County Of Sonoma Agenda Item Summary Report

Transcription

1 County Of Sonoma Agenda Item Summary Report Department: Auditor-Controller-Treasurer-Tax Collector, Human Resources, Information Systems 4/5 Vote Not Required Contact: Phone: Board Date: Deadline for Board Action: Cassandra Bridges (707) /24/2010 AGENDA SHORT TITLE: Human Resources Management System (H.R.M.S.) REQUESTED BOARD ACTION: Status report on HRMS project CURRENT FISCAL YEAR FINANCIAL IMPACT - None. Explanation (if required): Prior Board Action: 1/13/2009: Board authorized the Chair to execute an agreement with High Line Corporation for the H.R.M.S. implementation and authorized budgetary adjustments totaling $6.9 million to the H.R.M.S. Project Fund budget for Fiscal Year 08-09; 8/5/2008: Board approved completion of the software selection phase and directed the H.R.M.S. Steering Committee to return with a contract with the recommended system solution and recommendations for financing; 8/7/2007: Board approved H.R.M.S. project goals and directed staff to proceed with software selection phase; Fiscal Year 05-06, Fiscal Year 06-07: Board appropriated funding for H.R.M.S. through budget process. Alternatives Results of Non-Approval: The County will not achieve the goals associated with the implementation of a contemporary H.R.M.S. and will continue to use disconnected and manual systems that do not support strategic decision making.

2 Background: This item is a status report on the Human Resources Management System Project. The Board approved implementation of the project on January 13, 2009, with High Line Corporation s Human Resources Management System, epersonality. This project was to address the inconsistencies of human resources related systems across the various departments, developed in the absence of a comprehensive centralized system, and to replace the existing G.E.A.C. payroll system, a mainframe computer application developed in The current situation has resulted in duplication of effort, has become labor intensive to maintain, increases the risk of security issues, errors and delays, and does not provide the County with an integrated, comprehensive database of critical workforce data to support strategic decision making. Implementation Plan and Timeline The draft project implementation schedule developed in coordination with the vendor called for two phases with a go-live for the payroll portions in Spring of 2010 and a go-live for most of the other human resources portions at the end of the calendar year. The project initiated implementation in January 2009 with a dedicated, co-located team including subject matter experts from Human Resources, Payroll and Information Systems. The As-Is and To-Be design phases were completed with regard to business process improvements and re-engineering, both system and non-system related. The project team also worked on the standardization and efficiency of Countywide processes while taking into consideration the operational differences within departments. The project team was trained on the various system modules and functionality based on the County s specific business requirements because system configuration, interfaces, data conversions and training the County workforce are the responsibility of the core project team. In November of 2009, after much of the advance work noted above had been completed, the H.R.M.S. team went through an extensive process to evaluate the critical tasks that still needed to be completed and the optimal timing for the County to launch epersonality. Given the complexity of our organization and our unique business rules, in addition to increased demands on County staff and the looming budget situation, it was clear that additional time would be necessary in order to launch a system with the level of functionality and support from County staff that the project requires in order to achieve the desired scope. The ability to spread the work over a longer period of time allowed for engaging subject matter experts more effectively, many of whom are vital to County budget preparation processes as well, and provide for a smoother and more successful transition, particularly with respect to the annual payroll cycle. As a result, the Board may recall, the phase 1 go-live shifted from the tentative date of Spring 2010 to a confirmed date of December With the revised go-live date for Phase 1, the first live payroll checks will be produced by the new system on January 5, Having the start date at the beginning of the calendar year fit better with the annual payroll calendar. It eliminated the need to maintain two systems for the purposes of W-2 reporting and reduced some of the data conversions that would have been required with a mid year implementation. Phase 1 will include the following modules: Payroll, Foundation (Reporting Structure, Personnel Records, and Position Control), Benefits (Benefit Plan Administration), Attendance (Leave Policies and Attendance Records), and Salary Administration (Salary Surveys, Experience Tracking, and Personnel Actions). Following the phase 1 implementation, the Benefits and Employee Self-Service modules will be implemented in time for the Annual Enrollment process in March of This will allow all users, including retirees, to have direct access to update their benefit options, dependent information, demographics, etc. In June of 2011 the following modules will be implemented: Manager Self-Service (Review and Approve Personnel Actions and Leave Requests), Forecasting and Costing (Position Budgeting and Financial Analysis), Discoverer (Ad-Hoc Report Writing Tool), and Org Publisher (Organizational Chart Tool).

3 In conjunction with the above implementations, the H.R.M.S. team along with additional subject matter experts in the Human Resources Department will begin the development of the Labor Relations, Training and Development, and Safety and Health modules. Each of these modules will be rolled out once the business process re-engineering is complete in user departments. This will allow Human Resources to implement best practices and complete the intended use of epersonality to meet the County s needs. The formal completion of the project is June Current State The Human Resources Management System project is on track for the phase 1 release in December of The phase 1 build, configuration, conversions, and interfaces are all but complete. The remaining development is related to specific enhancements requested of the vendor and the team is prepared to move forward without those enhancements if necessary. The team is scheduled to begin testing the fully configured phase 1 portions of epersonality concurrently with our current Payroll and Human Resources systems on September 13, 2010 to ensure that we are achieving the expected results and iron out any glitches. When we finish this process successfully, we ll begin end-user training, immediately followed by the phase 1 go-live of epersonality. Project costs are tracking closely to the revised projections and are monitored by the team, an executive and change control committee, and the H.R.M.S. steering committee. In addition, the project employs an outside consultant to monitor the project and report to the H.R.M.S. steering committee. In order to achieve a successful transition and implementation of epersonality, the team has engaged key departmental stakeholders including Human Resources staff, Payroll staff, Information Systems staff, Human Resources Liaisons and Payroll Clerks. They ve contributed their valuable time in the following ways: 1. During the initial phases of the project, they worked with the team to document the County's current business processes and identify our business requirements. 2. They are participating in monthly information sessions about the project, providing us with valuable information about how we can best support them in the transition to the new system. 3. They volunteered to participate in a group called the Pre-Launch Quality Assurance Test Team, made up of subject matter experts across all functional areas of the County. A total of 27 employees agreed to participate, with Department Head approval, in assisting the H.R.M.S. team to develop and test training materials, identify best practices related to using the new system and identify how to preserve essential knowledge. By engaging in the project early, the Pre-Launch Quality Assurance Test Team has been gaining a level of system knowledge that will enable them to become H.R.M.S. super-users. This will not only benefit them, but the departments and the County as a whole. Future State This time next year many of our current manual processes will be replaced with automated processes in epersonality. At project initiation, an example was shared with the Board as to the current paper process for hiring a new employee and showed a simplified flowchart of what the new process will be. As a result of the more detailed design, configuration, and business process engineering work we are able to better define some of the after conditions and efficiencies with the new system. Two examples below illustrate some of the efficiencies the project will achieve. Staff will include additional examples as a part of each status update. Current Position Control Process Employees are not assigned to specific positions when hired because position control and payroll processing are handled by separate systems. Reconciliation between two different systems creates variances between the position control data and current authorized allocations. This means that current information on position allocations and vacancies is difficult to obtain and may not be accurate.

4 Future Position Control Process In epersonality, each employee will be hired into a specific position allocation, and if there is not an existing vacant allocation authorized for hire, the hire will not be allowed by the system. Payroll and budgeting processes are fully integrated with the position control functionality, keeping all three of these areas aligned at all times. This means that current and accurate position allocation and vacancy data will be available at any point in time, and can be reported by budget index, work location, job class, county department, and/or fund type. The position allocation data will be easily accessible to department managers, Human Resources, and the County Administrator's Office, significantly improving our ability to project and manage labor costs. Current Process for Obtaining Past Pay Stubs When an employee needs copies of past pay stubs, they must search through their own personal hard copy files. If they are unable to locate the information they need, they must submit a request to the Payroll division who runs a special earnings report. Future Process for Obtaining Past Pay Stubs Through the epersonality Self-Service module, the employee will be able to access and print copies of pay statements at any time. Bi-weekly pay stubs will be distributed electronically thereby eliminating thousands of pieces of paper remittance advices each pay date, along with eliminating the time needed to sort and distribute to employees. H.R.M.S. Project Budget and Financing The total project budget through implementation was estimated at $6.9 million in January Of that total, $2.5 million in funding had already been identified and provided to a project budget and we noted that $4.4 million additional financing would be needed to complete the implementation. The tentative plan at that time was to borrow the remaining $4.4 million and align the financing with the amortization of project costs in the state approved cost plan for claiming such costs from state and federal programs. In addition, this would take advantage of the fact that savings associated with efficiencies from this new system will also occur over time as the central service and end-user departments change the various human resources and payroll business processes. Staff was able to demonstrate projected savings meeting or exceeding project costs each year for the five year amortization using this financing approach. Per Board direction staff also continued to seek one-time funding sources to reduce the required total borrowing, and therefore interest costs, that would be needed. With the revised plan and timeline and to address two other issues, proper accounting and moving beyond this project s implementation, the H.R.M.S. Steering Committee is recommending that the total project budget be adjusted to $8.5 million, however no additional resources are being requested and the ability to achieve the projected savings at or exceeding project costs per the projections shared at the project approval remains uncompromised. Adjustments to the overall budget are mitigated in part by actions staff have taken to reduce specific costs where possible without sacrificing scope. The revised timeline adds approximately $400,000 to account for labor costs of the dedicated internal project staff to complete implementation and achieve project scope. Many of these internal project staff hours were anticipated for post go-live support and now can be included in the amortization of the total project costs. The second issue that requires a project budget adjustment has to do with properly accounting for the in-kind, internal project support provided by Information Systems. Since the beginning, the total project costs from the three key central service providing departments, Human Resources, Information Systems and Auditor- Controller-Treasurer Tax Collector, were estimated and divided into two different categories. The first category was the added costs necessary to dedicate staff to the project team for the project. These costs were included in the project budget because they were the added costs necessary to take on the project and represented new resources that would be needed in each of the 3 departments in order to complete the effort. The second category was the additional support that each of these departments would provide from within

5 their existing operating staff. These latter costs, while a part of successfully bringing on a new system, were planned to be absorbed within the department s normal operating expenditures and thus not needed to be financed as a part of the project budget. The estimates of the total costs necessary in both categories grew as noted above for the extension of the implementation timeframe but otherwise have proved fairly accurate. However, as the implementation has progressed and Information Systems began to support the development with various professional staff, it became apparent that those costs were going to have to be allocated to the project budget as opposed to absorbed in the department. This was necessary in order to account for them accurately, since all computer related Info Systems services are billed to user departments, and to try to absorb them elsewhere might jeopardize reimbursement from state and federal programs. As a result, approximately $1.1 million of these Information Systems costs over the 2 year implementation need to be allocated to this project. FY actual billings were adjusted at year-end (and as a result other computer service related billings to departments came in more than $600,000 below budget) but the overall project budget appropriations for FY will need to be adjusted in this final year of the project. The third issue has to do with moving beyond this project s implementation and budgeting for the on-going maintenance and support as well as the beginnings of the next two projects in the County s efforts to upgrade our central systems. These next two projects, replacing the accounting and budgeting systems, are not only needed to provide the County with better management information and to increase efficiencies in the budget process but also because replacing these last two systems will allow the County to retire its mainframe computer which has reached the end of its normal technological life. These costs total about $320,000. The H.R.M.S. Steering Committee recommends including them in the current project budget for two reasons. The first is that the portion related to the partial operations and maintenance for phase 1 (approximately $205,000) can be captured in the overall project financing until the second phase is completed. This will help better align on-going operational costs with the operational savings which won t begin to be fully realized until after the second phase is complete. The second reason is so that project staff, and in some cases staff hired to backfill in other departmental operations, will be able to better plan for transition after this project is complete, to the next projects in the sequence. The H.R.M.S. Steering Committee and project staff committed to avoid an impact to available County resources when the implementation timeline was extended. To meet that commitment for these needed adjustments to the total project budget, as well as to ensure the on-going cost savings anticipated are received after the implementation total project costs were reduced by about $200,000. This was accomplished by: redirecting some of the resources freed up by the departure of the Project Director; eliminating some work space build out costs, and renegotiating vendor travel costs. The adjusted project budget will also still include over $275,000 in contingencies but use of these contingencies requires approval from the executive/change control committee and the steering committee. Staff will bring forward the necessary budget adjustments, limited term position adjustments, and the actions necessary to complete the financing for the project, a recommended issuance of a note to the County Treasury of $3.6 million, (down from the $4.4 million originally estimated), in the Consolidated Budget Adjustments package in September. Attachments: None On File With Clerk: None.