BOARD OF SUPERVISORS FINANCE/GOVERNMENT OPERATIONS AND ECONOMIC DEVELOPMENT COMMITTEE ACTION ITEM

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1 BOARD OF SUPERVISORS FINANCE/GOVERNMENT OPERATIONS AND ECONOMIC DEVELOPMENT COMMITTEE ACTION ITEM Date of Meeting: # 3 SUBJECT: ELECTION DISTRICT: Monthly Report/Implementation of the Enterprise Resource Planning (ERP) Project Countywide CRITICAL ACTION DATE: STAFF CONTACTS: John Sandy, County Administration Wendy Wickens, Information Technology Vince Marchesano, Vivad Technologies, LLC PURPOSE: To provide an update on the status of the County s Enterprise Resource Planning (ERP) system implementation as well as to seek approval to hire a Project Executive to support the project. RECOMMENDATION: Staff recommends that the Finance/Government Operations and Economic Development Committee authorize the Purchasing Agent to award a contract to Yahya Technologies, LLC (Y-Tech) in the amount of $533,200 for Project Executive Services for Phase 2 of the ERP system implementation. BACKGROUND: The Loudoun County Government (LCG) and Loudoun County Public Schools (LCPS) began implementation of a new ERP commercial off-the-shelf (COTS) system in January 2012 as part of a larger program to replace three core financial systems: ERP, Computer Aided Mass Appraisal (CAMA), and Integrated Tax Revenue (ITR). This action was based on an independent assessment of Loudoun s legacy financial, human resources, and taxation systems, as well as the future replacement of those systems. The ITR and CAMA systems were successfully implemented and are now fully operational. On November 2, 2011, the Loudoun Board of Supervisors (the Board) authorized the negotiation of a contract to implement ORACLE ebusiness Suite (EBS) as the ERP System for Loudoun and LCPS. The resulting contract included EBS licensed software and implementation services for the ERP system, which were to be deployed in three phases, as detailed below.

2 Page 2 Phase 1: Financials, Procurement, Grants, and Document Management: o Duration: January 2012 July 1, 2013 o Status: COMPLETE Phase 2: Human Capital Management (HCM) Applications (HR and Payroll) o Duration: January 2014 August 2017 o Status: Paused in November 2015 and Restarted in May 2016 Phase 3: Advanced Procurement o Duration: November 2013 May 2014 o Status: COMPLETE Phases 1 and 3 were implemented and are currently operational, and on May 9, 2016, Oracle America Corporation, Inc. (Oracle) was retained to complete the Phase 2 HCM implementation. ISSUES: This item provides a monthly update from the Department of Finance and Procurement and the Department of Information Technology on the current implementation of the ERP system. The Loudoun Project Manager, Vince Marchesano, and Loudoun staff will be present to discuss details and answer questions. Phase 2 Human Resources and Payroll In January 2016, Loudoun engaged Oracle to perform a comprehensive assessment of the Phase 2 implementation and to recommend a road map to best move the project forward. Based on the outcome of the assessment, Loudoun authorized Oracle to begin the Phase 2 implementation on May 9, 2016, and on June 23, 2016, the Board approved the appropriation of $4,775,527, which includes a 10% contingency amount, from the FY 2016 General Fund balance to complete the implementation by August Oracle Phase 2 Implementation Oracle is currently onsite providing project management and system integration services. Additionally, the Business Transformation Office (BTO) is providing operational and strategic management support to LCG and LCPS, and Project and Client Management is providing internal project management and project communication across and among LCG and LCPS, the Oracle project team, and the project s Executive leadership. Further supplementing project efforts, Gartner, Inc. is providing Independent Verification and Validation (IV&V) support, which includes project management and technical review services. Approach Oracle s approach to successfully completing the Phase 2 implementation is based on the standard Oracle Unified Method (OUM - Oracle s methodology for deploying Oracle-based business solutions). To maximize efficiencies, Oracle further structured this implementation into two distinct sub-phases Phase 2 A: Inception and Elaboration and Phase 2B: Construction, Transition, and Production.

3 Page 3 During Phase 2A, Oracle, LCG, and LCPS have collaboratively reviewed all business requirements to (a) determine whether they are still applicable and to ensure that they are clearly defined; (b) determine whether the requirements can be met leveraging standard, out-of-the-box Oracle functionality (i.e., a fit ), or if a change to a business process or a customization is required to meet the requirement (i.e., a gap ); and (c) determine what existing design/build can be reused from the previous implementation, if any. These activities resulted in a scope of work, solution design, and test plans. During Phase 2B, Oracle is building the solution, data is being converted, LCG and LCPS will validate the build, and other tasks will be completed in preparation for Go-Live (i.e., testing, change management activities, including communications, training, documentation, post production support planning, etc.). Recently, as part of the project s go-live planning effort, the decision was made to stagger the LCG and LCPS go-live dates by three weeks; LCPS will go-live, as scheduled, on July 5, 2017 (first pay checks will be processed through Oracle with a July 21 st pay date), and LCG will go-live on July 24, 2017 (first pay checks will be processed through Oracle with an August 4 th pay date). The staggered implementation approach not only reduces risk (i.e., processing data conversions, VRS calculations, and a single initial payroll run instead of two), it also alleviates burden on both Loudoun and Oracles resources. The revised schedule is presented as Attachment 1: Oracle Phase 2 Project Timeline.

4 Page 4 Status Per the approved and baselined project plan, the Phase 2 implementation is 67% complete and scheduled to go-live in July 2017 (i.e., LCPS will go-live on July 5, 2017 and LCG will go live on July 24, 2017). The status of key project activities and milestones, by phase, are detailed below. *Note: The start and completion dates for the referenced key activities and milestones may fluctuate due to the concurrent nature of associated tasks; fluctuations will be closely monitored by project management, and will report and mitigate any impact to the critical path. Further, reported status is as of February 6, Inception Phase Phase 2A: Key project activities and milestones are complete. Elaboration Phase Phase 2A: This phase is 88% complete. o Completed Activities and Milestones: Data Cleanup (LCG and LCPS) o In Progress Activities and Milestones: System Integration Test (SIT) Test Scripts (LCG and LCPS): Percent Complete: 52% Scheduled Completion Date: March 3, 2017 *Note: The scheduled completion date changed from March 10 th to March 3, 2017; this change bears no negative impact to the critical path, and will enable project resources to dedicate efforts to other tasks. Construction Phase Phase 2B: This phase is 74% complete. o Completed Activities and Milestones: CRP2 (LCG and LCPS) Training Plan (LCG and LCPS) o In Progress Activities and Milestones: Detailed Functional Design Documents (LCG and LCPS): Percent Complete: 92% Scheduled Completion Date: *Note: The scheduled completion date changed from February 24 th to ; this change bears no impact to the critical path, and the earlier completion date will enable project resources to dedicated efforts to other tasks. Detailed Technical Design Documents (LCPS): Percent Complete: 58% Scheduled Completion Date: March 6, 2017 Detailed Technical Design Documents (LCG): Percent Complete: 43% Scheduled Completion Date: March 28, 2017 *Note: Per the realigned project schedule and revised LCG go-live date, this task will complete three weeks after LCPS. CWB Set-up and Configuration (LCG): Percent Complete: 52% Scheduled Completion Date: February 20, 2017

5 Page 5 Set Up and Configuration (LCG and LCPS): Percent Complete: 97% Scheduled Completion Date: February 24, 2017 CEMLI Development (LCPS): Percent Complete: 54% Scheduled Completion Date: April 13, 2017 CEMLI Development (LCG): Percent Complete: 45% Scheduled Completion Date: May 4, 2017 *Note: Per the realigned project schedule and revised LCG golive date, this task will complete three weeks after LCPS. User Productivity Kit (UPK) Training Materials (LCG and LCPS): Percent Complete: 5% Scheduled Completion Date: May 18, 2017 o Scheduled Activities and Milestones: Train-the-Trainer (LCG and LCPS): Scheduled Start Date: April 24, 2017 Scheduled Completion Date: May 17, 20 User Acceptance Test (UAT) Test Scripts (LCG and LCPS): Scheduled Start Date: March 6, 2017 Scheduled Completion Date: May 1, 2017 *Note: The scheduled start date changed from March 10 th to March 6, 2017, and the scheduled completion date changed from May 12 th to May 1, 2017; this change bears no impact to the critical path, and will enable project resources to dedicated efforts to other tasks. Transition Phase 2B: This phase is 2% complete. o In Progress Activities and Milestones: Data Cleanup Maintenance (LCG and LCPS): Percentage Complete: 5% Scheduled Completion Date: May 12, 2017 CRP3/SIT Preparation (LCG and LCPS): Percentage Complete: 33% Scheduled Completion Date: o Scheduled Activities and Milestones: Conduct CRP3 (LCG and LCPS): Scheduled Start Date: February Scheduled Completion Date: March 3, 2017 Conduct SIT (LCPS): Scheduled Start Date: March 3, 2017 Scheduled Completion Date: May 5, 2017

6 Page 6 Conduct SIT (LCG): Scheduled Start Date: March 27, 2017 Scheduled Completion Date: May 23, 2017 *Note: Per the realigned project schedule and revised LCG go-live date, this task will complete three weeks after LCPS. UAT Preparation (LCPS): Scheduled Start Date: April 27, 2017 Scheduled Completion Date: May 9, 2017 UAT Preparation (LCG): Scheduled Start Date: May 1, 2017 Scheduled Completion Date: May 25, 2017 UAT (LCPS): Scheduled Start Date: May 8, 2017 Scheduled Completion Date: June 22, 2017 *Note: The scheduled start date changed from May 10 th to May 8, 2017,and the scheduled completion date changed from June 27 th to June 22, 2017; this change bears no impact to the critical path, and will enable project resources to dedicated efforts to other tasks. UAT (LCG): Scheduled Start Date: May 26, 2017 Scheduled Completion Date: July 10, 2017 *Note: Per the realigned project schedule and revised LCG go-live date, this task will complete three weeks after LCPS. Production Infrastructure: Scheduled Start Date: May 1, 2017 Scheduled Completion Date: June 28, 2017 Production Phase 2B o Scheduled Activities and Milestones: Cutover to Production (LCPS): Scheduled Start Date: June 16, 2017 Scheduled Completion Date: July 5, 2017 Cutover to Production (LCG): Scheduled Start Date: July 10, 2017 Scheduled Completion Date: August 3, 2017 *Note: The start and completion dates for this activity were updated to reflect the realigned project schedule and revised LCG go-live date. Post Go Live Support (LCPS): Scheduled Start Date: July 6, 2017 Scheduled Completion Date: August 2, 2017

7 Page 7 Post Go Live Support (LCG): Scheduled Start Date: July 25, 2017 Scheduled Completion Date: August 21, 2017 *Note: The start and completion date for LCG post go-live support were updated to reflect the realigned project schedule and revised LCG go-live date. There are currently no issues that Oracle and Loudoun project management deem to be an impact to the overall project. ACTION NEEDED: Phase 2 of the ERP implementation is currently 67% completed, and both LCG and LCPS will begin the transition of activities for go live within the next four months. In preparation for go live, as well as post production support, a Project Executive (PE) is being requested from Y-Tech, LLC to provide additional project leadership. Y-Tech holds a GSA Schedule 70 contract that the County is eligible to leverage to provide the requested services. The PE s primary focus will be to provide executive oversight over the project and to ensure that the transformational strategy and post go live support structure are developed and initiated for both LCG and LCPS. This will be accomplished in two phases. During the first phase, the PE will provide executive level leadership for each department executive sponsors, contractors currently working on the project including Oracle (Project Management and System Integration), VIVAD Technologies (Project and Client Management), YTech (Business Transformation), Gartner (IV&V), and C2 Technologies (Organizational Change Management). Additionally, the PE will focus on ensuring that effective communications occur across and between LCG and LCPS leadership. The PE will: Provide the initial framework for the post go live support strategy. Work under the supervision of the County Administrator to ensure that project communication is effective and issues are raised in a timely manner to the right people. Ensure that all contractual resources are communicating and coordinating effectively to ensure project alignment. Review existing project resources to identify if there are any gaps that could lead to project risk. Lead short and long-term strategy development and provide strategic leadership through facilitating or advising strategy development while demonstrating foresight, conceptual capability and organizational awareness. Support the development of a clear case for business transformation, desired outcomes, accurate scope, clear roles and decision-making. During the second phase, the PE s focus will shift to managing and monitoring ongoing business operations associated with the HCM implementation, developing and providing guidance for the implementation of the ERP business strategy, and developing a realistic and workable business

8 Page 8 model focused on efficient delivery of technical and functional services and support for the HCM system. The PE will: Complete the development of a post go live strategy including presenting various models for communication and decision making with executive leadership Identify transformational business practices that will result in streamlining of business processes and result in long term post go live support costs. Serve as the champion for organizational transformation for both Loudoun County and Loudoun County Public Schools. Identify impacts to organizational structure and staff based upon transformational changes. Lead the effort to initiate and manage the chosen post go live transformational structure. The total cost for the PE contractual services is estimated at $533,200. The PE is expected to begin on March 15, 2017 and will provide services for approximately one year. FISCAL IMPACT: The Board appropriated $4,775,527 from FY 2016 General Fund Balance to complete the Phase 2 implementation. Currently $3,142,638 is available (unencumbered) in the ERP project in the Capital Fund. Staff requests to use $408,200 of the funds set aside for post go live support to hire this Project Executive in support of the Phase 2 go live, and post production support of the HCM system. The remaining $125,000 will be transferred via a budget adjustment from available and undesignated contingency funds from the Public Safety Technology System project. The PSTS Project s Orion System and Oracle Phase 2 require an important interface to afford for proper time and labor data entry into both the HR and Payroll modules. Among their many tasks, the Project Executive will be involved in ensuring that this becomes a successful effort. The contract with Oracle has been finalized and the total cost for Oracle to complete the Phase 2 implementation is estimated at $9,906,061, which has already been encumbered. The remaining funds not currently obligated are anticipated to be used for additional post go live support and other ancillary items related to the successful completion of Phase 2. No additional funds are being requested at this time. ALTERNATIVES: The Board could direct staff to absorb the Project Executive activities utilizing current staffing. This is not recommended as current staff do not have sufficient time to devote their full time attention to project oversight and the development of the post production transformational strategy, which is critical to ensuring the post production support model is developed and initiated.

9 DRAFT MOTIONS: Item 3, Monthly Report/Implementation of the Enterprise Resource Planning (ERP) Project Page 9 1. I move that the authorize the Purchasing Agent to award a contract to Yahya Technologies, LLC (Y-Tech) in the amount of $533,200 for Project Executive Services for Phase 2 of the ERP system implementation. OR 2. I move an alternate motion. ATTACHMENTS: 1. Oracle Phase 2 Project Timeline

10 ATTACHMENT 1: ORACLE PHASE 2 PROJECT TIMELINE