erp project update - granicus

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ERP Project Update

Presented to City Council

May 3, 2011

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Purpose of Presentation

Topic Presenter

Provide Funding Overview, Progress and Timeline of Phase I

Gary Goforth

Provide Funding Overview and Proposed Timeline of Phase II

Greg Jordan

Summarize information presented to the Audit and Finance Committee regarding Cost-Benefit Analysis

Mitt Salvaggio

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ERP Phase I Budget History

ERP Phase I Costs Budgeted ExpendituresRemaining

Balance ContributionsValue of

EffortOriginally Anticipated

eVerge Implementation 8,650,000$ 8,650,000$ - - 8,650,000$ STA Consulting Implementation Oversight 2,735,000 2,735,000 - - 2,735,000 PeopleSoft Software Maintenance and Training 2,070,000 2,028,000 42,000 - 2,070,000 Hardware Infrastructure 1,225,000 943,000 282,000 - 1,225,000 City Project Team 3,180,000 2,539,000 641,000 - 3,180,000 City Project Team Expenses 664,000 625,000 39,000 - 664,000

Sub-Total Originally Anticipated 18,524,000 17,520,000 1,004,000 - 18,524,000 Not Originally Anticipated

eVerge Additional Stabilization 3,249,000 1,967,000 1,282,000 146,000 3,395,000 STA Additional Stabilization Mgmt & Oversight 464,000 277,000 187,000 161,000 625,000 Extended Backfills - Hudson 301,000 301,000 - - 301,000 Project Assessment - MiPro 61,000 61,000 - - 61,000

Sub-Total Not Originally Anticipated 4,075,000 2,606,000 1,469,000 307,000 4,382,000 Total ERP Phase I Costs 22,599,000$ 20,126,000$ 2,473,000$ 307,000$ 22,906,000$

(1,004,000) 1,469,000$ Total Available to Allocate

As of 04/25/2011

Less funds restricted to Capital

Note: This does not include some internal cost such as staff time that are being charged to departmental operating budgets.

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STA Consulting • Provide expert oversight for the City’s ERP

implementation that is independent from Implementer and Software Provider

• Facilitate ERP vendor selection process• Supplement City project management• Supplement City functional team• Identify and manage risks

eVerge Group of Texas• Provide system implementation services• Lead design, development, testing of the ERP

software• Lead change management activities • Lead training activities to dept users• Lead knowledge transfer to CFW • Provide post implementation support• Identify and manage risks & issues

Contractor Roles

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ERP Project Coordination Overview as presented to Audit and Finance Committee March 24, 2011

Program CoordinatorGary Goforth

Police Time KeepingPete Anderson

Police Back LogSTA – Harry Anderson

Fire ReconciliationRichard Neuhaus

ERP Support & NewPolice Reconciliations

Mai Tran

TrainingGary Goforth

CommunicationsDeborah Cuffee

Human ResourcesKaren Marshall

PayrollLena Ellis

Employee Self ServiceGary Goforth TBD TBD TBD

Project Communication Chart

ACM ExecutiveSponsor

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ProjectCoordinatorGary Goforth


(MIPRO Recom.)

PoliceCommunication Back Log

STA – H. Anderson(MIPRO Recom.)

Fire Reconciliations& Holiday Pay

Richard Neuhaus

TrainingGary Goforth

CommunicationsDeborah Cuffee

(MIPRO Recom.)

PayrollLena Ellis

Employee Self ServiceGary Goforth(MIPRO Recom.)

e-LearningTBD

e-RecruitingTBD

e-PerformanceTBD

Executive SponsorCity Manager’s Office

STA ConsultingProject & Resource

Management

PeopleSoftSoftware Maintenance

& Version UpgradeTBD

User FriendlyFront End

TBD(MIPRO Recom.)

Business ProcessDocumentationGary Goforth(MIPRO Recom.)

Legend:

– External resources not required

– External resources required and allocated

– External resources required but not allocated

– Effort placed on hold

Leave Balance Audit(Tools and Procedures)

TBD(MIPRO Recom.)

TransitionTime KeepingBack to Police

TBD

Grants Accounting &Account Mapping

Lena Ellis

New PoliceReconciliations &

ERP SupportMai Tran


HumanResources

Karen Marshall(MIPRO Recom.)

Phase I Project Responsibilities

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New Police Paycheck Inquiries

2 2 1

19 4

12 6

6 4

162 6

7 4

18 3

0

50

100

150

200

250

1/ 7/ 11PP01

1/ 21/ 11PP02

2/ 4/ 11PP03

2/ 18/ 11PP04

3/ 4/ 11PP05

3/ 18/ 11PP06

4/ 1/ 11PP07

4/ 15/ 11PP08

ITS Time Entry Team covers three divisions

ITS Time Entry Team covers entire department


(MIPRO Recom.)

ITS Time Entry Team begins entry with part of a division

Sworn officers drive timesheet collection

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Police Communication Backlog Status

Status as of May 02, 2011

196 Folders Remaining,

21%

729 Folders Completed,

79%

PoliceCommunication Back Log

STA – H. Anderson(MIPRO Recom.)

Backlog based on 925 folders as of mid-March, 2011

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New Police Reconciliations

Status as of April 25, 2011307 Folders Complete,

100%

0 Folders Remaining,

0%


ERP SupportMai Tran


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ERP Support Accomplishments

IT Help Desk Tickets related to ERP issues (other than reconciliations) have continued steady downward trend

Examples of tickets include log-in assistance and understanding transaction error messages


ERP SupportMai Tran


Month Help Desk Tickets

October 2010 660

November 2010 555

December 2010 378

January 2011 258

February 2011 165

March 2011 111

April 2011 70

ERP Support Team members continue to attain the knowledge and experience to support steady state operations. Areas of upcoming focus are:

Functional and Technical Support in Time & Labor and Absence areas

Installation of maintenance updates to the software

Implementation of upgrade

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Fire Department Reconciliations Accomplishments

Paycheck research and corrections brought up to date

Continued testing of Fire Department system changes

Continued training of Fire Time and Leave Administration personnel

Fire Reconciliations& Holiday Pay

Richard Neuhaus

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Human Resources Team Accomplishments

Documented procedures to:

improve efficiency of benefit processing

ensure completeness and timelines of data for payroll processing

Implementation of procedures is in process

Significant progress toward resolving data sharing issues with third parties (e.g., Aetna)

Significant progress made toward knowledge transfer to Benefits Staff

Began identification of policy and procedure documentation requirements

HumanResources

Karen Marshall(MIPRO Recom.)

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ERP Phase I Post 90 Day Timeline2012

April M J J A S O N D J F M A M J J A S O N D

Implement & Test 5 Maintenance

Bundles

ERP Phase II

Begins

October 2012

Go Live

October 2014

Complete StabilizationGrant Accounting

__GL Account Mapping

__Process

Documentation__

Leave Balance Audit__

Police Time Keeping Transition

__Prioritized Issues

2011

Employee Self Service – On Going

Employee Training – On Going

Implement 9.1 Upgrade

Build In-House ERP Support Capability

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Estimate of Future Work Efforts

Post 90 Day Cost(to be funded by existing appropriations)

Estimate

Complete Stabilization Efforts – ERP Support $865,000Grant Accounting & Account Mapping $60,000Police Time Keeping Transition $514,000Employee Self Service & Employee Training $50,000

Total - Post 90 Day Costs $1,489,000

FY2012 Maintenance Efforts(to be funded in FY12 Operating Budget)

Estimate

Implement Maintenance Bundles $1,300,000Implement 9.1 Upgrade $1,500,000

FY2012 Maintenance Effort Sub-Total $2,800,000

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ERP Phase II Update

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ERP Phase II Overview

ERP Phase II Recent Developments

Guiding Principles

Schedule and Scope

Budget

Next Steps

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Guiding Principles used to Assess Alternative Strategies

Risk Mitigation

Eliminate Unsupported Systems

Improve Reliability & Dependability of Systems & Information

Address Audit Findings

Cost/Value

Manage Risk/Reward

Achieve a Meaningful Return on Investment

Timeframe

In scope, on time, and on budget

Manage impact on organization

Organizational Change Readiness

End-User Satisfaction/Motivation

No Loss of Functionality

Create Efficiencies and Improve Effectiveness

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Phase II Schedule and Scope Phase by Function, FY2012 start

Phase IIA – Core Finance and Procurement

Oct 2012

Oct 2014

Phase IIB – Budget Development Module

Jul 2014

Apr 2015

Phase IIC – Enhanced eProcurement & Capital Projects

Jan2015

Nov 2015

Pre - Implementation

Jun 2009

Sept2011

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Phase II BudgetJun 2009 - Sep 2011

Oct 2012 - Nov 2015

ERP PHASE II PROJECT COSTS Pre-Implementation Implementation TOTALImplementor (TBD) -$ 15,835,000$ 15,835,000$ Salvaggio, Teal and Associates (STA) 1,659,000 4,441,000 6,100,000 PeopleSoft Software License 1,510,000 - 1,510,000 PeopleSoft Software Maintence 664,000 664,000 1,328,000 PeopleSoft Software Training - 650,000 650,000 Hardware Infrastructure - 2,040,000 2,040,000 City Project Team and Operating Expenses 626,000 7,506,000 8,132,000 Facility 47,000 735,000 782,000 Policy Development (Crowe Horwath) 590,000 - 590,000 Data Cleansing 836,000 - 836,000 Backfills - 3,764,000 3,764,000

Contingency 794,000 6,375,000 7,169,000 Total Project Costs 6,726,000$ $42,010,000 $48,736,000

FUNDING SOURCESOct 2010 M&C G-17074 (CO Issue) $31,256,000

TBD (FY11 Enterprise Fund Transfers) 14,180,000TBD (Enterprise Fund Transfers) 3,300,000TOTAL 48,736,000$

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Next Steps

May 3, 2011 – Brief City Council on Phase II

Summer, 2012 – Consideration of Implementer Contract

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Cost Benefit Analysis

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Background Information Why ERP?

Standardized processes based on best practices

Improved budgeting and analysis tools

Strengthened Internal Control

Enhanced reporting across City government

Real-time data update and enhanced budgetary control

Automated workflow

Integration across all system modules

Employee and Vendor Self-Service

Regulatory Compliance

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Background Information “Single Source of Truth”

ERP

PACSCLASS

Red

Light

Enfo

rcem

ent

Courtview

Water Billing

Perm

its P

lus

FireHouse

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Cost / Benefit Analysis Overview

Cost of New System

Software

Hardware

Implementation

Upgrades

Ongoing Maintenance & Management

Training

Benefits/Avoided Costs

System Savings

Not Implementing Planned Systems

Replacing Current Systems

Process Improvements

Efficiencies

Cost Avoidance

vs.

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Cost / Benefit Analysis Assumptions

Expected life of the ERP system is a minimum of 20 years

STA focused on major benefit opportunities

STA work efforts will minimally impact City staff

Used standard 10 year planning horizon for accumulating costs and benefits

Assume that upgrades will occur every 3-5 years.

Every 4 years used for costing purposes

Consulting support for upgrades will be 15 percent of project implementation costs

Other assumptions were made regarding staff and consulting costs

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Cost / Benefit Analysis Summary of Major Quantified Benefits

Phase I – HR/Payroll

Benefit Estimated Average Annual Savings

Estimated Average Annual Savings - 10

year planning horizonConsistent Application of Overtime Policy $491,000 $4,910,000

Employee Self-Service Efficiencies $221,000 $2,210,000

Reduction in Other Payroll Errors $660,000 $6,600,000

Total $1,372,000 $13,720,000

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Cost / Benefit Analysis Additional Savings from Phase I Implementation

Decreases in:

Time spent in various payroll processing activities (processing extra pay, researching history and accounting across multiple systems, etc.)

Time spent entering/changing employee data, as well as researching and responding to employee inquiries

Time spent in various HR-related activities (processing Personnel Action Requests, projecting the impacts of changes in salaries or benefits)

Payroll costs due to effective dating of raises and longevity (they can start at any time during the pay period, not just the first day)

Time spent administering benefits and decreases in the employer costs of benefits due to improved technology (effective dating, ease of reporting)

Time required each year to generate custom reports that historically required retrieving data from multiple sources

These benefits and others have not been quantified

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Cost / Benefit Analysis Breakdown of Annual Support Cost Increases – Phase I

Cost Component Average Estimated Annual Cost

Anticipated Cost Increases

Consulting Support – Ongoing Maintenance $198,000

Average Annualized Upgrade Support

(15 % of Implementation Costs every 4 years)

$383,000

Ongoing PeopleSoft Maintenance $281,000

Ongoing Infrastructure Maintenance $16,000

Unanticipated Cost IncreasesOperating Budget – City Support Staff

(7 Authorized Positions beyond previous levels)

$733,000

Operating Budget – Additional Operating Costs $221,000 Total - Annual Support Cost Increases $1,832,000

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Cost / Benefit Analysis Summary of Major Quantified Benefits

Phase II – Finance/Procurement

Benefit Estimated Average Annual Savings

Estimated Average Annual Savings over 10 year planning horizon

“In-Sourcing” the CAFR $698,000 $6,980,000Decommissioning of the Mainframe $836,000 $8,360,000

Total $1,534,000 $15,340,000

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Other Phase II Benefits Additional Savings from Phase II Implementation

Reduction in:

Accounts Receivable (AR) balances and carrying costs

Carrying Costs for inventories

Time spent performing year-end close and preparing the CAFR

Time required to process grant draws

Time spent reconciling bank accounts

Time required to enter assets into the financial management system through integration with procurement and accounts payable

Time spent calculating and maintaining asset depreciation, as well as manually entering the resulting accounting entries into accounting and tracking systems

Reconciliations between separate administrative systems

Improvements in:

Revenue collection efforts

Vendor pricing due to improvements in analytical capabilities

These benefits and others have not been quantified

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Cost / Benefit Analysis Breakdown of Anticipated Annual Support Cost Increases – Phase II

Cost Component Average Estimated Cost

Consulting support – ongoing maintenance $200,000

Average Annualized Upgrade Support

15 % of Implementation Costs every 4 years

$570,000

Ongoing PeopleSoft Maintenance $523,000

Ongoing Infrastructure Maintenance $15,000

Operating Budget: City Support Staff (beyond previous levels) $0

Operating Budget: Operating Costs $0

Total - Anticipated Annual Support Costs Increases $1,308,000

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Annualized Project Costs and Benefits

Project Costs Phase I Phase II Total

Project Costs $22,599,000 $48,736,000 $71,335,000

Divided by Life of System 20 years

Annualized Project Costs $1,129,950 $2,436,800 $3,566,750

Annualized Support Costs Phase I Phase II Total

Annual Operating Costs $1,832,000 $1,308,000 $3,140,000

Benefits Phase I Phase II Total

Annual Benefit $1,372,000 $1,534,000 $2,906,000

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Concluding Comments

Risk Avoidance vs. Return on Investment

Decision of “when” not “if”

Comparable External Project Costs

Internal Cost Factors for Phase II

Higher support for departmental participation

More Change Management

More Training

Increased Internal Controls Focus

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Questions?

erp project update - granicus

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