ATTACHMENT 2 UPDATE ON ARIBA PROJECT IMPLEMENTATION

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1 ATTACHMENT 2 UPDATE ON ARIBA PROJECT IMPLEMENTATION I. Overview of Ariba Implementation Process 1 The following provides an update on the Ariba implementation since the last update was provided in May Considerable progress has been made to date. Technology Go-Live vs. Business Go-Live There are two different Go-Live dates associated with implementation: Technology Go-Live refers to when the Ariba technology has been configured to the County s specifications and is ready to be used by the County. This occurs after the County has tested and validated that the configuration meets the County s specifications. Business Go-Live refers to when the County will actually start using the technology. The County will start conducting transactions using the technology after County end-users complete training and the necessary change management has been implemented. Ariba will also continue to provide additional support for a period of time. II. Ariba Project Implementation Goods and Related Services A. Procure-to-Pay (P2P) Module Implementation Phase 1 2 Scope Phase 1 for P2P was focused on goods and related services contracts that are centrally established by the Procurement Department and used by different County departments. 1 The descriptions for the different modules are provided in Attachment 1 to the Legislative File. 2 Because of the Countywide nature of P2P implementation, a phased approach is being used to roll out the module. More background information about the P2P implementation was previously provided to the Committee. 1

2 There were 3,358 suppliers 3 currently in scope for Supplier Enablement for goods and related services contracts, standard purchase orders (POs) and Field Purchase Orders (FPOs). The Procurement Department has 707 term contracts for goods and related services with 566 of those suppliers, and the rest of the suppliers are on POs and FPOs, which are mostly one time purchases and small dollar purchases. Therefore, in Phase 1 the goal was to enable the 3,358 suppliers so that the County can transact with them using Ariba. Pre-Implementation Work Suppliers need to be enabled on the Ariba Network in order to transact business with the County. The following describes the steps that need to occur before Departments can start using the technology: 1. Set up Goods and Related Services contracts: a. Establish contracts by creating a contract workspace in Ariba. b. Setup pricing terms to ensure contract compliance based on categories such as item, catalog, and commodity and supplier level. c. Identify the type of product being procured under an agreement, and determine the appropriate type of catalog for that product, such as Catalog Interchange Format (CIF) or punch-out catalogs. d. Collaborate with suppliers to build catalog files based on the list of contracted goods and related services. e. Import and enable the catalogs. f. Conduct contract legacy load into Ariba. 2. Enable the Procurement Department to issue POs and FPOs for non-contract purchases that will be made by departments. 3. Enable requisition approval process based on pre-established workflows. 4. Enable processing of goods receipts. 5. Enable invoice processing and invoice exceptions. 3 The 3,358 suppliers represent the number of suppliers currently transacting in SAP. Some of these suppliers may also have Board Contracts and Service Agreements with the County outside of contracts established by the Procurement Department. 2

3 Implementation Strategy Phase 1 of P2P was scheduled to be rolled out to the County in four waves. Each wave focused on certain departments and, to the extent possible, the waves were grouped based on Board Committees to provide synergy in focus. Ariba and the County determined that the wave-planning criteria should be department-focused as opposed to other criteria, such as commodity type, because the County will be better able to facilitate end-user training and support and manage introducing a new system to staff from similar departments at the same time. Also, based on their operations, these likefor-like departments typically have similar purchasing needs and concerns and similar approaches to doing business. Supplier Enablement and Catalog Realignment The County has enabled 761 suppliers to transact on the Ariba Network and has cataloged 270 contracts to date. During this process, the County had to reevaluate how the contracts were cataloged because it did not meet the operational needs of specific departments. The Ariba Project Team met with the Ariba innovation product group and spent two full days at the SAP Innovation Center in Palo Alto to discuss the issues the County customers were facing with the way we had configured the workflow processes. The solutions discussed has allowed the County to establish different ordering methods to accommodate the operational needs on the front end to place orders to suppliers while being compliant on the financial front. Similarly, Ariba introduced a method of enabling suppliers for transactional procurement called Light Enablement which allows the County to transact with the supplier more quickly and efficiently than the traditional model outlined in their previous model for enabling all suppliers. Due to these two major changes, the County has introduced and implemented the P2P Module for transactional procurement for goods to the entire County for the 270 contracts that have been cataloged. The Procurement Department has undertaken the role of prescribing the method of ordering for catalogs with a non-traditional buying model to help the clients in various departments. Spot Buy for Small Dollar Purchases Ariba has introduced an online acquisition process for small dollar purchases of goods with established suppliers. The County is currently working with Ariba to test the functionality to evaluate how best to incorporate that for transactional procurement. 3

4 B. Ariba Modules with Implementation Dates Module/Workflow Phase Technical Implementation Date Supplier Information Management (Core Module) Phased Rollout Commencement Date 1 January 2015 April 2015 Discount Professional Cash Management (ancillary) Sourcing Professional (Core Module) Procure-to-Pay Module for Transactional Procurement with SAP integration to FM Module (Core Module) 1 January 2015 March June 2015 July 2015 (Used by Procurement for ITB/RFQ) 1 October 2015 October 2015 Supplier Enablement 1 Commenced On-going (ancillary) December 2014 Cataloging (Punchout and CIF) 1 Commenced On-going March 2015 Contracts Module with DocuSign for Electronic Signatures (Core Module) 2 March 2016 May 2016 (Used for new contracts by Procurement) Procurement Workspace 2 March 2016 May 2016 (Workflow) Supplier Performance 3 June 2017 September 2017 Management Spend Visibility (ancillary module) 3 December 2016 February

5 C. Branding, Marketing and Change Management Branding The goal of change management is to help Procurement staff, clients and suppliers impacted by the change to make a successful transition, given what is required by the solution. As part of the effort to be inclusive in the SCC P2P Project, a slogan contest within the departments (Procurement, Finance and Information Services Department) was followed by the creation of the SCC P2P logo. 17 submissions were received, and the winner slogan was SCC P2P Collaboration Made Easy. To increase brand awareness, the logo and slogan have been used consistently for all materials related to the Project. Marketing The Ariba project impacts all County Departments. The P2P Module Wave 2 Roll-Out Plan was implemented in January 2016 after the P2P module was successfully piloted by two County departments as Wave 1. At Wave 2, ten departments with the largest spend were identified. Presentations were conducted by the Project Team at these ten departments. Information packets and promotional items were provided to the department staff at these presentations. In total, Procurement has completed 31 roadshows to departments to engage and educate departments about the P2P Module rollout. As of August 31, 2016, the P2P Module has been rolled out Countywide and 628 staff have been trained in various roles. Attachment 3 has additional information related to this topic. In 2016, the Procurement has developed a comprehensive Vendor Outreach Plan to engage with the vendors. One of the major activities of this Plan is to conduct quarterly Workshops to educate the vendors about the procurement, contracting processes and business opportunities in the County and update them about the SCC P2P Project. Two workshops were held in July and November 2016 and many of them took the opportunity and registered on the Ariba System after the Workshop. 5

6 Change Management/Training Training is the foundation for building knowledge about the change, and developing the required skills necessary to succeed. Identifying the people who will be impacted and needing to be trained is a primary role of change management. Working in partnership with the Ariba Change Management Senior Consultant, the Project Team developed its internal change management strategies and plan. The Ariba Consultant, with input from the County technical and functional team members developed training materials, quick reference guides (QRG) and webinars for each module that was deployed. Ariba provided at least one Consultant Trainer-led classroom training to selected or nominated users, super users or trainers (train the trainers) once the module was pushed to production. Based on feedback, the materials were revised and updated; Procurement then accepted and confirmed completion of delivery from Ariba to SCC Project team. The SCC functional leads along with the technical leads updated the training materials as necessary during adoption. Changes are driven by technical and/or process due to system improvement/enhancement or policy changes. In addition to hands-on training, Countywide P2P Module training was provided by Procurement and Controller-Treasurer/ASAP teams on the following dates with additional sessions provided as needed between September and November Date Time Location Training Type Address Location in San Jose 7/26/2016 1:30 pm - 5:00 pm Isaac Newton Senter Req-to-Receipt 70 West Hedding Street 7/28/2016 8:30 am - 12 Noon Sheriff's Auditorium Req-to-Receipt 55 W. Younger Avenue 8/4/2016 8:30 am - 12 Noon Isaac Newton Senter Req-to-Receipt 70 West Hedding Street 8/10/2016 1:30 pm - 5:00 pm HHS-Valley Specialty Center Req-to-Receipt Basement S. Wing, Room BQ160 8/16/2016 1:30 pm - 5:00 pm SSA Auditorium Req-to-Receipt 333 West Julian Street 8/17/2016 8:30 am - 12 Noon SSA Auditorium Req-to-Receipt 333 West Julian Street 8/18/2016 1:30 pm - 5:00 pm Isaac Newton Senter Req-to-Receipt 70 West Hedding Street 8/24/2016 1:30 pm - 5:00 pm SSA Auditorium Req-to-Receipt 333 West Julian Street 8/25/2016 8:30 am - 12 Noon Isaac Newton Senter Req-to-Receipt 70 West Hedding Street 7/27/2016 1:30 pm - 5:00 pm SSA Auditorium A/P Invoice 333 West Julian Street 8/9/2016 1:30 pm - 5:00 pm Isaac Newton Senter A/P Invoice 70 West Hedding Street 8/11/2016 8:30 am - 12 Noon SSA Auditorium A/P Invoice 333 West Julian Street 8/23/2016 1:30 pm - 5:00 pm SSA Auditorium A/P Invoice 333 West Julian Street 6

7 D. Spend Visibility Spend Visibility is an ancillary module which will help the County analyze transactional spend data from Ariba applications, SAP and McKesson s Pathway Materials Management System (PMM). The implementation commenced on September 1, 2016 with an anticipated completion date of December As part of this ancillary module, Ariba provides a dedicated Program Manager through the term of the agreement. The County has built interfaces to extract data from SAP and PMM to facilitate the ease of data collection to upload into the Spend Visibility tool. To date, the County has provided 15 months of past purchase order and invoice transactions to Ariba as requested. Ariba will complete the data enrichment and rationalization process and build dashboards and reports in January Ariba will provide training to the key users. III. Ariba Implementation Professional Services Phase 2 of the Ariba Project implementation will include Service Agreements and Board Contracts that are primarily done in decentralized contracting. This includes professional service agreements, such as agreements with Community Based Organizations (CBOs), architects and engineers, and other professional consultants. Decentralized contracting is part of Phase 2 because Administration determined it would be most beneficial to the County to focus on goods and related services in Phase 1. This allows the County to use the new technology in a centralized environment and be able to take lessons learned from the Phase 1 implementation and apply them to the future phases. As the goods and related services contracts are brought forward into the Ariba system, detailed planning for implementation of the professional services contracts will be in place, and a multi-wave process will be used to bring these contracts into the system as well. 7