Enterprise Resource Planning ERP Phase 1 HRPayroll City

Enterprise Resource Planning (ERP) Phase 1 – HR/Payroll City Council Briefing Mai Tran, IT Solutions November 11, 2008

Agenda • • ERP Overview ERP Benefits ERP Phase 1 Project Recap ERP Phase 1 Solution HR/Payroll Implementation Components ERP Phase 1 M&Cs (5) Next Steps Legend - ERP: Enterprise Resource Planning; HR: Human Resources November 11, 2008 ERP Briefing 2

ERP Overview An integrated information system that provides a comprehensive set of financial and administrative capabilities. “Desired State” “Current State” November 11, 2008 Phase 1 – HR/Payroll Phase 2 – Financial Management Systems ERP Briefing 3

ERP Benefits and Justification • Replaces numerous aging, disparate, functionally-limited systems with a state-of-the-art, integrated enterprise system – – Improved efficiencies and workflow Process standardization Better information for management and decision-making Reduced risk via improved internal controls • Independent findings have shown the need to replace these systems: – “Assessment and possible upgrade of computer systems used in the accounting function”, Deloitte & Touche – Report to Management, Fiscal Years 2004 and 2005 – “Controls over payroll are essential to quality accounting and appropriate disbursements. ”, Deloitte & Touche – Report to Management, Fiscal Year 2006 – “Undertake a comprehensive, enterprise wide financial systems replacement project involving both financial staff and representatives of the operational units of city government”, Maximus - Finance Department Operations Review – August 22, 2006 – “An ERP system is critical for the City to effectively manage human capital”, Internal Audit Report to the Audit and Finance Advisory Committee – May 24, 2007 November 11, 2008 ERP Briefing 4

ERP Phase 1 Recap (Jul 07 -Jul 08) Council Approved Contract with STA to Serve as Principal ERP Consultant Gathered Over 3000 Functional and Technical Requirements Developed Request for Proposal Based on City’s Needs Jul – Sep 2007 Sep – Nov 2007 Received 8 Written Proposals Jan 2008 Jul – Sep 2007 Evaluation Committee Scored and Shortlisted Responses and Invited Three Vendors for Demonstrations Vendor Demonstrations (One Week Dedicated to Each Vendor) Jan – Feb 2008 Mar 2008 Council Approved Contract Amendment with STA to Engage Top Vendor in Negotiations June 2008 Top Two Vendors Invited to Submit Best and Final Offers (BAFO) Apr - May 2008 Reference Checks and Site Visits to Plano and Oklahoma City June - July 2008 Evaluation Committee Scored BAFO Responses and Recommended Top Vendor for Negotiations May 2008 Negotiations with Top Vendor July 2008 Legend – STA: Salvaggio, Teal & Associates, BAFO: Best and Final Offer November 11, 2008 ERP Briefing 5

ERP Phase 1 Recap (Aug 08 -Nov 08) City Suspends Negotiations with Top Implementer Invitation to Next Vendor for Demonstrations Next Vendor Demonstration Scored and Next Vendor Invited to Submit BAFO August 2008 Sept 2008 BAFO Scored and Next Vendor Recommended for Negotiations Sept 2008 Negotiations with Next Vendor Oct 2008 Council Approved Contract Amendment to Extend STA for Negotiations with Next Vendor Reference Checks for Next Vendor Sept 2008 Oct 2008 Council Approval Sought for ERP Implementation Nov 2008 Legend – STA: Salvaggio, Teal & Associates, BAFO: Best and Final Offer November 11, 2008 ERP Briefing 6

ERP Phase 1 Solution • After extensive analysis and evaluation, staff recommends: – People. Soft Enterprise Human Capital Management as the selected HR and Payroll solution for the City • People. Soft was chosen as the best ERP product to meet the City’s requirements – e. Verge Group as the selected vendor to implement People. Soft for the City • e. Verge was chosen as the best implementer after negotiations with the first selected vendor hit an impasse Legend - ERP: Enterprise Resource Planning; HR: Human Resources November 11, 2008 ERP Briefing 7

ERP Phase 1 Solution, cont. • People. Soft was identified as the strongest solution for several key reasons: – Most standard functionality “out of the box” – Significant functionality advantages in areas such as Staffing, Time & Labor, Training, Reporting, and Non. Visual Compliance – In use at 1200 municipalities and public sector organizations – Solution will grow with the City – Analytical processes occur inside instead of outside of the system – Does not require 3 rd party software for time and attendance processing November 11, 2008 ERP Briefing 8

ERP Phase 1 Solution, cont. • e. Verge Group is recommended as the best implementer for several key reasons: – 15 years of experience as a company focused solely on implementing, upgrading and supporting People. Soft – Recognized in the industry as a “go-to” company to rescue troubled ERP projects – Highly-skilled team assembled for Fort Worth – Implementation methodology focuses on knowledge transfer and self-sufficiency – A North Texas minority-owned business November 11, 2008 ERP Briefing 9

ERP Project Governance Executive Steering Committee Executive Project Sponsor Advisory Committee ERP Principal Consultant (STA) ERP Team Project Manager Change Management Committee Evaluation Committee ERP Vendor/Implementer (Oracle/e. Verge) Communication Committee Legend – STA: Salvaggio, Teal & Associates November 11, 2008 ERP Briefing 10

HR/Payroll Implementation Components P ER am Te Implementation Oversight H Inf ard ras wa tru re ctu re e pac jec t. S Pro ERP Phase 1 HR/Payroll n tio nta M, me OC ple s, Im rvice ining Se Tra Software Licenses Maintenance, OU Authorization to to contract with Authorization e. Vergefor: Group for: $8, 500, 000 Oracle $2, 070, 000 – People. Soft Implementation services and related licenses – software Organizational Change Management services – First year maintenance – Oracle End-user training for University ERP team Authorization procure Staffing coststo for Authorization to contract with hardware infrastructure and dedicated ERP project Salvaggio, Teal and support tools $1, 224, 570 team $3, 180, 000 Associates (STA) for system – Servers and storage implementation oversight: – ERP pays for 17 – Loadproject balancers $1, 790, 000 dedicated to project – staff Racks, cabling and associated (included in capital –hardware Project and Vendor Performance Management – budget) System maintenance tools –Training Quality lab Assurance of System – Departments equipment pay for Design & Testing (computers, projectors) associated backfills – (included team equipment –Project Risk Identification & in dept budgets) Legend – OU: Oracle University, OCM: Organizational Change Management November 11, 2008 ERP Briefing (desktops) Mitigation 11

ERP Phase 1 M&Cs 1. 2. M&C# C-23171 Authorization to contract with e. Verge Group M&C# C-23173 Authorization to contract with Oracle 3. M&C# P-10877 Authorization to procure hardware infrastructure and support tools M&C# C-23174 Authorization to contract with Salvaggio, Teal and Associates (STA) 4. $8, 500, 000 $2, 070, 000 $1, 224, 570 $1, 790, 000 Subtotal 13, 584, 570 Staffing costs for dedicated ERP project team $3, 180, 000 (ERP project pays for existing CFW staff dedicated to project – no M&C needed) Project workspace (estimated cost, M&C to follow) ERP Phase 1 Implementation Cost (capitalized) (Funded by ERP portion of $25 M Tax Note Sale on 9/16/08) November 11, 2008 ERP Briefing $ 580, 000 $17, 344, 570 12

ERP Phase 1 Backfills Department Human Resources Estimated FY 09 Cost $ 1, 030, 000 (M&C G-16356) Finance $ 0, 123, 200 $ 0, 556, 508 Total $ 1, 709, 708 (Overage or Contract TBD) IT Solutions (Staff augmentation contract M&C C-22834 approved on 6/3/08 ) (Included in FY 09 dept budgets) November 11, 2008 ERP Briefing 13

Next Steps • Nov 11, 2008: Council considers Phase 1 M&Cs • Nov 14, 2008: City executes vendor contracts • Dec 1, 2008: ERP Phase 1 implementation begins • Dec 8, 2008: Oracle/People. Soft training for project team begins • Dec 2008: ERP team move to project workspace • 2009 – 2010: Quarterly Project Updates • Apr 2010: Planned Go Live for ERP Phase 1 Legend – ERP: Enterprise Resource Planning November 11, 2008 ERP Briefing 14

Questions? November 11, 2008 ERP Briefing 15

Enterprise Resource Planning (ERP) Phase 1 – HR/Payroll City Council Briefing Mai Tran, IT Solutions November 11, 2008

STA Services • STA was selected as to serve as the City’s Principal ERP Consultant throughout the ERP initiative. • Services rendered to date include: – $689, 552 for Requirements Analysis, RFP Development, Vendor Selection and general ERP oversight • June 2007 thru June 2008 – $225, 243 for Vendor Negotiations (two rounds), Implementation Preparation and general ERP oversight • July 2008 thru October 2008 Legend - ERP: Enterprise Resource Planning; HR: Human Resources, RFP: Request For Proposal November 11, 2008 ERP Briefing 17

ERP Clients of STA • • • • • City of Houston, Texas - Citywide ERP City of Round Rock, Texas - Citywide ERP City of Victoria, Texas - Citywide ERP Houston Metro – ERP Business Case Tarrant County, Texas – ERP Project Oversight Texas State University - University ERP Texas Department of Information Resources - Statewide e-Procurement Texas Health and Human Services Commission - Eleven-agency ERP system Texas Department of Housing and Community Affairs - Agency ERP Texas House of Representatives - Agency ERP Johnson County, Kansas (Kansas City) - Countywide ERP Los Angeles County, California - Countywide ERP State of Louisiana - Statewide ERP State of Tennessee - Statewide ERP State of Nevada - Statewide ERP State of Nebraska - Statewide ERP State of Arkansas - Statewide ERP Commonwealth of Kentucky - Statewide ERP November 11, 2008 ERP Briefing 18

STA Implementation Oversight • STA team assigned to the City has over 30 years of combined ERP implementation and oversight experience. This experience allows the City to: – Facilitate on-time and on-budget delivery of project by supplementing City project management resources – Detect problems in the system design and testing earlier in the project when something can done about it – Avoid unnecessary modifications to the system by deploying process change approaches used in other projects – Incorporate ERP lessons learned from other government clients – Ensure the City understands the impact of key decisions and can accurately gauge progress through in-depth review of deliverables at critical project milestones • • Because STA advises public sector clients from across the country, STA has contacts at the highest levels of ERP software and consulting organizations and has used those contacts for the City’s benefit STA’s independence from software or implementation services vendors allows the City to have an experienced group focused on obtaining the best results for the City November 11, 2008 ERP Briefing 19

Ongoing Support Team (Very Preliminary Analysis) • After the new ERP system is in place, most project resources can return to their “regular jobs” and backfills can be released • It is anticipated that some project resources will transition from project roles to ERP support roles – The backfills for these people may be retained and there would be a corresponding net staff increase Support Role FTE Typical Support Duties HR Admin/Superuser 1 -2 System administration, user assistance, user training, business process troubleshooting, reporting Payroll Admin/Superuser 1 -2 System administration, user assistance, user training, business process troubleshooting, reporting Database Administrator 1 Database maintenance, interface maintenance, system development and support, advanced reporting Hardware/Network Support 1 Hardware and software maintenance and support, system administration, troubleshooting and repair 1 -2 System administration, application configuration, system maintenance, interface maintenance, advanced reporting, superuser support, application/system troubleshooting Application Support Total November 11, 2008 5 -8 ERP Briefing 20

Contingency • The ERP Phase 1 project estimate includes a 20% contingency allowance • Industry stats related to technology project costs reveal: – On average, actual ERP implementation costs exceeded estimates by 25% (2001 Conference Board Study of 117 ERP implementations) – It is common for actual software project costs to exceed estimated costs by 19 -43% (2004 Standish Group CHAOS Report covering 40, 000 projects over a 10 year period) • City of Fort Worth comparable technology project examples: – CPMS: 25% Contingency – CAD: 25% Contingency November 11, 2008 ERP Briefing 21

Systems Replace by ERP Administrative System Replaced by ERP? Genesys/Payroll Yes Time & Attendance Yes Absence Management Yes Misc Mainframe/3 rd Party Yes Sigma Yes MARS Yes BRASS TBD CPMS No Buyspeed Yes Telestaff No Registrar Yes FATS Yes MWBE No Accounts Receivable Yes Percent Replaced 75% Legend – ERP: Enterprise Resource Planning November 11, 2008 ERP Briefing 22

ERP Savings Example • For the City’s Time & Attendance process, the City anticipates the following soft and hard savings: – Process time reduction of approximately 20, 000 hours annually. • This is the total estimated hours of time that will be saved across the City by all time and attendance clerks and represents a soft savings to the City. Note that although the aggregate total time savings is large, the time savings for any particular clerk represents only a small portion of their typical work week and there is no expectation that these time savings would make immediate staff reductions possible. – Approximately $3, 550 reduction in annual paper costs. • This is the annual estimated savings that will be achieved by eliminating the printed forms used by the time and attendance clerks and represents a hard savings to the City. November 11, 2008 ERP Briefing 23

e. Verge Cost Breakdown Item Cost Implementation $ 3, 917, 639 Enterprise Readiness Technical Team $ 0, 833, 280 $ 0, 808, 655 Development Items Additional 2000 Hours Contingency $ 1, 171, 365 $ 0, 369, 000 November 11, 2008 $ 1, 400, 051 ERP Briefing 24

Oracle Cost Breakdown Item Cost Software Licenses $ 1, 136, 594 1 st Year Maintenance $ 0, 250, 051 Oracle University Training $ 0, 677, 063 Contingency $ 0, 006, 292 Total $ 2, 070, 000 November 11, 2008 ERP Briefing 25

STA Cost Breakdown Item Cost Implementation Oversight $ 1, 626, 240 Contingency $ 0, 163, 760 Total $ 1, 790, 000 November 11, 2008 ERP Briefing 26

HW/Tools Cost Breakdown Item Cost Server Computers $ 126, 426 Storage System $ 182, 747 Web Load Balancers $ 111, 458 Virtual Server Hardware $ 050, 900 Windows Operating System $ 016, 944 Database Software $ 128, 270 Disk Backup Tool $ 033, 408 Application Monitoring Tool $ 016, 685 Configuration Management Tool $ 132, 500 Job Scheduler $ 121, 652 Server Racks $ 016, 112 Training Lab/Team Equipment $ 060, 608 $ 997, 711 Subtotal November 11, 2008 ERP Briefing 27

HW/Tools Cost Breakdown, Cont. Item Cost Electrical Work $ 0, 001, 200 Ethernet Patching $ 0, 005, 000 Backup Tapes $ 0, 004, 500 Database Backup Tool $ 0, 003, 975 Database Scheduling Tool $ 0, 000, 790 Antivirus Software $ 0, 000, 418 Disk Maintenance Tool $ 0, 001, 976 Load Test Tool $ 0, 005, 000 Contingency $ 0, 204, 000 Subtotal From Prior Slide $ 0, 997, 711 Total $ 1, 224, 570 November 11, 2008 ERP Briefing 28

City Staffing Cost Breakdown Department Human Resource (9) Finance (2) IT Solutions (7) Contingency Total November 11, 2008 $ $ $ ERP Briefing Cost 1, 221, 930 0, 286, 613 1, 137, 945 0, 533, 512 3, 180, 000 29

Workspace Cost Breakdown Item Estimate Lease & Supplies $ 445, 774 Contingency $ 134, 226 Total $ 580, 000 November 11, 2008 ERP Briefing 30

Overall Schedule June 2010 Phase 1: HR/Payroll Systems Phase 2: Financial Mgmt Systems June 2007 October 2012 31