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Home My WebLink AboutIR 8849INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8849 To the Mayor and Members of the City Council Date: June 12, 2007 Page 1 of 3 a SUBJECT: IT Lessons Learned as Applied to Potential ERP Project ..m Background: On May 29, 2007 (M &C C- 22133), the City Council appropriated funds and authorized the City Manager to execute a consulting agreement with Salvaggio, Teal & Associates (STA) for the first phase of the Enterprise Resource Planning Project (ERP). This first phase is a fixed fee contract which is not to exceed $860,450 and includes a detailed list of milestones and deliverables. During the Pre - Council discussion, two specific historical initiatives were pointed out as having significant management problems: • The Computer -Aided Dispatch system for Fire and Police that began in 1999; and, • A consulting contract to revamp the IT Solutions Department in 2001. The intent of this IR is to provide a summary of the lessons learned from these initiatives and to demonstrate efforts taken to avoid a reoccurrence. Additionally, a matrix is included which outlines the problems encountered in the past, lessons learned and the changes planned for ERP and future projects. Any budget variances from the approved plan and contract will be presented to the City Council for consideration prior to proceeding. What We Learned: After reviewing these initiatives we have distilled the following critical needs that contribute to project success: • Expertise of project team and project management; • Disciplined project management and governance; • Clear accountability for the success of the initiative; • Effective contract controls. What We Are Doing Differently with ERP: We have incorporated the following elements into our approach for the project: • Supplementing the City's functional expertise with that of an outside consultant, experienced in ERP systems and independent of software, hardware and implementation vendors to assist the City with ERP requirements definition and product selection. • Providing an executive sponsor at the appropriate level to control and access resources, resolve issues and provide direction for delivering the project on time and within scope and budget. • Following a proven methodology supplemented by generally accepted project management processes, including a cross functional steering committee that will provide detailed oversight of project budget, schedule, risks and issues. • Using a fixed fee approach in phase 1 of the initial contract with STA where a detailed schedule ties payments to the completion and acceptance of deliverables and milestones. Moreover, the contract language states, "The City shall have sole discretion to determine whether a deliverable /milestone is complete prior to acceptance by the City, however, acceptance will not be unreasonably withheld." Each deliverable and milestone is required to be accepted by the City and communicated on a signed Milestone Acceptance Document prior to payment. ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS mltlii INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8849 To the Mayor and Members of the City Council Date: June 12, 2007 Page 2 of 3 °► SUBJECT: IT Lessons Learned as Applied to Potential ERP Project Following is a chart summarizing past project problems and lessons learned. 1. Undefined and unrealistic budget, insufficient financial reporting to compare actual expenditures to plan. 2. Unrealistic schedule. 3. Changes to scope were not properly estimated and evaluated. 4. Project manager decisions that affected finances and timeliness were not monitored; no process for oversight/accountability. CAD Proiect 1. Lack of a clearly established budget and financial oversight caused cost overruns and unforeseen charges. 2. Overly optimistic timelines and inadequate planning led to unmet expectations and failures to deliver. Any changes in scope affect a project in some manner: deliverables, time, resources, cost or quality. Governance must be in place for any changes to scope to ensure proper approvals. No project manager or single authority should have sole control over a project. System requirements must be published and reviewed by stakeholders for completeness prior to approval. Governance must be in place for any changes to scope to ensure proper approvals. Project Manager and team members must be held accountable for deliverables, timeline and cost. 1. Explicit budget will be reported and reviewed monthly by the Steering Committee and accepted only after the approval of the Executive Sponsor /ACM. 2. Will do extensive planning to produce a detailed schedule listing all the tasks to be included in the project plan and reviewed by the Steering Committee. 3. No scope changes will be allowed without the approval of the Executive Sponsor /ACM, Steering Committee and a re- estimate of the timeline, costs, end product received or the resulting quality. City Council approval is required if items exceed current appropriation. 4. Weekly meetings will be held with the Executive Sponsor /ACM and the Project Management team. ACMs and Department Heads will be depended on to ensure awareness, accountability and that the best interest of the City is the primary focus. The ERP Project will be tracked in the Capital Project Management System (CPMS) as one project account and must have Executive Sponsor /ACM approval prior to invoices being submitted for INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 8849 rA p ` To the Mayor and Members of the City Council Date: June 12, 2007 Page 3 of 3 SUBJECT: IT Lessons Learned as Applied to Potential ERP Project If you have questions, please contact Karen L. Montgomery, Assistant City Manager and Chief Financial Officer at (817) 392 -6222 or Pete Anderson, Chief Information Officer at (817) 392 -8781. Charles R. Boswell City Manager ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS IT Solutions /Contractor r 2 1. CIO directed the payment of invoices 1. High -level governance with 1. ERP project contracts will be managed from consultants without required appropriate checks and by an Executive Sponsor /ACM documentation of deliverables and balances, including an overseeing a Steering Committee intimidated employees. IT used Executive Sponsor and Steering consisting of 4 department directors, 3 existing State contracts for work done Committee, is mandatory. assistant directors, ITS Project Manager by Contractor that lacked controls or Effective contract controls must and key members of identified specified end dates. be in place. departments. Budget and deliverables will be tracked in CPMS and presented monthly for review. 2. Prior funding requests for critical 2. All requests need a valid review 2. A solid business case with cost/ benefit system upgrades were not approved by process and proper approval. analysis will be developed to provide a management until the situation was dire. sound basis for review and approval. CIO allowed Contractor open -ended This business case will be kept updated funding with inappropriate checks and to ensure City Council is appropriately balances. advised on funding decisions. Consultants will be `managed' rather than be given complete autonomy. 3. CIO and Contractor pushed changes 3. Every technology 3. The essentiality of a system will be forward as necessary, citing `must implementation must stand on weighed against the benefits and long have' technology. its own merit and not be done on term costs to the City. the basis of global statements. 4. CIO failed to accurately communicate 4. Regular communication about 4. Status of the ERP Project will be changes and progress to City Council. project progress, scope changes reported to City Council on a regular and budget variance with the basis. The Steering Committee will City Council and the CMO is review progress and budget monthly. essential to maintain orderly The Executive Sponsor /ACM will checks and balances. monitor project weekly. The Project Manager will be dedicated only to ERP to allow timely reporting and communication. An intranet website will maintain project status, meeting minutes, budget information and presentations which will provide transparency for the project. 5. Did not follow adequate change control 5. A comprehensive change 5. The ERP project team will follow procedures. For example, changes were control process must be in place. appropriate change control processes, put into production for a mainframe conducting unit testing, user acceptance upgrade without proper testing, causing tests, parallel testing and system a network outage. capacity testing. If you have questions, please contact Karen L. Montgomery, Assistant City Manager and Chief Financial Officer at (817) 392 -6222 or Pete Anderson, Chief Information Officer at (817) 392 -8781. Charles R. Boswell City Manager ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS