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HomeMy WebLinkAboutV. COW Agenda Item Enterprise Resouce Planning (ERP) System Update Mount Prospect INTEROFFICE MEMORANDUM Village of Mount Prospect Mount Prospect, Illinois TO: MICHAEL E. JANONIS, VILLAGE MANAGER FROM: DAVID ERB, FINANCE DIRECTOR BRIAN SIMMONS, COMMUNITY DEVELOPMENT DEPUTY DIRECTOR MICHAEL DALLAS, ADMINISTRATIVE ANALYST DATE: DECEMBER 3, 2009 ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM UPDATE SUBJECT: PURPOSE To review the status of the Enterprise Resource Planning (ERP) System project and obtain approval to complete final vendor negotiations. BACKGROUND On March 18, 2009, Finance Director David Erb sought approval to enter into an agreement with the consulting firm Plante & Moran to assist the Village in the ERP's System selection process. See Attachment I for a description of the events leading up to the hiring decision. Once on board, Mr. Mark Warner and Ms. Tracey Rau (from Plante and Moran), in concert with the Village's steering committee, helped identify the Village's enterprise software requirements, create and issue a Request for Proposals (RFP), and evaluate the RFP responses. Once the responses were evaluated, the committee began a rigorous due diligence process including vendor demonstrations, site visits, and reference checking. All Village employees were invited to attend and evaluate the vendor demonstrations, and several employees (including process/subject matter experts) attended site visits. Attachment II (Mr. Warner's letter to ERP System co-sponsors) provides a more thorough description of the software selection process to this point. DISCUSSION A. The Process Thus Far As indicated by Mr. Warner's letter to the project's co-sponsors, the process undertaken to select the ERP system software has been very methodical and meticulous. During each step in the process, very careful planning and preparation has been done to ensure the Village selects the best system for its needs. One of the more notable contributions to the process was Plante & Moran's detailed requirements and specifications document that supplemented the Village's RFP. Its thoroughness (over 175 pages) and simplicity made it easy to determine whether the vendors could meet the Village's requirements. Moreover, it served as the necessary foundation to create a script for vendors to adhere to during the demonstrations. The script then became a tool for staff to use to help evaluate the vendor's software. Also of great assistance during this selection process and unaddressed in Mr. Warner's letter, was staff's initial efforts to document their existing processes in flowcharts and narratives prior to the consultants conducting their needs analysis. This work significantly reduced the time necessary to identify the organization's process inefficiencies and understand the department's expectations in terms of outputs and improved coordination. The great work provided by the departments truly represented Enterprise Resource Planning (ERP) System Update December 3, 2009 Page 2 their support and willingness to work together in a complicated project and help prepare for the new system. In addition to the effort put forth during the needs assessment and RFP process, it should also be noted how much work has gone into the committee's due diligence activities. As we have learned from the vendors, many local governments fail to put forth the effort to determine what will be the best solution for them. They make decisions based on one trait alone, such as cost, reputation, or some specific functionality. During this process, the committee has emphasized the importance to reach out to others using the software, including some communities not on the vendor's reference list, to determine vendor and system strengths and weaknesses. Emails have been sent and phone calls have been made to communities in and outside the State of Illinois. In addition to reference checking, many staff members attended site visits to learn from their counterparts how well the system was being utilized. Admittedly, some aspects of the site visits were not always pretty, including the candid opinions of the implementation process. Nevertheless, these and other positive comments have helped shaped the committee's evaluation of the vendors to this point. B. What An ERP System Should Offer Since the very first WebEx demonstration, there has been a strong sense of excitement regarding the level of functionality, improved cross-functional productivity, and amount of readily available and easy to understand information to improve decision-making that a new ERP system will bring to the Village. As compared to the disconnected and dysfunctional software systems that the Finance Department's GEMS and Community Development's Blackbear currently provides, the steering committee believes the ERP system will eventually improve the organization's process efficiency by leaps and bounds. As one prime example, these new systems integrate closely with Microsoft applications like Outlook (notifications and workflow processing), Excel (report generation and budgeting), and Word (reporting). These functions are very important to staff who spend a great deal of time in these applications. Even more exciting, are the boundless opportunities presented by the new E-service or on-line business applications, such as online permitting, licensing, request for service, bill payments, utility billing, and employee access to payroll and benefit information. Finally, these software applications begin to meet the demands created by the business world to provide 24 houri? day a week access to local government operations via the Internet. Also as exciting are the collaboration tools and management dashboards that appear to be making inroads into the system. In the future, these tools should help to improve communication, as well as help managers monitor operational performance through metrics. C. What We Have learned While the systems have generally impressed us thus far, admittedly, the steering committee has found through its reference checking and site visits that the ERP implementation process is no easy undertaking and should not be taken lightly. Often times a steering committee's plans are never fully realized due to the amount of time and effort necessary to bring a module on-line. There is a significant amount of time taken by the selected vendor to learn about the Village's existing processes and configure them to their system's architecture. Conversion of software data in old systems must be cleansed and formatted prior to uploading to the new system. Careful integrations must be programmed to ensure process automation continues at the same operational level. End-user training must take place to get employees comfortable with the new system and system testing must occur to ensure the outputs and workflows meet the Village's expectations. All of these will require significant investment of time by an already lean workforce, dedication by upper management to maintain a commitment to complete system implementation and process integration, and unwavering support by the Village Board. H:\ACCT\Financial Software RFP\ERP Status Update - COW 12-3-09.doc Enterprise Resource Planning (ERP) System Update December 3, 2009 Page 3 Without these, any system that is purchased and installed, no matter the cost or level offunctionality, will fail to significantly improve Village operations, as well as meet the steering committee's vision for this project. D. What Are the Next Steps? I n order to complete the system selection process between the final two vendors, New World and Tyler, the steering committee has requested a best and final offer that addresses some changes to the original RFP's scope of work (mainly integrations/interfaces), as well as other concerns posed in the vendor's original cost proposals (including professional service figures and budgetary constraints). Soon after the December 8, 2009, committee-of-the whole meeting, the steering committee will select and notify the finalist vendor in order to enter sole contract negotiations with the Village. During negotiations, the committee expects further project scoping to occur, as well as some fine tuning of the cost proposal. On December 15, 2009, the project sponsors and project manager plan to submit the final vendor selection to the Village Board for approval. During the board meeting, a thorough explanation will be provided as to why the finalist vendor was selected. RECOMMENDATION Grant staff approval to complete vendor negotiations, with the intent to return to the Village Board on December 15, 2009, for conditional contract approval. 1'fi~/c/ <L- David Erb Finance Director ~.}.? t/ --.. Br' immons Community Development Deputy Director Copy: ERP Steering Committee H:\ACCT\Financial Software RFP\ERP Status Update - COW 12-3-09.doc plante ~ moran Attachment II Memorandum To: David Erb, Brian Simmons From: Mark Warner Date: December 3, 2009 Re: ERP System Selection Project Summary Over the past several months, the Village has completed a thorough process of conducting a Village-wide Software Information System needs assessment and software system selection in preparation for replacement of the Village's current financial and Community Development systems. The project has been named internally at the Village, the ERP System Selection Project. Plante & Moran was engaged by the Village in late April 2009 to provide professional consulting services to the Village of Mount Prospect, to support the Village's effort in replacing its core business information systems with a new suite of integrated systems. The remainder of this memorandum summarizes the activities conducted by the Village with assistance provided by Plante & Moran which is expected to soon culminate in the recommendation of the preferred vendor solution. CURRENT SITUA nON OVERVIEW The focus of the ERP System Selection project has been to replace and implement the core legacy financial and Community Development software systems used at the Village as well as reduce the Village's dependency on custom developed applications and interfaces. Such current application software includes twenty three (23) separate modules, applications and components from the vendor Harris Computer Systems, Government E-management Solutions division (referred to at the Village as "GEMS"), as well as many internally developed programs and integrations. Additionally, the Community Development department uses the Blackbear software to process its building permits and inspections. GEMS and the internally developed programs primarily run on a Windows server supported by the Village's Information Technology Services department. Additionally the Village uses, several related custom printing programs (checks, utility bills, W2s), various custom software, various MS FoxPro and Access tracking and reporting databases and a significant number of departmental tracking spreadsheets to support departmental operations. Due to the Village's desire to migrate to a more current technology to provide improved support for Village operations, the ERP System Selection project was initiated both in response to Village staff's significant dissatisfaction with the current GEMS and Blackbear systems and in a general intent to implement more current technology that will better serve the needs of the Village in the future. To develop a leadership structure for the project, the Village established a Steering Committee for the project to support the software selection process and key decisions related to it. The Steering Committee initially included participation by departmental leaders from the Village Manager's office, Information Technology Services, Finance and Community Development departments. During the project, as the Committee gained additional insight of the cross functional nature of many Village processes, departmental leaders from Public Works, Fire and Police departments were added. The Village's Steering Committee, through a project charter, has established the following objectives with the successful completion of the ERP System Selection project: . Incorporate fully integrated "best business practices". . Develop a system that is user-friendly and empowers departments to analyze and improve their business processes. . Add and improve functionality in back-office functional areas. . Improve quality and accessibility of information for decision support and business planning. . Mitigate paper-based workflow processes and forms. . Reduce redundant "shadow systems", data entry, storage, and paper processing. . Improve operational effectiveness and productivity. . Enable e-Government initiatives, including enhanced customer service and web self-service. . Reduce the number of systems owned and supported by the Village and their related costs and inefficiencies by retiring existing legacy and back office "systems" and tools. . Implement redundancy in the system where appropriate for disaster recovery and business continuity purposes. SOFTWARE SELECTION SUMMARY As the project initiated, the Village's Steering Committee assessed the ERP software marketplace by meeting with four representative software vendors (Hansen Information Technologies, New World Systems, SunGard Public Sector, and Tyler Technologies) to review their software at a high level through a two hour Web-Ex demo. During the months of June through August 2009, a series of interviews were conducted with Village staff to identify software needs for a new integrated ERP solution. Individual departmental interviews were conducted and then cross-functional meetings were held which included staff with interests in processes that spanned the Village. The output from these interviews, as well as many other technical requirements, was used as the major source of input into the development of a Request for Proposal (RFP). The RFP was significantly detailed to document the Village requirements. In addition to system requirements the RFP included minimum proposal criteria, described the criteria for initial proposal evaluation and established finalist vendor selection activities and criteria. The Village's Steering Committee performed a detailed review of the RFP and provided feedback which was subsequently incorporated into the final version. Once compiled, the RFP was directly distributed on August 31, 2009 to a significant number of ERP providers and other related vendors of software solutions to local government. Additionally, the RFP was posted to the Village's web site and the Village posted an advertisement in the Daily Harold on September 5, 2009. Although there was a wide range of software functionality requested in the RFP, it was the desire of the Village to select, if possible, a single turn-key vendor solution that would satisfy a significant portion of the needs. The process included vendor Q&A, a Pre-Bid Meeting and Intent to Propose process along with multiple RFP addendums. On September 25, 2009 four vendor responses were received to the RFP. Two of the vendors (CRW Systems and EnerGov Solutions) proposed solutions limited to Community Development functions while the other two vendors (New World Systems and Tyler Technologies) provided solutions focused on addressing the majority of the Village's functional requirements. The Village also received a "No Bid" letter from the Public Works incumbent Asset Management software vendor, Hansen Information Technologies, indicating that they would not able to provide a solution within the budget that was allocated towards this project. Another "No Bid" letter was received by SunGard Public Sector explaining that their latest software release would soon meet many of the Village's requirements however it was not targeted for release until the Spring of 2010. The prices of the qualified proposal responses ranged widely. However, there were varying levels of response to the proposal requirements that necessitated further review of the proposal responses to develop a more comparable analysis of the respondents. Plante & Moran and the Village Steering Committee conducted a detailed review of the proposals and Plante & Moran presented an initial -2- plante ~ rnoran proposal analysis to the Steering Committee on October 8, 2009 that included a comprehensive review of vendor responses related to software functionality, vendor profile, costs provided by vendors, and compliance with requested contractual terms and conditions. In order to maximize the thoroughness in reviewing the most qualified solutions, a decision was made at this meeting to conduct a two-stage demonstration process for the two vendors that proposed software for the majority of the modules (New World Systems and Tyler Technologies) and only one round of demos from the two vendors (CRW Systems and EnerGov Solutions) that proposed the Community Development solution. In the first stage, the two vendors that proposed software for only the Community Development needs were brought in for a one-day demonstration and given detailed scripts to follow for each of the modules they proposed. The Steering Committee members as well as the Community Development staff participated in these demonstrations. The two full ERP vendors (New World Systems and Tyler Technologies) were brought in for a one-day overview demonstration given only to the Steering Committee. On November 3, 2009, the Steering Committee met to review the feedback/evaluations from the one day software demonstrations. At that time, all of the one day demos had been completed and the 3 day demonstrations were underway. The Committee discussed high level feedback relating to the vendor software demos and provided guidance on evaluating the demonstrations. At this particular Steering Committee meeting, it was decided to include department leadership from Public Works, Fire and Police to the Steering Committee due to an increased awareness of cross-departmental processing. The three-day demonstrations provided Village staff an opportunity to perform a detailed review of the products based on scripted criteria identified within each of the module areas. The three day long vendor demonstrations included staff from the various departments who had participated in the needs assessment process as well as members of the Village's Steering Committee. A meeting was held with the full Steering Committee on November 11, 2009 where the Steering Committee members reviewed the three day demonstrations and planned out site visits to 3 other local units of government. These site visits would again involve staff from the various departments who had participated in the needs assessment process as well as members of the Village's Steering Committee. Also initiated in this meeting was a decision on which ERP modules would be needed as well a discussion of desired interfaces/integrations to other software outside of the ERP modules. In addition to the site visits, in November, the Steering Committee distributed a survey to another 13 local units of government. These units included 7 municipalities that were using Tyler's product and 6 that were using New World's product. On November 18th, a status of these surveys as well as two of the three site visits was discussed with the Steering Committee. Points of integration with existing Village modules were discussed in length. It was concluded that the two Vendors that only proposed a solution for Community Development would no longer be included in the evaluation process, due to the fact that there was full agreement of the Steering Committee that the two full ERP vendors provided Community Development software which adequately met Community Development's needs and provided additional integration with the financial modules. After the meeting, requests for draft contracts from the two full ERP solution vendors were made and have subsequently been received. On November 25, 2009, the Steering Committee met to review the updated results of the site visits and it was decided that there was a need for additional discussions with vendors related to specific integration points with the Village's existing software for Public Works and the Fire Departments. -3- plante ~ rnoran Subsequent to a vendor decision, the Village will hold additional meetings to determine which software modules would be appropriate to purchase and to ensure that a complete and fully agreed to Statement of Work (SOW) with associated pricing is developed. As of the date of this memorandum this activity continues to be underway. The currently expected software purchase includes the following functions: 1. General Ledger & Financial Reporting 2. Comm Development-Permits & Inspections 3. Payroll 4. Master Address & GIS Integration 5. Budgeting 6. Utility Billing 7. Accounts Payable 8. Licensing 9. Comm Development-Housing 10. Purchasing and Requisitions 11. Comm Development-Planning & Zoning 12. Misc. Billing & Accounts Receivable 13. Human Resources 14. Cash Receipting/Cash Register 15. Request for Service 16. Bank Reconciliation 17. Miscellaneous Taxes 18. Project Management 19. Fixed Assets 20. Work Orders 21. Web Self Service components 22. Various Integrations Plante & Moran is in full support of the process that the Steering Committee is conducting in their vendor due diligence and supports the Village moving forward with negotiating a contract to receive the best and final offer before making a final decision. -4- ~-- rnoran Attachment I Mount Prospect INTEROFFICE MEMORANDUM Village of Mount Prospect Mount Prospect, Illinois FROM: MICHAEL E. JANONIS, VILLAGE MANAGER FINANCE DIRECTOR TO: DATE: MARCH 18, 2009 ENTERPRISE RESOURCE PLANNING (ERP) PROJECT MANAGEMENT CONSULTANT RECOMENDATION SUBJECT: PURPOSE: Present for the Board's consideration a recommendation to retain the services of a project management consultant to support the analysis/design and vendor selection phases for a village- wide ERP system. Enterprise resource planning is an enterprise-wide information system designed to coordinate all the resources, information, and activities needed to complete business processes. ERP software works to promote integration and process automation and better provides for tools and data useful for the end user. BACKGROUND: The Village currently utilizes a suite of software applications to administer its general ledger, payroll, accounts payable, utility billing, accounts receivable and other financial management systems. In addition, there are several other third-party and internally written programs that assist the Village in managing its various business processes. The main suite of programs is over 10 years old and has reached the end of its useful life. Connectivity and similar obsolescence issues are apparent with the third-party and internally written programs which have also reached the end of their useful life necessitating replacement as well. The 2009-2013 Capital Improvement Plan (CIP) identifies budget needs for the replacement of this software. In the 2009 and 2010 Capital Improvement Fund budgets there are monies allocated for the hiring of a consultant to take the Village through the steps of selecting and implementing the new software. DISCUSSION: In February, Request for Proposals (RFP) were sent out to twelve (12) ERP project management consultant firms to solicit their interest in assisting the Village with the selection and implementation of a village-wide ERP system. We feel that a village-wide ERP system, in lieu of the current system configuration, will permit improved connectivity throughout the departments and increase efficiencies in operations. Tasks to be provided by the selected firm include assessment of the Village's current business information system, identify the computing needs and associated applications of its users, recommend a system design, develop a Request for Proposals (RFP) for the new integrated ERP system, evaluate the vendor's proposals, recommend a vendor solution, and manage the implementation. The project is broken down into three phases. Phase 1 is for analysis and design of the existing system and proposed ERP system. Phase 2 is for vendor selection which includes preparation of an RFP. Phase 3 covers the implementation of the selected software. A copy of the RFP is included as Attachment 1. The RFP strictly stated that only independent consultants would be considered for the engagement. Consultants could not have an affiliation or be a reseller of any software or enterprise system proposed. ERP Project Management Consultant Recommendation March 18, 2009 Page 2 of 3 The Village received responses from five (5) firms. The five firms that returned a proposal were Clerestory, Conlon Group, IT Advocates, KPMG and Plante & Moran. Each of the firms has performed the scope of services listed above for other governmental entities. After a review of the proposals, four firms were invited for interviews before a core selection team. The core team included Dave Strahl and Mike Dallas from the Manager's Office, Joan Middleton from IT and Lynn Jarog and myself from Finance. A set list of questions was asked each firm to easily compare qualifications and experience. In addition, several follow-up questions were asked related to the proposals and information that came out during the interview process. After the interviews there was consensus among the core team of a first and second choice to provide the consulting service. Calls were then made to listed references to further assess the firm's capabilities and get insight into their interaction with staff. Finally, the fee structure and time commitment section of the proposal was addressed. Attachment 2 lists the total fees and hours allocated for each phase of the project. Some of the factors considered when determining the most qualified, best suited firm include staffing and other resources available to the firm, experience in providing similar services for other clients, understanding of and approach used to address the Village's needs outlined in the RFP and compatibility with Village staff. Based on these factors it was decided that Plante & Moran (P&M) was most qualified and best suited to provide the consulting services for this engagement. Below are some of the ways P&M was able to address the needs outline in the RFP. . Staffing and Resources: P&M is a management and consulting and public accounting firm with a staff of over 1,600 professionals, 150 of which support the Management Consulting Services Group. The project team that would have a part in the engagement with the Village includes professionals from the consulting, governmental accounting, technology and software sectors of their organization. Based on the size and complexity of the engagement we felt that the resource demands would not overwhelm P&M as it could some of the other firms interviewed. The core team also felt the number of hours allocated to the project were sufficient for a successful completion within the desired timeframe. . Relative Experience: Each of the members of the consultant team has considerable experience working with governmental clients. The scope of work for projects P&M team members have been involved in matches what the Village is looking to accomplish with its village-wide ERP system. . Project Approach and Understanding: Through the interview process P&M was best able to convey their business approach to our project. They were able to outline their project work plan that addressed the requirements outlined in the RFP. The project work plan proposed by P&M is very methodical and includes measurable objectives for each phase of the project. Defined roles and expectations were outlined for staff as well as for the consultant. . Compatibility: Understanding the importance of complete buy-in by the end user has on the success of the project we wanted to make sure that the consultants would be able to interact well with staff while balancing the need for the project to move along. Phase 1 of the project is for analysis and design of the existing system and proposed ERP system. This phase will consist of inter-department and inter-function meetings with end users. A high level of interpersonal skills will be needed by the consultant. Based on the interviews and reference calls we believe that P&M staff possesses the needed skills in this area. H:\ACCT\Financial Software RFP\ERP Consultant Recomendation.doc ERP Project Management Consultant Recommendation March 18, 2009 Page 3 of 3 As staff worked through the proposals and firm interviews it became apparent that to address all three phases at this time might not be cost effective for the Village. There are currently a number of questions regarding the final phase that are dependent on the system configuration and software that is ultimately chosen. The difficulty among the firms in pricing and setting hour commitments for this final phase is obvious in the pricing proposals received. Hours ranged from 76 to 2,330. The number of hours that P&M has allocated for Phase 3 (576) appears to be most in line with the successful completion of the project. However, since it is not necessary to commit to the Phase 3 work at this time we felt it is in the best interest of the Village to delay final decision for this work until better information is available. P&M and the Village have agreed to hold off on setting the scope and pricing on Phase 3 activities until a software vendor is selected. The original fee proposed by P&M for Phases 1 and 2 is $114,720. This is based on 478 hours of consultant staff time. The average number of hours allocated for the first two phases by all five firms was 590 with a low end commitment of 162 hours and a high end commitment of 1,100. Staff has had follow-up conversations with P&M and their final fee is negotiable while we firm up roles and responsibilities between the Village and the consultant. Results of our discussion with the consultant will be provided to the Board at the Committee of the Whole meeting. Although the fee for P&M is not the low quote we feel that there is better overall value being received from a more qualified firm. The 2009 and 2010 budgets includes $90,000 for consulting services. The original scope of work that the budget was based consisted of a simple village-wide financial management system, similar to what we currently have, along with the implementation of an integrated suite of programs for Community Development. The scope as presented in the RFP was expanded to address the issues we are having with the third-party and internally written programs that are best addressed using an ERP system. As a result the budget will need to be adjusted to accommodate the additional work. Funds to support the additional cost are available from the Community Development budget for Other Professional Services. These funds are intended for process review in the Building Division that will now occur in the analysis and design phase of the ERP project. RECOMMENDA liON: Request authorization from the Board to retain the services of Plante & Moran to provide ERP project management consulting services for an amount not to exceed $114,720. David O. Erb Finance Director DOE/ H:\ACCT\Financial Software RFP\ERP Consultant Recomendation.doc