ERP Needs Assessment Report CITY OF GEORGETOWN, TX MAY, 2017

Transcription

1 ; ERP Needs Assessment Report CITY OF GEORGETOWN, TX MAY, 2017

2 Table of Contents 1. Executive Summary Project Background Project Goals & Objectives Assessment Scope Project Approach Summary of Key Findings Options Analysis Summary and Recommendation Current Systems Assessment SWOT Analysis Key Issues and Opportunities Application Inventory and Preliminary Migration Plan Application Inventory Current Profile Assessment and ERP Readiness Options Analysis & Recommendation ERP System Deployment Options ERP System Deployment Comparison ERP System Deployment Comparison Matrix ERP System Deployment Considerations Total Cost of Ownership (TCO) Comparison Options Analysis & Recommendation ERP Marketplace Overview Vendor Consolidation Update Market Consideration: Tier 1 vs. Tier 2 ERP Market Consideration: On-Premise Vs. the Cloud Market Consideration: Integrated ERP vs. Best-of-Breed P age

3 1. Executive Summary 1.1 PROJECT BACKGROUND The City of Georgetown (the City), located approximately 30 miles outside of Austin, Texas is home to approximately 63,000 citizens and growing at a rate of almost 8%. The City was named the nation s fastest growing city with a population of 50,000 or more according to the US Census Bureau in As the community continues to grow rapidly, the City as an organization recognizes the need to enhance efficiency internally which requires resources and technology to support these goals. Within the City, Finance, Human Resource (HR) and Information (IT) departments are core internal functions supporting all other City services such as Development and Planning, Police and Fire, Parks and Recreation, Library, Facilities, Engineering and Business Resource Management, Municipal Court, Customer Care, Public Works, and Utility Operations. The City has been operating on the legacy version of Incode 9 (a subsidiary of Tyler Technologies) as its primary financial management system since January Incode modules deployed to date and utilized in various capacities, include: General Ledger Accounts Payable Accounts Receivable Budget Cash Receipts Time & Attendance Payroll Utility Billing Municipal Court Fixed Assets Purchasing Human Resources The City does not currently have a full service human resource platform, although Incode does provide some basic human resource and payroll functionality. In addition, departments throughout the City use decentralized side systems, such as Microsoft Excel, to manage information due to the limitations of Incode. The City replaced the fixed asset system in October 2014 and is in the process of replacing the Incode Utility Billing module with a new Customer Information System (CIS). The City recognizes that their aging version of Incode without a SQL server database on the backend may be deficient in supporting certain business needs. Many City staff have articulated their concerns with lack of functionality and challenging usability of the current system. Additionally, the City has recently experienced a fair amount of staffing changes in various departments/divisions which has presented a unique opportunity to define a strategic course of direction for improving their Enterprise Resource Planning (ERP) environment and related business processes. 1.2 PROJECT GOALS & OBJECTIVES The City is reviewing its ERP software environment with the following goals in mind: 1. Identify challenges including people, process and technology with current City ERP-related business processes 2. Identify opportunities for process improvements without and with new technology 3. Identify system needs for a new ERP system 4. Move forward with selecting and implementing a new enterprise resource planning environment 2 P age

4 To support these goals, in October 2016 the City engaged Plante & Moran, PLLC (Plante Moran) to: 1. Conduct a comprehensive needs assessment for the City s ERP software environment and related business processes to identify City needs for the system replacement of the legacy Incode solution 2. Identify opportunities for process improvements and provide recommendations to address issues and gaps related to the current system and business processes 3. Provide an options analysis and recommendation of new ERP system deployments including total cost of ownerships for each option 4. Conduct current state business processes mapping for key established business process 1.3 ASSESSMENT SCOPE Included in the scope of this assessment were the following key business processes spanning over two major business functions. Business Functions Business Processes Financial Management Accounts Payable Bank Reconciliations Budgeting Cashiering/Point of Sale (POS) Cash Management Cash Receipting Contracts and Grants Management Debt Management Fixed Assets Financial Reporting General Ledger Inventory Management Investment Management Miscellaneous Billing/Accounts Receivable Project and Grant Accounting Purchasing Travel and Expenses Human Resource Management Absence/Leave Management Applicant Tracking/Requisitions Employee Performance Reviews Employee Self-Service Human Resources Learning Management Payroll Risk Management The project scope excluded recommendations for systems and processes outside of the above functional areas. However, interfaces to additional systems were included as part of the review due to the importance of their functions in supporting the related business processes covered within the scope of the project. 3 P age

5 1.4 PROJECT APPROACH The following chart illustrates the approach that was taken in performing the ERP Needs Assessment: The project was conducted using a participative and inclusive approach with significant input from City management and staff to ensure accuracy, completeness, and ownership of the resulting recommendations. Participation was obtained through the following activities: Developing a Project Steering Committee to assist in creation of the project charter, work with the City staff to identify needs, make decisions about the project, and review and provide feedback on project deliverables. Facilitating project management status meetings to manage project activities and provide status updates. Conducting interviews with City management, departmental end users, and process owners to evaluate current systems and business processes. Collection and review of numerous documents provided by the City, as well as completed questionnaires by department staff. Soliciting input from the participating Departments that included the evaluation of the following items: identification of current systems, duplicate entry / re-keying of information, strengths and issues with / shortcoming of current systems, strengths, unused features / functionality of current systems, opportunities to interface systems, unique City business rules, vendor interaction, current and future technology project initiatives The process for implementing new technology not only focuses on the technology itself, but also aims to enhance existing business processes performed by individual departments across the City. is intended to enhance departmental business processes by: Making them more efficient Making them more effective Improving decision-making Providing enhanced customer service to both internal and external customers Improving access to information Streamlining processes to reduce costs. 4 P age

6 1.5 SUMMARY OF KEY FINDINGS The approach Plante Moran followed in developing the needs assessment report focused on identifying how the current technology applications supports the City s business goals and denoting opportunities for improving the effectiveness of business processes performed at the City in the future. Below is a summary of key current state findings and key opportunities detailed further in Section 2: Current State Assessment of this report. Key Current State Findings There were a number of consistent themes noted throughout each of the functional areas. The key highlevel current state findings are summarized as follows: Aging Incode system lacks functionality and automation capabilities available in modern ERP systems HR processes are manual and paper based as there is currently no system or ERP module in use Current system limitations requires the use of side systems and processes Lack of system integrations eliminates automation opportunities The chart of accounts design no longer meets the City s requirements Incode lacks functionality that is standard in modern ERP systems (either because they are not available or were never implemented) including robust search capabilities, self-service capabilities, full integration between all modules and linking related documents, electronic workflow, dashboard capabilities and user friendly reporting. These automated functions can significantly enhance efficiencies, as they enable users to complete and route transactions to the appropriate decision makers leveraging the use of notifications and queues. The City s Human Resources (HR) department does not currently have an integrated set of applications designed for personnel management, employee self-service, applicant tracking, payroll processing integrated with personnel master file, and training and certification management resulting in manual and paper based processes. Human Capital Management is commonly offered as a primary module within new ERP systems to manage these activities and support the organization s HR and Risk Management responsibilities. To address gaps in the current system, the City uses many side systems and processes (i.e. individual Microsoft Excel spreadsheets, Access databases, and paper files) that require excessive time to use and maintain. Replacing these systems with an integrated ERP system can reduce the effort required to maintain the information, make information more accessible to others, prevent data loss, decrease manual reconciliation, and reduce the risk of human error through duplicate entry or structured import. The City s use of multiple standalone systems utilized by departments with limited or no automated integration to Incode causes significant delays, multiple sources of truth, manual and redundant data entry, manual processes and reconciliations, and limited reporting as staff do not have access to necessary, detailed information in real-time. The chart of accounts does not have a consistent structure across all departments and object codes have different meanings in different departments. Departments are requesting new general ledger accounts, typically as a work around to manage projects, grants, and funds at a more granular level. This has made the chart of accounts very large and cumbersome to manage. A redesign of the chart of accounts is needed 5 P age

7 and a change in processes on how to manage this change is required to improve reporting capabilities. Limited access to real-time data makes it difficult to make financial decisions Lack of training and system access Due to limitations in Incode, many business processes are manual, paperbased, and very time consuming. This creates a considerable lag time of updated data to be accessible in the system and in reports. For example, the majority of the budget process is done outside the system and an extremely cumbersome process. Therefore, departments do not have access to their updated budgets for the current year until after the year begins. Many departments rely on Finance or IT to run or query reports on data from Incode due to lack of training and system access. Additionally, they rely on Excel spreadsheets or other systems to store duplicate information so that they have real-time information accessible to them. Key Opportunities There were a number of consistent themes noted throughout each of the functional areas. The key highlevel opportunities are summarized as follows: Full integration between City systems and ERP modules Immediate access to real-time data Improved reporting capabilities Enhanced automation and online workflows and approvals Streamlined business processes aligned with best practices Improved training for City staff Full integration between all ERP modules and core City systems will allow for the elimination of side systems, duplicate entry, and manual reconciliations. Eliminating side systems and manual or paper based processes will allow for real-time, immediate update and access to financial information and reporting. User-driven, user-friendly and flexible reporting tools that support the information needs of staff and client including tracking and reporting of performance metrics. Elimination and/or reduction of manual and paper-based processes by replacing with automated, online workflows and approvals. New ERP system allows for streamlining business processes and incorporating established government best business practices. An ERP replacement project is an ideal time to develop and provide training to City staff on new system and processes. Select a system deployment model that best meets the needs of the City ERP systems and vendors currently in the marketplace offer several system deployment models that can be assessed and selected to best meet the needs of the City. Overall, the majority of the unmet needs that are listed above could be met by a public sector based ERP system with a common database. 6 P age

8 1.6 OPTIONS ANALYSIS SUMMARY AND RECOMMENDATION ERP System Deployment Options Consistent with project objectives to replace the legacy ERP system, this options analysis compares the system deployment options currently available in the marketplace to implement a new ERP system. Ultimately, this analysis and recommendation will assist the City in making a strategic decision for the ERP system deployment method that best meets the needs of the City. There are three (3) distinct ways to implement an ERP solution: traditional on-premise, traditional vendor hosted ( Private-Cloud ), and Software-as-a-Service (SaaS) Public Cloud. Therefore, the City has three primary options in regard to the strategic direction of deploying the new ERP system: Option 1: On Premise Option 2: Vendor Hosted Option 3: Public Cloud The City would procure the hardware and software for a new ERP system and deploy in the City s environment on-premise. The City would procure the software for a new ERP system and host in the vendor s environment off-premise via a private-cloud. The City would subscribe to and implement an ERP Public Cloud solution. Recommendation Plante Moran evaluated three scenarios to assist the City in making a decision on a preferred approach to modernize the ERP environment. Plante Moran believes that all three of the options presented are viable considerations for the City. All three of them have advantages and disadvantages, so therefore it is important that the City consider the ultimate goals and criteria that will be used to measure the success of the project. Based on the City s current ERP environment and other factors that tie into the process of making a decision that will best serve the needs of the City over the long-term, Plante Moran viewed the following key criteria and factors in assessing each of the options and making a strategic direction recommendation: ERP system replacement project Total Cost of Ownership (TCO) City FTE s available to implement and support ERP City technical infrastructure System deployment fit with what is generally observed with other organizations of a similar size and complexity Ability for the City to take on risks, such as availability of resources during implementation, tolerance for change, sustainability of complex technology investments, and long-term support for Ability to expand the solution set to incorporate needs that have not currently been implemented City staff knowledge and use of current technology capabilities and best/next business practices that exist in current ERP systems Ability for City to commit the necessary resources for the change to include both staff time and financial expenditures Timeframe associated with achieving benefits from each deployment option Desire to lessen dependence on internal IT support resources Willingness for the City to consider solutions that are hosted external to the City 7 P age

9 Based on the above factors as assessed by Plante Moran during the course of our interview process and collection of background information, we feel that the most prudent course of action is to proceed with a cloud deployment method (Option 2 or Option 3) for the following reasons: 1. Upfront Costs: There are less up-front costs associated with cloud systems since little infrastructure is needed. 2. Upgrades: Your system will always be compatible with upgrades, and in some cases the upgrades are included in the software license fees. Upgrades are handled by the vendor and require less effort than traditional on premise upgrades. 3. Ongoing support: Less FTE s are required to maintain the system. Staff can be shifted from maintaining the hardware and software to other value added activities. 4. Security: Most cloud providers offer data security standards that exceed many local government practices, including redundant data centers and regular data back-ups. 5. Processes: Most City processes are not unique, so functionality available in Public Cloud/SaaS solutions could be sufficient. 6. Scalability: Scaling up the system is easy as the City grows and the system requires additional users and data storage. 7. Upgrade Frequency: Continual access to updates will reduce the chance of the system becoming obsolete. 8 P age

10 2. Current Systems Assessment 2.1 SWOT ANALYSIS The following is a high-level analysis of the key strengths, weaknesses, opportunities, and threats based on the City s current systems, business processes, staffing resources, and system replacement project. Strengths 1. City staff have created significant workarounds to address user reporting needs 2. Pent up demand: users crave system changes to improve their work processes 3. City management and staff are receptive to embracing best practices and willing to reexamine business processes 4. City commitment to engaging stakeholders in change process 5. Recently hired City staff have experience using newer ERP systems 6. City-wide desire to reduce paper-based processes whenever possible 7. City has gained recent system implementation experience and lessons learned through several recent projects (i.e. Infor EAM system implementation) 8. City systems are currently supported by their vendors Weaknesses 1. Limited tools to develop reports for access to critical information 2. Lack of integration between Incode and other City systems 3. Significant side systems exist to assist with departmental tracking of data in multiple functional areas due to the limitations of the current system (i.e. Excel spreadsheets 4. Several staff expressed frustration due to limited access to real-time data (i.e. updated budgets) 5. Limited ongoing training available. As a result, new staff members may not be receiving enough training to fully utilize existing systems. 6. The system is not user-friendly and makes processes less efficient. 7. Existing modules in Incode are not fully utilized 8. Limited human resource management functionality available or utilized in Incode Opportunities 1. Replace current system with a fully integrated suite of applications/modules (ERP) that better meets the City s needs 2. Utilize the new ERP system for human capital management and other paper-based and manual processes 3. Review and improve business processes and align with government best practices 4. Expand reporting and provide dashboard capabilities for end-users 5. Increase automation and workflow capabilities 6. Improved integration with other City systems 7. Provide training to City staff on new system and processes 8. Increase internal controls 9. Access data in real time to support financial decisions 10. Explore system deployment models that best meets the needs of the City Threats 1. Managing City staff expectations that a new system will solve all issues will require process redesign, procedure & policy changes and changes to roles and responsibilities 2. Managing expectations - balancing robust data tracking capabilities vs. simple interface 3. Managing staff expectations that future system may not provide all requested features 4. Difficulty in enforcing new policies and managing change 5. Retro-fitting old processes in the new system 6. Inherent complexity with data conversion and integration 7. Need for significant staffing dedicated to the implementation process 8. Process improvements depend upon users with little experience using modern systems 9. Managing change required when moving from paperbased processes to electronic processes 10. Possible need for ongoing IT and functional system support staffing 9 P age

11 2.2 KEY ISSUES AND OPPORTUNITIES One of the primary reasons for selecting and implementing a new ERP system is to improve the efficiency and effectiveness with which business processes are executed at the City. This includes the ability to more easily access and report on information in order to make informed decisions. Through a series of interview sessions with City departments and staff, key issues and opportunities with existing processes and supporting systems were identified. All of the decisions will impact one or more of the following: People Policy Process Each of the issues and opportunities defined in the following sections has a decision timeframe associated with it as follows: Immediate: This item can be addressed immediately but is not necessarily required for implementation Selection: Prior to final vendor selection : During implementation of the selected solution These issues and opportunities should not be viewed as a comprehensive list of all issues that were defined during the needs assessment phase of the project as the current environment has a significant number of issues related to functionality, integration, and process challenges inherent within the existing system s infrastructure. Likewise, the decisions highlighted below should not be viewed as a comprehensive list of all decisions that will need to be made during the course of the project as there will be a large number of specific process-related decisions within each functional area that will be reviewed and assessed during the implementation phase of the project. The issues, opportunities, and decisions highlighted in the table below are those that were noted during the interview sessions as one of a significant nature that will likely require discussion among the City management team. 10 P age

12 # Process Area Issue Opportunity / Recommendation Category Timing 1. Accounts Payable There is no electronic workflow for invoice approval. 2. Accounts Payable Purchase order information is not automatically populated in the system when creating an invoice. 3. Accounts Payable Departments can t view up to date invoice payment information in Incode, requiring them to maintain their own spreadsheets to track how much has been spent. 4. Accounts Payable Limited vendors are set up to accept ACH payments from the City increasing payment processing time. 5. Accounts Payable There is no control or vendor validation in Incode that prevents duplicate vendors to be created in the system. Therefore, multiple records exist for the same vendors and un-used vendor records are active in Incode. Additionally, naming conventions in Incode are not flexible in search results (i.e. user could search "XYZ Secure," but find nothing if it was entered into the system as "X.Y.Z. Secure," and therefore create a new vendor file anyway. Modern ERP systems have electronic workflow capabilities and can be configured so invoices are sent to the proper approvers based on the City s policies. Modern ERP systems allow purchase order data to be automatically populated over to the invoice which saves time when creating an invoice and eliminate errors from data entry. Invoices should be entered when they are received with payment terms so that the system is up to date. Modern ERP systems have better reporting capabilities so that departments can run reports to view invoice payment information. Departments should have access to this information in the new system as well. Modern ERP systems allow vendors that accept ACH payments to be flagged. Enforce a process that all vendors who accept ACH payments must be paid in this form. New ERP systems have better controls for finding duplicate vendors as the information is entered, which will reduce multiple vendor records being created in the future. When migrating data from the old system to the new system, decide which vendor records you need to keep. Eliminating duplicate vendors and vendors that are no longer used will reduce cases of the wrong vendor being selected in the system and reduce the amount of data that needs to be converted for the new system. Process / Process / Immediate / 6. Accounts Payable There is currently no automated 2-way matching process between purchase order and invoice done in the system. Additionally, there is no 3-way matching process between purchase order, invoice, and receipt in or outside of the system. 3-way matching is a best practice and should be implemented as a control, so the City knows it is receiving what they intended to purchase at the right price. This can be done in the new system and/or with an interface between Infor and a new ERP system. Process / Immediate / 11 P age

13 # Process Area Issue Opportunity / Recommendation Category Timing 7. Accounts Payable The AP check distribution process is manual/paper-based. 8. Accounts Payable Staff are able to charge against a PO that has no remaining balance in the system. 9. Accounts Payable Requests for pre-payment of travel expenses more than 60 days in advance must be manually entered into the expense report. 10. Accounts Payable SutiSoft does not have an interface with Incode making it difficult to upload expenses from SutiSoft to Incode and SutiSoft is unable to check if the correct G/L is assigned to the request. Credit Card purchases are not encumbered at the time of purchase 11. Accounts Receivable 12. Accounts Receivable 13. Accounts Receivable 14. Accounts Receivable Each fund has their own customer set in Incode and a customer can exist in a set for each type of receivable causing some customers to receive multiple invoices (i.e. separate invoices for each type of receivable). Finance is required to manually separate cash from credit card payments collected by departments due to limitations in Incode. The City currently does not have the ability to create recurring invoices. There is no City-wide customer master fee schedule resulting in multiple departments maintaining and tracking fee schedules within their own departments. Maintaining multiple decentralized fee schedules can lead to customers being charged different fees for the same purchase and Modern ERP AP modules will save an image of checks that will allow the process to be automated and eliminate the need for saving the paper stubs. The City should require purchase orders with no remaining balance to be closed, and create a formal policy to enforce this. Modern ERP systems have the ability to prohibit charges against a PO with no remaining balance. Modern ERP systems can be configured to accept travel expense pre-payments from a date range identified by the City. Creating a true interface between an ERP AP module and SutiSoft will allow for better controls. An interface should allow for the G/L code to be checked at the time of submission and easier transfer of data between SutiSoft and AP. This will also allow the new ERP system to encumber the money at the time of purchase. Alternatively, the City can replace Sutisoft with the ERP system as this functionality is standard in the AP module. The City should use one set of customers for all funds so that customers will receive one statement and can send one payment. Modern ERP systems would then be able to allocate the money received to the correct funds based on the invoice generated. This will reduce the number of payments AR receives. Modern ERP systems can be set up to automatically account for both cash and credit card payments separately eliminating the need for manually separating payments. Modern ERP systems have the capability to create recurring invoices. This will save time for the finance staff. Since some fees are legally required to be a certain amount or within a certain range, keeping a master list of fees will help ensure compliance. Once the list is created, manage the master fee schedule in the new system to allow department s access to it when needed and have a policy instructing all departments to notify accounts receivable when their fees change. Process / Immediate / Selection / Process / Immediate / 12 P age

14 # Process Area Issue Opportunity / Recommendation Category Timing 15. Accounts Receivable maintaining different schedule will become more difficult as the City grows. Bad debt is not currently tracked in a system but instead an excel spreadsheet. 16. Budget The budget process is completed outside of Incode and input into Incode at the end of the process. This means year to date data is not updated once the budget process starts. This makes it more difficult to prepare the budget. 17. Budget Position control is currently maintained by the budget staff outside of Incode. 18. Budget The current system allows Inter-fund transfers to process that do not balance. 19. Budget Departments cannot prepare for the following budget year in advance, because they do not know their updated budget until after the year has begun. This is mainly due to the cumbersome budget process on the backend. Therefore, many departments maintain their own budget tracking spreadsheets outside of the system. 20. Budget Currently, the City has a one year budget approval process making it impossible to budget for multi-year capital projects 21. Cash Receipting Only Finance manages centralized cash receipting in Incode. Departments each have their own cash receipting process and system which does not interface with Incode. Therefore, departments are required to manually input cash collections into Incode which can be a cumbersome process because the system is not user New ERP systems can run reports showing invoices that have been unpaid for a certain amount of time. They can then set up notifications based on the invoice to notify the correct department. Modern ERP systems have more robust forecasting and budgeting capabilities to automate the process from end to end. This will allow the City to complete their budget activities in the new system. The City should consider budget functionality available in each ERP system during selection to meet the City s requirements. HR typically maintains the position control process. A new ERP system with an HR module will manage position control. This will make budgeting based on positions easier, as well as allow management to see how many employees are working and at what pay-grade. Modern ERP systems have the capability to only allow processing of inter-fund transfers that balance in both accounts. A modern ERP budget module will allow for automation within the budget process, real-time budget information accessible by departments, and easier reporting on budget vs actuals. If departments revenues and expenses are tracked in the new system, directly or through an interface, departments will not need to maintain their own budget tracking spreadsheets. Modern ERP systems will have the capability to have multi-year budgeting. This would be useful for capital project budgeting, and make project accounting easier. New ERP systems are easier to interface with 3 rd party cash collection systems. Creating interfaces between the 3 rd party systems and the ERP will eliminate manual entry, and eliminate the process of manually separating cash from credit card payments. Process / People / Policy / Process / Selection / Immediate/ Immediate/ Selection / 13 P age

15 # Process Area Issue Opportunity / Recommendation Category Timing 22. Contract Management 23. Contract Management 24. Contract Management 25. Contract Management friendly. Additionally, departments have to manually reconcile cash collections from multiple sources of data and systems with Incode because data is reflected differently in each system. Financial data related to contracts is not tracked. Departments use purchase orders to identify when the contract will expire. Tracking expenses related to the contract is difficult and in some cases is not done at all. There is no link between the contract and related requisitions, PO, and invoices in the system. Contracts are not centrally stored or managed due to limitations in InCode. Staff are implementing a manual system to centralize contracts in the City Secretary's Office and Laserfiche. 26. Fixed Assets Information in Infor is incomplete when it is transferred to Incode. For example, a CIP account will only have the total dollar amount in Incode, not the amount of each individual asset within the CIP account. 27. Fixed Assets Historically IT fixed assets were not tracked, so there are items not accounted for in the current system. Modern ERP systems can link a contract to purchase orders which will allow for contract balances to be tracked. A contract management module allows automatic notifications to be set up for contract expiration dates. Modern ERP systems allow for tracking of invoices related to each contract as well as contract milestones. Modern ERP systems can link between each of these documents, and allow drill-down capability to make navigating between them easy. Storing all contracts in one place will make it easier to find information when it is needed and create one source of truth. Modern ERP systems allow for storing and tracking contracts centrally but still accessible by all departments. A true interface between the new ERP system and Infor is necessary to take advantage of the functionality offered by Infor. This interface will make data consistent across the systems and eliminate the need for dual manual data entry. IT fixed assets that are not in Incode should be added to the current system for data migration to the new system or directly into the new system 28. Fixed Assets Labor costs are not being capitalized. Modern ERP time and attendance and project accounting modules have the capability to associate time entries with a specific project to allow for capitalizing labor costs. 29. Fixed Assets Purchases are not marked as fixed assets at the time of purchase. Therefore, invoices are manually reviewed to see if they qualify as fixed assets and journal entries recording fixed assets only happen at the end of the year. If purchases are designated as fixed assets at the time of purchase, they will automatically be placed in the fixed asset list, with associated journal entries, when the item is received. Rules can be created in the system to automatically classify purchases above a threshold as fixed assets. 30. Fixed Assets Fixed assets are not physically tagged. Currently, only the invoice is stamped with a fixed asset tag number. The City should consider tagging the actual asset with its fixed asset Process Immediate / Process/ Process/ Process / Selection / Immediate / Immediate / 14 P age

16 # Process Area Issue Opportunity / Recommendation Category Timing 31. Fixed Assets The City does not have a way to depreciate and value assets resulting in significant write downs to their fixed assets accounts. 32. General & Technical 33. General & Technical 34. General & Technical 35. General & Technical 36. General & Technical 37. General & Technical Many processes within the City are not standardized or centralized. Additionally, many current processes are not documented, followed, or enforced. not documented, followed, or enforced. It is difficult to search in Incode (i.e. on a specific field or data set). Workflow with automated notification and electronic approvals are either not available in Incode or not widely used due to other limitations of the system. Data is stored in many different systems throughout the city, and in many cases, this data is not shared with other departments or systems. There is no vendor self-service functionality limiting automation of several processes. Incode does not have the capability to attach documents to records in the system. Some City departments utilize Laserfiche for document management but this is not interfaced with Incode. number. This will make tracking inventory of fixed assets easier in the system. New ERP systems have project accounting and fixed asset modules to accurately manage assets and their values. Comprehensive documentation should be created on how to complete processes once the new system has been implemented. In addition, some work should be done immediately to document processes or train back-ups. Without either of these, the City risks not being able to complete necessary activities should a key employee leave. Modern ERP systems have enhanced search capabilities, including the ability to search on most fields and/or data. New ERP systems have the ability to create workflows for different processes. These workflows can define which role must approve something based on City defined criteria. This will increase efficiency by lowering the time between a request and final approval. Many processes can be more efficient and accurate if interfaces are made between key systems and the new ERP system. However, each interface adds more complexity and potentially more costs. The City must balance these costs and added complexity with the benefits provided by an interface. This should be a factor in the selection process. Vendor self-service allows vendors to update their own information which save the time for the finance staff. Vendor self-service could also be used to allow electronic bid submission, and allow vendors to see their purchase orders and invoices. Standard functionality in modern ERP systems allow documents to be attached to a record in the system (for example, an image of the check attached to an invoice paid). The City should assess their document management needs (i.e. what is being done in Laserfiche) and make a decision to replace this system with an ERP Process Processes / Process / Immediate Selection 15 P age

17 # Process Area Issue Opportunity / Recommendation Category Timing 38. General Ledger There is little consistency across G/L codes. An object code can have different meanings depending on the department. Department codes do not always represent actual departments. 39. General Ledger Due to limitations in how the chart of accounts are set up, departments are requesting the set-up of additional G/L codes in the system as a work around to have the ability to better track their receivables, payables, budgeting, etc. This has resulted in the creation of too many G/L codes set up in the system which can be difficult to manage. 40. General Ledger There are not enough internal controls related to the General Ledger i.e. depts. people charge G/L accounts that aren t their own, expense accounts are charged instead of revenue accounts and vice versa. 41. General Ledger Due to limitations in how the chart of accounts are set up, money from multiple funds will roll into one G/L code which makes balancing the funds difficult. 42. Grant Accounting Grants aren t managed in Incode. A G/L account is created in the system but there is nothing currently being done to track the Grant. 43. Human Resources Performance management activities are manual (i.e. done in Excel spreadsheets) 44. Human Resources Position control functionality is not sufficient in Incode resulting in manual and timely processes. document management system or interface Laserfiche with the new ERP system. The City should consider recreating the chart of accounts to a more consistent and standardized format. This will make finding information and generating reports easier. It will also make verifying that the correct G/L account was used easier. Explore options to re-design the chart of accounts to better meet the City s requirements as part of a new ERP implementation. Limit the creation of G/L codes to only ones that are absolutely necessary. With a new system with better reporting and budget tracking capabilities, the perceived need for new G/L codes should decrease. Have positions/roles tracked in the system, then set up controls based on the role a user has. This will prevent users from accessing parts of the system or G/L that they should not have access to. Don t allow expenses/revenue related to multiple funds be tracked in a single G/L account. Utilizing a grant management module will allow for tracking of grant financial data including reimbursements. This will make it easier to know when the grant money has been exhausted. This will also simplify the chart of accounts and reduce the number of inactive accounts. Modern HR modules of ERP systems have performance management capability. This can include mid-year and annual reviews, as well as one-time performance evaluations. Modern HR modules of ERP systems have position control functionality. An employee can be entered at the time of hire and given a position in the system. This makes managing position control and tracking employees easier and the Process Process Process / Process People / Process / Immediate Immediate Immediate / Immediate 16 P age

18 # Process Area Issue Opportunity / Recommendation Category Timing information can be shared with the budget module. 45. Payroll There is no link/integration between benefits enrollment data and payroll. 46. Payroll Multiple payroll periods cannot be open at the same time. Because of this they must have 6-7 payroll runs just for the month of December due to the awards and bonuses paid. 47. Payroll Payroll is unable to perform mass pay rate updates in Incode due to limitations of functionality in the system (i.e. only the entire City can be updated by the same amount) requiring manual and time consuming updates. 48. Payroll HR cannot run reports to find the following information: part-time employee hours to make sure they don t go over 1000 for the year, injury leave for workman s compensation, years of service for retirement purposes, resulting in the need to track in excel spreadsheets. 49. Payroll Payroll staff are required to manually track and notify employees of when they will lose accrued leave due to limitations in Incode. 50. Payroll There is no direct integration of the HR module or data to payroll in Incode. 51. Payroll Incode is limited to 7 leave codes and 3 are hard-coded and cannot be changed. Therefore, leave is tracked separately because one code in the system can mean multiple things. Modern HR modules of ERP systems have the ability to track benefit information and can share information with other modules, including payroll. Modern ERP systems all prior payrolls to be opened and updated if desired. Additionally, awards and bonuses can be entered in the normal pay roll run eliminating the need for additional payrolls to do this at the end of years. With proper positions maintained in the system, new ERP systems can make this process faster and allow for mass rate changes by department or other category. New ERP HR modules will have more flexible reporting capabilities, and regular users should be able to customize reports to find information they need. More complex reports can be created during implementation. Modern ERP systems typically provide configurable functionality that can send notifications based on specific parameters. (i.e. send a notification if an employee is at risk of losing accrued leave time). This type of functionality may be able to save hours of work per year by the admin techs who have taken it upon themselves to help their team. Creating an interface between HR and payroll, or having both modules as part of the same ERP system, will eliminate dual entry and reconciliations. Payroll should have access to position control, which makes tracking which employees should be submitting time easier. Modern ERP payroll modules allow for creation of more leave codes. A new system will also enhance reporting capabilities, including tracking part-time employee hours. 17 P age

19 # Process Area Issue Opportunity / Recommendation Category Timing 52. Project Accounting Project invoices are paid from an unintended funding source. For example, if a project is funded by a Grant and operating funds, an invoice may be paid from the grant before the operating funds. Modern ERP systems commonly have the ability to designate multiple funding sources for a project, and have the system calculate how much money to take from each source. 53. Project Accounting Project accounting is not truly used in the system resulting in the need for departments to manually track their project budgets. 54. Project Accounting Multi-year projects require workarounds to manage. Departments can either roll-over the PO, which requires another budget approval, or keep the PO open from the previous year but this will negatively impact the accounting ratios. 55. Project Accounting One purchase order is used for a vendor that works on multiple projects. This makes tracking individual project status and budget difficult. 56. Project Accounting Separate purchase orders are created for the engineering and construction vendors. There is no link between the two for project tracking purposes. 57. Purchasing Purchase orders are sometimes created after the actual purchase occurs. This eliminates internal controls because approvals are skipped and increases the risk that something is purchased when they don t have the budget to make the purchase. Utilizing modern an ERP project accounting module will allow departments to have more accurate information. This will allow them to track their budget and project status. This should reduce the number of times projects go over budget. If possible, change the budget process/policy to allow for City-wide multi-year budgeting and approvals to eliminate issues and/or workarounds in the system to handle multi-year budget items i.e. capital projects. Multi-year projects are available in new ERP systems and allow automatic rollovers. Use project codes in the new ERP system to link expenses to a project which will allow the project status and budget to be tracked easily within a new ERP project accounting module. Utilize project codes to link expenses to a project in the new system. Enforce policies regarding creation of purchase orders before purchases are made to utilize workflow approval to increase internal controls. New ERP systems have workflow for approvals and budget controls that won t allow a PO to be processes if it causes the fund to go over budget. 58. Purchasing Bids are not accepted electronically. Accepting electronic bids will make entering the data for evaluation into the system much easier. If policy does not allow electronic submissions, consider changing the policy. 59. Purchasing City may be missing the opportunity to receive volume discounts due to extensive use of P-Cards. The City should try to negotiate discounts with vendors based on the total volume of purchases. It may be possible to get a volume discount once they reach a certain threshold. Limiting the number of p-card purchases can help manage this process. Policy / Policy / Process Policy Process Immediate / Immediate / Immediate Immediate 18 P age

20 # Process Area Issue Opportunity / Recommendation Category Timing 60. Purchasing Purchase orders are created by finance, not the department making the purchase. Departments should be able to create their own purchase orders. Process / Immediate / 61. Purchasing Change orders do not update information in Incode. If the quantity of items they plan to receive changes, there is no way to change the PO or keep track of the change in the system. Similarly, when the unit price changes there is no way to update this in the system. 62. Purchasing Commodity codes are not used when making purchases. 63. Purchasing Receipt of purchases are not entered in Incode. 64. Purchasing Blanket purchase orders are not used in Incode and it is not possible to create an unencumbered purchase order 65. Purchasing Infor doesn t interface with Incode, creating the following issues: Year-end roll over of POs involves checking Infor and Incode to reconcile any differences. Assets are not capitalized in Infor. Project numbers are created in Incode and manually input in Infor. Disbursement report is created in Infor and manually delivered to finance. Finance must manually enter the journal entries. New ERP systems have workflow capability to allow necessary approvals once the purchase order process is initiated. The workflow can be set up with multiple thresholds that determine the level of approvals needed for purchase orders. New ERP systems have the ability to change purchase information once the proper approvals have been obtained through electronic workflow. Use of NIGP commodity codes in the new ERP system will make reporting and tracking expenses easier. There should be a 3-way match between the purchase order, invoice, and receipt of goods/service. This will ensure that the correct goods and services are received for the right price. An interface between Infor and Incode will allow for easier receipting. Using unencumbered purchase orders will allow a purchase order to be made based on a contract. This will make it easier to track expenses by contract. Most ERP systems have a way to create unencumbered purchase orders. Modern ERP systems have the capability of creating unencumbered purchase orders. This will allow the City to create purchase agreements with vendors without inaccurately affecting budgets until the invoices are received. Additionally, Creating an interface between Infor and a new ERP system will eliminate most dual entry and manual reconciliation involved in the purchasing process. It will also allow the requisition to be linked to the purchase order and the invoice, and allow an item to be marked as a capital asset at the time of purchase. 19 P age

21 # Process Area Issue Opportunity / Recommendation Category Timing PO number in Infor is handwritten on the Incode PO. 66. Reporting Due to lack of real-time data available in the system, financial reports requested by departments are not accurate or current requiring tracking of data outside of the system completely. 67. Reporting Incode does not have accurate data to build the CAFR (manual reconciliations have to be performed out of the system to get accurate data) and limitations in running the reports needed to build the CAFR. Therefore, the process to create the CAFR is cumbersome requiring the City to hire a 3 rd party contractor to complete. 68. Reporting Running reports from Incode is in many cases manual and time consuming. 69. Staffing & Training Several departments are understaffed and/or do not currently have resources to manage key business processes. For example, there are obvious staffing needs in HR, Accounting, Budget, Purchasing, Treasury, etc. 70. Staffing & Training It was reported by City staff that the organizational chart structure (i.e. hierarchy of departments and divisions) and frequent re-organizations within the City cause confusion 71. Staffing & Training Roles and responsibilities across City departments and staff are often unclear. A new ERP system will have improved reporting capabilities, including the ability for users to customize reports without SQL knowledge. More complex custom reports can also be created during implementation. Users should have access to reporting tools, so they can run their own reports at any time. Modern ERP systems have the ability for users to generate reports at any time without needing knowledge of SQL or other technical knowledge. Modern ERP systems with enhanced reporting and data accuracy will help cut down on the CAFR process. Also, systems are available that can automate most of the CAFR process, either as part of an ERP solution or a standalone solution. The City should evaluate ERP CAFR functionality and consider a best of breed solution if the ERP system will not meet their needs. The City must also ensure that their staff have enough time to complete the CAFR process before they take ownership back from the auditors. Modern ERP systems have more flexible reporting capability. They allow users to create reports ondemand, with some degree of customization possible without requiring technical knowledge. Assess the resources needs of the City, and hire accordingly (i.e. HR, Accounting, Budget, Purchasing, Treasury, etc.) The City should review the current organizational structure/hierarchy to eliminate confusion and reduce the frequency of re-organizations. The City should standardize and document clear roles and responsibilities across City departments and staff and incorporate in onboarding trainings. People / People People / Process People / Process Selection / Immediate Immediate Immediate 20 P age

22 # Process Area Issue Opportunity / Recommendation Category Timing 72. Staffing & Training There is lack of training on City systems and business processes for current and new employees. 73. Staffing & Training Departments often rely on Finance to print reports from Incode due to lack of training and difficult usability of reporting functions in the system (i.e. depts. may not know the correct codes or date ranges) 74. Time & Attendance Fire and Police time entry is complex (i.e. due to scheduling and overtime) and time consuming because the current T&A system does not handle their unique requirements. 75. Time & Attendance It is difficult to validate if all employees have entered their time for payroll processing. Payroll must run a report and review for missing employees to identify if they have not entered their time and then the employee to confirm the reason as to why they didn t enter time. 76. Time & Attendance Many departments (police, fire, etc.) need to enter their time in decimal increments, however, this is not possible in the current T&A system and must be done directly in the payroll module. This causes inconsistency across T&A and payroll data. 77. Time & Attendance Many departments (police, fire, parks and Recreation) time entry is done outside the system at multiple sites and requires a department resource to manually enter each employee s time into Incode and manually reconcile time sheets. This is also a manual and time-consuming department head approval process, especially for larger departments. Implementing a new system will allow the City to develop training materials and resources for City staff. The City should have trainings during onboarding as well as available throughout the year. Training materials should be kept current and easily accessible for City staff. Newer ERP systems have more user-friendly, intuitive, flexible, and robust reporting capabilities making it easier for all end users to be trained on running reports on their own. The City should also provide live training and system documents/manuals for system users to reference as needed. The city should evaluate time & attendance applications and pick one that is flexible enough to handle the needs of disparate departments (including mobile entry of time). A more robust time and attendance system will reduce time spent entering time and allow for easier reporting. Modern ERP systems have better reporting generating capabilities that allow you to select, filter, and query information desired (i.e. missing time entry) Additionally, many modern ERP systems allow you to set up reoccurring reports that are sent automatically at a frequency designated by the user (i.e. monthly) Modern ERP systems Time and Attendance modules allow more flexible time entry. Some Time and Attendance systems allow for mobile time entry. Consider a way for employees to enter their time on a mobile device (their own or shared device). This will reduce the time spent by admins or supervisors entering time for all of their employees or reconciling multiple timesheets. The City should also implement a process where all City staff enter their time directly into the system (if the system is available to them) to reduce manual time and entry on the back-end, manual People / Process Process / Process / Policy / Immediate / Selection/ Selection/ Selection/ Immediate / 21 P age

23 # Process Area Issue Opportunity / Recommendation Category Timing 78. Treasury Debt is not tracked in Incode. It is an extremely manual process handled in Excel and there is opportunity for errors to occur. 79. Treasury The City does not currently have enterprise systems or resources to comprehensively track debt and investments internally. 80. Treasury Calculating sales tax is done manually and requires reconciliations mainly because Finance must assess whether sales tax was included in a total line item or broken out. reconciliations, and allow for automated approvals. A debt management module will make it easier to track debt and reduce errors. Additionally, more accurate tracking of debt will help with cash flow forecasting. Due to the millions of dollars of debt to track, the City should consider hiring someone that is solely responsible for treasury activities. As the City grows this job will become more demanding. Additionally, the City should investigate debt and investment management modules / capabilities in modern ERP systems during system selection. Modern ERP systems all for sales tax to be broken out as a separate line item to easily identify and report on. The City should require departments to create a separate tax line (if required) in the system as part of their process. People / Process / Process / Immediate / Selection / Immediate / 22 P age

24 2.3 APPLICATION INVENTORY AND PRELIMINARY MIGRATION PLAN A partial list of the City applications identified through the ERP Needs Assessment process has been assembled, organized by functional area and is presented below: * Legend: Preliminary System Migration Plan Replacement (R): The City is intending on replacing this application. Consider (C): Maintain (M): Interface (I): The City is considering replacing this application with an ERP solution, based on the strength of the finalist vendor offering and cost / benefit of the replacement module. The City is intending on retaining the application, not replacing it. The City is intending on keeping the application and interfacing/integrating it with the selected ERP solution. ** Legend: ERP Availability Generally Available (G): The module is generally available from most / many providers of ERP solutions to similar size entities Best of Breed (B): Expanded ERP (E): The module is not generally available from most / many providers of ERP solutions to similar size entities and is typically selected and implemented as a separate best of breed system, then later integrated to ERP, as feasible, based on available funding and skills. The module is available from certain, select providers of ERP solutions to similar size entities and if not selected and implemented as part of the integrated ERP system, would need to be retained and / or obtained by the City from a separate best of breed system, then later integrated to ERP, as feasible, based on available funding and skills. The City s application inventory and preliminary migration plan contained in the table below should be leveraged into the Request for Proposal (RFP) development and system selection processes. As part of the RFP development process, the City management team should review this preliminary plan and update it accordingly. Through this, in addition to the numerous business and technical requirements and other required RFP components, the City should ensure that its intent toward considering implementation is adequately described and include its migration plan in the RFP. This will provide further insight to potentially interested vendors on the City s current environment and plans to transition to a future ERP solution. Additionally, as part of the RFP development and system selection process, we will assist the City in creating a table that lists future interfaces to the new ERP system including their source application and data feed. 23 P age

25 2.4 APPLICATION INVENTORY Current Application Application Notes/Description Departmental Owner Preliminary Migration Plan* ERP Availability** 1099 Pro ACA IRS reporting 1095c HR M N/A N/A Expected ERP Module ACR System Work orders and service requests Engineering Support M/I E Work Orders Active Directory System single sign on Multiple M N/A N/A Apollo Library management system Library M B N/A ArcMap, ArcGIS, ArcGIS Online Authorize.net/Evalon GIS desktop software, GIS server software, GIS web mapping platform geocoding / graphic representation of agreements, city assets, projects, etc. Online and credit card meter to cash payments. Will terminate after Dec CIS Go-Live Development Services M/I B N/A GUS M B N/A AVFuel Airport credit card payments Airport C G Cash Receipting Avigilon Security camera system Facilities M N/A N/A Benetrac 3 rd party online benefits enrollment HR I/C B N/A Bosch ESI Truck Truck diagnostic software Fleet M N/A N/A Brazos Tickets and warrants Municipal Court M B N/A 24 P age

26 Current Application Application Notes/Description Departmental Owner Cartegraph Pavement management information system Technical Services & Engineering Support Preliminary Migration Plan* ERP Availability** M B N/A Expected ERP Module Centra Vu MDM Portal GUS M N/A N/A Chameleon Animal adoption services Customer Care M N/A N/A Checkfree, Metavante, Princeton 3 rd party online payment processing (meter to cash) Customer Care M N/A N/A Cisco CIS pop up screens via phone system, IT M N/A N/A Customer Interactive Voice Response System, Automatic Call Distribution Cry Wolf False alarm payments Police M/I G Cash Receipting Cummins Insight Engine diagnostic software Fleet M N/A N/A Dataprose 3 rd party billing, printing and mailing provider Customer Care M N/A N/A DisSPatch Outage Management System GUS M N/A N/A DPS Conviction reporting Municipal Court M B N/A Elster Emergicon ESO Mobile Meter Data Collection System, Advanced Metering Infrastructure 3rd party ambulance billing and collection service EMS reporting, EMS and billing, reporting, personnel GUS M B N/A Fire M N/A N/A Fire M N/A N/A ESRI GIS system, collects premises information for utility account creation Engineering Support M/I B N/A 25 P age

27 Current Application Application Notes/Description Departmental Owner FireHouse Fire incident reporting, state reporting, scheduling, personnel, inventory Preliminary Migration Plan* ERP Availability** Fire M B N/A Expected ERP Module FME (Desktop and Server) Spatial Extract, Transform, Load Software GUS M B N/A Ford IDS Ford diagnostic software Fleet M N/A N/A GeoDigital WorkStudio Manage electric utility projects Utility Operations M N/A N/A Guardian Fire alarm systems Fire M N/A N/A ifleet Fleet fuel management Fleet M B N/A Incode Various functions: General Ledger Accounts Payable Accounts Receivable Budget Purchasing Payroll Cash Receipting (centralized) Inventory Fixed Assets Building Permits Human Resources Multiple R G General Ledger Accounts Payable Accounts Receivable Budgeting Purchasing & Inventory Payroll Cash Receipting Fixed Assets Building Permits Human Capital Management Incode Courts billing and payments Municipal Court M/I B Accounts Payable Incode CIS and Data Warehouse GUS R E N/A 26 P age

28 Current Application Application Notes/Description Departmental Owner Infor Enterprise asset management, inventory, requisition creation, receipting of goods, fleet work orders Public Works, Utility Operations, Engineering Support / Business Resource Mgt., Fleet Preliminary Migration Plan* ERP Availability** Expected ERP Module I/C G Purchasing & Fixed Assets Insite Online credit card payments Municipal Court M/C G Cash Receipting Ionwave Itron Bid management, post-execution contract management Mobile Meter Data Collection System, MVRS Purchasing M B N/A GUS M B N/A John Deere Service Advisor Diagnostic software Fleet M N/A N/A LaserFiche Document management Multiple I/C G Various Master Link Mobile Mobile Meter Data Collection System GUS M B N/A Merchant Connect Card payment collections Multiple C G Cash Receipting Metavante Online payment processing clearinghouse file import GUS M B N/A Microsoft Excel Tracking and reporting on various data (i.e. inventory, invoice, and budget) Multiple R G Various Microsoft Excel Bid and contract tracking Purchasing R G Contract Management Microsoft Excel Tracking fiscal surety bonds Finance R E Treasury Management 27 P age

29 Current Application Application Notes/Description Departmental Owner Preliminary Migration Plan* ERP Availability** Microsoft Exchange Mail server access Multiple M/I N/A N/A Expected ERP Module Microsoft Word Correspondence, RFPs & RFQs, contract documents Multiple M N/A N/A Milsoft Outage information for utility accounts, electric engineering analysis, and electric distribution mapping Customer Care/GUS, Water, Engineering Support M N/A N/A Monarch Financial reporting Multiple R G Financial Reporting Moneris Parks credit card processing Parks and Recreation I/C G Cash Receipting MyPermitNow Planning, permitting, and inspections Development / Planning and Inspections I E Permitting NeoGov Employee applicant tracking and onboarding HR I/C G Human Capital Management Novus Agenda City council agendas Multiple M N/A N/A Operative IQ Inventory, personnel, reporting, asset management tracking Fire M G Purchasing, Fixed Assets Operator 10 Data management system Development Services M B N/A OSSI / RMS Police records management system Police M B N/A OTC Pegasus Automotive diagnostic software Fleet M N/A N/A 28 P age

30 Current Application Application Notes/Description Departmental Owner Preliminary Migration Plan* ERP Availability** Expected ERP Module Paymentus Point of sale system Customer Care I/C G Cash Receipting Perfect Mind Parks and recreation management system Parks and Recreation I B N/A Playground Guardian Playground management Parks and Recreation M B N/A Princeton Online payment processing clearinghouse file import GUS M N/A N/A Milsoft IVR Interactive voice response GUS M N/A N/A Remit Plus Payment file processing, cash letter creation Customer Care M B N/A RTA Fleet Fleet management system Fleet M/I B N/A SGR / Litmus City training and development materials HR M N/A N/A SQL Server Data warehousing Multiple I N/A N/A Square Cash collections Community & Development I/C G Cash Receipting 29 P age

31 Current Application Application Notes/Description Departmental Owner Preliminary Migration Plan* ERP Availability** Expected ERP Module Suti-Soft Credit card and travel expenses Multiple R G Accounts Payable Team Sideline League scheduling Parks and Recreation M B N/A Total Aviation Fuel and lease billing Airport M/I B N/A Tyler Content Management Document scanning and management Municipal Courts M E Document Management Ucentra Meter data management Customer Care M B N/A Umax (currently implementing) CIS, utility payments Utility Operations I E Utility Billing WaterGEMS Water Engineering Model GUS M N/A N/A When2Work Scheduling Parks and Recreation M B N/A Wonderware Supervisory Control and Data Acquisition GUS M N/A N/A WorkStudio Electric engineering design and project management Engineering Support I B N/A 30 P age

32 2.5 CURRENT TECHNOLOGY PROFILE The City of Georgetown IT department is in charge of 30+ sites where they provide telephone, internet, intranet, desktop and server access to City data and software that is housed within the primary data center (GCAT) within the City. Sites are inter-connected in a Hub-Spoke topology via dark fiber, with speeds ranging from 1GBE up to 10GBE based on the needs of each site. The network infrastructure is built and maintained by Georgetown IT Staff and protected by Firewalls, Anti-Virus, Anti-Malware, Anti- Spyware, Content Filtering, and various other network security devices. is hosted by the City using Microsoft Exchange version 2010 SP1. Telephone services are provided by VOIP hardware that is built and maintained by the IT Staff. Internet services are provided by multiple carriers and centralized within 2 primary internet connections, and providing speeds of 50MB (upload and download) speeds and 150MB (upload and download) speeds respectively for these connections. The City has a secondary connection point to the internet with speeds of 50MB (upload and download) using microwave technologies. The data center primarily consists of Cisco Servers running Windows 2008 and The City currently has 24 physical servers and 230 virtual servers. These virtual servers have been built to scale when needed and fail over for disaster recovery means. Microsoft SQL is present (2008 and 2012) in this environment, with their standard being Storage is done on a consolidated network storage system that was built to scale, fail over and replicate (real-time) for best practice and backup. All systems and software are monitored in real-time with /text notifications to IT Staff. Backups are currently performed using both disk to disk and using storage servers with replication to alternate physical location. In addition to data center services the IT Department also utilizes cloud services in the form of Software as a Service (SaaS) where needed. The City IT Staff manage 600 workstations located throughout the City and are primarily Dell workstations. All workstations/thin clients range in age from 3-5 years. These workstations are imaged, managed, and updated using automation tools, or manual engagement. The City utilizes Microsoft Internet Explorer, Firefox, and Google Chrome as browsers as required for applications. 2.6 TECHNOLOGY ASSESSMENT FINDINGS & ERP READINESS An assessment of the City technology infrastructure was performed for three primary purposes: Identify its ability to support a new ERP system on premise environment Identify its ability to support a new ERP system in an off premise (i.e., vendor hosted) environment. Identify technology related requirements and standards for a new ERP system to operate effectively in the City s technology environment 31 P age

33 In summary, we found City technology to be in a good state of readiness for the implementation of a new ERP solution. In Table 2 below, we present an overview of our technology findings and readiness at the City. To facilitate your review, we have included the following dashboard indicators in the assessment: Critical Finding Warning/Caution Finding Sufficient Finding Table 2: Assessment Topic Data Center Description The Primary Data Center is located at the Georgetown Communication & Center. Our research indicates that this facility is NOT located within a flood zone. HVAC systems are used for temperature and humidity control. Based on best practices and available funding, the City should consider redundant HVAC systems for this critical area. HVAC system are tied to the generator with dedicated 24x7 cooling. Access to the data center is restricted via door access control system, Video cameras monitor entrances. Halon or inert gas Fire Suppression System protects the data center. People Accessing Data Center: Trusted with computer-skilled employees. 32 P age

34 Topic Data Network Description The City contains 30+ sites and all are connected to the network. The network is a hub and spoke dark fiber network, with speeds ranging from 1GBE to 10GBE according to the needs of each site. The users report that the network is very reliable and has few issues. The availability of the network has a high availability generally > 99.9%. The Data Network supports Data, VoIP, Apps, Video, and GIS which constitutes a great utilization of technology and economies of investment. All Network equipment is covered by Next Business Day Support and network equipment is Palo Alto or Cisco (industry leaders). The City should consider a multiple firewall configuration with failover functionality should the current single firewall fail. Firewall response service level is currently Next Business Day. The City should consider moving to Same Day response (or until multiple firewall configuration is in place). Very little data Network documentation: The City should consider updating documentation for network stability, disaster recovery, and staff turnover. Sufficient Network Capacity. Data Network Monitoring: Multiple solutions utilized for monitoring. Internet/Cloud Connectivity Multiple pathways and providers for accessibility to the internet. Centralized connectivity to the internet. City should consider load balancing and failover between the 2 primary connections. 33 P age

35 Topic Server & Network Administration Description Servers are Enterprise-Class style servers. Servers exist on UPS units and generator power. Server hardware contains dual power supplies with cross connects to diverse UPS sources. Server Utilization rates for servers are normally between 0 10%. Windows 2008, and Windows 2012 are all used in the environment. New Servers have maintenance for 3 years and then have extended coverage. Servers are physically secure and located in an access controlled data center. Critical Servers are in a cluster or load balanced, with redundancy hardware. Majority of Servers are virtualized and configured for redundancy and failover. Consolidated Storage system. All servers are running the latest service pack excluding the Microsoft Exchange Server. Consider updating service pack on the exchange server. City maintains a patch management policy and applied effectively. Antivirus/Antispyware protection is updated and current on all servers. Server Documentation not fully developed or complete. Consider updating documentation for best practices. Potential additional Servers and Storage will be needed in support of the new ERP solution and will need to be evaluated during the award process. Storage & Backup Environment & Disaster Recovery Disk to Disk and storage servers are used with replication to alternate location for survivability. There is a verified full backup performed Daily, Weekly and Monthly. Backup window is primarily less than 6 hours. Databases are backed up in a live environment. Consider testing and adoption of using encryption technology on backups. Automated messages are sent on backup process. Data is reviewed for sensitivity and appropriately controlled. Bare Metal Restore is utilized and tested frequently. Disaster Recovery (DR) Plan: City does not have a plan in place currently but exploring DRaaS technologies as a potential solution. Consider the development of a threat assessment matrix to identify the likely occurrence of threat events. Take actions with a plan starting first with the highest probability of the threat. 34 P age

36 Topic User Administration Description Formal process for creation, deletion, and access of user accounts. User Accounts are audited on regular basis and defunct accounts removed. Shared access to services/shares are audited on a regular basis. 2 Factor Authentication is utilized for access. Is only partially deployed within the organization and should be adopted throughout the organization. Passwords and password complexity rules are enforced. Limited number of users having Administrator account access. Applications Browsers: Internet Explorer/Chrome/Fire Fox Report Writing: Microsoft SQL Reporting Services and IBM Cognos Staffing System Administration is accomplished by multiple members on the IT Team. After Hours support is provided (5-9pm). Administrators are paged/notified based upon automated monitoring of systems. Staff indicates limited resources for report development. Consider: 1). Adding funding for a bucket of hours for report development training, or report development within the vendor contract. 2). Evaluate internal resources for report development in the future 3). Adding additional staff for report development. Staff indicates limited resources for database administration. Consider: 1). Adding additional staff for database administration 2). Discuss with potential vendors if they offer database administration services. IT Staff will be taking on additional responsibilities such as configuring workflows, dashboards, and potentially complex report development. ERP Conversion resources need to be evaluated for potential solutions to the current environment and transition to the new ERP solution. 35 P age

37 3. Options Analysis & Recommendation 3.1 ERP SYSTEM DEPLOYMENT OPTIONS Consistent with project objectives to replace the legacy ERP system, this options analysis assess and compares the system deployment options currently available in the marketplace to implement a new ERP system. Ultimately, this analysis and recommendation will assist the City in making a strategic decision for the ERP system deployment method that best meets the needs of the City. The City has three primary options in regard to the strategic direction of deploying the new ERP system: Option 1: On Premise Option 2: Vendor Hosted Option 3: Public Cloud (SaaS) The City would procure the hardware and software for a new ERP system and deploy in the City s environment on-premise. The City would procure the software for a new ERP system and host in the vendor s environment off-premise via a private-cloud. The City would subscribe to and implement an ERP Public Cloud solution. 3.2 ERP SYSTEM DEPLOYMENT COMPARISON Our options propose that the City could proceed in deploying ERP via one of three ways: traditional onpremise deployment, off-premise vendor hosted (private cloud) deployment, and Software-as-a- Service (public cloud) deployment. It must be noted, that hybrid approaches exist, but when reviewing the deployment of a fully integrated ERP solution that includes core financial, human resources and payroll functionality there are realistically three deployment options with a variety of vendor defined pricing strategies to consider. Traditionally, the traditional on premise approach was the preferred strategy for implementing an ERP solution. As ownership of the software was perpetual and the development of the solution was unique to the client, local governments looked favorably on the overall control they had over the application software and hardware. However, in recent years, private cloud implementations have become increasingly popular. A majority of the traditional software Private vs. Public Cloud What s the difference? Both deployment strategies involve hardware and data residing off-site, so depending on the definition both may qualify as being in the cloud. However, this paper will only refer to solutions as public cloud that meet three criteria: 1) The hardware, software, and data are located off-site. 2) The software has a common code base for all customers. 3) The software is sold on a subscription basis, so access terminates when payments stop. providers now offer a private cloud hosted alternative, however only a handful are offering public cloud ERP to the local government marketplace. Vendor hosted solutions in a private cloud also support more customization and are regularly on a single tenant model. The private cloud deployment approach, can allow for flexibility from an exit strategy 36 P age

38 perspective as well as the benefits that are aligned with the hosting vendor taking on much of the backoffice maintenance and support that would be taken on by the client in an on premise model. Public cloud solutions are less flexible, from an ability to modify the software perspective, but also require much less maintenance and technical staff to support them. Public cloud SaaS solutions are by definition, multi-tenant which indicates that numerous customers utilize the same instance of the solution. As a result, when an upgrade is readily available, every customer will receive the upgrade at the same time. Regardless, as the City considers various ERP deployment options they need to be cognizant as to what is being proposed, the robustness of the proposed solution, and the stability of the product. 3.3 ERP SYSTEM DEPLOYMENT COMPARISON MATRIX On Premise Vendor Hosted Private Cloud Public Cloud - SaaS Hardware required All hardware is paid for and maintained by the client. The vendor handles all aspects and costs related to hardware. The vendor handles all aspects and costs related to hardware. Customization options Extensive configurations and customizations are available to fit the client s unique needs. Extensive configurations and customizations are available to fit the client s unique needs. Little customization options are available. Software Maintenance All software and data is maintained by client s staff. The hardware and software reside offsite, but the client is responsible for installing updates and maintaining databases. The vendor handles development, patches, etc. and data is stored in their data centers. Upgrade options Upgrades must be bought by the client, and development may be necessary to make the upgrade compatible with the customizations. Upgrades must be bought by the client, and development may be necessary to make the upgrade compatible with the customizations. All upgrades are included in the annual license fee. Annual Fees Annual maintenance fees are paid but this is generally a much smaller amount than a SaaS subscription, but staff must be paid to maintain the hardware and software. Both annual software maintenance and hardware maintenance fees are paid to the vendor. Significant annual fees are charged in exchange for the vendor handling the majority of aspects for keeping the system running. License Method Perpetual licensing Perpetual licensing Subscription for use Exit strategy The client s data is all on-site and they are free to do what they want with it. Transferring the data from the vendor s server will require planning and may be imperfect. Transferring the data from the vendor s server will require planning and may be imperfect. Disaster Recovery Disaster recovery is maintained by client Disaster recovery is maintained by vendor Disaster recovery is maintained by vendor. 37 P age

39 3.4 ERP SYSTEM DEPLOYMENT CONSIDERATIONS Selection Considerations When evaluating the need for a new ERP system, organizations must consider how many of their requirements are currently being met. If most of the needs are being met, it s not necessary to move to a new system just to move to the cloud. Organizations should take an inventory of all systems being utilized and review where there is any overlap in functionality. In addition, heavy use of shadow systems indicates that needs are not being met by the current suite of systems. If some of the shadow systems are already in the cloud, a strategic move to the cloud for ERP may be advantageous. Once the decision has been made to replace an ERP system, organizations must decide what functionality they need in a system. The organization must engage as many stakeholders as possible to identify gaps in their processes and areas of inefficiencies. These gaps will then be used to determine the requirements of a new system. All of this information will be used to create a Request for Proposal document. This explains what the organization requires and vendors will respond with their proposal for a solution. Organizations may decide before the RFP if they prefer cloud or on premise, or if they prefer integrated or best of breed. Some organizations may let vendors propose any type of solution, and then compare all of the options. However, organizations may be better served deciding this based on their needs before the proposals are submitted. This way, they will not be swayed by a low cost proposal or even oversold a product that they do not truly need. After receiving the proposals, organizations must consider not just the software and associated costs, but the vendor providing it. Some vendors may provide better support and have more frequent upgrades. Vendors also have different implementation styles and timelines. Organizations must conduct extensive due diligence activities, such as site visits to other organizations that have used that vendor, to make sure they choose a vendor with software that meets their needs and is a company they want to work with. After the vendor is chosen, a contract and statement of work must be negotiated. These legal documents will make sure the organization receives the product and service it believes it is buying. These contracts are often complex and involve multiple parties, such as the software vendor, any third party solution vendors, the software integrator, hosting provider and the organization itself. It is important that the contract captures all of the services the organization wants and the vendor must agree to them. Therefore, plenty of time must be allocated in the project schedule for this activity as this process can sometimes be much slower than anticipated. Considerations ERP implementation efforts are notorious for being completed late and over budget. A 2014 study found that 54% of recent ERP implementations incurred cost overruns, and 72% exceeded the expected duration. In order to avoid these pitfalls, ERP projects must have strong executive support that is then passed down through the organization. The project must have strong project management that has the experience to keep the project within the agreed upon scope. Organizational change management is also very important. It is critical to have staff buy-in and be active participants in the project. Without staff buy-in, it is unlikely that they will be receptive of process changes. Important organizational change management components include proper communication about the project, allowing staff to give their input into decisions that will affect them, and proper training so staff know how to use the system. considerations are obviously very important. For example, implementing a solution with extensive modifications can be problematic. As more changes are introduced to the source code of the application, the software becomes more complex to maintain and applying future updates can be 38 P age

40 challenging. In addition, it is important to have sufficient technology infrastructure in place to support the new ERP system. A system deployed via the cloud will require a strong network connection for all users, while an on premise system will need servers, storage, operating systems, infrastructure monitoring tools, etc. Adding instant failover capabilities for internet should be a high priority if a cloud system is chosen. While the City maintains a backup internet connection, if the GCAT datacenter is lost, the backup internet connection would be unavailable due to lack of backup switching capabilities. Without the proper infrastructure, an ERP system will not meet its full potential. It is important to consider the best implementation project management approach for deploying an ERP system as well. Traditionally, implementation project managers employed a standard waterfall approach to project management. With a waterfall approach, each stage of the project must be 100% complete before moving to the next stage of the engagement. For example, planning and requirements gathering for the whole phase of an implementation must be completed before configuration can begin. The waterfall approach focuses on having complete documentation at each step. Various system components cannot be tested by end users at all until near the end of the project. The agile implementation approach started as a software development methodology, but aspects of are now regularly employed in ERP implementations. Agile focuses on breaking the project down into smaller pieces, and focusing on the implementation activities with specific components of an overall phase. For example, planning, design, and configuration will all happen just for one key business process workflow at a time versus the whole system deployment. This makes the process more adaptive and if a problem arises, it can be caught before it is too late to reverse course. With a waterfall methodology, if a requirement was not properly communicated to development staff, it would not be identified until the entire system is in testing. With agile, the problem is caught faster, and now lessons learned from that problem are incorporated into future requirements gathering. Agile stresses working software over complete documentation, but that is not to say that documentation is unimportant. Documentation still occurs but project managers employing the agile approach try to avoid getting slowed down by extensive documentation before the software is configured. Finally, effective recruitment and alignment of dedicated project staff is a critical factor when implementing a new system. As systems change, the organization must ensure they have the staff required to support and fully utilize a system. Cook County, IL is an example of a government that is ahead of the curve when it comes to this issue. In 2015 they awarded $154 million in contracts to fund four major application modernization projects: integrated justice, integrated property, integrated revenue, and an enterprise resource planning system. In 2014 and 2015, the CIO hired or promoted about 1/3 rd Bureau of employees to align the skills of their employees with the new technology. They targeted employees with skills in management and systems integration to manage the new vendor relationships. The job descriptions and postings were changed to reflect the new skills necessary for the jobs. They also promoted employees with experience in other aspects of the County, so they could break down silos and communicate across departments. 39 P age

41 3.5 TOTAL COST OF OWNERSHIP (TCO) COMPARISON TCO Methodology Based on Plante Moran s experience managing projects for clients of similar size as the City of Georgetown, we have estimated internal and external cost projections for an integrated ERP system to replace the scope of the City s existing Incode system for the following: 1. Status Quo (current environment) as a baseline comparison 2. Low and High Tier 2 systems on-premise 3. Low and High Tier 2 systems vendor hosted (private cloud) 4. Low and High public cloud-based systems (SaaS) These costs are presented on a low and high scale to show the span of costs the City can expect to pay when implementing a new solution. On the higher end, the City would be looking at a solution that provides for greater functionality and additional implementation services. Solutions that fall into the higher end cost estimate are often more complex and will require a greater amount of internal support from City staff, increasing internal cost projections. Key assumptions were necessary in preparing these estimates and these are represented at the end of this section. TCO Assumptions 1. costs include all one time fees paid to the vendor that is not software license or hardware costs 2. Project Contingency is 25% of the implementation costs 3. Software License fees are estimated to be 58% of the one-time fees paid to the vendor 4. Fees are estimated to be 42% of the one-time fees paid to the vendor 5. Estimated Total One-Time Fees were calculated using cost proposals and actual contract data from previous clients. 6. Since implementation is estimated to last 18 months, one-time costs were spread out over 2 years. The total one-time license fee and first year support is included in year 1, but only 2/3 rd of the following fees are in year 1: implementation fees paid to the vendor, hardware fees, 3 rd party implementation management, Infor interface development, and project contingency. The remaining 1/3 rd of these one-time costs are included in year Hardware costs are estimated at 10% of the total one-time fees paid to the vendor 8. Inflation of on-going maintenance and support fees is assumed to be 3% per year. 9. Hosted support / maintenance fees are 3x the on premise cost. 10. In this TCO, FTE s represent estimated hourly equivalents to implement the system (not specific positions that need to be filled). 11. All scenarios are assumed to have 3 FTE s of on-going support, for a total cost of $275,741 per year. 12. Other annual on-going costs include miscellaneous hardware and software fees not covered in annual support payments. 13. On-premise low scenario implementation is estimated to use 3.5 FTE s for 18 months. 14. On-premise high scenario implementation is estimated to use 5.5 FTE s for 18 months. 15. Private Cloud low scenario implementation is estimated to use 3 FTE s for 18 months. 40 P age

42 16. Private Cloud high scenario implementation is estimated to use 5 FTE s for 18 months. 17. Public Cloud low scenario implementation is estimated to use 3 FTE s for 18 months. 18. Public Cloud high scenario implementation is estimated to use 5 FTE s for 18 months. 19. System implementation management costs cover a 3 rd party project manager with significant onsite presence throughout the duration of the project. 41 P age

43 10 Year TCO Estimate On-Premise Low Scenario On-Premise Private Cloud High Scenario Low Scenario Private Cloud High Scenario Public Cloud Low Scenario Public Cloud High Scenario Cost Category First Year One-Time Vendor Cost Summary Software License $ 649, $ 974, $ 649, $ 974, $ - $ - $ 313, $ 470, $ 313, $ 470, $ 566, $ 3,158,434 Hardware $ 74, $ 112, $ - $ - $ - $ - Total First Year Vendor Cost $ 1,037, $ 1,556, $ 963, $ 1,444, $ 566, $ 3,158, First Year Support/Maintenance Fees Support/Maintenance or Subscription Fees (SAAS) $ 126,802 $ 190,202 $ 380,405 $ 570,607 $ 291,442 $ 437,163 Total First Year Support/Maintenance Fees $ 126,802 $ 190,202 $ 380,405 $ 570,607 $ 291,442 $ 437,163 First Year Other One-Time Costs Management $ 352,500 $ 352,500 $ 352,500 $ 352,500 $ 352,500 $ 352,500 3rd Party Interface Development $ 33,333 $ 33,333 $ 33,333 $ 33,333 $ 33,333 $ 33,333 Project Contingency $ 205,333 $ 308,000 $ 186,667 $ 280,000 $ 141,555 $ 789,609 Total Other First Year One-Time Costs $ 591,167 $ 693,833 $ 572,500 $ 665,833 $ 527,388 $ 1,175,442 First Year Internal Costs Existing FTE Effort Duration Total Internal Cost $ 281,596 $ 442,508 $ 241,368 $ 402,280 $ 241,368 $ 402,280 Grand Total First Year Costs $ 2,037, $ 2,883, $ 2,157, $ 3,083, $ 1,626, $ 5,173, Remaining Costs Remaining Vendor One-Time Costs $ 194,133 $ 291,200 $ 156,800 $ 235,200 $ 283,110 $ 1,579,217 Other One-Time Costs $ 295,583 $ 346,917 $ 286,250 $ 332,917 $ 263,694 $ 587,721 Internal Costs (6 months of FTE's) $ 140,798 $ 221,254 $ 120,684 $ 201,140 $ 120,684 $ 201,140 Year 2 One-Time Costs $ 630,515 $ 859,371 $ 563,734 $ 769,257 $ 667,488 $ 2,368,078 Grand Total One Time Costs $ 2,541, $ 3,552, $ 2,340, $ 3,282, $ 2,002, $ 7,104, External Ongoing Costs Support/Maintenance or Subscription Fees (SAAS) $ 126,802 $ 190,202 $ 380,405 $ 570,607 $ 291,442 $ 437,163 Total External Ongoing Cost $ 126,802 $ 190,202 $ 380,405 $ 570,607 $ 291,442 $ 437,163 Internal On-Going Costs Internal Support FTE Internal Support Cost $ 275,741 $ 275,741 $ 275,741 $ 275,741 $ 275,741 $ 275,741 Other Annual Support $ 12,680 $ 19,020 $ - $ - $ - $ - Total Internal Cost $ 288,421 $ 294,761 $ 275,741 $ 275,741 $ 275,741 $ 275,741 Total Annual On-Going Cost $ 415,223 $ 484,964 $ 656,146 $ 846,348 $ 567,183 $ 712,904 Total Cost Summary 10-Year Ongoing System Support Cost (including infla $3,922, $4,643, $6,462, $8,452, $5,531, $7,056, Total 10-Year Cost (including inflation) $ 6,590,573 $ 8,385,821 $ 9,183,388 $ 12,305,209 $ 7,825,188 $ 14,597, P age

44 First Year Cost Estimate 10 Year TCO Estimate On-Premise On-Premise Private Cloud Private Cloud Public Cloud Public Cloud Cost Category Low Scenario High Scenario Low Scenario High Scenario Low Scenario High Scenario First Year One-Time Vendor Cost Summary Software License $ 649, $ 974, $ 649, $ 974, $ - $ - $ 313, $ 470, $ 313, $ 470, $ 566, $ 3,158,434 Hardware $ 74, $ 112, $ - $ - $ - $ - Total First Year Vendor Cost $ 1,037, $ 1,556, $ 963, $ 1,444, $ 566, $ 3,158, First Year Support/Maintenance Fees Support/Maintenance or Subscription Fees (SAAS) $ 126,802 $ 190,202 $ 380,405 $ 570,607 $ 291,442 $ 437,163 Total First Year Support/Maintenance Fees $ 126,802 $ 190,202 $ 380,405 $ 570,607 $ 291,442 $ 437,163 First Year Other One-Time Costs Management $ 352,500 $ 352,500 $ 352,500 $ 352,500 $ 352,500 $ 352,500 3rd Party Interface Development $ 33,333 $ 33,333 $ 33,333 $ 33,333 $ 33,333 $ 33,333 Project Contingency $ 205,333 $ 308,000 $ 186,667 $ 280,000 $ 141,555 $ 789,609 Total Other First Year One-Time Costs $ 591,167 $ 693,833 $ 572,500 $ 665,833 $ 527,388 $ 1,175,442 First Year Internal Costs Existing FTE Effort Duration Total Internal Cost $ 281,596 $ 442,508 $ 241,368 $ 402,280 $ 241,368 $ 402,280 Grand Total First Year Costs $ 2,037, $ 2,883, $ 2,157, $ 3,083, $ 1,626, $ 5,173, P age

45 Remaining and Total One-Time Costs On-Premise On-Premise Private Cloud Private Cloud Public Cloud Public Cloud Low Scenario High Scenario Low Scenario High Scenario Low Scenario High Scenario Remaining Costs Remaining Vendor One-Time Costs $ 194,133 $ 291,200 $ 156,800 $ 235,200 $ 283,110 $ 1,579,217 Other One-Time Costs $ 295,583 $ 346,917 $ 286,250 $ 332,917 $ 263,694 $ 587,721 Internal Costs (6 months of FTE's) $ 140,798 $ 221,254 $ 120,684 $ 201,140 $ 120,684 $ 201,140 Year 2 One-Time Costs $ 630,515 $ 859,371 $ 563,734 $ 769,257 $ 667,488 $ 2,368,078 Grand Total One Time Costs $ 2,541, $ 3,552, $ 2,340, $ 3,282, $ 2,002, $ 7,104, On-Going Costs On-Premise On-Premise Private Cloud Private Cloud Public Cloud Public Cloud Low Scenario High Scenario Low Scenario High Scenario Low Scenario High Scenario External Ongoing Costs Support/Maintenance or Subscription Fees (SAAS) $ 126,802 $ 190,202 $ 380,405 $ 570,607 $ 291,442 $ 437,163 Total External Ongoing Cost $ 126,802 $ 190,202 $ 380,405 $ 570,607 $ 291,442 $ 437,163 Internal On-Going Costs Internal Support FTE Internal Support Cost $ 275,741 $ 275,741 $ 275,741 $ 275,741 $ 275,741 $ 275,741 Other Annual Support $ 12,680 $ 19,020 $ - $ - $ - $ - Total Internal Cost $ 288,421 $ 294,761 $ 275,741 $ 275,741 $ 275,741 $ 275,741 Total Annual On-Going Cost $ 415,223 $ 484,964 $ 656,146 $ 846,348 $ 567,183 $ 712, P age

46 Costs by Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 On Premise Low $ 2,037, $ 1,049, $ 422, $ 426, $ 431, $ 435, $ 439, $ 444, $ 449, $ 453, On Premise High $ 2,883, $ 1,350, $ 496, $ 502, $ 508, $ 515, $ 521, $ 528, $ 535, $ 542, Private Cloud Low $ 2,157, $ 1,231, $ 679, $ 691, $ 703, $ 716, $ 729, $ 743, $ 757, $ 772, Private Cloud High $ 3,083, $ 1,632, $ 881, $ 899, $ 917, $ 937, $ 957, $ 977, $ 998, $ 1,020, Public Cloud Low $ 1,626, $ 1,243, $ 584, $ 594, $ 603, $ 613, $ 623, $ 634, $ 644, $ 656, Public Cloud High $ 5,173, $ 3,094, $ 739, $ 753, $ 767, $ 782, $ 797, $ 813, $ 829, $ 846, Cumulative Costs by Year Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 On Premise Low $ 2,037, $ 3,086, $ 3,509, $ 3,936, $ 4,368, $ 4,803, $ 5,243, $ 5,687, $ 6,136, $ 6,590, On Premise High $ 2,883, $ 4,233, $ 4,729, $ 5,232, $ 5,741, $ 6,256, $ 6,778, $ 7,307, $ 7,842, $ 8,385, Private Cloud Low $ 2,157, $ 3,388, $ 4,068, $ 4,759, $ 5,463, $ 6,180, $ 6,910, $ 7,653, $ 8,411, $ 9,183, Private Cloud High $ 3,083, $ 4,716, $ 5,597, $ 6,496, $ 7,414, $ 8,351, $ 9,308, $ 10,286, $ 11,284, $ 12,305, Public Cloud Low $ 1,626, $ 2,869, $ 3,454, $ 4,048, $ 4,652, $ 5,266, $ 5,890, $ 6,524, $ 7,169, $ 7,825, Public Cloud High $ 5,173, $ 8,267, $ 9,006, $ 9,760, $ 10,528, $ 11,310, $ 12,108, $ 12,921, $ 13,751, $ 14,597, P age

47 Cumulative Investment Comparison Graph 46 P age

48 3.6 OPTIONS ANALYSIS & RECOMMENDATION Consistent with project objectives and based on the evaluation of the current functional and the technology environment, the City has three primary options in regard to the deployment of a future applications environment. These are analyzed in additional detail throughout this section of the report. Option #1: The City would procure the hardware and software for a new ERP system and deploy in the City s environment on-premise. Plante Moran believes this option presents the following advantages and disadvantages to the City: Advantages 1. Software License: With a perpetual license, on premise solutions still offer an indefinite right to use the software. 2. Data Ownership: With data stored and managed on premise, there is no question regarding how to retrieve that data in an emergency or disaster. 3. Interfaces: On-premise ERPs make it easier to create interfaces between the many different systems that different departments will continue to use. 4. Customization: The flexibility in customization will allow the City to adapt the system to unique processes with less system constraints. 5. System mitigation: Client ownership of data in on premise servers makes migrating to another system easier, should that be desired in the future. 6. Cost: From an external cost perspective, onpremise solution is the lowest 10 year TCO. Disadvantages 1. Infrastructure: As the city grows, more infrastructure may need to be purchased and maintained to support more users and data. 2. FTE s: More FTE s are required to maintain the system and associated infrastructure. 3. Upfront costs: On premise solutions require high upfront costs for infrastructure and implementation. 4. Upgrades: Upgrades must be purchased and implemented by the client, including what can be extensive time spent on the project. 5. Obsolete: Advances in software can render the software obsolete before it is economically viable to upgrade or switch systems again. 6. Customization Cost: Extensive customizations can make upgrading the system difficult and expensive. 7. Processes: The ability to extensively customize the system can lead the City to adapt it to their current processes, instead of evaluating and implementing best practices. 8. Cost: Costs are more unpredictable than cloud solutions. 47 P age

49 Option #2: The City would procure the software for a new ERP system and host in the vendor s private-cloud environment (off-premise) Plante Moran believes this option presents the following advantages and disadvantages to the City: Advantages 1. Software License: With a perpetual license, vendor hosted solutions still offer an indefinite right to use the software. 2. Data Ownership: Data is still owned by the City. 3. Customization: The flexibility in customization will allow the City to adapt the system to unique processes with less system constraints. 4. FTE s: City FTE s will not be required to maintain the system and associated infrastructure if vendor hosted. 5. Infrastructure: As the city grows, infrastructure will not have to be purchased if vendor hosted. Disadvantages 1. Upgrades: Upgrades must be purchased and implemented by the client, including what can be extensive time spent on the project. 2. Obsolete: Advances in software can render the software obsolete before it is economically viable to upgrade or switch systems again. 3. Customizations: Extensive customizations can make upgrading the system difficult and expensive. 4. Best Practices: The ability to extensively customize the system can lead the City to adapt it to their current processes, instead of evaluating and implementing best practices. 5. Cost: Costs are more unpredictable than cloud solutions. 48 P age

50 Option #3: The City would subscribe to and implement an ERP Public Cloud solution. Plante Moran believes this option presents the following advantages and disadvantages to the City: Advantages 1. Upfront Costs: There are less up-front costs associated with cloud systems since little infrastructure is needed. 2. Upgrades: The City s system will always be compatible with upgrades, and in some cases the upgrades are included in the SaaS license fees. Upgrades are handled by the vendor and require less effort than traditional on premise upgrades. 3. FTE s: Less FTE s are required to maintain the system. Staff can be shifted from maintaining the hardware and software to other value added activities. 4. Security: Most SaaS providers offer data security standards that exceed many local government practices, including redundant data centers and regular data back-ups. 5. Processes: Most City processes are not unique, so functionality available in Public Cloud solutions could be sufficient. 6. Scalability: Scaling up the system is easy as the city grows and the system needs more users and data storage. 7. Best practices: Public Cloud solutions are usually tailored to fit best practices, so implementing a new cloud system would be a good time to evaluate process efficiency. 8. Obsolete: Continual access to updates will reduce the chance of the system becoming obsolete. Disadvantages 1. Migrating Data: Migrating data off the system can be difficult. 2. Network: Absent a stable network connection, the system will not function. 3. Vendor Relationship: While the technical support necessary will decrease, the City needs to increase the effort spent managing the relationship with the vendor and tracking service provided compared to the Service Level Agreement. 4. Control: There is less control over when updates are applied, so the City must be ready to train users on any differences and adapt quickly to avoid process disruptions. 5. Interfaces: Maintaining the interfaces between the public cloud and other off-premise hosted systems may be difficult due to the lack of control over updates. As the system on either side of the interface is updated, the interface may need to be changed to continue to function properly. 49 P age

51 Recommendation Plante Moran evaluated three scenarios to assist the City in making a decision on a preferred approach to modernize the ERP environment. Plante Moran believes that all three of the options presented are viable considerations for the City. All three of them have advantages and disadvantages, so therefore it is important that the City consider the ultimate goals and criteria that will be used to measure the success of the project. Based on the City s current ERP environment and other factors that tie into the process of making a decision that will best serve the needs of the City over the long-term, Plante Moran viewed the following key criteria and factors in assessing each of the options and making a strategic direction recommendation: City FTE s available to implement and support the ERP system City technical infrastructure System deployment fit with what is generally observed with other organizations of a similar size and complexity Ability for the City to take on risks, such as availability of resources during implementation, tolerance for change, sustainability of complex technology investments, and long-term support for Ability to expand the solution set to incorporate needs that have not currently been implemented City staff knowledge and use of current technology capabilities and best/next business practices that exist in current ERP systems Ability for City to commit the necessary resources for the change to include both staff time and financial expenditures Timeframe associated with achieving benefits from deployment option Desire to lessen dependence on internal IT support resources Willingness for the City to consider solutions that are hosted external to the City Based on the above factors as assessed by Plante Moran during the course of our interview process and collection of background information, we feel that the most prudent course of action is to proceed with either a public or private cloud deployment (Option 2 or Option 3) method for the following reasons: 1. Upfront Costs: There are less up-front costs associated with cloud systems since little infrastructure is needed. 2. Upgrades: Your system will always be compatible with upgrades, and in some cases the upgrades are included in the software license fees. Upgrades are handled by the vendor and require less effort than traditional on premise upgrades. 3. Ongoing support: Less FTE s are required to maintain the system. Staff can be shifted from maintaining the hardware and software to other value added activities. 4. Security: Most SaaS providers offer data security standards that exceed many local government practices, including redundant data centers and regular data back-ups. 5. Processes: Most City processes are not unique, so functionality available in cloud solutions should be sufficient. 6. Scalability: Scaling up the system is easy as the city grows and the system needs more users and data storage. 7. Upgrade Frequency: Continual access to updates will reduce the chance of the system becoming obsolete. 50 P age

52 4. ERP Marketplace Overview Generally, enterprise system solutions evolved out of a desire to provide the functionality of two or more systems, such as financials and human resources, in an integrated software solution. Enterprise resource planning (ERP) software solutions experienced their first major growth in private sector businesses in their manufacturing and supply chain operations. Over the past several years, these solutions were enhanced, configured, and tested in public sector organizations. With these enhancements, those solutions originally developed for private sector organizations could now be deployed in a public sector setting. This appendix provides an overview of the ERP marketplace, organized as follows: Vendor consolidation update Market Consideration: Tier 1 vs. Tier 2 ERP Market Consideration: On-Premise vs. The Cloud Market Consideration: Integrated vs. Best of breed 4.1 VENDOR CONSOLIDATION UPDATE Consolidation among public sector software vendors has left a fewer number of vendors providing customized services to the public sector than in prior years. Organizations such as Harris, Oracle, SunGard Public Sector, Infor and Tyler Technologies have acquired competing software offerings over time and, to varying extents, marketed, licensed, implemented, and supported each of them. As such, the remaining vendors have a larger installed base per vendor. It is anticipated that, over time, these vendors will reduce, not increase, the number of ERP solutions that they will maintain and support for the public sector. This consolidation of solution offerings is typical in the software industry as a result of their desire to create a sustainable business model. Thus, it is important during the due diligence and contract negotiation process to consider any future product plans available from software providers, with the purpose of maximizing solution longevity and avoiding expensive capital outlays for upgrades and replacements. 4.2 MARKET CONSIDERATION: TIER 1 VS. TIER 2 ERP Tier 1 vendors provide broad offerings that often include modules for customer relationship management (CRM), enterprise asset management (EAM), learning management, analytics and reporting, data warehousing, and project management modules. While Tier 1 providers offer robust core financial modules, as well as human resources and payroll, typically they rely on third party vendors for functionality specific to government activities in other functional areas. Most, but not all, Tier 1 providers have a large network of implementers available to implement their solution, many of which have dedicated public sector practices. The most significant challenge with Tier 1 solutions is that government agencies often find that they are not able to dedicate enough technical resources to leverage expansive capabilities of the system to meet their needs. Due to their flexibility (thus complexity) Tier 1 implementations are most successful at organizations with structured IT software governance and/or ERP process governance, not typically demonstrated in organizations which have implemented a fragmented software approach. In addition to the necessary governance, strong IT project management is also critical for the successful deployment of Tier 1 solutions. In several instances, Plante Moran has worked with public sector clients who have implemented Tier 1 ERP systems and the following situations have 51 P age

53 prevented them from realizing the full benefit of these systems; thus diminishing their return on investment: The governmental body did not budget the necessary capital to implement the solution and optimize current business processes due to cost factors related to capital budget and resource constraints. The operating costs to maintain Tier 1 solutions relative to software maintenance and support consumed operating budgets thus creating a situation where hiring the necessary internal resources to maintain and enhance these systems (e.g., data mining, workflow, custom reporting) was not feasible. There are a number of Tier 2 ERP software providers that offer specific vertical solutions designed for the public sector including fund accounting, encumbrance accounting, sophisticated budgeting, grants management, etc. and capabilities which are pervasive in this segment. These Tier 2 solutions are normally deployed in medium sized public organizations. Over time, there has been increased focus from these Tier 2 vendors towards developing niche solutions designed to compete with the Tier 1 providers. Users of Tier 2 solutions often find that these solutions are more prescriptive; i.e., governmental best practices are designed within the application. This is intuitive since Tier 2 solutions were designed for use within the government sector. They may offer less flexibility and configurability than Tier 1 system but, as a result, are typically less cumbersome to implement within their organization, because of their native public sector design and more prescriptive implementation approach. Tier 2 vendors tend to have their origin based in the government sector and have been improving and updating their software products to offer a greater range of modules and functionality. As such, the Tier 2 vendors are touting themselves as viable alternative solutions to Tier 1 providers; however, beyond enhanced functionality, the scalability of the services being offered by Tier 2 solution providers is a strong consideration when determining the best overall solution. Unlike Tier 1 solution providers, nearly all Tier 2 solution providers implement their own software and do not rely on third party implementers. The software marketplace has seen the emergence of solutions being touted as Tier 1.5s, or one and a halves. Originally positioned as Tier 1 or Tier 2 solutions, these vendors have now positioned themselves between the two tiers and often offer enhanced functionality in areas such as human resources and payroll. They are also offering modules that are able to scale up to a larger client s complexity and transaction volume but at a lower cost and time to implement as compared to a Tier 1 provider. A third tier of software providers (i.e., Tier 3) also exists that are implemented in small organizations and will not be discussed in this report due to the lack of relevance to the City of Georgetown. Medium size government agencies, such as the City, generally select financial management solutions identified as either Tier 1 or Tier 2 solutions. The most basic differentiation between Tier 1 and Tier 2 providers lie within the depth of functionality, breadth, and complexity of the software. As identified by Gartner Research, there are still distinct differences between Tier 1 and Tier 2 software providers in the ability to address all business needs. Tier 1 vendors, such as IBM, Microsoft, Oracle, SAP and UNIT4, garner economies of scale by focusing on a smaller set of back-office capabilities and building add-ons to products they sell in other vertical markets. They attempt to address local government-specific business requirements, such as permitting and licensing, by building templates using a combination of ERP, CRM, and business intelligence (BI) products. Conversely, the Tier 2 provider s smaller scale allows for country-specific business and regulatory compliance requirements, and positions them to focus on local government-specific capabilities. In order to meet a greater subset of business 52 P age

54 needs, they have evolved through a number of acquisitions that have led to solutions that satisfy both back-office and front-office business requirements. The struggle, however, has been to evolve toward an integrated suite package while continuing investments in business development for the separate products. While overlap occurs, generally Tier 1 vendors are more prevalent in larger communities over 375,000 population while Tier 2 vendors occupy the market space for communities below this threshold. Large global vendors tend to focus on the largest local government jurisdictions. The cost of their solutions and their business models, which usually require a system integration partner for design, configuration and implementation, are usually beyond the means of smaller jurisdictions. Conversely, local independent software vendors tend to be viable for smaller jurisdictions and have pricing and implementation timelines that tend to be more favorable for midsize and small local government organizations. Table 3 identifies some of the key differences between Tier 1 and Tier 2 software providers on issues such as support requirements, cost of implementation services, and cost for major version upgrades, software support channel, and other factors. Table 3: Comparison of Tier 1 v Tier 2 Tier 1 Tier 2 Sample Representative Vendors Design Considerations Oracle (Oracle e-business Suite, PeopleSoft) SAP Workday Infor (Lawson) (1.5) CGI UNIT4/ITP (1.5) Others Developed product for private sector and later adapted for public sector Many modules specific to public sector Larger organizations with greater R&D budgets, offer more robust technology Robust development tools Scalable to leverage most robust development and database environments Harris (Innoprise) Microsoft Dynamics AX New World Systems (recently purchased by Tyler Technologies) Springbrook Systems SunGard Public Sector (ONE Solution) Tyler Technologies (New, World, Eden, MUNIS) Others Primarily designed for public sector More prescriptive functionality and less conducive to customization without altering source code Often leverage common municipal technology standards (e.g. MS SQL database); some support Oracle Environments leverage third party tools (database, report writer, etc.) Ongoing Support Resource Requirements Most require multiple technology FTEs to support Requires fewer technology FTEs to support Also impacted by level of integration with other organizational systems Also impacted by level of integration with other organizational systems 53 P age

55 Tier 1 Tier 2 Software Functionality Core modules have robust functionality May lack public sector specific features (e.g. encumbrance rollover, GASB 34 reporting) License costs per user typically more expensive than Tier 2 Incrementally less robust functionality for core components HR/Payroll modules are frequently less robust as compared to Tier 1 offerings Many vendors offer additional public sector modules, such as fleet management, request for service, etc. License costs per user typically less expensive than Tier 1 Requires multiple full time staff to implement Services for New Requires significantly greater implementation Installation vendor resources than Tier 2 to implement including key staff that are full-time to the project Vendor homework approach has organization responsible for many implementation tasks Frequently implemented with organization resources not dedicated to the project Software implementers are typically integrators/channel partners Rarely requires full-time vendor staff to implement services cost ratio comparison to license fees often many times software cost (frequently 3:1 or higher) Software vendors also implement their own solutions services ratio typically closer to 1:1; 2:1 would be more robust services approach Staff required for Ongoing support staff required Cost Model for Major Version Upgrades 6 to 12 FTEs 3 to 7 FTEs 3 to 8 FTEs 1 to 3 FTEs Most major upgrades include significant license fee costs Most major upgrades require significant levels of vendor services to assist License fees for version upgrades often included with maintenance fees Most major upgrades require moderate levels of vendor services Software Support Mixed; some direct, some through implementer / Channel value added reseller channel Primarily direct vendor support 4.3 MARKET CONSIDERATION: ON-PREMISE VS. THE CLOUD Over the last couple of years, there has been an acceleration of vendor products moving to the cloud and touting themselves as cloud providers to be consistent with buzzwords in the marketplace; however, in certain situations these vendors have merely offered up a hosted solution in which there software is being installed remotely while other vendors are offering up true cloud-based solution that support elements of the NIST standards to include multi-tenancy. In certain situations, these cloud offerings have been available for several years but are now being introduced to the governmental marketplace (i.e., Workday, Oracle ERP Cloud). Other solutions have undergone a rewrite of their applications to make themselves true cloud solutions (i.e., Infor s CloudSuite), while certain vendors have re-architected their solution to operate as a cloud solution (i.e., Advantage 360). An overview of the vendors in the marketplace, as well as the deployment approaches they offer, is provided in the table below. 54 P age

56 Table 4: Vendor Offerings and Deployment Approach Options Vendor/Application Tier Traditional On Premise Private Cloud Public Cloud (SaaS) CGI/Advantage CGI/Advantage 1 Infor/Lawson 1.5 Infor/CloudSuite 1.5 Harris/Innoprise 2 Oracle/E-Business 1 Oracle/JD Edwards 1 Oracle/PeopleSoft 1 Oracle/Cloud ERP 1 SAP 1 Springbrook 2 Workday 1 Microsoft/Dynamics AX 2 Sungard/OneSolution 2 Tyler/Eden 2 Tyler/MUNIS 2 Tyler/New World Systems 2 The traditional on-premise deployment was the primary strategy for local governments for many years, who looked favorably on the flexibility and overall control they had over the application software, hardware and organizational data. As the ownership of the software is perpetual and the development of the solution is unique to the client, on premise solutions are regularly selected and deployed by those governments that are required to extensively customize their software to meet unique business requirements. Similar to the traditional on-premise deployment, solutions hosted off-premise in a private cloud also support more customization and are regularly on a single tenant model. The private cloud deployment approach, can allow for flexibility from an exit strategy perspective as well as the benefits that are aligned with the hosting vendor taking on much of the back-office maintenance and support that would be taken on by the client in an on premise model. Public cloud solutions are less flexible, from an ability to modify the software perspective, but also require much less maintenance and technical staff to support them. Public Cloud SaaS solutions are by definition, multi-tenant which indicates that numerous customers utilize the same instance of the solution. 55 P age

57 As a result, when an upgrade is readily available, every customer will receive the upgrade at the same time. Traditionally, on premise was the preferred choice for implementing an ERP solution however, private cloud implementations have become increasingly popular. Most traditional software providers now offer a private cloud alternative, however only a handful are offering public cloud ERP to the local government marketplace. Vendors have confused the issue by referring to all flavors of ERP subscription pricing as cloud deployment offerings, however it must be noted there is a difference between the three deployment models regardless of how they are priced. Moving to public cloud ERP solutions, in theory, should be a very marketable ERP deployment strategy for small to mid-size local government organizations. In general, public cloud solutions typically have lower initial investment and project period costs since significant infrastructure spending is usually not required. Public cloud costs are more predictable, usually incurring a monthly fee that is set in Cost Component Comparison Traditional On Premise One time upfront license fee (at contract signing) professional services fees (duration of project) Hardware fees (upfront) Ongoing Maintenance and Support fees (12 months after contract signing) Private Cloud Hosted One time upfront license fee (at contract signing) professional services fees (duration of project) Ongoing Maintenance and Support fees (12 months after contract signing) Monthly or annual hosting fee (required at software installation) Public Cloud /SaaS professional services fees (duration of the implementation) Monthly or annual software subscription fee (varies by vendor but usually due at contract signing) advance and as customization options are limited, it is easier to scale for small to midsize organizations looking for standard financial, human resources and payroll functionality. In addition, in an era when local governments are routinely multiple versions behind the current release, moving to a public cloud offering allows organizations with the cloud to more easily stay current with technology. Whereas, on premise solutions routinely required significant upgrades that made enhancing the functionality of a system unaffordable, public cloud solutions offer regularly scheduled upgrade capability and the ability to more quickly and take advantage of new technology trends. As local governments are increasingly challenged to finance large scale ERP implementations and retain highly qualified technical resources necessary to maintain the ERP systems once they are implemented, the public cloud should theoretically level the playing field and provide small to mid-size governments the opportunity to operate powerful business solutions with minimal long-term risk of being unable to support and optimize the investment. 4.4 MARKET CONSIDERATION: INTEGRATED ERP VS. BEST-OF-BREED Another consideration in the market is whether to obtain all desired functionality in one integrated enterprise system, or implement a multi-vendor best-of-breed infrastructure. To be clear, a best-of-breed does not break out financial components, but rather offers state-of-the-art management of typically complex areas like budgeting, grants and asset management. The decision-making process needs to focus on the management of infrastructure and access to resources to maintain and upgrade the system it ages. A single vendor system can bring a less complex and faster deployment with encompassing configuration and design approaches. A best-of-breed solution can improve workflow and capture important data related to revenue for specialty areas. A single vendor 56 P age

58 system can mean easier integration of data, while a best-of-breed approach prevents an organization from being dependent on a single vendor s plans for support and expansion. This decision is highly dependent on revenue projections for the organization, and should be considered with forward/future thinking, not just addressing ways to address current challenges. Table 5 presents an overview of the advantages and disadvantages of integration vs. best-of-breed. 57 P age

59 Table 5: Summary of Integrated v Best of Breed Integrated ERP Best of Breed Advantages Meets the needs of the organization as a whole. Rather than provide the best solution for each functional area, ERP solutions tend to be designed for the needs of the broader organization focused around processes versus functions. Better optimize business processes. Because they tend to be designed around processes, ERP solutions provide a better platform for process optimization (depending on how it s configured) including cross-functional workflow. Improved reporting. Many ERP vendors provide a variety of canned reports and specialized reporting tools. A single database typically allows for more robust reporting across functional areas Potential for more robust functionality. Each system is selected and implemented to accommodate the needs of the specific functional area(s). Vendor independence. A best of breed approach allows greater flexibility and independence versus a single vendor. Over time, the organization is in a better position to replace a single system if its functionality becomes inadequate or obsolete. Market trends. The market for ERP systems in the public sector continues to evolve. The trend is toward consolidation as companies acquire best of breed solutions to build into their solutions. Disadvantages Change management. A new ERP typically requires more thoughtful consideration and planning for change management. In any organization, the introduction of new processes coupled with new technology is typically met with varying and unpredictable degrees of staff resistance. Some organizational change may result, adding to the complexity. Significant capital investment. The selection and procurement of an ERP requires a sizable investment with software licensing, vendor consulting resources, internal staffing, and other related project expenditures. risk. Given the robust functionality and flexibility of some ERP solutions, there is increased risk given the decisions and interdependencies that exist. A higher degree of ERP experience (and a good contract) can help mitigate risk. Complex reporting. Database complexity can create reporting challenges and will require dedicated and long-term support. Risk commensurate with integration experience. Risk of system issues increases with integration complexity and the organization s experience / resources to deal with the complexity. Added support for multiple systems. The staffing requirements increase due to the necessity to develop and maintain the interfaces between applications. Information silos. In best of breed situations, the characteristic islands of information are a result requiring complex data warehousing. Further, interfaces are not as robust as true integration. Distraction from core mission. Developing integration between best of breed modules requires strategic allocation of resources away from other, perhaps transformational /innovative strategic goals. Fragmented and inefficient processes. As processes flow across functional areas, so must information. Streamlined work flow becomes more challenging in a non-integrated environment. 58 P age

60 {Thank You!}