Vermont officials defend single go-live for statewide Workday ERP, warn project funding may be at risk

Rep. Kathleen James convened a joint hearing where state fiscal staff and the Joint Fiscal Office reviewed the status of Vermont's multi-year enterprise resource planning (ERP) project, saying the administration has shifted to a single go-live approach and that more legislative attention to funding will be needed.

"My name is Lisa Gob, and I'm the JFO IT consultant," the consultant told legislators as she opened the technical review. Gob said the project replaces five legacy systems with a Workday ERP and noted that the Adaptive Planning budget module went live last fall.

Gob summarized three persistent concerns she raised in the JFO review: "the risk of functional gaps between Workday and the business needs," unclear project definition when contracting began, and the degree to which the Guidehouse implementation contract is tightly scoped so that changes after acceptance can trigger substantial additional costs. She said a separate business-process vendor (Attain) was later contracted to document requirements and that the two contracts must coordinate closely.

Agency leaders defended the new sequencing. "The outcome of the project is to have a modern ERP platform and system that meets the needs of state government," Denise Riley Hughes, secretary for the Digital Services Agency, told the committees. She and Deputy Secretary Sean Brown said the administration concluded the HCM and finance modules are tightly integrated and that delivering them together will reduce long-term risk and create needed runway for end-to-end and parallel testing ahead of a July 1, 2028 go-live.

Riley Hughes described progress to date: the budget (adaptive planning) module is in production and business users have given positive feedback; unit testing on HCM is nearly complete; and the administration plans more end-to-end and parallel testing to compare the new system's results with current systems across several payroll cycles.

On costs, JFO reporting and administration figures presented to the committees included an approved project budget of roughly $36 million, about $11.9 million in invoices already submitted, and approximately $1.6 million in invoices shown as pending discussion. Legislators noted that the legislature had previously appropriated about $24.6 million for the project; agency witnesses said they had expected to use accumulated interest in the IT modernization fund (roughly $9.9 million that had been in the fund prior to a recent appropriation sweep) to cover some of the difference and would seek legislative authority to do so.

"We're hoping senate's gonna reinstate the interest in the fund and that the interest is gonna allow us to pay for it," Riley Hughes said when questioned about how the gap would be covered this fiscal year. She added the administration was negotiating an amendment to the Guidehouse contract to align sequencing, deliverables and payments to the revised single-go-live plan.

Committee members pressed technical questions about the NASPO procurement, whether Workday was the only ERP listed on the cooperative contract, and whether the state would retain code or configuration rights. Witnesses said Workday is a SaaS product and that Guidehouse configures the tenant rather than modifying core cloud code; the state will retain configuration documentation and data but not proprietary SaaS code.

Legislators also asked about historic data access. Gob said the current plan includes loading one year of data into a data lake but that she had not yet seen a plan for routine access to older archives or whether PeopleSoft or other legacy systems would be retained for historical querying; she recommended the committee seek a clear plan for legacy data access and archival retrieval.

No formal legislative action was taken at the hearing. Agency staff said they will provide the independent review and supporting deliverable lists for posting, continue negotiations with vendors on a contract amendment, and return to the legislature with funding specifics once the updated project plan is finalized.

The committees paused the hearing after a series of follow-up questions and indicated they would post the JFO report and the administration's independent review for members and the public.