Strategy and Benefits of Outsourcing Accounting Systems.

• Author: Thetford, Anita

The City of Hurst in North Central Texas has embarked on a remarkable journey to transition its accounting systems from an in-house, primarily paper-based environment to an online powerhouse. Not only is the intent to update and automate the accounting function, but also to enjoy the many advantages associated with doing business in the wired world. Efficiency and bottom-line savings are key benefits, and to accomplish these results, Hurst was the first local city government to take advantage of a new Shared Services Center (SSC) in which the city will outsource many of its accounting systems to a business processing center.

While shared financial services and business process outsourcing may be business-as-usual in the private sector, they are virtually nonexistent in the governmental arena. However, through the direction and support of consultants, the North Central Texas Council of Governments and the Hurst City Council, city manager and staff, the city is now ready to embrace the 21st Century.

The Need to Migrate

Hurst is located in Northeast Tarrant County between Dallas and Fort Worth in an area known locally as the Mid-Cities. With a population of approximately 37,000 residents, Hurst is small enough to be known as a quality-of-life community, yet also considered large enough to compete locally due to its strong business community, award-winning community services, superior schools and expanding retail establishments, including the second largest regional mall in the state.

Hurst's municipal government includes seven operating departments, and has the typical make-up of other governments, with a city council/manager form of government. All accounting functions and responsibilities are housed within the Fiscal Services Department, which is charged with processing all financial data in a timely, accurate and cost-effective manner. Individual divisions are Finance, Personnel, Information Systems (IS), Utility Billing, and Support Services, including Risk Management and Purchasing.

Over the last 20 years, improvements in the city's computer and processing systems were made as new technologies became available--and old systems were deemed unserviceable and unreliable. New hardware and software applications were installed in 1979, and in 1992, the city invested in InterFund, a UNIX-based financial application package. Conversion of the existing general ledger, accounts payable, purchasing, accounts receivable, and fixed assets software was performed. Like many conversions, the goal was to standardize as much as possible; however, the system contained many features that were custom-configured just for the city. The system could not operate in a Windows environment and had no Web-enabled capabilities.

Over the next several years, Hurst was faced with developing numerous internally programmed modules using a DOS-based language (Clipper) that currently cannot be adequately supported. The city's accounting processes needed to be properly updated if operating efficiency was to be improved.

Existing systems were due to be replaced in fiscal year 2000-2001. The Hurst City Council, in early 1999, issued several directives in a strategic plan that were a perfect match for the shared-services model:

* provide standardized software to meet organizational needs,

* provide state of the art infrastructure to facilitate internal and external connectivity, and

* study and identify innovative approaches to improve delivery of services.

No one would doubt that standardization is required in today's system environment, and the city desperately needed this standardization to operate at optimum efficiency. In addition to the risk associated with internally programmed modules, the intellectual capital so vital to streamlining computer systems was in peril due to attrition. When several members of the Finance...