Bret Ingerman, Vice President for Information Technology. Recommendation for a new ERP System

Transcription

1 May 29, 2013 M E M O R A N D U M TO: FROM: SUBJECT: Jim Murdaugh, President Bret Ingerman, Vice President for Information Technology Recommendation for a new ERP System The College is facing two choices with respect to procuring and implementing a new Enterprise Resource Planning (ERP) system. We can either buy a product (or products) currently on the market, or we can partner with a company to develop a next generation ERP solution. While we cannot be certain that any product, old or new, will meet all of our needs, there are major differentiators between buying an existing solution and partnering to build a new one. Products that are currently on the market have the advantage of having existing customers who can share their experiences, and having identifiable track records with respect to meeting customer needs. However, all of the products currently on the market were built upon technological frameworks from the past century, and all fail to systemically address contemporary methods of data- driven decision making and the modern ways in which people need to interact with information. On the other hand, partnering to develop a new system has the advantage of creating a new product to meet our current and future needs using modern technologies, and affording us a chance to influence product development. However, with those advantages comes an inherent risk, as we cannot be completely sure that the final product will actually make it to market. I have written this memo to help guide our decision in selecting a new ERP solution for TCC. The memo is broken into the following sections: 1. Recommendation for a New ERP Solution 2. Proposed Timeline to Implement a New ERP Solution 3. Background 4. Previously Stated Goals 5. Current ERP Costs 6. Projected ERP Costs 7. Key Technology Differentiators 7a. Software as a Service (SaaS) vs. Traditional ERP Products 7b. Database Architecture 7c. Web services vs. traditional data transfer methods 8. The Workday Solution 9. The Jenzabar Solution 10. The Banner Solution Note: Some of the information contained in this memo is covered by Non- Disclosure Agreements and may only be shared with those who are directly involved in the decision making process. It may not be shared by them, or with others.

2 1. Recommendation for a New ERP Solution Based on the needs of TCC with respect to a new ERP system, the Strategic Priorities of the College, the critical need to begin to immediately move off of Integrow, and the desire to implement an ERP system built on modern technologies, I recommend that the College enter into an agreement with Workday <trade secret>, and to subscribe and immediately start to transition to their Human Capital Management (HCM) solution (human resource management, talent management, recruiting, payroll, time tracking), Financial Management solution (core financials, revenue management, business assets, expenses, procurement, project and work management, grants management), and Big Data Analytics solution. If this recommendation is not acceptable due to cost considerations then I believe that the only other practical solution is to reach out to Ellucian to sole source the Banner ERP system, including an embedded license for the Oracle database. With either choice, I recommend that to help lower implementation costs we contract with Vicki Tambellini of The Tambellini Group to help negotiate the implementation contracts, and that we continue to work with the Gartner Group to review implementers and contracts. Should we proceed with Workday, I further recommend that we hire a project manager to work with us throughout the multi- year project. Should we proceed with Banner, I recommend that we contract with a third- party consulting firm with experience implementing Banner, to guide the implementation. Page 2

3 2. Proposed Timeline to Implement a New ERP Solution <trade secret> Page 3

4 3. Background There is an urgent need to replace the present Integrow system due to its inability to provide that data that is needed to effectively drive and support decision making at all levels of the College, and due to its inflexibility to meet the business and academic needs of our students, faculty and administrators. In fact, the need to replace Integrow is well understood and has been discussed many times, in many venues, for many years. Compounding the urgency is the fact that of the four programmer/analysts at TCC who presently support Integrow, only three are intimately familiar with the underlying ADABAS database and Natural programming language (both from Software AG), and two of these employees will be retiring within the next 1-4 years. Thus it is critical that we migrate off of Integrow as soon as possible to minimize the risks associated with a turnover of essential staff. In addition to the internal pressures to move away from Integrow, there are external pressures that are helping drive the need to make a decision quickly. It is well know that the FINANCIER financial aid software from WolffPack is woefully inadequate to meet our current needs. Of more concern is the very real possibility that WolffPack will discontinue support for the product, leaving us in the extremely difficult position of maintaining currency with Federal regulations. We obtain the Integrow software and support, and the licenses for the underlying Software AG products (ADABAS and Natural), through the HETGroup, a consortium of eight colleges who collectively fund the maintenance and development of Integrow. Of serious concern is the fact that of the eight remaining members of the HETGroup consortium, three have already begun the process of leaving the consortium: two by moving to a new ERP system (Broward, NW Florida) and one that has issued an RFP to migrate away from Integrow (Miami Dade). One additional member, Mercer College, is ending their relationship with the HETGroup at the end of June, With each decrease in the HETGroup membership comes increased costs for the remaining schools as the cost for the Software AG products and maintenance of Integrow are shared proportionally among the consortium members. There is also the very real, and ever increasing risk that the consortium will simply cease to exist, leaving the remaining schools to license and maintain the Integrow software and Software AG products on their own. Page 4

5 4. Previously Stated Goals In a presentation to the TCC Board of Trustees in January 2012, the following goals were presented with respect to a new ERP system: To implement a system that addresses many missing features in Integrow, such as user self- service, device independence, and improved access to data. To move away from green screen character based software To reduce the cost associated with local programming changes To reduce the amount of time IT staff spend maintaining and training on Integrow Reduce dependence on dwindling pool of ADABAS/Natural programmers Provider greater ease of use to the campus community When asked, Why Invest in a new ERP system, the answers given to the Board were: Question is not why but when Lower risk to exit consortium on College s terms as opposed to a forced exit Improve effectiveness and efficiency of operations. Less time trying to get information in and out of system, and more time analyzing and interpreting. Provide applications and services not currently available. 5. Current ERP Costs During the January, 2012 Board of Trustees Workshop, the cost associated with Integrow was stated to be $348,283 per year. For FY 2014 the cost will actually rise to $390,225, an increase of $41,942 or 12% over the prior year. The costs for Integrow (including the Software AG licenses and HETGroup costs to maintain Integrow) are allocated proportionally to the schools in the HETGroup. As a result, when schools leave the consortium these relatively fixed costs will be re- allocated among the remaining schools, greatly increasing their costs. According to the proportional funding model (based on student FTE) Miami Dade presently pays 40% of the HETGroup costs and Broward pays 21.5% (TCC pays 8.5%). When Miami Dade and Broward leave the HETGroup, their combined 61.5% of the HETGroup costs will then be re- allocated to the remaining schools. That means that in three years time, TCC s share of the HETGroup costs will likely rise from 8.5% to almost 22%, representing a yearly cost of $925,000. Note that while both Broward and Miami Dade have announced plans to leave the consortium in whole or in part, the CIOs of those institutions have made verbal financial commitments to the HETGroup for three years (although this commitment is not yet in writing). In addition to the software and support costs, the College also maintains six servers to support Integrow. These cost approximately $12,000 each and should be replaced every three years. That amortizes to $24,000 per year for hardware. That brings the total cost for our present ERP to $414,225 for FY , rising to approximately $950,000 in 2017 (based on announced departures from the HETGroup). Page 5

6 6. Projected ERP Costs At the January, 2012 presentation to the Board of Trustees the costs associated with a new ERP system were projected to be: Initial Implementation: $12 million (at the high end of estimated pricing scale) o $5 million to $6 million for initial software purchase o $5 million to $6 million in implementation services o These figures did not include the cost of new server hardware Yearly costs: $900,000 to $1,080,000 o Based on annual maintenance costs of 18% of initial acquisition o This amount did not include the cost of server replacement o No amount was presented with respect to the year over year increase in maintenance costs, which is presently 12% annual growth for Integrow The following table shows the projected costs of a new ERP system. For comparison, the projected costs that were presented to the Board of Trustees in January 2012, and the projected costs for Integrow are also shown. Note that the table does not take into account IT staffing. All of the on premises ERP solutions (Jenzabar. Banner, and, presently, Integrow) require Programmer/Analysts, Database Administrators and Systems Administrators to specifically maintain the ERP system itself. While it is true that these staff members can also work on other tasks, the vast majority of their time is taken up supporting the ERP software itself (patches, updates, etc.), any local modifications to the ERP software, the underlying database(s), and the multiple servers that are used for the ERP system. Indeed, while some IT staff members are called Programmer/Analysts our present staffing levels require them to spend the majority of their time as Programmers, and little time working with campus departments as Analysts (which is where the true value in their expertise can be found). This will remain the case should TCC acquire a new, traditional, ERP system such as those from Banner or Jenzabar. Should we choose a SaaS solution for a new ERP system, such as Workday, we will not need Programmer/Analysts, Database Administrators, or Server Administrators dedicated primarily to supporting an ERP system. Instead, we will be able to evolve our Programmer/Analysts so that they spend the majority of their time working with departments to help them analyze and evolve their workflows to take advantage of the ERP system, and then configure the ERP system to match campus needs. We will still need Programmers to provide application development support and integration, Database Administrators to support other on- campus databases, and Systems Administrators to support the rest of our on- premises servers. However, should we subscribe to a SaaS solution their time will be freed up considerably and used more productively to enhance services to the campus community rather than simply ensure that the systems continue to operate. It should be noted that we expect two of our present ADABAS and Natural Programmer/Analysts to retire during the next four years. Should we partner with Workday, we would have a tremendous opportunity to replace those positions with new Analyst/Programmers who have skills and experience with both the operational needs of the departments, and the modern technological environment in which we will work. Page 6

7 <trade secret> Page 7

8 7. Key Technology Differentiators Each of the options before us in the selection of a new ERP system offers a different mix of technology solutions. Some are older yet proven, while others are newer and potentially empowering. What follows is a description of some of the key technology differentiators of the various ERP choices available to TCC. Later in this memo I will talk about each of our options in the context of these technologies. 7a. Software as a Service (SaaS) vs. Traditional ERP Products The traditional ERP model is one in which TCC would buy an ERP system and any attendant software products from one or more vendors (such as Banner). We would then buy a number of servers from a hardware vendor for production, pre- production and testing purposes. There would be ongoing yearly maintenance fees paid to the ERP vendor so that we can receive software fixes and updates. While major enhancements of the product will sometimes be included in the maintenance fee, sometimes there will be an additional charge. However, the decision to install upgrades is entirely up to us and, in a traditional ERP model, the ERP vendor is supporting many versions of their software. Since we would own the servers, we will need to replace them with some frequency (typically no less than every three to four years), thus resulting in a large capital outlay on a recurring basis. Software as a Service (SaaS) takes a fundamentally different approach. In a SaaS model the software resides in the cloud on servers maintained by the SaaS software provider. Further, in a true multi- tenant SaaS model (such as Workday), all of the customers are using the same version of the software on the same servers. That means that rather than writing code to customize the software, the client (TCC) can instead focus on using the built- in configuration tools to align the software with business needs and workflows. This has tremendous economies of scale in that the vendor can focus on a single version of the software for all customers, instead of spreading their support and development resources across many different versions. In a SaaS environment, when there is an update all customers immediately receive the update; in the traditional ERP model each customer takes the time to install their own local copies of updates on all of their servers )or they can decide to not implement the update). Having all clients in a SaaS environment use the same version of the software allows the clients to collaborate and share processes, reports and knowledge more efficiently without the need to worry about specific software versions or site customizations. In a SaaS environment the vendor maintains the software in the cloud, so there is no need for local servers and therefore there are no costs associated with buying and maintaining server hardware and software. The traditional model of buying ERP software requires a large initial cost and then yearly maintenance fees; in a SaaS model the client typically subscribes (or rents or leases ) the software on a yearly basis for an annual subscription fee; there is no large initial purchase. This has the advantage of regularizing and operationalizing the costs associated with the system. SaaS solutions are also inherently environmentally friendly due to the decreased needs for electrical power and cooling. Page 8

9 Since there is no local software to install or maintain in a SaaS model the IT staff can spend greater time working with departments on how to effectively and efficiently use the system, rather than spending time keeping the system running. Rather than write code, the programmer/analysts work with business units to configure the SaaS solution to meet theirs needs and help them make the most of the resources inherent in the system. Note that some vendors (<trade secret>) use what is called a single tenant SaaS solution. In this model, the vendor maintains the hardware and software for the client, but each client is running their own copy of the software on hardware dedicated to them. While this would free the client (TCC) from having to maintain servers and software, this model does not provide the economies of scale of a true multi- tenant SaaS solution as each customer is running their own version of the software, with their own customizations, and the company is then forced to maintain and support many versions of the software. Rather than calling this a single tenant SaaS solution, this approach would more properly be referred to as a hosted solution. 7b. Database Architecture All traditional ERP solutions are software programs that ultimately store data in underlying relational databases. For example, Integrow uses ADABAS as its relational database. Some ERP solutions require a specific database (such as Banner, which uses Oracle) and others allow you some flexibility in which database you use (<trade secret>). The database can be licensed independently by the client or licensed as an embedded part of the ERP software solution provided by the ERP vendor. Either way, it represents an added cost to the client unless the client already owns an independent license to use that same database. The need for a separate database also adds a level of complexity to traditional ERP systems in that the client needs to have local database administrators to support the regular updates and patches to the database. The programming staff not only must understand the programming language that the ERP system is written in, but also understand the underlying database technology. Traditional ERP solutions are also fundamentally transactional in nature. That is, they excel at getting individual elements of data into and out of the underlying relational database quickly. When a data element is needed, a request is made to the underlying database to retrieve the data and place it into the server s memory where it can then be viewed or manipulated, after which it is sent back to the underlying database. Since these systems are busy processing thousands of simultaneous data transactions to and from the underlying database, they are typically not effective at providing analytics. In order to perform analytics on the data, most current ERP solutions require a data warehouse, a separate database where transactions are pushed from the transaction database on some sort of schedule, typically once a day (due to the time required to output large data sets from the transaction system). Analytics are then performed on the data in the data warehouse, rather than the transaction system, on data that is not the most Page 9

10 current and that is only accurate as of the time it was pushed to the data warehouse. There is a new type of database, called an in- memory database, which is growing in popularity. In this model (used by Workday) all of the data is stored in the memory of the server and not in an underlying database. That dramatically increases the speed with which transactions can be processed. In fact, having all of the data in memory allows for instant analytics on the data, without the need for an underlying data warehouse (note that in- memory databases do write data to disk using a relational database, but only for disaster recovery purposes). Further, the analytics are being provided in real- time on up- to- the- moment data. In memory databases have only become possible due to the decreasing costs of computer memory. In the last century, when the cost of computer memory was $200,000 per gigabyte and disk storage was a fraction of that cost, the only viable approach to working with data was to use fast, relational databases to move data to and from inexpensive disk to expensive computer memory as the data was needed. With the cost of computer memory now costing closer to $1 per gigabyte, storing all of the data in memory is financially feasible. That means that the need for a relational database to support the ERP is removed, leading to decreased software licensing costs and eliminating the need for database administrators to solely support an ERP database. 7c. Web services vs. traditional data transfer methods Regardless of what core application features an ERP system has, it must be able to communicate and share data with a multitude of other systems. For example, the ERP system may need to share data with a locally installed data warehouse, or a cloud- based learning management system (such as Blackboard) or fundraising application (such as Raisers Edge). There are two fundamentally different ways in which data is shared between applications. The traditional approach is known as ETL (Extract, Transform, Load). In this model data from one system is exported to a file, which it then transferred to the second system where it is then imported. When applications use this approach (such as Banner), the transfer of data is usually done on some time- based schedule. For example, information on students may be transferred from the ERP to the learning management system every 15 minutes, while financial data may only be transferred to a data warehouse every night due to the sheer volume of data that needs to be exported. ETL also needs an intermediate file storage location that is large enough to hold all of the data that is being exported and imported. A more modern approach to data transfer is done using web services. Software applications using this model (such as Workday) communicate with other applications directly over the World Wide Web (the Internet), with the information transfer happening in real- time. There is no need to export and import, no need for intermediate storage locations, and no need to create fixed schedules to transfer data. The web services model allows applications to communicate with each other the data that is needed at the moment it is needed. 8. The Workday Solution Page 10

11 Workday provides ERP software in a true multi- tenant SaaS environment using an in- memory database and communicating with other applications via web services. It is by far the most forward- looking software provider in the ERP space, making the most use of modern technologies. Workday presently has over 400 customers subscribing to their core Human Capital Management (HCM) solution (human resource management, talent management, recruiting, payroll, time tracking), Financial Management solution (core financials, revenue management, business assets, expenses, procurement, project and work management, grants management), and Big Data Analytics solution. Among their higher education customers are Broward College, Brown University, Carnegie Mellon University, Champlain College, Cornell University, Georgetown University, Madison College and Yale University. Among their public sector clients is the City of Orlando. Workday offers a fundamentally different way of working with information. Data entry and analytics are intertwined. There is no need to leave a data entry screen to see how that data element impacts others. Rather than taking the traditional ERP model of being screen- based, Workday is process based. You configure the system to match your workflows and processes and, as a result, related data can be edited, viewed and analyzed without the need to constantly switch between screens. All of the information associated with a particular process can be accessed in the same place, at the same time. Since analytics and reporting are built- in, all reports show up- to- the- moment information without the need to first export the data to a data warehouse. A variety of dashboards are provided with the system, each of which offers the ability to drill- down into the underlying data to provide greater insight and understanding. Rather than customizing the software, Workday provides for full configuration of the solution. That means that we will be able to use the built- in tools to craft solutions that match our business processes (and that we can change business processes to match best- of- breed workflow processes). Most interestingly is how Workday plans to address the current problem of <trade secret>, which is the approach that has been taken by every other ERP vendor, they believe that the <trade secret> in ways that are natural for each of these environments and their customers. Workday is also unique in that it is built as a mobile- first application. Workday recognizes that we are increasingly using mobile devices to enter and access information, yet they also appreciate that what someone may want to do on a mobile phone is different than what someone might want to do using a tablet or desktop computer. Workday offers mobile applications that transform the user- interface into one appropriate for the size of the device that you are using. This is in contrast to the approach taken by traditional ERP providers where they simply make every screen usable on mobile browser through scrolling, pinching and zooming (Although this is also available in Workday, the mobile clients offer a far richer experience). While there is significant benefit to implementing the present suite of Workday products and <trade secret>, there is also some risk. The major risk centers on the ability of Workday to <trade secret>. There have been a number of failed attempts to <trade secret> The major differentiator between those efforts and the <trade secret> Workday rests with the Workday corporate leadership. Simply put, Dave Duffield, Co- founder and Co- CEO of Workday, has a long and successful history of bringing modern software solutions to higher education. In fact, supporting higher education is not only a passion of Dave s, but also of Page 11

12 the rest of the company. Dave has a long history of developing software for the education market starting with his early efforts as founder of Information Associates. He then went on to co- found PeopleSoft in PeopleSoft was a then groundbreaking new ERP solution that was built as a fundamentally web- enabled software suite, in contrast to the server based, or client- server based approaches of the competition. After a hostile takeover of PeopleSoft by Oracle in 2004, Dave co- founded Workday with Aneel Bhusri, the former vice chair and head of product strategy at PeopleSoft. We have been told that Workday is completely committed financially and organizationally <trade secret>. In fact, Dave and his son, Mike, are directly supervising the new unit within Workday that has been dedicated to this project. Further, Workday has recently hired a new Vice President for Strategy and Product Management <trade secret>, Liz Dietz. Liz worked for Dave at PeopleSoft, and most recently was a VP at CedarCrestone (a major PeopleSoft and Workday implementation and consulting company). <trade secret> he is firmly committed to maintaining his reputation and delivering on his commitment to higher education. I have consulted with both the Gartner Group and Vicki Tambellini of the Tambellini Group regarding Workday. It should be noted that Vicki Tambellini used to work for Dave at PeopleSoft, where she was General Manager and Vice President. Even more interestingly, the Gartner consultant on ERP systems, Terri- Lynn Thayer, is the former Deputy CIO at Brown University and was present during Brown s migration to the Workday financials and HCM solutions. They have both been uniformly positive about Workday, <trade secret>. The second area of risk with respect to Workday relates to the loneliness of being an early adopter. When we implement the Workday <trade secret>, we will be one of only a handful of higher education institutions that will be using and depending on the new system. That limits the number of peer schools we can turn to for advice, support and collaboration. However, Broward College is presently implementing the core suite of Workday products and <trade secret>. Should TCC partner with Workday we will have another school in the State of Florida with which we can work to develop all of the custom reports that are necessary for State reporting, as well as serve as support and backup for the IT and business areas of the College. As mentioned earlier, one of the true benefits of a SaaS solution is that all customers use the same version of the software. That means that the reports, workflows, and integrations that Broward develops can be immediately shared with us and our reports, workflows, and integrations can be immediately shared with them. With both of us <trade secret> we should each be able to reap financial savings as the Workday team will save on travel and consulting by having two schools in Florida to work with at the same time. While the costs of Workday have yet to be negotiated with TCC, I was able to obtain some rough pricing from Workday, and a sense of pricing from Broward. Note that these prices are not firm. The cost of subscribing to all of the current Workday products (Human Capital Management, which includes human resource management, talent management, payroll, time tracking; Financial Management solution which includes core financials, revenue management, business assets, expenses, procurement, project and work management, grants management; and Big Data Analytics) is anticipated to be approx. <trade secret> per year. Since Workday is a SaaS application, there is no upfront purchase cost as there would be with a more traditional ERP solution that is installed on premises. It may also be possible to have Workday include their new Recruiting solution (to be released in Q1 of 2014) included in this price. Note that Broward will likely be paying over <trade secret> for the Page 12

13 same suite of solutions. While pricing has not yet been determined, it is likely that <trade secret> per year. Further, <trade secret>. That brings the likely cost of the yearly license fee to between <trade secret>. This is well within the price range that was presented to the TCC Board of Trustees in January In addition to the annual subscription fees there will also be the cost of implementation, which is handled by a third party implementer (Broward is using CedarCrestone). Broward is spending approx. $2.3M to implement the present suite of Workday products. Thus TCC can expect to spend roughly the same amount. In recognition of <trade secret>, it is expected that Workday will implement those systems themselves, thus saving <trade secret> a significant amount of money over the anticipated $2M in implementation fees. With the help of Vicki Tambellini and Gartner, we should be able to negotiate a favorable set of implementation terms and pricing. 9. The Jenzabar Solution <trade secret> 10. The Banner Solution The Banner software suite from Ellucian is an on- premises solution that requires the Oracle database. It is built on decades old software that Ellucian is making more accessible to modern technology through additional software applications and updates. Thus while the core applications were written using technology from the last century, a number of new applications have been written to accommodate more modern technologies such as mobile and web services. A fundamental concern about Banner is its future: it is one of three different ERP products being offered by Ellucian. Ellucian was created through the strategic merger of the former Sungard Higher Education, who sold both the Banner and PowerCampus ERP systems, and the former Datatel, who sold the Colleague ERP system. As these are all on- premises solutions, Ellucian currently supports and maintains all three systems, and multiple versions of each product, thus spreading their development and support staff across an array of systems. To complicate matters, Ellucian is held by the private equity investors Hellman & Friedman. It is believed in the higher education community that Hellman & Friedman will want to lower the costs associated with the strategic merger which may result in reduced staffing, reduced investments or reduced product offerings. Indeed, Ellucian recently announced the discontinuation of the Banner Relationship Manager (BRM) software in favor of the former Colleague Recruiter software (now branded Ellucian Recruiter). Not only does this adversely affect Banner schools who either have implemented or are in the process of implementing BRM, it means that those same schools will now have to run and support another database (Microsoft SQL Server) in addition to the Oracle database required to run Banner. It is believed that the deprecation of BRM and cross- ERP support for Recruiter is the first step in the Ellucian XE vision, which seeks to unify the various solutions that Page 13

14 Ellucian will be supporting through a common ecosystem. No matter what it is called, this approach will result in the continuing need to bolt on additional pieces of software to the core ERP system, and in some risk in adopting solutions from Ellucian that will be deprecated in the future. In many cases, buying Banner could be seen as the easier solution: it is a proven ERP system with hundreds of higher education customers. However, with the longevity of Banner comes a large customer base. In fact, there are nine schools in the Florida College System that use Banner: Valencia, Edison, Gulf Coast, North Florida, St. James River, Brevard, Northwest Florida, Manatee and Lake Sumpter. While not necessarily all on the same software release of Banner, these schools do make arrangements to share information among them, including reports that are needed for the State of Florida. One other perceived advantage of Banner over a more modern solution such as Workday is the cost. In speaking with other Banner Schools in Florida, I learned that the implementation cost of Banner will likely be the same or greater than that of Workday (Gulf Coast budgeted $4.2M to implement Banner and have spent $3.7M to date as they complete the first phase of implementation and Edison is spending appox. $370K per year on the core Banner and Oracle licenses). However, this does not include the costs associated with maintaining the on- site servers, training of the IT staff in multiple databases, or the cost of developing the necessary ETL interfaces to other systems. Regardless of the perceived advantages of Banner, buying Banner means buying into old technology. In fact, Gartner stated that doing so would essentially have TCC being one of the last schools to buy into a decades old solution. Page 14