California prisons dispersed >$US2.52 million in victim restitutions in 2013
Tracking assets and personnel across 37 institutions is a monumental undertaking. CDCR needs to maintain buildings and supplies as well as pay 47,000 staff members and equip them with tools. SAP ERP solves the challenge by providing real-time data, so that CDCR managers armed with information sooner, can now make faster and more informed decisions.
Company California Department of Corrections and Rehabilitation (CDCR)
Line of Business Asset Management, Finance, Human Resources, Sourcing and Procurement, Supply Chain, Sustainability
SAP Solutions SAP ERP Financials, SAP ERP Human Capital Management (SAP ERP HCM), SAP Supply Chain Management (SAP SCM)
State Run Since 1851–When it Was a Prison Ship
In 1851, California activated its first state-run institutions. This institution was a 268-ton wooden ship named "The Waban," and was anchored in the San Francisco Bay. The prison ship housed 30 inmates who subsequently constructed the San Quentin State Prison, which opened in 1852 with approximately 68 inmates.
Since 1852, the Department has activated thirty-one prisons across the state. CDCR's history dates back to 1912 when the agency was called California State Detentions Bureau. In 1951 it was renamed California Department of Corrections. In 2004 it was renamed California Department of Corrections and Rehabilitation (CDCR).
Customer Snapshot:Business Model
Like Running 37 Small Cities
One of the largest state departments in the United States, CDCR operates the prison, parole and rehabilitation systems in the state of California. The department employs approximately 47,000 people at 37 different institutions and is responsible for the safety and security of more than 125,000 inmates and juvenile wards. Each institution operates just like a small city—with restaurants, accommodations, a transport fleet, and medical centers.
Massive Operations that Needed Clear Insight
CDCR manages a budget of more than $9.1 billion and tens of thousands of staff. Without clear insight into its vast operations or an efficient means of controlling spending, the department struggled to track assets and properly manage its budget—subjecting CDCR to regulatory penalties and raising the threat of cost overruns.
When managing such a budget and tens of thousands of employees across dozens of different institutions, keeping track of resources to ensure effective allocation is almost impossible. CDCR lacked timely, accurate insight into operations and tight control over vast resources—leaving the department unable to ensure its multi-billion dollar budget was properly allocated.
Best Single Unified Solution
When it came to choosing an ERP platform to take on this challenge, CDCR searched for a single, unified solution covering all the functional areas to integrate and automate—budgeting and accounting, capital management and human resources. SAP ERP delivered on this requirement, providing all of the functionality on a centralized platform. To deploy the solution, CDCR partnered with IBM Global Business Services and created a vision of replacing thousands of standalone systems with SAP ERP, which would streamline information-access and enable new controls over assets.
Enter SAP:The SAP Experience
Automating 37 Institutions
CDCR and IBM collaborated on the largest enterprise resource planning implementation in California’s public sector—replacing thousands of standalone systems with an integrated SAP solution. The applications, including SAP ERP Financials, SAP ERP Human Capital Management, and SAP Supply Chain Management, are currently accessed by more than 7,800 users across 37 institutions.
As the implementation progressed, CDCR also standardized business processes, which each institution previously performed in different ways. Manual operations are now automated and integrated, which streamlines procurement, inventory and financial reporting. As each functional area entered production, legacy solutions were retired.
Getting Payments in On-Time is a Huge Cost-Saver
The SAP ERP project has already delivered substantial operational cost-savings for CDCR, which anticipates further, on-going savings through improved efficiencies and better financial controls. With rapid insight into organizational data and quicker reporting, they can process payments and financial statements in a timelier manner, which significantly reduces late-payment penalties and audits.
Since implementing SAP ERP, CDCR dramatically reduced the time to process invoice payments, which means they no longer miss deadlines set by the state controller’s office. This reduced late payment penalties from more than $2.6 million in 2008 to $681,000 in 2011— an 80 percent drop in three years. Many departments now pay invoices so quickly, they benefit from early payment discounts, which helps drive costs down even further.
Massive Time and Cost Savings
By leveraging their new improved insights from SAP ERP, CDCR now spends funds much more strategically. Better resource and inventory management and centralizing functions allows them to make larger consolidated purchases and distribute resources efficiently throughout 37 institutions. This also reduces freight costs and ensures inventory is allocated properly to eliminate shortfalls and surpluses.
SAP ERP has also helped CDCR achieve several other process efficiencies and cost-savings:
The deployment of SAP ERP has taught CDCR just how effectively their staff can operate with advanced technology. Previously, 28 staff members required two months to complete and submit year-end statements to the state controller. For the 2011 financial year, SAP ERP enabled just five staff members to complete and submit these reports in only one month—the first time in 10 years that year-end statements were submitted on time.
Better Business:Run Simple
Fully Operational and Getting Fiscally Fit
SAP ERP is deployed and fully-operational in 37 CDCR institutions and accessed by more than 7,800 users that generate thousands of transactions each day. In all, more than 500,000 purchase orders, 46 million financial accounting entries and 325,000 human resource transactions have been processed since initial go-live activities began in 2008.
For the first time, CDCR can also take advantage of real-time financial reporting. While in the past, they suffered from as much as a 60-day lag between gathering and reporting on information, the new platform allows users to access financial data instantly.
Accelerated information availability vastly improves their ability to prepare month-end and year-end financial reports.
Functions for More Savings and Safer Institutions
CDCR continues to extend and improve the new SAP ERP system by adding functionality, such as introducing a time-and-shift scheduling application any day now. The scheduling component is provided by a third-party niche product that seamlessly integrates with the SAP ERP time-management module.
When fully operational, the time-and-shift application will track 35,000 custody and nursing staff 24/7, providing accurate staffing and overtime/leave usage reports. This will enable CDCR to better identify expenditure trends as well as ensure safety and security are maintained across all institutions.