HomeMy WebLinkAboutIR 9297INFORMAL REPORT TO CITY COUNCIL MEMBERS
No.
To the Mayor and Members of the City Council September 14, 2010
Page 1 of 5
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r SUBJECT: ENTERPRISE RESOURCE PLANNING (ERP) PROJECT UPDATE
The purpose of this Informal Report is to provide an update on the current status of the Enterprise
Resource Planning ( "ERP ") Initiative. A brief status of both ERP Phase I and Phase II is
presented below.
ERP Phase I: HR/Payroll
ERP Phase I Project Details:
Council was last briefed on ERP Phase I through an Informal Report in February, and by two
briefings given to the Audit and Finance Advisory Committee in March and April of 2010. At that
time, additional time was needed to address the following:
■ Additional testing, training, and organizational readiness activities
Redesign and retest many aspects of the system resulting from the recent ratification of
the Fire contract.
The combination of these factors resulted in a revised date of October 18, 2010 for the
PeopleSoft system to replace Genesys as the system of record for time, absence, and payroll.
The first paychecks /advices will be issued from PeopleSoft on the October 29th pay date.
The project is currently in the middle of conducting the fifth of five planned Parallel Tests, where
select payroll cycles from the City's current payroll system are compared to those same cycles
produced by PeopleSoft. At this time in the Parallel Testing, three points are notable.
• Items that require fixes to the system continue to decrease and the system is stable and is
on track to being ready for "Go Live."
• Additional training and practice for time entry staff has resulted in a reduction of data entry
errors. For many departments, this fifth Parallel Test serves is more of a refresher for
timekeepers, while a few departments have need to use the opportunity to clarify
proficiency of personnel and modify work steps that are related to the time keeping but are
outside of the system.
• Testing results indicate that the variation of timekeeping practices across departments is
reducing and moving to be more closely aligned with the City's established policies.
As briefed to the Council in December 2009, when the system is deployed, the City should expect
there to be differences in paychecks /direct deposits that stem from data entry errors and /or the
consistent application of policies. In addition, certain activities related to the timekeeping process
will take longer in the near term as staff continue to develop proficiency and work steps outside of
the system are refined. Upon deployment, it should be expected to find system issues that need
correction as well. This overall stabilization process, for the system and for the organization, will
occur over the months following October 18tH
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS
Ion
To the Mayor and Members of the City Council September 14, 2010
�MT•� Page 2 of 5
• SUBJECT: ENTERPRISE RESOURCE PLANNING (ERP) PROJECT UPDATE
ERP Phase I Budget Details:
From a budgetary perspective, the status of ERP Phase I as of July 31, 2010 is as follows:
• Budget Amount: $17,344,570
• Expended Amount: $12,962,467
■ Remaining Amount: $ 4,382,103
• Percent of Budget Remaining: 25%
• Percent of Current Schedule Remaining: 23%
• Original Date for PeopleSoft to Replace Genesys: April 6, 2010
• Revised Date for PeopleSoft to Replace Genesys: October 18, 2010
ERP Phase II: Finance /Procurement
ERP Phase II Project Details:
Phase II of the ERP Project will focus on Finance and Procurement, and will consists of the
following modules:
• General Ledger and Budgetary • Grant Accounting
Control • Purchasing
• Accounts Receivable • Inventory
• Accounts Payable
• eProcurement
• Fixed Assets • Budget Preparation
• Project Accounting and Project
Management
During the past few weeks, the ERP Project Team has been in the process of completing the Pre -
implementation phase and is preparing to move on to its Implementation Phase. Pre -
Implementation is (has been) focused on 1) defining software requirements; 2) confirming
PeopleSoft's fit to these requirements to support a single Enterprise Resource Planning solution,
rather than a best -of- breed; 3) defining a budget preparation solution to deploy as part of Phase
II; 4) preparing a Request for Proposals (RFP) for Implementation Services; 5) evaluating
vendor's responses and conducting oral presentations; and 6) selecting a vendor with whom to
conduct negotiations. The Project Team is also in the process of cleansing data, specifically
Capital Projects data, in preparation for conversion and implementation.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS
No. 9297
To the Mayor and Members of the City Council September 14, 2010
C;"-
Page 3 of 5
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• SUBJECT: ENTERPRISE RESOURCE PLANNING (ERP) PROJECT UPDATE
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The Implementation Phase for Phase II, as described in the RFP, is designed to accomplish a
number of business objectives beyond the implementation of the PeopleSoft modules described
above. First, to the extent possible, is to mitigate the risks associated with implementing ERP.
Risk mitigation measures include extending the project timeline from the initial 18 month
timeframe to 24 months. Additionally, enhanced or high risk functionality will be deferred to a
second deployment cycle. eProcurement and Budget Preparation will be deployed in the second
cycle. Also, departments will need backfills to support on -going fiscal operations, while
departmental Subject Matter Experts participate on the project. The above - mentioned measures
will allow more time to manage unforeseen issues and to help manage a high degree of
organizational change, and will provide for an adequate subject matter knowledge -base for
project success.
Other business objectives that the ERP Phase II effort will focus on are solutions to address
many of the deficiencies noted in the external audit management letter. An internal controls
review and the identification of an improved citywide organizational structure (in accordance with
new system functionality) have been explicitly requested as part of ERP implementer services.
Lessons learned from ERP Phase I will also be incorporated in project planning. For example,
project staff will be beefed up in areas of high risk, such as Project Leadership and Change
Management.
Core ERP Phase II functionality is scheduled to "Go Live" on October 1, 2012, while the
functionality that is more enhanced or high risk (second deployment cycle) is scheduled for an
April 2014 "Go Live." The Budget Preparation solution will be implemented to coincide with the
budget process for fiscal year 2014.
ERP Phase II Proposed Funding Sources:
Budget and project cost transparency are other ERP Phase II objectives. These objectives will be
accomplished by including all relevant project - related costs, not just the software implementation
costs, when tracking and reporting on the project budget. The cost for data cleansing and policies
and procedures development are being captures as part of total project cost, as well as other pre -
implementation activities. The proposed funding for the ERP Phase II is recapped below:
Certificates of Obligation (included in the M&C to be reviewed 9/14):
To be repaid by General Fund Debt Service: $ 35,052,007
To be repaid by Golf Fund Debt Service: $ 2,837,432
Total Certificates of Obligation $37,889,439
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS
ilx�
To the Mayor and Members of the City Council
No. 9297
September 14, 2010
Page 4 of 5
SUBJECT: ENTERPRISE RESOURCE PLANNING (ERP) PROJECT UPDATE
Transfers in From Enterprise Funds (included in 2011 and future Operating Budgets)
Water
$ 14,863,374
Aviation
$1,071,641
Solid Waste
$ 2,402,412
Parking
$ 397,976
Storm Water
$1,743,756
Culture & Tourism
$710,872
Total Enterprise Funds
$21,190,031
Grant Total — All Funding Sources
Competitive bids for the Certificates of Obligation will be accepted the morning of September 14th
and presented to City Council that evening for approval. If approved, the bond proceeds are
anticipated to settle on October 19tH
Risk Reduction, Benefits, and Cost Savings from ERP
It is imperative to launch the City's ERP Initiative centered on the reduction and mitigation of risks
faced by the City from unsupportable and obsolete financial and human resource systems. These
legacy systems presented a barrier to improvements in the City's business processes and overall
financial internal control framework. In addition, personnel with the requisite knowledge to
maintain these systems either had retired or were approaching retirement.
The limited functionality of the legacy systems produced a proliferation of manual workarounds,
ad hoc spreadsheet systems' and significant challenges related to the maintenance of redundant
data across the organization. ERP will provide improvements in these areas by centralizing data
into a single platform and eliminating redundancies. It is expected that this should improve
process cycle times and reduce overall staff effort related to administrative business processes. It
will also improve the timeliness and accuracy of the information upon which management
decisions are made. In consideration of their current debt ratings, the Rating Agencies continue to
inquire on the status of the new accounting and financial reporting system, as well as related
improvements to internal controls and overall fiscal management.
With the City's current cost structure, which is mostly personnel cost, the opportunity for hard
dollar cost savings is limited in comparison to private sector entities that typically have large,
high - volume supply chains from which to derive large -scale efficiencies and cost reductions
through economies of scale. In addition, the City's recent and continued reductions -in -force have
created a much leaner administrative workforce which likely eliminates significant opportunities
for further reductions due to ERP - related process improvements. The benefit that ERP provides
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS
No.
To the Mayor and Members of the City Council September 14, 2010
�
�Tt�
Page 5 of 5
a QV_ SUBJECT: ENTERPRISE RESOURCE PLANNING (ERP) PROJECT UPDATE
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in this environment is to reduce time requirements of certain administrative activities thus
providing part of the solution to the reallocation of work responsibilities across existing staff.
In conclusion, both phases of the ERP Project are progressing and will continue as currently
planned. A more detailed project status report is anticipated to be provided to the Audit & Finance
Advisory Committee and /or City Council by mid - November. At that time, the ERP Phase I:
HR/Payroll should be in Post -Go Live and the ERP Phase II: Finance /Procurement implementer
selected and negotiations completed.
If you have any questions or need any additional information in the interim, please contact Pete
Anderson at 817 - 392 -8781, Lena H. Ellis at 817 - 392 -8517, or Karen Marshall at 817 - 392 -7783.
Fisseler, P.E.
City Manager
ISSUED BY THE CITY MANAGER
FORT WORTH, TEXAS