Enterprise Resource Planning (ERP)

Department of Information Technology

Enterprise Resource Planning (ERP)

Finance CommitteeNovember 25, 2013


Agenda

• What is ERP? • Objectives & Benefits• The Current State • Tyler Munis ERP• Implementation Timeline• Project Oversight• Measurable Success Factors• Staffing• Budget• Council Recommendations• Questions

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What is ERP?

• ERP = Enterprise Resource Planning> Software system that can seamlessly integrate all information

and processes flowing through an organization> Enables widespread data sharing from a single information

repository to improve information accuracy and availability> Drives business transformation and change management efforts> Most medium/large organizations use ERP systems. Popular

software vendors include: SAP, Oracle, JDEdwards, Peoplesoft, Sage/MAS, Microsoft.

> Common functions of ERP systems: finance and accounting, human resources management, budgeting, payroll, cashiering, project tracking, procurement, invoicing and inventory.

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Objectives & Benefits

• Fully integrate finance, human resources, budget and payroll functions

• Provide enterprise-wide reporting and decision support in real-time through a single information repository

• Streamline or eliminate inefficient, redundant and manual processes that increase potential of errors and inaccurate information

• Align financial and human resources operations to industry best practices

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Objectives & Benefits

continued…

• Establish a core system that can be reused to automate all financial operational processes

• Enable city staff to become more efficient, productive, and responsive to the needs of the constituents

• Incorporate modern technology and new functionality to eliminate paper based processes and a springboard to provide new online constituent services

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The Current State

• Information Technology Strategic Plan (2011)> Recommendation: Implement an integrated ERP system

• ERP Assessment Report (2012) by SoftResources, LLC

> Widespread manual process and aging systems prevent the City from keeping up with industry best practices

> Extensive use of stand-alone systems that are not integrated resulting in process duplication and staff time consumed by reconciling information between systems

> Fewer staff to complete workload as a result of economic downturn

> Institutional process knowledge is poorly documented and long-term employees are reaching retirement age

> PeopleSoft Financials version 8.4 is no longer supported by Oracle

> Recommendation: Implement a new ERP system 6


Tyler Munis ERP

• Tyler Munis ERP system recommended through competitive solicitation process and due diligence

• Tyler Technologies, Inc. > Founded: 1966 (NYSE: TYL)> Provides software exclusively for the public sector > Employees over 2,500 employees> 11,000 Customers Worldwide> 30+ California cities using Tyler Munis ERP

Customers include Beverly Hills, Chino, Culver City, Santa Barbara

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Implementation Timeline

Project Schedule FY 2014 FY 2015 FY 2016 FY 2017 Total

Phase I Financial

Modules

18 Months

Phase II Human Resources / Payroll

12 Months

Phase III Business

License & Cashiering

6 months

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Project Oversight

Attachment B

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Executive Steering Committee

ACM, Finance, HR, DoIT

Project Steering Committee

Dept Managers

Project Core Team

City Staff

Subject Matter Experts

IT, Vendors

Project Management

ERP PM, DoIT PMO


Measurable Success Factors

• Developed by Project Steering Committee and Project Core Team> Reduce time to complete month-end and year-end

closing> Increase availability and accuracy of data > Reduce the number of stand-alone systems > Eliminate workflow redundancy and streamline work

processes allowing City staff to focus on more important tasks

> Update and document all financial processes and procedures

> Ability to manage and report CIP budget information from integrated financial system

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Staffing

• Addition of six new at-will limited-term full-time equivalent (FTE) positions to support project implementation> ERP Project Manager – Responsible for overall

management and delivery of the entire project> ERP Business System Analysts – Responsible for

configuring the new system with new processes and data workflows

> City Temporary Workers (CTW) – Backfill for existing staff assigned to the project. Flexible positions to hire interns, City retirees and other professional staff on a rotating basis

> All new positions tied to project duration and funding11


Budget

Project Budget FY 2014 FY 2015 FY 2016 FY 2017 Total

Software (Tyler Contract) $667,398 $1,493,218 $825,820 $0 $2,986,435

Hardware $127,000 $20,000 $15,000 $5,000 $167,000

Professional Services (System Integration and Change Management)

$38,651 $77,394 $101,160 $19,881 $237,085

Temporary City Staff Support $535,936 $668,286 $652,792 $328,189 $2,185,203

Project Contingencies $18,715 $273,521 $273,521 $273,520 $839,277

Annual Fiscal Impact $1,387,699

$2,532,419

$1,868,293 $626,590 $6,415,00

0

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Council Recommendations

1. Find that the proposed contract is exempt from the California Environmental Quality Act (“CEQA”) pursuant to State CEQA Guidelines Section 15061(b)(3);

2. Authorize the City Manager to enter into a three-year contract with Tyler Technologies, Inc. to furnish and deliver software, hardware, and services for an Enterprise Resource Planning System in an amount not to exceed $3,434,400 which includes the base contract amount and ten percent for contingencies. Competitive bidding is not required pursuant to City Charter Article X Section 1002(F), Contracts for professional or unique services;

3. Amend the Fiscal Year 2014 Capital Improvement Program (CIP) Budget to increase the total estimated cost for the Enterprise Resource Planning System (ERP) Project, 71149, by $3,415,000 to $6,415,000;

4. Authorize the addition of six new at-will limited-term full-time equivalent (FTE) positions to the Department of Information Technology FY2014 Operating Budget funded by the ERP Project, 71149 in the Project Management Fund (301), increasing the department total FTE count from 63.50 to 69.50, and authorize staff to make necessary adjustments to the budget; and

5. Establish the title and salary control rate of $115,000 for the ERP Project Manager and the title and salary control rate of $95,000 for the ERP Business Systems Analyst as unclassified (at-will) positions in the Non-Represented Management Salary Resolution.

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Questions

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ERP Project Funding Sources

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ERP Project Funding Sources

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Cost Allocation Methodology

• Itemization of all ERP costs - $6.415 million (inc 15% contingency)

• Development of cost allocation groups> FY 2014 Budget > FY 2014 Budgeted FTEs> FY 2013 Cash Balance> FY 2013 Number of Purchase Orders> FY 2013 Fixed Assets Totals> # of FY 2013 Grant Revenue> FY 2013 Accounts Receivable> FY 2013 Number of Purchasing Cards

• Calculation and allocation based on groups and Fund


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Cost Allocation Methodology

• Adjustment of allocation based on special circumstances

• Identification of legal restrictions of allocation• Identification of Funds with insufficient

resources to pay allocation• General Fund will advance Funds with

insufficient resources and establish a receivable for repayment later

• General Fund provides initial funding in FY 2014

• Remaining allocation requirement begin in FY 2015 through FY 2017


Request for Proposals Overview

• RFP Posted on City Website (September 18, 2012)

• Seven Proposals Received (October 30, 2012) • On-site Demonstrations (March-April 2013)

>Top four proposers conducted demos over three days each

• Due Diligence of Tyler Munis (May-August 2013)>Ten municipal customer references surveyed>Conference call with City of Chino, CA>On-site visit to Culver City, CA

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Change Management Process

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Enterprise Resource Planning (ERP)

Documents

Transcript of Enterprise Resource Planning (ERP)