ERP Project Update. Presented to City Council May 3, 2011

Transcription

1 ERP Project Update Presented to City Council May 3,

2 Purpose of Presentation Topic Provide Funding Overview, Progress and Timeline of Phase I Provide Funding Overview and Proposed Timeline of Phase II Summarize information presented to the Audit and Finance Committee regarding Cost-Benefit Analysis Presenter Gary Goforth Greg Jordan Mitt Salvaggio 1

3 ERP Phase I Budget History As of 04/25/2011 ERP Phase I Costs Budgeted Expenditures Remaining Balance Contributions Value of Effort Originally Anticipated everge Implementation $ 8,650,000 $ 8,650, $ 8,650,000 STA Consulting Implementation Oversight 2,735,000 2,735, ,735,000 PeopleSoft Software Maintenance and Training 2,070,000 2,028,000 42,000-2,070,000 Hardware Infrastructure 1,225, , ,000-1,225,000 City Project Team 3,180,000 2,539, ,000-3,180,000 City Project Team Expenses 664, ,000 39, ,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 3,395,000 STA Additional Stabilization Mgmt & Oversight 464, , , , ,000 Extended Backfills - Hudson 301, , ,000 Project Assessment - MiPro 61,000 61, ,000 Sub-Total Not Originally Anticipated 4,075,000 2,606,000 1,469, ,000 4,382,000 Total ERP Phase I Costs $ 22,599,000 $ 20,126,000 $ 2,473,000 $ 307,000 $ 22,906,000 Less funds restricted to Capital Total Available to Allocate $ (1,004,000) 1,469,000 Note: This does not include some internal cost such as staff time that are being charged to departmental operating budgets. 2

4 Contractor Roles 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 3

5 ERP Project Coordination Overview as presented to Audit and Finance Committee March 24, 2011 Project Communication Chart ACM Executive Sponsor Program Coordinator Gary Goforth Police Time Keeping Pete Anderson Police Back Log STA Harry Anderson ERP Support & New Police Reconciliations Mai Tran Fire Reconciliation Richard Neuhaus Training Gary Goforth Communications Deborah Cuffee Human Resources Karen Marshall Payroll Lena Ellis Employee Self Service Gary Goforth TBD TBD TBD 4

6 Phase I Project Responsibilities Executive Sponsor City Manager s Office Project Coordinator Gary Goforth STA Consulting Project & Resource Management Police Time Keeping Pete Anderson (MIPRO Recom.) Police Communication Back Log STA H. Anderson (MIPRO Recom.) New Police Reconciliations & ERP Support Mai Tran Fire Reconciliations & Holiday Pay Richard Neuhaus Human Resources Karen Marshall (MIPRO Recom.) Transition Time Keeping Back to Police TBD Grants Accounting & Account Mapping Lena Ellis Leave Balance Audit (Tools and Procedures) TBD (MIPRO Recom.) Employee Self Service Gary Goforth (MIPRO Recom.) Training Gary Goforth PeopleSoft Software Maintenance & Version Upgrade TBD Business Process Documentation Gary Goforth (MIPRO Recom.) Payroll Lena Ellis Communications Deborah Cuffee (MIPRO Recom.) e-recruiting TBD e-performance TBD Legend: External resources not required External resources required and allocated External resources required but not allocated User Friendly Front End TBD (MIPRO Recom.) e-learning TBD Effort placed on hold 5

7 New Police Paycheck Inquiries / 7/ 11 PP / 21/ 11 PP02 ITS Time Entry Team begins entry with part of a division / 4/ 11 PP / 18/ 11 PP04 ITS Time Entry Team covers three divisions Sworn officers drive timesheet collection 3/ 4/ 11 PP05 3/ 18/ 11 PP06 ITS Time Entry Team covers entire department 64 4/ 1/ 11 PP / 15/ 11 PP08 16 Police Time Keeping Pete Anderson (MIPRO Recom.) 6

8 Police Communication Backlog Status Status as of May 02, Folders Remaining, 21% 729 Folders Completed, 79% Police Communication Back Log STA H. Anderson (MIPRO Recom.) Backlog based on 925 folders as of mid-march,

9 New Police Reconciliations 307 Folders Complete, 100% Status as of April 25, Folders Remaining, 0% New Police Reconciliations & ERP Support Mai Tran 8

10 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 Month Help Desk Tickets October November December January February March April 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 New Police Reconciliations & ERP Support Mai Tran 9

11 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 10

12 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 Human Resources Karen Marshall (MIPRO Recom.) 11

13 ERP Phase I Post 90 Day Timeline April M J J A S O N D J F M A M J J A S O N D Complete Stabilization Grant Accounting GL Account Mapping Process Documentation Leave Balance Audit Police Time Keeping Transition Prioritized Issues Implement & Test 5 Maintenance Bundles Build In-House ERP Support Capability Employee Self Service On Going Implement 9.1 Upgrade ERP Phase II Begins October 2012 Go Live October 2014 Employee Training On Going 12

14 Estimate of Future Work Efforts Post 90 Day Cost Estimate (to be funded by existing appropriations) Complete Stabilization Efforts ERP Support $865,000 Grant Accounting & Account Mapping $60,000 Police Time Keeping Transition $514,000 Employee Self Service & Employee Training $50,000 Total - Post 90 Day Costs $1,489,000 FY2012 Maintenance Efforts Estimate (to be funded in FY12 Operating Budget) Implement Maintenance Bundles $1,300,000 Implement 9.1 Upgrade $1,500,000 FY2012 Maintenance Effort Sub-Total $2,800,000 13

15 ERP Phase II Update 14

16 ERP Phase II Overview ERP Phase II Recent Developments Guiding Principles Schedule and Scope Budget Next Steps 15

17 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 16

18 Phase II Schedule and Scope Phase by Function, FY2012 start Jun 2009 Pre - Implementation Sept 2011 Oct 2012 Phase IIA Core Finance and Procurement Oct 2014 Jul 2014 Phase IIB Budget Development Module Apr 2015 Jan 2015 Phase IIC Enhanced eprocurement & Capital Projects Nov

19 Phase II Budget Jun Sep 2011 Oct Nov 2015 ERP PHASE II PROJECT COSTS Pre-Implementation Implementation TOTAL Implementor (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 1,328,000 PeopleSoft Software Training - 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 Policy Development (Crowe Horwath) 590, ,000 Data Cleansing 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 SOURCES Oct 2010 M&C G (CO Issue) $31,256,000 TBD (FY11 Enterprise Fund Transfers) 14,180,000 TBD (Enterprise Fund Transfers) 3,300,000 TOTAL $ 48,736,000 18

20 Next Steps May 3, 2011 Brief City Council on Phase II Summer, 2012 Consideration of Implementer Contract 19

21 Cost Benefit Analysis 20

22 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 21

23 Background Information Single Source of Truth ERP PACS CLASS 22 Courtview Red Light Enforcement Water Billing Permits Plus FireHouse

24 Cost / Benefit Analysis Overview Software Hardware Cost of New System Implementation Upgrades Ongoing Maintenance & Management Training vs. Benefits/Avoided Costs System Savings Not Implementing Planned Systems Replacing Current Systems Process Improvements Efficiencies Cost Avoidance 23

25 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 24

26 Cost / Benefit Analysis Summary of Major Quantified Benefits Benefit Consistent Application of Overtime Policy Employee Self-Service Efficiencies Reduction in Other Payroll Errors Phase I HR/Payroll Estimated Average Annual Savings Estimated Average Annual Savings - 10 year planning horizon $491,000 $4,910,000 $221,000 $2,210,000 $660,000 $6,600,000 Total $1,372,000 $13,720,000 25

27 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 26

28 Cost / Benefit Analysis Breakdown of Annual Support Cost Increases Phase I Cost Component Anticipated Cost Increases Average Estimated Annual Cost Consulting Support Ongoing Maintenance $198,000 Average Annualized Upgrade Support $383,000 (15 % of Implementation Costs every 4 years) Ongoing PeopleSoft Maintenance $281,000 Ongoing Infrastructure Maintenance $16,000 Unanticipated Cost Increases Operating Budget City Support Staff $733,000 (7 Authorized Positions beyond previous levels) Operating Budget Additional Operating Costs $221,000 Total - Annual Support Cost Increases $1,832,000 27

29 Cost / Benefit Analysis Summary of Major Quantified Benefits Benefit Phase II Finance/Procurement Estimated Average Annual Savings Estimated Average Annual Savings over 10 year planning horizon In-Sourcing the CAFR $698,000 $6,980,000 Decommissioning of the Mainframe $836,000 $8,360,000 Total $1,534,000 $15,340,000 28

30 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 29

31 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 $570, % of Implementation Costs every 4 years 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 30

32 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 31

33 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 32

34 Questions? 33