MUNICIPALITY OF CHATHAM-KENT CORPORATE SERVICES INFORMATION TECHNOLOGY SERVICES

Transcription

1 MUNICIPALITY OF CHATHAM-KENT CORPORATE SERVICES INFORMATION TECHNOLOGY SERVICES TO: FROM: Mayor and Members of Council Steve Wilson, Project Manager Information Technology Services DATE: November 20, 2012 SUBJECT: RTC 201b Integrated Enterprise Resource Planning (ERP) and egovernment Solution RECOMMENDATIONS It is recommended that: 1. The ERP and egovernment solution and the implementation of this solution be separated into 2 phases. Phase 1: ERP and core egovernment modules as presented in this report to Council for review and approval. Phase 2: Property Tax and Document Management modules, requiring further due diligence in the form of functionality reviews, reference checks and site visits be presented for approval at a later Council meeting. 2. Investment into the project in the amount of $7,833,343 $7,231,586 be approved as follows: a) Mid-Range Solutions Limited be awarded the contract to provide the latest version of the JD Edwards EnterpriseOne Enterprise Resource Planning software and implementation services in the amount of $2,991,379. Software features will include Human Capital Management, Financial Management, Supply Chain Management, Asset Management and Business Intelligence functionality. b) RAC Software Inc. be awarded the contract to provide the latest version of the FMW Web Operating and Capital Budgeting software and implementation services in the amount of $34,853. Software features will include Budgeting functionality and will be integrated into the JD Edwards EnterpriseOne ERP solution. Note: Amounts shown in report reflect the requested reduction of the provision for contingency by $600,000 to reflect a 21 month implementation timeline rather than the originally proposed 24 months.

2 RTC 201b - Integrated Enterprise Resource Planning (ERP) 2 and egovernment Solution c) CityView be awarded the contract to provide the latest version of CityView egovernment software and implementation services in the amount of $869,455. Software features will include Planning Services, Building, Licensing and Enforcement, Cemetery Management, eplan, Parking Permits and Customer Service Request functionality and will be integrated into the JD Edwards EnterpriseOne ERP solution. d) The amount of $2,238,867 $1,937,110 be available for: Hardware (Servers & Software) $196,626 Staff Backfill $2,011,713 $1, Project Office Operating Costs $30,528 $2,238,867 $1,937,110 e) A contingency of 15% of Phase 1 project costs in the amount of $920,183 $620,183 be provided for. f) Funding for Phase 2, Property Tax and Document Management functionality in the amount of $778,606 be placed in reserve and that the Municipality continue to fulfill its due-diligence requirements by conducting further review, reference checks and site visits for recommendation to Council at a later date. The amount contains a contingency of 15% of Phase 2 project costs in the amount of $101, Funding from the Capital Budget and existing reserves be approved as follows: B: Existing Funds Capital Budget (split over the years 2012 to 2014) 5,000,000 Existing Reserves 2,833,343 2,231,586 Total Existing Funds $7,833,343 $7,231,586

3 RTC 201b - Integrated Enterprise Resource Planning (ERP) 3 and egovernment Solution BACKGROUND At the Council meeting of November 5, 2012, administration tabled a comprehensive report on replacing the core computer systems of the Municipality. That report is attached as appendix A to this report. Administration recommended two changes to that report: a) That the provision for contingency be reduced by approximately $600,000 to reflect a 21 month implementation timeline rather than the originally proposed 24 months. b) That Council receives and discusses the proposal at its November 5 meeting and, due to the significant investment required; defer a final decision to the Council meeting of November 26. Council agreed to the above two changes. In addition, Council asked that the following matters be clarified at its meeting of November 26: a) An overview of current ITS reserves. b) An overview of the team required to implement the project and the corresponding backfill requirements of that team. This report addresses both of the above. It restates the recommendations with the $600,000 implementation cost reduction incorporated and provides the additional information requested. COMMENTS Information Technology Lifecycle Reserves Lifecycle Reserves are set aside for software licensing and hardware purchases for infrastructure and applications that business solutions utilize. This includes the upgrade or replacement of: Enterprise licenses for operating systems, client access licenses, server, network, and management software, as well as communication, database, and application frameworks/infrastructure. The following detail is a list of ITS related reserves that provide for non ERP business solutions: Actuals Dec Actuals Dec GIS System 259, ,439 - This lifecycle reserve is for upgrade/replacement of Geographic Information Systems (GIS) application software, licensing and hardware for specific business areas which is also supported through service level agreements.

4 RTC 201b - Integrated Enterprise Resource Planning (ERP) 4 and egovernment Solution Strategic Plan 107,351 (62,164) - This lifecycle reserve is for implementation/update of the ITS Strategic Plan. The ITS Strategic Plan must be reviewed before it reaches the end of its recommended life, to ensure that the direction and steps that were recommended are still appropriate given strategic corporate decisions and the changes in information technology. Web Lifecycle 322, ,557 - This lifecycle reserve is for the upgrade/replacement of web application software and hardware. This would include the SharePoint software components and the hardware necessary to host the services. Copy/Printing Equipment 362, ,077 - This lifecycle reserve is for the replacement of standalone or network printers, photocopiers, postage meter machines, faxes and scanners throughout the Municipal offices. Computer Hardware (385) 10,407 - This lifecycle reserve is for replacement of end of life servers and server related technology. Computer Software 2,215,769 1,894,607 - This lifecycle reserve is for software related purchases including server client access licensing and licensing of other corporate related software. - Server client access licensing and agreements provides permissions of users and or devices to connect to the network and access servers, application platforms, and is a core prerequisite for many business solutions currently in place. - The agreement includes the right to upgrade to newer releases of the software as they are made available during the contractual period. - There are approximately 150 corporate related software applications which need to be updated and or replaced in the future. - Some examples are: web security software (Barracuda), intrusion detection, virus/malware detection, readers, design and flash software (Adobe products for enterprise use), Blackberry Desktop and Web Manager (RIM), barcode scanner software, AutoCAD, survey software, Crystal Reports, label writer software, voice editor and digital viewer software, reservation software, Microsoft Project, virtual private network (VPN) software for secure access, queue printer software, Streetsweeper (mailing innovations), Microsoft Visual Studio, Microsoft Visio, etc. Network 565, ,138 - This lifecycle reserve is for the upgrade/replacement of networking related technology such as switches, routers, and security firewalls.

5 RTC 201b - Integrated Enterprise Resource Planning (ERP) 5 and egovernment Solution Telecommunications 1,014, ,034 - This lifecycle reserve is for the upgrade/replacement of telecommunications systems such as telephone phone systems, phone sets and voic systems located throughout the Municipality. Applications 334, ,020 - This lifecycle reserve is for the upgrade/replacement of software applications for specific business areas which is also supported through service level agreements. Corporate Technology 11,844 7,896 - This lifecycle reserve is for the upgrade/replacement of hardware for specific business areas which is also supported through service level agreements. GIS Data 37,294 32,257 - This lifecycle reserve is for the purchase of up-to-date GIS data (orthophotography) for specific business areas which is also supported through service level agreements. PUC Workstations 65, This lifecycle reserve is for the upgrade/replacement of Public Utilities Commission computer hardware as per service level agreement.

6 RTC 201b - Integrated Enterprise Resource Planning (ERP) 6 and egovernment Solution Core Infrastructure Server Software Application Platforms Network Software Management Platform Core User Software Communication Platform Database Platform Application Platforms Business Solutions Supporting Service Delivery Solutions for Chatham Kent Over 100 diverse Business Units Supporting 1000 s of Business Process's Supporting 100 s of Business Applications and tools Supporting many Large solutions for business operations Project Team Having the right resources on the implementation team is a Critical Success Factor (CSF) that is often overlooked when forming a team. Organizations incorrectly assume that the staff can perform their normal day-to-day functions and at the same time take on the demanding task of understanding and implementing a new business solution. The result of not having enough of the right skills dedicated to the project is that the project will not be delivered as planned, on time or on budget. Skilled, knowledgeable resources must be seconded to the project from the beginning or project kick-off. As other support resources are required to assist, they should be brought in to ensure project tasks are completed on time. The resources assigned to the project need to have the following character traits: o Has an in-depth understanding of business area o Work well with others, as part of a larger team o Can motivate and lead others (functional end-users) o Provide communication to functional end-users and o Bring topics, concerns and suggestions forward to the team. The team members will be instrumental in gathering functional requirements, defining the new business processes, assisting in configuration of the ERP and egovern software, scrubbing and loading data, performing and signing-off on quality assurance

7 RTC 201b - Integrated Enterprise Resource Planning (ERP) 7 and egovernment Solution testing using Municipal data, identifying end-user training requirements and providing go-live support. These Subject Matter Experts (SMEs) must be identified for each of the functional areas. These SMEs will act as leads in their areas of expertise. SMEs are required for: Financial Management Human Capital Management (HR / Payroll) Asset Management Supply Chain Management Information Systems Cemetery Management Building, Licensing and Planning The SMEs who assist in the requirements gathering need to be made available for the duration of the project. Backfilling Positions While the SMEs are assigned to the ERP / egovern project, their day-to-day activities need to be distributed amongst other staff or their position backfilled with an appropriate or equally skilled resource. This will ensure that the project team members are not distracted from their key objective, the ERP / egovern implementation. Resource Quantity Duration Backfill Cost Backfill Cost (Years) (24 Months) (21 Months) Finance / Supply Chain Mgt ,328 Finance / Supply Chain Mgt ,157 Human Capital Mgt ,157 Asset Mgt ,254 Building / Planning ,751 Cemeteries Coordinator ,751 Customer Service Representative ,503 Network Analyst ,652 Web Analyst ,731 GIS Analyst ,125 Data and Application Administrator ,304 Staff Backfill (2 yrs. inc. benefits) 2,011,713 1,709,956 As a group, the SMEs will work with an equal from the vendor s implementation team to: Define Business Processes Analysis (BPA) Define Business Systems Requirements (BSR) Develop a Business Solution Design (BSD)

8 RTC 201b - Integrated Enterprise Resource Planning (ERP) 8 and egovernment Solution Configure the software to match the BSD Scrub or clean existing data, mapping it to new codes Migrate data/history Identify Integration points and assist in development Develop User Acceptance Testing (UAT) Scripts Test and sign-off on system functionality Support training of end-users Assist in production go-live Provide continued support and direction to organization In addition to the core functions required of each SME, they will individually be responsible for: Finance / Supply Chain Management: Define a new Chart of Accounts (COA) Map existing chart to new chart Determine data/history to be migrated Identify and fulfill Audit requirements for migration and go-live Migrate and balance COA Define new processes (receivables, payables, procurement, etc.) Define and Develop new reports Define and Perform User Acceptance Testing of procedures and reports Determine training requirements for Accounts Processing, Revenue, Financial and Budget Analysts, Purchasing Direct and support other staff during implementation and go-live. Human Capital Management: Define new Earning / Deduction, status and other HR related codes, etc. Determine data/history to be migrated Define new processes (on-boarding, time collection, payroll, etc.) Guide deployment of Employee Self-service functionality Define and Develop new reports as required Define and Perform User Acceptance Testing of procedures and reports Determine training requirements for Human Resources and Organizational Development (HROD) staff Direct and support other staff during implementation and go-live. Asset Management: Define new Inventory and Asset Management codes (equipment failure, downtime codes etc.)

9 RTC 201b - Integrated Enterprise Resource Planning (ERP) 9 and egovernment Solution Define and Build Equipment/Facility master and hierarchy Determine data/history to be migrated Define and build maintenance programs and schedules, Define new processes (maintenance costing service and warranty management, work order requests and management, etc.) Guide deployment mobile maintenance functionality Define and Develop new reports as required Define and Perform User Acceptance Testing of procedures and reports Determine training requirements for IES, RVG, PUC, CKPS staff Direct and support other staff during implementation and go-live. Building, Licensing, Enforcement and Planning Services: Define new building and planning codes and fee structure Define and Build activity or permitting sequences Determine data/history to be migrated Define new processes (permit applications, inspection scheduling, etc.) Guide deployment mobile inspection and review functionality Define and Develop new and legislated reports as required Define and Perform User Acceptance Testing of procedures and reports Determine training requirements BLED, Planning Services, IES, CKPS and Fire Services staff Direct and support other staff during implementation and go-live. Cemetery Management: Define new cemetery management codes and fee structure Determine data/history to be migrated Work with GIS Analyst to map enable cemeteries, sections and lots Define new processes (sales, internment, cemetery maintenance, etc.) Guide deployment mobile sales, lot availability and review, as well as citizen portal search functionality Define and Develop new and legislated reports as required Define and Perform User Acceptance Testing of procedures and reports Determine training requirements Cemetery staff Direct and support other staff during implementation and go-live. Project Manager (PM): Define project charter, identifying scope, budget and timeline Identify and oversee project team Define system integration strategy (how system integrates with existing applications)

10 RTC 201b - Integrated Enterprise Resource Planning (ERP) 10 and egovernment Solution Work with Vendor Project Manager to develop detailed project plan Oversee project activities (Plan, Do, Act, Check) Identify and manage risk and change Construct Parking lot list of change requests that can be scheduled after project go-live Balance competing demands for quality, scope, time and cost Utilize project management tools and methodologies available (i.e. Chatham- Kent Project Management Office (CKPMO) and Project Management Book Of Knowledge (PMBOK) guidelines), as well as proven strategies Communicate progress, risk and changes to Executive Management Team, Council and other stakeholders Direct and support staff during business process review, system specifications or definition, configuration, data migration, testing and go-live. Network and Systems Administrator (NSA): Work with Vendor Technical staff to identify network and server requirements Order, install and configure hardware as per vendor instructions Work with Security and Network Analyst to identify and implement network security (logons, access rights) and review and harden application security Document as-built documentation for all network components following Technical Service Guidelines Review backup requirements and implement Develop disaster recovery processes, implement and document Meet with other Technical Services staff to keep them up-to-date on project activities as it related to technology implemented Develop and implement hardware and software monitoring agents for proactive monitoring of all technology components. Provide alerts on failure to appropriate staff Support other project team members and staff during implementation and go-live. Web Analyst: Work with Vendor Technical staff to identify web hardware and software requirements Work with NSA to order, install and configure hardware as per vendor instructions Work with Security and Network Analyst to identify and implement network security (logons, access rights) and review and harden application security Work with GIS Analyst to define Citizen Portal requirements and deploy portal as a part of the overall Chatham-Kent website Ensure effective integration and transfer of information and data to and from the core applications, using Service Oriented Architecture (SOA) principles

11 RTC 201b - Integrated Enterprise Resource Planning (ERP) 11 and egovernment Solution Meet with other Information Services staff to keep them up-to-date on project activities as they relate to Web technology implemented Support other project team members and staff during implementation and go-live. GIS Analyst: Work with Vendor Technical staff to identify GIS hardware and software requirements Work with NSA and Web Analyst to order, install and configure hardware as per vendor instructions. Work with Building, Licensing, Planning and Cemetery SME to identify requirement for GIS technology Work with Web Analyst to define Citizen Portal requirements and deploy portal as a part of the overall Chatham-Kent website Ensure required mapping tools and maps are available to support project efforts Meet with other Information Services staff to keep them up-to-date on project activities as they relate to GIS technology implemented Support other project team members and staff during implementation and go-live. Data and Application Administrators: Work with the individual Subject Matter Experts (SMEs) to define business requirements, solution design, configure system Assist SMEs in data scrubbing where it can be automated Define and build data conversion, and migration scripts Migrate data/history Help SME define and implement new processes Assist in the definition and development of new and legislated reports as required Assist preparing system for User Acceptance Testing of procedures and reports Identify, define and develop integration requirements Direct and support other staff during implementation and go-live. COUNCIL STRATEGIC DIRECTIONS The recommendations in this report support the following Council Directions: Healthy, Active Citizens Growth Through Variety of Post-Secondary Institutions High Quality Environment Through Innovation Destination Chatham-Kent! Magnet for Sustainable Growth Prosperous and Thriving Community Has the potential to support all Council Directions Neutral issues (does not support negatively or positively)

12 RTC 201b - Integrated Enterprise Resource Planning (ERP) 12 and egovernment Solution CONSULTATION The General Manager of Corporate Services and Director of Information Technology Services were consulted during the preparation of this report. FINANCIAL IMPLICATIONS The financial implications of this project were outlined in RTC Integrated Enterprise Resource Planning (ERP) and egovernment Solution, which has been attached as Appendix A. Prepared by: Reviewed by: Steve Wilson Project Manager Reviewed by: Helen McLaren, CMM III Director, Information Technology Services Reviewed by: Gerry Wolting, B. Math, CA General Manager Corporate Services Don Shropshire Chief Administrative Officer Attachment: Appendix A RTC 201 Integrated Enterprise Resource Planning (ERP) and egovernment Solution P:\RTC\ITS\2012\RTC ERP egovern Implementation\RTC 201b - ERP - egovern Implementation.docx

13 Appendix A MUNICIPALITY OF CHATHAM-KENT CORPORATE SERVICES INFORMATION TECHNOLOGY SERVICES TO: FROM: Mayor and Members of Council Steve Wilson, Project Manager, Information Technology Services DATE: October 6, 2011 SUBJECT: ITSP Tactical Cycle 2 Security, Redundancy and Reliability (Core Business Application Rationalization, Revitalization and Consolidation) RECOMMENDATIONS It is recommended that: 1. Council consider the following recommendations: a. The recommendations contained within the Information Technology Strategic Plan (ITSP) developed by MGCG Ltd. (attached as Appendix A), for Tactical Cycle 2 be approved and implemented through the following project over a two year period: Replacement of CMiC, Hansen and Tax Applications with an integrated Enterprise Resource Planning (ERP) and Government solution b. Council approve moving to the RFP stage for this project. c. The estimated funding required to implement an industry standard solution over the next two year period, be set aside to fund this project. A portion of the funding, equal to approximately 50% project cost, to be set aside in the 2012 budget cycle out of the existing Capital budget. The remainder to be identified by the RFP process and allocated in the 2013 budget process for one time and annual budget requirements. BACKGROUND At the Council meeting of March 3, 2008, MGCG Consulting presented the final Information Technology Strategic Plan (ITSP). The following motions were carried:

14 ITSP Tactical Cycle 2 Core Business Application Rationalization, Revitalization and Consolidation 1. The Information Technology Strategic Plan as prepared and presented by the firm MGCG Limited be received. 2. All recommendations contained within the Information Technology Strategic Plan developed by MGCG Limited be taken into consideration, and referenced specifically when planning future budget and work plans for Information Technology Services. 3. Administration use the Information Technology Strategic Plan to develop an implementation report for Tactical Cycle 1 covering the eighteen month period to June 2009 within the next two months for Council s consideration. On June 23, 2008, Council approved RTC 177 enabling Tactical Cycle One projects outlined in the Information Technology Strategic Plan (ITSP) to proceed. On August 1, 2008 RFP R Infrastructure Revitalization and Renewal was approved enabling ITS to contract Dell as a technology partner to assist in the replacement of the core infrastructure. The successful completion of these Tactical Cycle One projects have enabled the Information Technology Services (ITS) to provide the Municipality with a reliable base foundation of server technology, and industry standard and desktop software. In addition, ITS has reorganized its staff to be aligned more with the Municipality s business requirements. The projects identified in the ITSP are based on emerging technologies, IT trends and best practices. This plan identifies the need to implement core business and government solutions that will meet current and future business needs. COMMENTS The Municipality of Chatham-Kent has an urgent need to replace the current aged and unsuitable core business applications with up-to-date integrated Enterprise Resource Planning (ERP) and egovernment solutions. These new applications will deliver business value to the Municipality by: realizing greater operational efficiency and flexibility being more responsive to change providing a support foundation for growth and change to meet current and future business requirements providing an application environment that encompasses security mechanisms, facilitates easy upgrades, scales efficiently, integrates with new and existing applications, performs adequately and delivers the functionality required providing a backbone for many other applications o Employee performance management o Business process management Page 2 of 26

15 ITSP Tactical Cycle 2 Core Business Application Rationalization, Revitalization and Consolidation o Potential to satisfy EMT and SMT need for high level information and increasing customer satisfaction by being able to obtain information on a timely basis providing opportunities for productivity gains resulting from the availability of information from a single source which would be more accurate and allow for better decision making realizing a return on investment through improved functionality and the ability to address other value-added opportunities Governments today are under greater pressure to deliver citizen centric services and achieve more with fewer resources, To meet these goals, one must go beyond simply enhancing existing programs one must also pursue new strategies and approaches and foster inter-governmental collaboration. It is a time to seek out untapped opportunities and innovate which is vital for transformation. The Institute of Public Administration of Canada The implementation of fully integrated ERP and egovernment solutions will have an impact on all departments within the Municipality and, as such, these solutions must become a Corporate rather than departmental responsibility. The business areas will be implementers, the subject matter experts (SMEs), and the owners of the business processes. ITS will facilitate the successful implementation of the selected solutions using recognized project management methodologies. In late 2010 and during the first quarter of 2011, a committee was formed to review the business processes within the Municipality. A pilot project was initiated to review and document the processes in the Payroll area. The mapping efforts revealed that: Current applications do not meet current business requirements and will not adapt to future requirements. For example, Fleet Services and the Performance Management Team are looking for new applications to address current business needs Some applications have already or are reaching the end of their lifecycle and software vendors are no longer supporting the version of applications that the Municipality is using. (i.e. FMW Financial Managers Workbench) Still other aged applications are running on hardware that is no longer available for purchase and do not run on newer technology. (i.e. mpower Payroll) Current applications lack ability to import data or co-exist through effective automated integration (the ability to transfer data between applications) Departments need to create work-arounds (spreadsheets) to fulfill business requirements, causing data to be re-entered into several systems The current applications use different software and hardware technology making it difficult to support ITS does not have Subject Matter Experts (SMEs) that could facilitate the exploitation of the core business applications Staff are doing the best that they can with the tools available to them Page 3 of 26

16 ITSP Tactical Cycle 2 Core Business Application Rationalization, Revitalization and Consolidation Entry and manipulation of data into two or more systems (mpower, CMiC, Info:HR, spreadsheets) The process mapping effort also showed that: There is a lack of integration between core business applications. Limited integration capability forces data re-entry and opportunities for data to be entered incorrectly. The Municipality is working within current inefficient processes and the business has accepted such inefficiencies as status quo The improvements that have been identified would be difficult or impossible to implement in the current environment. The business process mapping pilot consisted of the mapping of 13 payroll and time collection processes. The findings and recommendation were presented to the committee. The recommendation to the committee was to stop the Business Process review and use the time to search the market for a fully integrated Enterprise Resource Planning and Government solution. The primary requirement of this solution is that it meets the current needs of the Municipality and has the flexibility to be changed or adapted to meet future business requirements. Additionally, mapping all current business processes at the Municipality would produce a document that would not be useful as it would map all current inefficiencies. The findings were then presented to the Executive Management Team (EMT) who requested that a high-level Request for Information (RFI) be published to determine what vendor solutions were available and how these solutions would match the requirements of the Municipality. The vendor responses clearly showed that there is no single application that will meet the requirements of the Municipality: ERP Implementer Oracle JD Edwards (Mid- Range, Syntax, IBM*) MS Dynamics GP (Diamond Municipal Solutions) MS Dynamics AX (Tyler) Developer Agresso (Unit4) Government Applications ERP & GovernmentApplications EnerGov (EnerGov) icity (Vadium) Cayenta ERP (Cayenta) egovern (Diamond Municipal Solutions) Champs EAM (Champs) CityView (MSGovern) CityWorks (ESRI & Azteca) SAP (IDS Sheer*) Lawson/Hansen (Lawson) Asset/Work/Service Manager (WorkTech) Tempest (Tempest) Munis Land Mgt (Tyler) Page 4 of 26

17 ITSP Tactical Cycle 2 Core Business Application Rationalization, Revitalization and Consolidation Cogsdale (Cogsdale) * - have not responded to RFI but will to RFP Implementer - An ERP solution will be implemented by someone other than the developer Developer - developer of ERP solution will implement their own product The options available to the Municipality are: 1. Status Quo: maintain systems as they are now. 2. Upgrade Existing Applications: upgrade CMiC, mpower, Municipal Tax and Hansen to most current (supported) release and implement data integration functionality. 3. Replace existing applications: Develop and distribute an RFP that details the Municipality s business requirements, select the appropriate solutions and implement. The pros, cons and risks for each option are provided in Appendix B. Options 1 and 2 are high risk options as their ability to eliminate inefficiencies, reduce the Municipality s exposure to risk and provide flexible integration is limited. Option 3, is the recommended approach and would necessitate the implementation of a two-part solution. The first part would replace the Municipality s core business applications (Financial Management, Human Capital Management, Asset Management and Supply Chain Management, Customer Relation Management, Customer Service) while the second part would focus on replacing the government specific applications (Building, Licensing & Permitting, Planning, Code Enforcement, Inspections and Property Tax). It is critical that these two parts are fully integrated. The implementation of an ERP solution will enable the Municipality to adopt best practice processes in core business areas and provide a platform to standardize processes across the organization. Additionally, it would provide Business Intelligence tools that would facilitate effective and timely decision making at all levels. Implementation of an integrated Government solution will provide enhanced functionality and information sharing in Property Tax Management, Licensing and Permitting, Building Code Enforcement, and Planning areas. Information Technology Services has contacted numerous municipal and city governments to gain an understanding of the strategies that they have deployed for their core business applications. Efforts were focused on public sector organizations of similar size in population and revenue to Chatham-Kent. Findings indicated that some Page 5 of 26

18 ITSP Tactical Cycle 2 Core Business Application Rationalization, Revitalization and Consolidation organizations have recently implemented a fully integrated business solution, while several others are at different stages in their efforts to replace existing systems. Deployment of the applications can be addressed in a number of manners, these include Software as a Service (SaaS or cloud computing), Hosted or Shared service and on-premise implementation. Each option has its pros and cons, and although the SaaS and Shared solutions may be less costly from a hardware cost and resources support perspective initially, over the long term high hosting fees and maintenance would see them as being more costly and restrictive in that the Municipality could not modify or upgrade the selected applications without consultation and commitment from other sharing organizations. Each of these options is outlined in more detail in Appendix C. Tactical Cycle 2 focuses on the rationalization, revitalization and consolidation of core business applications and is in alignment with overall theme of the ITSP, Survival through Simplification, Stability and Sustainability. Rationalization and consolidation of applications will: Reduce the number of applications that ITS must support enabling them to focus on core technology Provide full integration, eliminating the need to develop and support external programs to transfer data and reducing duplicate data entry Enable staff to focus on value-added tasks instead of data re-entry and workarounds and Allow the Municipality to provide better service to our citizens Appendix D depicts the current status of the applications which do not integrate and are silos of information that cannot be utilized for more than 1 function. It also depicts the recommended proposed solution with fully integrated and supporting applications. The core applications used by the Municipality of Chatham-Kent to conduct business do not provide the functionality required to meet their needs. The applications are old, disparate software packages that do not integrate effectively. The purpose of this project is to source and implement a fully integrated ERP and egovern solution that will fulfill these core business requirements. The solution will include the following capability: o Phase 1: Core Functional Modules: Financial Management Human Resource Management (including Payroll) Asset Management Procurement (Supply Chain Management) Business Intelligence o Phase 2: Expanded Functionality Property Tax Page 6 of 26

19 ITSP Tactical Cycle 2 Core Business Application Rationalization, Revitalization and Consolidation Permits and Licensing Building Code Enforcement o Phase 3: Additional Functionality Cemetery Customer Relationship Management (CRM) Customer Service The resources on this project will come from two sources, internally from different departments and externally from the selected implementation partner. Recommendation is that dedicated resource positions will be backfilled. The project is estimated to be 24 months in duration after contract is signed. ERP/eGovern applications that are currently available are developed using industry standards techniques and best practices. Implementing any solution at the Municipality will require a significant change to the end-user s work style and job responsibilities. Implementation of these applications should not be considered a software solution but part of a larger Business Transformation effort that has a results-based outcome for the Municipality. It is a Municipal tool that will provide an integrated business solution that will facilitate efficiencies through the use of standard business processes. Success of this project will be determined by the attitude of the Municipality, its acceptance of the selected solution and its ability to adapt to the changes. COMMUNITY STRATEGIC PLAN The recommendations in this report support the following objectives and strategic directions: B: Economy We are a prosperous community B1: Promote and market Chatham-Kent B3: Maintain and enhance new and existing infrastructures to support economic and smart growth opportunities E: Civic Engagement We are an engaged community E3: Enhance networking and communication opportunities throughout Chatham-Kent F: Learning We are a learning community F2: Support the delivery of lifelong learning programs Page 7 of 26

20 ITSP Tactical Cycle 2 Core Business Application Rationalization, Revitalization and Consolidation Desired Outcomes/Proposed Activities 1. Ensure municipal services support business by reducing both red tape and the cost of doing business within the municipality 2. Support new infrastructure investments and modernize existing infrastructure 3. Focus on information sharing and developing collaborative initiatives to address existing and emerging community issues and opportunities. The recommendations will not adversely impact on the remainder of the Community Strategic Plan. CORPORATE STRATEGIC DIRECTIONS The recommendations in this report support Strategic Direction #4 We will be a Municipality of quality services, effective structure and fiscal responsibility. The desired outcome of Tactical Cycle 2 Core Business Application Rationalization, Revitalization and Consolidation will be: 1. Simplification and standardization of IT infrastructure and technology and support through the rationalization, revitalization and consolidation of business applications 2. Implementation of standardized best-practice business processes throughout Municipality 3. Introduction of new functionality that will enable the Municipality to provide valueadd work or service 4. Improved integration capabilities from existing satellite systems that are not included in Tactical Cycle 2 to the new solutions 5. The implementation of Disaster recovery / Business Continuity procedures CONSULTATION This report was completed in consultation with: Planning; Building, Licensing and Enforcement; Finance; Payroll and Fleet were consulted for their expertise. Other Municipalities were consulted about their current applications, future plans, migration and implementation processes. The Executive Management Team was consulted and approves the recommendation. FINANCIAL IMPLICATIONS The financial implications will be determined based on the award of the RFP. Page 8 of 26

21 ITSP Tactical Cycle 2 Core Business Application Rationalization, Revitalization and Consolidation The following table highlights Tactical Cycle 2 estimates based on MGCG s presentation: Tactical Cycle 2 Application Rationalization, Revitalization and Consolidation Estimates Phase MGCG C-K Timing Comments Review of CMiC, Hansen and Tax Applications $100,000 $0 Jan Mar 10 Majority internal resources, supported by vendors and consultants. Business process review pilot uncovered inefficiencies, full review not required Replacement of CMiC or Installation of Enterprise Application Integration (EAI) and replacement of tax application $500K $2M *Discussed in Closed Session to ensure a competitive procurement process Q Q Cost variable depending on solution selected. Minimal CMiC expansion or EAI deployment would be low end, total CMiC replacement would be high end. 2 distinct yet integrated systems will be required to fulfill Municipal requirements ( ERP & Government) Prepared by: Steve Wilson Project Manager, Information Technology Services Reviewed by: Reviewed by: Helen McLaren, CMMIII Director, Information Technology Services Gerry Wolting, B.Math., CA General Manager, Corporate Services Attachments: Appendix A ITSP Tactical Cycle 2 Appendix B Alternative Options Appendix C Deployment Methods Appendix D Status of Applications : sjw Page 9 of 26

22 ITSP Tactical Cycle 2 Core Business Application Rationalization, Revitalization and Consolidation P:\RTC\ITS\2011\RTC Tactical Cycle Two - Core Business Application Rationalization and Consolidation.docxx Page 10 of 26

23 ITSP Tactical Cycle 2 Core Business Application Rationalization, Revitalization and Consolidation Appendix A ITSP Tactical Cycle 2 (MGCG Ltd) Page 11 of 26

24 ITSP Tactical Cycle 2 Core Business Application Rationalization, Revitalization and Consolidation Page 12 of 26

25 ITSP Tactical Cycle 2 Core Business Application Rationalization, Revitalization and Consolidation Page 13 of 26

26 ITSP Tactical Cycle 2 Core Business Application Rationalization, Revitalization and Consolidation This Page Intentionally left blank Page 14 of 26

27 ITSP Tactical Cycle 2 Core Business Application Rationalization, Revitalization and Consolidation Appendix B Alternative Options Page 15 of 26

28 ITSP Tactical Cycle 2 Core Business Application Rationalization, Revitalization and Consolidation Option Description 1 Status Quo: maintain systems as they are now. 2 Upgrade Existing Applications: upgrade CMiC, mpower, Municipal Tax and Hansen to most current (supported) release and implement data integration functionality. 3 Replace existing applications: Develop and distribute an RFP that details the Municipalities business requirements, select the appropriate solutions and implement. Page 16 of 26

29 ITSP Tactical Cycle 2 Core Business Application Rationalization, Revitalization and Consolidation Option 1: Status Quo Pros Cons Risks No immediate capital outlay Staff familiar with existing systems & processes No Disruption resulting from the project No implementation risk Business evolving and applications do not meet business needs Software cannot adapt to new requirements Fleet, Performance Management, etc will look for alternative solutions to meet their needs Significant inefficiencies (duplicate entry, etc) Vendor no longer supports current version Poor vendor support on some applications Existing versions of some software are not on maintenance Need to redesign business processes Lack workflow, document management Inadequate reporting capabilities Poor or no system integration Hardware is failing Outdated technology Cost of maintaining outdated technology will increase Current applications have exceeded their end-of-life Entry of data into numerous systems etc High risk of failure of providing internal and external services to employees and citizens Potential to not meet payroll Modifications/enhancements to support new business requirements or new government regulations will become more difficult and expensive due to older technologies Limitations of existing systems will encourage the creation of shadow applications such as spreadsheets. Proliferation of these will increase: o Difficulty in sharing, accessing and analysing information o o o Conflicting information Possible knowledge transfer gaps due to employee attrition Hidden costs of duplicate data entries and consolidation Recruiting IT staff to support obsolete technology will become more difficult and counter productive Page 17 of 26

30 ITSP Tactical Cycle 2 Core Business Application Rationalization, Revitalization and Consolidation Option 2: Upgrade Existing Applications Pros Cons Risk Lower capital outlay Some newer functionality Upgrade to latest supported version of software Band-aid solution Outcome will still not address functional gaps, constraints & underlying risks Not all business requirements will be met Fleet, Performance Management, etc will look for alternative solutions to meet their needs Significant inefficiencies (duplicate entry, etc) Will need to upgrade hardware End-user Training will be required May need to go through multiple upgrades to get to latest release of software Vendor support may improve marginally Depending on the migration path provided by vendor, it could be a simple straight forward project or a full complex implementation Entry of data into numerous systems Unlikely that integration capability is improved Business processes will remain much the same, standardization unlikely etc All risks identified in Option 1 will apply to this option. Page 18 of 26

31 ITSP Tactical Cycle 2 Core Business Application Rationalization, Revitalization and Consolidation Option 3: Replace Existing Systems Pros Cons Risks Opportunity to meet Key business requirements Business processes will be redefined and streamlined to match best practices and will be standardized throughout the organization All core financial, budget, HR and payroll, procurement and maintenance activities within the municipality will be integrated. Improved reporting Employee/Manager self-service Embedded workflows Reduced requirement for spreadsheets, and data stores outside of system Automation or elimination of manual processes Elimination of paper intensive processes Integration, for the most part will be transparent Technology upgraded to current standards Single vendor for core business systems and a single vendor for egovernment systems New relationship with a Tier 1 or 2 software vendors Increased user satisfaction etc Highest capital outlay Committed resources Impacts entire organization Large risk Training for all end-users and ITS to maintain systems Longer project timeline to implement Contract negotiations Project Schedule Project Duration Project Complexity Project Management Procurement Cost sensitivity Cultural / Organizational Security Technical Lack of Commitment, Communication & Resources Lack of buy-in from all levels of organization Page 19 of 26

32 ITSP Tactical Cycle 2 Core Business Application Rationalization, Revitalization and Consolidation This Page Intentionally left blank Page 20 of 26

33 ITSP Tactical Cycle 2 Core Business Application Rationalization, Revitalization and Consolidation Appendix C Deployment Methods Page 21 of 26

34 ITSP Tactical Cycle 2 Core Business Application Rationalization, Revitalization and Consolidation Deployment Method There are 3 primary methods of deploying an ERP application, those being: o o o Software as a Service (SaaS) is a method of deploying ERP software in a hosted or ondemand environment, typically over the internet. Usually, a number of customers are hosted on same applications environment, all receiving with access to same version, when an upgrade is done, all customers are affected. Hosted / Shared Software is hosted on a service provider s or another local government s server, (usually the software vendor) that is accessible over the internet. Service includes choice of operating system, hardware, etc. Server administration can usually be provided by the hosting company as an add-on service. Dedicated servers are housed in data centers, providing redundant power sources and HVAC systems. On-Premise hosted on-site, company owns (right to use) software, ability to configure and customise as needed. Company required technical skills to implement and support As business conditions change the Municipality needs to be able to change or adapt its supporting applications as required. The ability to grow the application with the municipalities needs, and to be able to upgrade to newer versions, patches or releases when they become available are important. To facilitate this flexibility the ERP should be deployed on-premise. Page 22 of 26

35 ITSP Tactical Cycle 2 Core Business Application Rationalization, Revitalization and Consolidation Appendix D Status of Applications Page 23 of 26

36 ITSP Tactical Cycle 2 Core Business Application Rationalization, Revitalization and Consolidation Page 24 of 26

37 ITSP Tactical Cycle 2 Core Business Application Rationalization, Revitalization and Consolidation Glossary CFF CMiC CSF EAI EMT ERP ITS ITSP ITSSC Legacy MGCG OCM SaaS SME Critical Failure Factor factors that will lead to the failure of a project. Computer Methods International Corp developer of current Financial and Project management software. Critical Success Factor factors that will lead to a successful completion of the project. Enterprise Application Integration utility to facilitate the interchange of data between applications. Executive Management Team consisting of Chief Administrative Officer and General Managers of departments. Enterprise Resource Planning system typically consists of 4 core modules: Financial, Human Capital, Asset and Supply Chain Management as well as a Business Intelligence module. Information Technology Services department of the Municipality. Information Technology Strategic Plan outlines roadmap for deployment of hardware and software technology, in the Municipality of Chatham-Kent, over the next 5 years. Information Technology Services Steering Committee consisting of senior management, provide direction to ITS. Refers to current applications that will be replaced by selected ERP solution. Mackin Gibson Consulting Group consulting firm used to develop the Information Technology Strategic Plan. Organizational Change Management the process of managing the change that a new application has upon an organization in particular the staff. Software as a Service software that is hosted by a provider, a single configuration of the application is shared by multiple organizations. Service is a pay as you go option. Subject Matter Expert Municipal or Implementer functional experts who will work together to implement system modules. Page 25 of 26

38 ITSP Tactical Cycle 2 Core Business Application Rationalization, Revitalization and Consolidation SMT UPS Senior Management Team consisting of General Managers and Directors. Uninterrupted Power Supply backup of failover power supply used in the event of a power failure. Page 26 of 26

39 MGCG Limited The Municipality of Chatham-Kent IT Strategic Plan Presentation to Council Paul J. Mackin March

40 MGCG Limited Agenda Key points regarding ITSP Plan Development As Is Findings To Be Architecture How to recommendations Questions and Answers 2

41 MGCG Limited Opening Remarks: What is IT? 3

42 MGCG Limited Key Points on ITSP This is the first technology review since amalgamation This document will be owned, maintained and extended annually by a steering committee. It should be independently reviewed every five years. The process to develop it has been very inclusive Over 90 persons interviewed including all ITS staff, critical business area stakeholders, and members of Council Monthly meetings with Steering Committee and ITS Staff Questions by ITS and other stakeholders encouraged Work plans will be developed and brought to council for review and approval 4

43 MGCG Limited This plan was developed through: A review and the documentation of Current Situation ( As Is ) Identification of Requirements ( To Be ) Business Needs Resources Defining the Gap between As Is and To Be Developing a prioritized five year roadmap How To 5

44 MGCG Limited The Municipality of Chatham-Kent As Is Findings

45 MGCG Limited Current infrastructure: Working but not simple and in the long term, not sustainable It is not a Cadillac solution How long can the cards stand up? Not standards based Out of date Vulnerable 7

46 MGCG Limited How did we get here? This is the legacy of amalgamation the As is infrastructure is reflective of different groups and technologies coming together Business decisions, which have technology impact, have been made in the absence of corporate standards, governance and technology roadmap Tremendous change in the organization since amalgamation resulting in pressures which have not allowed focus on enterprise wide IT requirements Everyone works hard to keep the infrastructure functioning 8

47 MGCG Limited This As Is infrastructure is not sustainable 9

48 MGCG Limited Chatham Kent IT Strengths ITS Strengths Infrastructure works Staff are well liked by their peers Staff are dedicated to Keeping the Lights On Staff are technically competent with the As Is environment Staff operate and are advocates for a responsible spending ITS is skilled at forming partnerships with outside organizations and accessing funding opportunities Business Strengths Municipality is open to the use of technology to help drive efficiency Technology lifecycle management has been identified as an effective mechanism for managing technology purchases although it is not currently fully funded 10

49 MGCG Limited Top five IT issues within the Municipality 1. Siloed culture from a technology prospective 2. Outdated Infrastructure is highly vulnerable 3. Lack of corporate technological governance 4. Technology Focused culture vs. Service Oriented 5. Lack of Corporate Technology Roadmap (until now) 11

50 MGCG Limited The Municipality of Chatham-Kent To Be Recommendations

51 MGCG Limited Strategic Themes: Survival through simplification, stability and sustainability Governance of Technology through corporate, not departmental, decision making Corporate Policies related to technology solutions, coupled with business requirements, must drive application selection 13

52 MGCG Limited The To Be will be simpler 14

53 MGCG Limited The Municipality of Chatham-Kent How to Recommendations

54 MGCG Limited A five year plan To realize this vision, a 5-year plan has been developed, comprising 3 tactical cycles Reviewed annually and extended Tactical Cycle Duration From/To Tactical Cycle 1 - Infrastructure Renewal Tactical Cycle 2 - Security, Redundancy and Robustness, Reliability Tactical Cycle 3 - Seamless Access and Communications 18 months Mar 2008 Aug months Sept 2009 Feb months Mar 2011 Feb

55 MGCG Limited Reserve or Base Funds: $2 M New Funds: $176K (in 2009) Tactical Cycle One Infrastructure Renewal 03/08 09/08 03/09 09/09 17

56 MGCG Limited Reserve or Base Funds: $305K New Funds: $750K to $2.25M Tactical Cycle Two Security, Redundancy, Reliability 09/09 03/10 09/10 03/11 18

57 MGCG Limited Tactical Cycle Three Realizing the vision: Seamless Access and Communications Reserve or Base Funds: $50K New Funds: $4.3M - $5.6M 03/11 03/12 03/13 19

58 MGCG Limited Five Year Plan This infrastructure is not a Cadillac This is a migration to Roadworthy and Reliability Governance is vital: Technology needs to become a Corporate Responsibility, not departmental 20

59 MGCG Limited In Conclusion, MGCG s recommendations are: 1.Tactical Cycle 1 be initiated as soon as possible to provide an improved foundation for the IT infrastructure within the municipality and to enable all other aspects of this strategic plan 2.That the IT Steering Committee be formed and that it be empowered with authority over technology policy and tasked with ownership and delivery of the strategic plan 3.That the ITS department be reorganized with an emphasis on a simpler, service oriented structure and with the addition of business analysts to provide contact persons within the ITS group for business areas. 21

60 MGCG Limited The Municipality of Chatham-Kent Questions and Answers

61 Appendix C Enterprise Resource Planning: Impacted Business Functionality egovernment: Functionality Financial Management (AP, AR, GL, FA, etc.) Human Capital Management (HR, Payroll, Time & Labour, Self Service, etc.) Supply Chain Management (Procurement & Subcontract Management, Inventory, etc.) Asset Management (Work Order, Preventative Mtce, Equip Cost Analysis, etc.) Business Intelligence (Reporting, Dashboards, KPIs, etc.) Functionality Property Information Building (Electronic Plans, Inspections (mobile), etc.) Licensing (Business, Animal, etc.) By-law Enforcement (Inspections (mobile), etc.) Parking Permitting & Enforcement Planning Services (Program Management, Reporting, etc.) Cashiering Cemetery Management (Space Management, Sales, Work Orders, (mobile) etc.) Citizen Portal (24x7, pay or renew parking permits; dog licenses, apply for business licenses or events, submit building plans, log issues or complaints, view all personal payments and unpaid bills, search cemetery interned information & location) Customer Service Request

62 Appendix D (Tax included) Option 1 ERP and Core egovern (Human Capital Mgt, Financial Mgt, Asset Mgt, Supply Chain Mgt, Business Intelligence plus Planning Services, Building, Licensing & Enforcement, Cemetery Mgt) Software & Implementation Cost: ERP Phase 1 Phase 2 Option 2 ERP and egovern (Option 1 plus eplan, Parking Permits, Customer Service Requests) Tax, Document Scanning 1 Time Annual 1 Time Annual 1 Time Annual JD Edwards Software & 2,991, ,305 2,991, ,305 Implementation FMW 34,853 13,080 34,853 13,080 ERP 3,026, ,385 3,026, ,385 egovern CityView 735,808 57, ,455 62,876 Property Tax - 457,920 50,371 egovern 735,808 57, ,455 62, ,920 50,371 Miscellaneous Document Scanning 84,175 12,121 Miscellaneous ,175 12,121 Total Software & Implementation Cost 3,762, ,675 3,895, , ,095 62,492 Additional Costs: Project Office Operating Costs 30,528 30,528 Hardware (Servers, Sans,etc) 196,626 71, ,626 71,087 Staff Backfill (2 yrs - inc 27% 2,011,713 2,011, ,954 burden) Total Additional Costs 2,238,867 71,087 2,238,867 71, ,954 - Project Cost 6,000, ,762 6,134, , ,049 62,492 Contingency (15%) 900,136 51, ,183 52, ,557 9,374 Total Project Cost 6,901, ,477 7,054, , ,606 71,866 (A) (B) (C) (D) 1 Time (A+C) Annual (B+D) Total Project Cost 7,833, ,766 Project Office (Approved R12-165) 147,755 Total Project Cost 7,981,098

63 The table below outlines the estimated cash requirements by year for the current and next 3 years. The costs include system purchase, implementation, base budget and lifecycle amounts. 1 Time Annual ,805, ,750 ERP & Core egovern Planning, Software & Hardware Purchase ,146, ,840 ERP & egovern Implementation Property Tax & Doc Mgt Purchase Base Budget, Lifecycle , ,767 ERP & egovern Implementation Property Tax & Doc Mgt Implementation Base Budget, Lifecycle ,767 Base Budget, Lifecycle $7,833,343 $1,453,356

64 Enterprise Resource Planning (ERP) / egovernment Integrated Solution October 17,

65 Agenda ERP/eGovernment What is it? IT Strategy Status of Current Systems Process to get here Results of the process Options Sustainability Return on Investment (ROI) Recommendations 2

66 ERP/eGovernment What is it? 3

67 Strategy: On March 3, 2008, MGCG Consulting presented council the Information Technology Strategic t Plan (ITSP). The ITSP represents a multi year vision or roadmap for Information Technology within the Municipality that outlines what needs to be done and when, based on business priorities. Tactical Cycle 1 Tactical Cycle 2 Tactical Cycle 3 Infrastructure Rationalization and Renewal Security, Redundancy, Reliability Seamless Access and Communications 4

68 Criticality Matrix: Red System may fail at any time due to Hardware/ software age and inability to support, System no longer provides required business functionality Amber System working but hardware/software is aged, System not providing complete functionality Green System hardware/software technology is current System provides functionality required by business 5

69 Criticality Matrix: Status of current Systems ERP egovernm ment Payroll Human Resources Finance Fleet Management Asset Management Cemetery Property Tax Building, Licensing & Enforcement Planning Services Customer Service 6

70 Process to Get Here: March 2008 June 2008 June 2011 October 2011 March 2012 Information Technology Strategic Plan accepted by Council Tactical Cycle 1 of ITSP approved by Council Infrastructure Rationalization and Renewal Request for Information (RFI) for Integrated ERP and egovernment solution Followed Municipal Purchasing policy High Level requirements document (63 page) 17 responses Tactical Cycle 2 of ITSP, Move to RFP stage approved by Council Replacement of CMiC, Hansen and Tax application with an integrated Enterprise Resource Planning (ERP) and Government solution Set aside approximately 50% of estimated project cost, remainder to be identified and allocated in 2013 budget process Request For Proposal (RFP) for Integrated ERP and egovernment solution Followed Municipal Purchasing policy Detailed requirements document (439 pages) 6 responses 7

71 Process to Get Here: (cont d) 2012 Selection Process: Oct2012 RFP functional review by Municipal i lsubject tmtt Matter Experts (SME) Reference Checks Site Visits Preferred vendors solutions identified Software Recommendation: ERP / egovern solution recommendation to EMT & Council 8

72 Results of the process: RFI Estimate Low High Average 50th Estimate Percentile (median) Software & Implementation Costs 1,469,306 4,757,540 2,763,835 2,470,649 2,850,000 Staff Backfill, Computer Hardware, Project Office 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 2,969,306 6,257,540 4,263,835 3,970,649 4,350,000 Contingency (15%) 445, , , , ,000 Total 3,414,702 7,196,171 4,903,410 4,566,246 5,002,500 Based on the average value of the 17 responses, the original estimate provided was $5 million. 9

73 Why the 50% difference? Software: Higher than anticipated user count for software licensing (HR, Self Service and Payroll, egovern modules, etc.) Cost of Database licenses where added to RFP due to cost advantages of buying it bundled with software Added Software licenses for functionality that was not included in the RFI Second RFI for Property Tax and Document Mgt solutions, used high quote. Annual Maintenance: Annual Maintenance increased as a result of the additional users licenses Annual Maintenance will be charged at time of license purchase for ERP software instead of after go live Backfill: Additional Backfill resources required to address areas that where not included Increased Implementation service costs to included expanded functionality Contingency: Contingency (15%) on all components 10

74 Results of the process: RFP Solution Costs ERP & egovern Implementation A: Project Costs Phase 1 Phase 2 Total Annual Original ERP & Core Property Tax & Estimate egovern Document Mgt Software & Implementation $3,895,687 $542,095 $4,437,782 $341,753 $2,850,000 Project Office, Hardware, DB 1,500,000 2,238, ,954 2,373,821 71,087 Licenses & Staff Backfill Contingency (15%) 920, ,557 1,021,740 61, ,500 Total Project Costs: $7,054,737 $778,606 $7,833,343 $474,766 $5,002,500 B: Proposed Funding Capital Budget 5,000,000 Existing Reserves 2,833,343 Total Existing Funds $7,833,343 11

75 Options: (1) Status Quo Upgrade ERP / Existing egovern 1 - Status as of 2014 ERP Payroll Human Resources Finance Fleet Management Asset Management Upgrade Upgrade New New eg Governmen nt Cemetery New Property Tax New Building, Licensing & Enforcement Planning Services Customer Service New New New 1 Time Cost $6,309,679 $7,833,343 + $1,523,664 Annual Req t $246,266 $716,176 $474,766 ($241,410) Sustainability $160,000 12

76 Sustainability: Impact or consequence of not changing Business applications are not sustainable Data is becoming unreliable Technology (software and hardware) is out of date and unsupported or at end of life Existing Functionality does not meet current and future business requirements Cost of sustaining current systems will increase exponentially Risk of Total failure will result in reverting to manual processes, possible loss of data and increasing response times 13

77 Sustainability: Impact to Citizens Processes will become more manual (labour intensive) increasing wait or response times Occurrence of Citizen encountering incorrect informationwill increase as data becomes more unreliable Risk of TtlFil Total Failure will result in longer response times and reduces customer service 14

78 Sustainability: The following are required for sustainability purposes: a) Additional base budget funding of $246,000 (from existing $228,500 to $474,766) for software maintenance a agreements. e To be part of budget deliberations. b) Annual lifecycle funding of $160, for costs that are not covered by the annual maintenance associated to major upgrades in future based on a 5 year plan. Will become part of the infrastructure deficit phase-in. c) Funding of $230,000 for staff resources that are required to provide ongoing end user and system support. Will be reallocated from existing budgets through the Service Sustainability Review Process. 15

79 Return on Investment: It is difficult at this time to quantify the annual cost savings/cost avoidance. Previous implementations by Oracle/SAP have typically resulted in a 10 20% return on investment realized 80% by year 5 after the implementation. The savings come from more productive and efficient business processes; avoiding costs associated with creating legislatively compliant cost accounting systems and retiring old mainframe systems. City of Kitchener, 2006 Corporate Integrated Financial System 16

80 Return on Investment: Benefits (Balanced Scorecard Approach) Financial: Reduced cost per service call Improved decision making capability Improved visibility of progress and spend for activities or projects More easily measure against Key Performance Id Index (KPI) (KPIs) Cost avoidance: Litigation, quality of data, grievance costs, meeting timelines for legislated requirements, fines from Ministries Customer: Shorter response/wait times Online access to needed d information/services reduced calls/visits for standard processes Improved customer satisfaction rate Improved first call resolution rate Internal Business Processes: Elimination of duplicate data and manual integration Improved access to accurate information/reporting Labour productivity growth Increased use of workflow automation Reduced operational problems Improved system reliability/recovery Improved ITS functional support Improved communication between Divisions Learning and Growth: Improved access to personal information using Employee self-service Improved report writing capabilities by Divisions Training in industry standard business and technology processes and tools Capitalize sharing of information and networking with other Municipalities using best practices 17

81 Setting Expectations: 18

82 Recommendations: It is recommended that: 1. The ERP and egovernment solution and the implementation of this solution be separated into 2 phases: o o Phase 1: ERP and core egovernment modules as presented in this report to Council for review and approval. Phase 2: Property Tax and Document Management modules, requiring further due diligence in the form of functionality reviews, reference checks andsite visits, bepresented for approval at a later council meeting. 19

83 Recommendations: (cont d) 2.Investment into the project in the amount of $7,833,343 be approved as follows: a) Mid Range Solutions Limited be awarded the amount of $2,991,379 for ERP software and implementation services. Software features will include Human Capital Management, Financial Management, Supply Chain Management, Asset Management and Business Intelligence functionality. b) RAC Software Inc. be awarded the amount of $34,853 for budgeting software and implementation services. c) CityView be awarded the amount of $869,455 for egovernment software and implementation services. Software features will include Planning Services, Building, Licensing and Enforcement, Cemetery Mgt, eplan, Parking Permits and Customer Service Request functionality and will be integrated to the JD Edwards EnterpriseOne ERP solution. 20

84 Recommendations: (cont d) d) The amount of $2,238,867 be available for: Phase 1 Hardware (Servers & Software) $196,626 Staff Backfill $2,011,713 Project Office Operating Costs $30,528 $2,238,867 e) A contingency of 15% of the Phase 1 costs in the amount of $920,183 be provided for. f) Funding for Phase 2, Property Tax and Document Management functionality in the amount of $778,606 be placed in reserve and that the Municipality continue to fulfill its due diligence requirements by conducting further review, reference checks and site visits for recommendation to Council at a later date. Amount includes a contingency of 15% of the Phase 2 costs. 21

85 Recommendations: (cont d) 3. That council approve the source ofthe funding being: B: Existing Funds Capital Budget 5,000,000 Existing Reserves 2,833,343 TtlEiti Total Existing Funds $7,833,

86 Questions:? 23