Frequently Asked Questions​ About Luma

​What is Enterprise Resource Planning or an ERP System?

"Enterprise resource planning (ERP) is a process by which a company manages and integrates the important parts of its business. An ERP management information system integrates areas such as planning, purchasing, inventory, sales, marketing, finance and human resources." Ref: Investopedia.


What is the key driver for the State of Idaho to purchase and implement an ERP?

The longer we remain in the status quo, the greater the risk that the state will not be able to meet payroll or pay its bills on time. The existing legacy systems (Statewide Accounting and Reporting System (STARS) and Employee Information System (EIS)) are fast becoming obsolete and do not meet the current business needs and reporting requirements of the State of Idaho.  


What are the key benefits of acquiring a new ERP system?

This system will modernize, consolidate, and standardize business processes and financial information across state agencies resulting in greater transparency of government to the legislature and citizenry.


How was the $102M price estimate developed?

An independent expert advisory company completed a State of Idaho System Modernization Study in 2015 reviewing 19 state agencies consisting of approximately 80% of the State's combined operating budget and 70% of the combined FTE. The estimate is a conservative total cost estimate based on an on-premise solution.


What is the State of Idaho purchasing with these requested funds?        

The State will be completing a project plan that incorporates the acquisition and implementation of an ERP system and modernizes State business processes. Costs associated with the project include: Request For Proposal (RFP) development and independent advisory services, ERP software, ERP software integrator services, state programmatic systems integration, report development, facilities & equipment, contingency planning, and state personnel backfill as required.


How long will the new ERP system be serviceable?

Historically, business operating systems were installed on-premise with large software upgrades completed at 3-5 year intervals. Due to the large acquisition cost and upgrade costs, most companies try to extend the life of their ERP system as long as possible. Today, ERP systems can be installed on premise, in the cloud, or a hybrid. Modern ERP system vendors are frequently trying to keep systems up to date with more regular system updates. It is anticipated that a new ERP system will be serviceable for over 15 years.


What are the anticipated savings/cost efficiencies of a new ERP system?

Based on the System Modernization Study it is anticipated that approximately 75 agency-specific systems may be replaced by the new ERP system. The actual cost savings to the state will be a function of how many of these systems will be completely retired and the elimination of current costs to support those systems. Many benefits will be observed in greater efficiencies through the reduction of dual data entry and the increased capability of the new system including more robust reporting functionality across a larger number of state agencies.


Why are you requesting funding outside of the normal appropriations process?

This project is of such importance and expense to the state of Idaho that following the annual appropriations process creates risk to successful acquisition and implementation of a new ERP system. It will likely take two years of planning and implementation from contract award before the budget planning, financial management, and procurement modules are operational and another 18 months for the payroll and human capital management modules to be operational.  With an estimated total four-year project implementation period, a consistent and secure funding source is critical to project success.


What funds will be redirected into the Business Information Infrastructure Fund (BIIF)?

Historically, Statewide Cost Allocation Plan (SWCAP) funds are collected into the Indirect Cost Recovery Account 0125 and then transferred into the General Fund as a source of funds when building the next fiscal year budget. For the next five years, the Indirect Cost Recovery Account finds will be directed to the BIIF under the direction of the Controller to provide funding for this modernization project.


Why are you asking that the BIFF be continuously appropriated?

Obtaining approval for continuous appropriation authority will eliminate risk by having a consistent and secure funding source. It demonstrates the strong commitment and support across state government and will enable the Leadership Council comprised of the Governor, the Controller, the Speaker of the House, and the Senate Pro Tempore to focus on issues related to successful project implementation and not annual funding requests.  Additionally, a consistent and secure funding source will show statewide commitment to potential industry vendors assisting in obtaining a better value to the state during acquisition negotiations.