EDR Update School Board Workshop July 21, 2015

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1 EDR Update School Board Workshop July 21, 2015

2 Where We Total Decline of $143 million since Have Been?

3 Where We Have Been Original Contract & Amendments Timeline 7/16/02 Original Contract License = $1.0M Annual Maintenance = $100K 8/14/12 2nd Amendment Annual Maintenance Change: From $100K to $360K Name Change: From CrossPointe to EDR 1/21/02 1st Amendment Contract Verbiage Change: Deleted: CrossPointe pricing is based on ASP usage and configuration. Replaced with: CrossPointe pricing is based on an in-house stand alone installation of the Software 4/9/13 - Form rd Amendment Software, Implementation License = $5.2M Maintenance Fees: Additional annual fee of $200K for two years not to Exceed $560K. (returns to $360K thereafter) Total Amount (license & Fees) Not to Exceed $8.0M 3

4 Where We Are Today Human Resources/Payroll Module Received New Code Tested In Production Personnel Administration Yes Yes No Budget Forecasting Yes Yes No Position Control Yes Yes No Payroll Yes Yes No Staff Development Yes Yes No Job Assignments Yes Yes No Future File No No No Employee Portal Module Received New Code Tested In Production Employee Information Yes Yes N/A Electronic Contracts Yes Yes Yes Time & Attendance Yes Yes No Leave Request Yes Yes No 4

5 Where We Are Today Financial Information Module Received New Code Tested In Production Accounts Payable Yes Yes Yes Accounts Receivable Yes Yes Yes Cash Receipts Yes Yes Yes Budget Management Yes Yes Yes Budget Preparation Yes Yes Yes General Ledger Yes Yes Yes Project Management Yes Yes Yes Purchasing Yes Yes Yes Vendor Portal Module Received New Code Tested In Production Online Bid Request No No No Payment Status No No No 5

6 Where We Are Today Supply Chain Module Received New Code Tested In Production Capital Assets No No No Warehouse No No No Operations No No No Enterprise Information Portal (EIP) Module Received New Code Tested In Production Finance Yes Yes Yes Human Resources Yes Yes Yes Payroll Yes Yes Yes Worksheets Yes Yes Yes Ad Hoc Query Yes Yes Yes Data Warehouse Yes Yes Yes Reporting Yes Yes Yes Analytics Yes Yes Yes Dashboards Yes Yes Yes 6

7 Where We Are Today Workflow Engine & Projects Tasks Module Received New Code Tested In Production Role-based No No No Individual Level No No No Approval Queue No No No Department Level No No No Escalation Policy No No No Student Registration Module Received New Code Tested In Production Parent Portal Yes Yes No Clerk View Yes Yes No Received New Code Tested In Production 72.5% Complete 72.5% Complete 45% Complete 7

8 Where We Total Decline of $143 million since Go From Here?

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10 I. The 1002 Product Order Form is Part of the Master License Agreement 1. It will be affixed to and become part of the Master License Agreement signed by Brevard Public Schools on July 17, Deliveries and Installation. Promptly after receipt of the down payment of the Product Order Price, CrossPointe will deliver to the Client one copy of the Software (if the Client's Product Order Form calls for an in-house stand alone installation of the Software) and one copy of the Documentation. 2 1 See Product Order Form 1002, dated April 2, 2013, page 1. 2 See CrossPointe Master License Agreement between CrossPointe, Inc. and BPS dated July 11, 2002, page 5. 10

11 I. Propriety of Software and Maintenance Payments 1. See payment chart. 2. The $600,000 down payment for the new software was proper because it was required under Product Order Form The $2,350,000 software payment made on July 30, 2014, and the $600,000 and $700,000 payments made in December 2014 were improper because the software had not been delivered. 4. The $200,000 maintenance payments made in July of 2013 and 2014 for new software were improper because the new software had, in large part, not been delivered, and there was little, if anything, to maintain. 11

12 II. Propriety of Software and Maintenance Payments (cont.) 5. The two $360,000 maintenance payments in July of 2013 and 2014 for the green screen software were proper. 6. The $280,000 partial maintenance payment on April 29, 2015 was improper because it was an advance which was not authorized by the School Board for software which had not been delivered. Though it is not perfectly clear, there is no evidence to support this being a maintenance payment for the green screen software. Therefore, it was most likely a maintenance payment for the new software, which had largely not been delivered. 7. Any future payments in years 3, 4, or 5 would be improper unless the software is delivered. 12

13 III. Recommendations 1. Establish a policy requiring BPS to develop a scope of work that clearly identifies each item being purchased, the amount for each item, and the date of delivery for each item prior to entering into direct negotiations on service and supply contracts. 2. Establish a policy requiring legal review and approval of all contracts for supplies and/or services over a specified value. 3. Establish a policy requiring (i) invoices and (ii) proper delivery of supplies and/or services to be verified prior to issuing payments. 4. Establish a policy separating BPS purchasing and payment activities. The same office and/or individuals negotiating the contract should not be the same officer and/or individuals approving payment. 13

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15 ERP Software Analysis Brevard Public Schools July 21, 2015 McGlad

16 Introduction Jeff Britton Director, Technology & Management Consulting Southeast Practice Lead for IT Strategy & Transformation Over 12 years of experience helping IT organizations plan, communicate and execute complex IT projects Specific areas of expertise include: IT Strategy & Planning IT Finance & Cost Optimization Program/Project Management IT Operations IT Service Management Governance About McGladrey McGladrey is a leading provider of tax, audit and consulting services focused on the middle market. 8,000 professionals 80 US offices 8 Florida locations McGlad

17 Our Understanding At the request of The Board of Brevard Public Schools on July 2, 2015 McGladrey has conducted a rapid study of ERP projects within Florida public entities, in effort to provide additional visibility and context to the costs and progress of their ERP initiative. Key Points to Consider in this Study: Considerable challenge retrieving relevant data over aggressive schedule Data is not apples to apples comparison, given various modules, levels of customization, terms and duration of support, and inclusion/exclusion of resource costs Even over the last 5-7 years, the ERP landscape has changed considerably, and continues to evolve Overview: In April 2013, Brevard Public Schools entered into an agreement with EDR (Crosspointe) to build a new ERP software solution for HR and finance functions Software & implementation cost: $5,200,000 Annual maintenance & support: $ 560,000 a year until 2018 $ 360,000 for continued support of legacy $ 200,000 for support of new system McGlad

18 ERP Cost Comparison Entity Employees Year Total Project Cost Total Project Cost per Employee Software & Licenses Annual Cost Main. & Support Brevard Public Schools 9, $ 8,000,000 $ $ 5,200,000 $ 560,000 (5 years) Pasco District School Board 9, $ 7,900,000 $ unavailable unavailable Broward County 32, $ 31,000,000 $ $ 2,370,500 $ 521,510 Pinellas County Government 3, $ 7,600,000 $ 2, $ 3,700,000 unavailable Polk County 2, $ 7,029,000 $ 2, unavailable $ 128,700 District of Escambia County 1, $ 1,358,000 $ $ 685,327 $ 170,968 Marion County 5, $3,100,000 $ $ 1,200,000 $ 375,000 Total ERP Project Cost Per Employee McGladrey $ 2, $ 2, $ 1, $ 1, $ $ $2, $2, $ $ $ $ Brevard Pasco Broward Pinellas Polk Escambia $ Marion

19 Time to Implementation Actual data regarding total time to implementation for ERP software in Florida public entities was not readily available. Based upon our research, ERP implementation projects for Florida public entities were typically planned between 2-3 years. Key Drivers for Implementation Time Product and modules selected Extent of change Level of customization Testing and resource training McGlad

20 Research The status of the ERP project for Brevard Public Schools is not ideal but it is also not uncommon. A 2010 study found that across 10,000 different projects in organizations worldwide of software implementation, only 37% were delivered on-time and on-budget. Over 50% of the projects evaluated cost 189% (or more) than the initial budget. Fister Gale, S. (2011). Failure Rates Finally Drop. PM Network, August 2011, A study on ERP projects found that out of 192 different implementation projects 72% of projects took longer than expected 54% of projects exceeded Panorama Consulting Group. (2014) ERP Report McGlad Panorama Consulting Group. (2014) ERP Report

21 McGladrey LLP is the U.S. member of the RSM International ( RSMI ) network of independent accounting, tax and consulting firms. The member firms of RSMI collaborate to provide services to global clients, but are separate and distinct legal entities which cannot obligate each other. Each member firm is responsible only for its own acts and omissions, and not those of any other party. McGladrey, the McGladrey signature, The McGladrey Classic logo, The power of being understood, Power comes from being understood and Experience the power of being understood are trademarks of McGladrey LLP McGladrey LLP. All Rights Reserved. McGladrey LLP One South Wacker Drive, Suite 800 Chicago, IL McGladrey LLP. All Rights Reserved. McGladrey LLP. All Rights Reserved.

22 22

23 Harris School Solutions Tim Fitzgerald Sr. Executive Vice President, Harris School Solutions (HSS) Beth Senn Vice President, HSS Financial Solutions Group

24 Agenda Who is Harris School Solutions? CrossPointe Acquisition What did Harris acquire? When? Why? CrossPointe Solution / Brevard County Public Schools: How did we get here? How do we move forward? Product Timeline (initial assessment) Questions

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