Loading...
SR-05-12-2015-3OCity Council Ci P� nl 4a ®r$ noOnion7 City Council Regular Meeting: May 12, 2015 Agenda Item: 0 To: Mayor and City Council From: Gigi Decavalles- Hughes, Director Subject: Enterprise Resource Planning System Purchase Recommended Action Staff recommends that the City Council: 1) Award RFP# 4714 to Tyler Technologies, Inc., a Maine -based company, for an Enterprise Resource Planning (ERP) System to replace the City's Financial Management, Human Resources and Payroll systems; 2) Authorize the City Manager to negotiate and execute an agreement with Tyler Technologies, Inc., in an amount not to exceed $3,200,000, including a $576,000 (22 %) contingency, for five years with future year funding contingent on Council budget approval; 3) Authorize the City Manager to negotiate and execute a maintenance agreement with Tyler Technologies, Inc., a Maine -based company, in an amount not to exceed $1,160,000 to provide maintenance and support for the Tyler Munis software system for five years with future year funding contingent on Council budget approval; and 4) Authorize the Director of Finance to issue any necessary change orders to complete additional work within contract authority. Executive Summary The City of Santa Monica currently uses two software systems to perform financial management, human resources, and payroll activities. At the time the City selected these software packages they were considered best of breed, but neither was specifically designed for the public sector. Both systems are now antiquated, and software vendors no longer support them. Staff determined that replacing the systems with an integrated system was the best way forward. The City issued a Request for Information (RFI) in August 2013, and a Request for Proposals (RFP) in April 2014 for an Enterprise Resource Planning (ERP) System to replace current systems. Staff recommends Tyler Technologies, Inc., which specializes in software designed for the public sector, as the best qualified bidder to provide an ERP system for a total not to exceed $3,200,000. l[.SL3 Background On November 28, 1995 (Attachment A), Council authorized the purchase of a human resources and payroll software system from PeopleSoft. On March 24, 1998 (Attachment B), Council authorized the purchase of a financial management system from JD Edwards. In 2003, PeopleSoft acquired JD Edwards and in 2005, Oracle acquired PeopleSoft. The Oracle Corporation now owns both software systems. When ownership changed, Oracle presented a plan to join the two software packages and create a unified package containing the best features of each. That software never came to fruition and as a result, Oracle announced that it would continue each product line as separate software, and would support the City's versions of each until December 2013. After this point, the City would either need to upgrade both systems, or purchase an ERP system to replace them. Although both software systems are functional, they operate on code written in the 1980s, and have not been upgraded for over 10 years. In some cases, the current systems do not have the functionality to provide data, and in many cases cannot provide data in an efficient and timely manner. Since systems are not integrated, staff must manually transfer data to complete processes, gain information, or create reports. This lack of functionality and integration makes processes inefficient, and can also lead to financial risks, as noted in the February 2015 internal controls review conducted by the City's internal auditor. Due to the availability and quality of systems designed specifically for the public sector, significant costs associated with upgrading existing software, and risk and efficiency concerns inherent in systems that are not integrated, staff decided to pursue system replacement. On June 12, 2012 (Attachment C), Council approved an initial budget for this purchase with the FY 2012 -14 Capital Improvement Program budget. Discussion In June 2013, knowing that the manufacturer planned to end existing software systems support, staff began to explore purchasing a new ERP system. Following a Government Finance Officers Association (GFOA) recommendation, the City issued an RFI in August 2013 to explore new functionality in ERP software. The City received 17 responses to the RFI. From these submissions, staff invited six vendors to provide high level demonstrations. 2 of 6 These presentations showed the significant advances in software systems specifically designed for public sector entities since the City's 1995 and 1998 system purchases, including vast improvements in the software systems' functionality and reporting capability. The RFI process and related presentations confirmed staff's decision to purchase an ERP system. The City formed an evaluation team and executive team, both composed of representatives from the Finance, Human Resources and Information Systems Departments to lead the search for an ERP software system. The evaluation team provided high level guidance and support to the evaluation team, including making the final system recommendation. The executive team will remain in place throughout implementation, and will provide guidance to and approve recommendations from the project manager. Vendor Selection On April 7, 2014, the City issued an RFP for an ERP System. The RFP was posted on the City's online bidding site, and notices were advertised in the Santa Monica Daily Press in accordance with City Charter and Municipal Code provisions. Seven hundred and twelve (712) vendors were notified, 53 vendors downloaded the RFP, and 6 firms responded. Responses to the RFP were reviewed by a selection panel of staff from the Finance, Information Systems and Human Resources Departments. The RFP was very detailed, citing over 2,000 requirements developed in conjunction with key representatives from every City department. Staff received detailed responses from six software vendors. The evaluation team reviewed RFP responses using the following criteria: ® Proposed solution functionality; • Corporate experience; • Vendor references; • Project plan /work schedule; • Staffing and organization, and ® Cost. From these proposals, the evaluation team recommended three vendors to the executive team for further consideration. In September 2014, after obtaining executive team approval for the three short - listed vendors, the City conducted in -depth scripted demonstrations with each vendor. Each vendor presented at 22 sessions over a three- 3of6 day period on all functional areas under evaluation, including general ledger, procurement, accounts payable, budget, and human resources. Staff invited representatives from each City department to attend any vendor session. Over 50 employees attended those vendor sessions applicable to their respective City functions. Session participants provided feedback on each software system, including likes and dislikes related to their specific area, and provided overall vender rankings. Following the scripted demonstrations, staff selected two of the three vendors for additional questions in specific areas, and in November 2014 invited these two vendors to perform further demonstrations. In January and February 2015, staff performed site visits and made reference calls to other municipalities and County governments that use the software systems under consideration. The evaluation team used the following additional criteria in this final review of short- listed vendors: • Performance in scripted demonstrations; • Site visits; • Vendor references; and • Comprehensive, best and final cost proposal. After all reviews, the evaluation team recommended the Tyler Technologies, Munis software system to the executive team for final approval. The executive team approved the evaluation team's proposal and recommends Tyler Technologies, Inc. as the best qualified bidder to provide the City an ERP system. By implementing the Tyler Technologies, Inc., Munis software package the City expects to gain the following: • Efficiencies in having a single software system on a single database; • Reduced risk in having a single software source without the need for manual interfaces between payroll and financial systems; • An evergreen philosophy which states that the City will not be charged additional license fees for any future enhancement releases; • A user - friendly and familiar end -user interface; • Employee and vendor self - service portals; • Easy -to -use reporting tools for staff with non - technical backgrounds; • Robust electronic workflow; and • A robust content management system that stores and easily retrieves electronic copies of documents such as purchase orders, invoices, and payments. 4of6 The recommended contract is for an amount not to exceed $3,200,000, including a $576,000 or 22% contingency to account for implementation costs not yet defined, including for sales tax, additional hardware or added functionality, and for other unforeseen circumstances. This cost is competitive with that of other vendor proposals, and provides the lowest total ownership cost over a 10 -year period. Along with the ERP system purchase, staff will need to purchase hardware and enlist professional services assistance to develop the various interfaces needed for software packages currently in use. Staff estimates that the cost associated with these additional purchases will not exceed $500,000. Staff will purchase these items as needed, returning to Council for approval as appropriate. The first of these requests is included within the May 12, 2015 Finance Department report to Council for additional licenses, professional services, and extended maintenance for Kronos timekeeping software. 5of6 Financial Impacts and Budget Actions The software licensing and professional services contract to be awarded to Tyler Technologies, Inc., is for an amount not to exceed $3,200,000, including a $576,000 or 22% contingency for taxes and /or unforeseen circumstances that may arise during implementation, including the need for software licensing, professional services and miscellaneous hardware. Funds are available in account C019113.589000. The cost for software maintenance and support services for the five fiscal years beginning FY 2015 -16 through FY 2019 -20 is estimated not to exceed $1,160,000. Funds for the FY 2015 -16 maintenance support costs are included in the FY 2015 -17 proposed biennial budget in the Finance Department; the contract will be charged to account 01221.533580. Future maintenance and support costs will be included in proposed budgets for Council's review and approval. Prepared By: Gayle Kirby, Financial Systems & Payroll Administrator Approved Forwarded to Council r r Gigi ecavalles Wug, es,` irecto4130 /2015 Elaine M Polachek, Interim City MSVd g d5 Attachments: A. November 28, 1995 Staff Report B. March 24, 1998 Staff Report C. June 12, 2012 Staff Report 6of6 Reference: Agreement No. 10061 (CCS) Agreement No. 10062 (CCS)