPD’s sponsor, and it was also discussed with the Reengineering Steering Committee in late May.
This HRPD project team has prepared the first draft of its recommendations for a comprehensive orientation program to help new employees understand MIT’s organizational structure, culture, and resources. The program is designed to complement, rather than replace, existing orientation efforts.
The recommendations are based on suggestions from new employees, employees in departments with and without orientation programs, best practice research, Website data, and information from a review of management and human resource journals. Employee input proved very helpful in identifying the critical components of an orientation program, as well as providing ideas for program support and delivery.
Though staff from the Management Reporting Project have done countless presentations and written numerous articles and Web documents about MIT’s new financial system, many faculty members have probably not had the time (nor interest) to pay attention to all the news about SAP. In case you’re wondering why the Institute is going to all the effort and expense of installing SAP R/3, here are a few of the reasons, as well as some background information.
It’s been more than 30 years since MIT’s core financial systems were updated, and during that time the various areas of accounting, procurement, budget, and the Office of Sponsored Programs have each developed separate systems. This has created an unwieldy network. (For example, if you were connected to the general ledger and wanted information on a particular purchase order, you had to change systems and computers.)
The new system - SAP R/3 - will replace the separate general ledger, accounts payable, accounts receivable, procurement, and financial reporting systems with a single, integrated software program. Some advantages include the following:
The last feature will be particularly valuable when DLCs begin using SAP for purchasing this fall.
The capacity to create new accounts in the old MIT financial systems (with five-digit account numbers and three-digit object codes) is almost exhausted -- seriously constraining the Institute’s ability to respond to sponsor and internal reporting needs. The new financial architecture designed in SAP (with seven-digit "cost objects" and six-digit general ledger accounts) will relieve this constraint. DLCs as well as central offices will have much greater flexibility in setting up new research accounts.
Not all of MIT’s administrative financial systems that interact with SAP are compatible with this new architecture; the goal is to upgrade all these applications to seven and six digits by December 31, 1998. Departments with systems that receive financial data from the central applications must also upgrade them by that date.
A major benefit to MIT is that SAP R/3 is "Year-2000" compliant. SAP AG designed the R/3 system to support four-digit year dates at the inception of the product five years ago. R/3 also automatically recognizes and converts two-digit year dates passed from external systems to proper four-digit numbers.
The Audit Committee of the MIT Corporation requested that year-end financial results be available in a more timely manner than with the Institute’s old systems. In addition, the federal government shortened the deadline for the A-133 audit beginning in fiscal year 1998. In order to provide this financial information earlier, SAP electronic journal vouchers will be used for the 1998 fiscal year closing -- and for all business thereafter. (The use of paper and $SumMIT journal vouchers will be discontinued at the Institute after June 24, and June 26, 1998, respectively.) Using SAP journal vouchers will dramatically speed up the closing time, and also will allow users to see the effect of journal voucher transactions on accounts immediately, instead of having to wait until the end of the month.
There will inevitably be some discomfort from changing business processes as SAP is rolled out to departments, labs, and centers. Many employees will need to learn new procedures and abandon old, familiar methods of doing financial work. To support users during the transition, the Management Reporting Project is offering extensive training at the W89 Professional Learning Center. In addition, the MIT SAP Website <http://web.mit.edu/sapr3/> has online documentation for all procedures and reports. The new Business Liaison team in Information Systems is also now in place to provide SAP help via e-mail <business-help@mit.edu> and by telephone (252-1177).
As of May 1998, four school and area coordinators have been appointed to assist departments, labs, and centers as well as administrative areas during the transition to SAP. Coordinators Bob Davine, Jennifer Kratochwill, and Brian Tavares are former MIT fiscal officers or administrative officers; and Shirley Picardi is a former Institute Bursar. (Two additional school and area coordinator slots are still unfilled.) The coordinators’ main task for the summer of 1998 will be to help areas to create requisition approval structures for use in SAP.
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