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Committee hears plan to draw FY2023 ERP funds into human capital management work (Workday)
Summary
Administration proposed using a FY2023 appropriation originally for finance system replacement to fund the human capital management (HCM) portion of the state’s ERP modernization (Workday) because Phase 1 (HCM) needs funds to complete implementation.
Deputy Commissioner Artie Merrill and other administration officials told the House Appropriations Committee that the state’s enterprise resource planning (ERP) modernization program—based on the commercial Workday cloud platform—remains a multiyear, multi‑phase project and that available appropriations will need to be reallocated across phases.
Merrill said an $11.8 million FY2023 appropriation for the statewide financial system remains unspent and that, because Phase 1 of the program now centers on human capital management (HCM, replacing the VTHR system), the administration proposes expanding allowable uses of the FY2023 funds to cover HCM implementation costs. The HCM phase was presented as the near-term priority; the financial-replacement phase is scheduled to start later, currently forecast to begin around October 2026.
The administration described why additional funds were needed to finish Phase 1: the project requires business-process transformation work, contracting for experienced implementation consultants, and backfilling departmental staff who will be engaged in the conversion; those expenses were not fully covered by the original ADS-focused appropriation. Merrill said the administration had asked for an additional $3 million last year to complete HCM but instead obtained authority to reallocate existing appropriations, so it now needs to draw on the FY2023 pot to finish Phase 1.
Committee members pressed for contract details, recurring fees and how the state will operate parallel systems during implementation. Administration staff explained current practice: one-time implementation costs are covered by appropriations while operation of the legacy system during transition is funded in the existing operating budget; after go-live the new system will be supported from the operating budget. The administration said some contractors have already begun work and a contractor with experience in Workday implementations started last week to assist with business transformation work.
Ending: The committee was briefed on the reallocation request, implementation sequencing and the need to use FY2023 financial-system appropriations to complete HCM (Phase 1); members asked for more contract and cost detail in follow-up briefings.
