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Agenda Item
ASR
Control 23-001163 |
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MEETING
DATE: |
01/23/24 |
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legal entity taking action: |
Board
of Supervisors |
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board of supervisors district(s): |
All
Districts |
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SUBMITTING Agency/Department: |
Auditor-Controller (Approved) |
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Department contact person(s): |
Andrew
Hamilton (714) 834-2457 |
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Laurence
McCabe (714) 796-0310 |
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Subject: Approve Release of Request for
Proposal for Enterprise Resource Planning System
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ceo CONCUR |
County Counsel Review |
Clerk of the Board |
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Concur |
No
Legal Objection |
Discussion |
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3
Votes Board Majority |
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Budgeted: N/A |
Current Year
Cost: N/A |
Annual Cost: See Financial Impact Section |
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Staffing Impact: |
No |
# of Positions: |
Sole Source: N/A |
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Current Fiscal Year Revenue: N/A
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Prior Board Action: N/A |
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RECOMMENDED
ACTION(S):
Authorize the County Procurement
Officer or Deputized designee to release Request for Proposal for
Software-as-a-Service Enterprise Resource Planning System and associated
implementation and support services.
SUMMARY:
Authorizing the County Procurement
Officer or Deputized designee to release Request for Proposal will allow the
County to solicit proposals from qualified proposers for a
Software-as-a-Service Enterprise Resource Planning System and associated
implementation and support services with the necessary scope to achieve
modernization by replacing the County’s on-premises Enterprise Resource
Planning System which will meet the County's needs from a growth, integration,
technological advancement, business improvement, and operational support perspective.
BACKGROUND
INFORMATION:
Current
Enterprise Resource Planning System
The County’s
current Enterprise Resourcing Planning (ERP) system, also known as the
Countywide Accounting and Personnel System (CAPS+), is a vital component of the
County's infrastructure. This system is the County’s main accounting system and
the official system of record. This system is required for County operations
such as processing the County’s payroll, making vendor and trust disbursements,
financial planning, budget development, maintaining financial records,
generating financial statements, collecting costs for federal and state program
billings, procuring goods and services, and administering personnel records.
The County has utilized CGI
Technologies and Solutions Inc’s AMS Advantage software for the core of its ERP
system for over thirty years, which comprises multiple Advantage software
products, including the Financial/Payroll System (FS), the Personnel/Payroll
(HR) System, and the Performance Budgeting (PB) System. The County performed an analysis of the FS
environment in 2006 with the help of an outside firm, Gartner, and an analysis
of the HR environment with the assistance of AgreeYa Solutions, Inc. in 2007/2008.
These reports led the County to its
last major technology platform change for the FS and HR systems, in 2007 and
2009, respectively, from the mainframe to an open system platform solution. The
PB system was also moved off the mainframe in 2014 (PB was previously known as
the BRASS system). This movement from the mainframe to the open system platform
was the County’s last major technology change for the ERP system.
Minor release upgrades were last
conducted within the open platform environment in 2016 for FS, 2017 for HR and
2021 for PB. These minor upgrades were
conducted to stay on an operational and supported version.
Research
and Analysis
Having performed both major and
minor upgrades over the last 30 years in CAPS+, the Auditor-Controller’s Office
recognized that the current on-premises platform is quickly becoming
obsolete. In addition, it has been about
15 years since the last business-case analysis that included a review of
available technology. Lastly, recognizing that technology is fluid, dynamic and
in a state of constant improvement, the Auditor-Controller’s Office requested
and received approval from the Board of Supervisors on January 11, 2022, to
contract with Intueor Consulting, Inc. (Intueor) for an analysis of the
County’s ERP systems, business processes, ancillary systems, and interfaces.
The focus of this study was to
analyze the current ability of CAPS+ to service the County’s critical finance,
budgeting, procurement, payroll, and human resource needs. Critical to this analysis
was the ERP system’s ability to meet the needs of County business stakeholders
today, while also allowing future flexibility, growth, and the incorporation of
modern-day best business practice enhancements.
Intueor’s analysis documented the
County’s requirements for an ERP System. Intueor estimated that the status quo
option of “doing nothing” could achieve roughly 60% of the developed ERP
requirements, as implemented. Based on
recent vendor responses to similar requirement needs, the major ERP packages on
the market can typically meet 90% or more of requirements, with some claiming
to have the flexibility to achieve a fit in the high 90%.
Their research concluded that
implementing a Software-as-a-Service (SaaS)-based ERP solution would provide the
County with the highest degree of control, scope, scalability, and ultimate
quality of a new system implementation while also providing the most ERP
options at a competitive price. Further, Intueor concluded that a new ERP
system should improve the County’s administrative processes and allow the
County to re-engineer existing business processes to streamline workflow,
reduce paperwork, improve controls, improve management reporting, and reduce
operating costs.
Based on the research and analysis
conducted, Intueor recommended that the County procure SaaS-based ERP solution
through a Request for Proposal (RFP) process.
See Attachment B for a copy of the Intueor report.
The Auditor-Controller’s Office
surveyed the top 30 largest counties in California and found that approximately
one third already moved or are in the process of moving to a SaaS-based ERP
solution.
Quality
Assurance
To ensure the
County procures the best ERP system and implementation services for the County,
the Auditor-Controller’s Office retained the services of the Government Finance
Officers Association (GFOA) to assist in drafting an RFP for a SaaS-based ERP
system. GFOA is the premier association
for public-sector finance professionals in the United States and Canada and has
extensive experience assisting local governments in procuring new ERP systems
and implementation services. Founded in 1906, GFOA currently has over 23,000
members that look to GFOA as the gold standard for identifying, developing, and
communicating leading practices in government management. As a non-profit organization, GFOA’s mission
is to promote excellence in state and local government financial
management. The contract with GFOA,
MA-003-23011335, fell under the one quote threshold for vendor selection and
did not require Board approval. See Attachment D for the contract with GFOA.
A collaborative
effort with GFOA and County Staff resulted in an ERP RFP with best practices
and a necessary scope for a modern ERP.
See Attachment A for the recommended RFP.
Transition
from On-Premises to SaaS
The County’s current ERP model is
managed “on premises” and requires County staff to perform regular hardware and
software upgrades to keep the system operating and functional. Each upgrade is
expensive and labor intensive. The future SaaS model will not require direct
County management of the system. Instead of expensive, major upgrades, the
vendor is responsible for managing and upgrading the ERP platform. Vendors are
almost exclusively moving away from providing “on premises” licensing and
replacing it with the SaaS model.
Major
Project Cost Categories
The IT Executive Council approved
this project in FY 2022-23 during the budget process, pending a full funding
and resource analysis. This project was included in the 2023 Strategic
Financial Plan as a Strategic Priority.
In addition to the normal operational and maintenance costs of the
current legacy system, below are some of the major cost categories of the ERP
replacement:
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Project
implementation |
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Data migration |
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Software-as-a-Service
subscription costs (ongoing) |
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Project quality
assurance and risk management during RFP selection, contract negotiations and
implementation (separate scope of work not contained in this RFP, to be
brought to Board of Supervisors at a later board date) |
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Hardware/software
infrastructure |
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Auditor-Controller
IT project management |
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Change
management |
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Training and
documentation |
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Backfill
staffing plan |
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Project
contingency |
Recommendation
The Auditor-Controller’s Office
requests Board approval to issue the attached proposed RFP, Attachment A, so
the County can leverage the advantages of modern offerings in the ERP
market. This RFP includes a SaaS ERP
System, associated implementation, and support services. See Attachment C for a graphic representation
of the scope of the desired ERP system.
The Auditor-Controller will return
to the Board with the resultant contract, if any, as recommended by the
evaluation panel after the RFP evaluation process is complete. The following is the expected timeline for
this RFP:
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January 23,
2024: Release of RFP through County’s bidding system OpenGov |
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April 25, 2024:
Deadline to return completed proposals |
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May 2024 –
October 2024: Evaluation of proposals and demonstrations |
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October 2024 –
December 2024: Contract negotiations |
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January 2025:
Board approval of recommended contract |
Project
Governance
The ERP Project will be governed by
the ERP Steering Committee, comprising the Auditor-Controller, the County Chief
Financial Officer, and the Chief Deputy Auditor-Controller. The ERP Steering Committee will make major
project policy decisions and support a Countywide project team.
FINANCIAL
IMPACT:
A significant portion of funding
for this project may come from indirect cost recoveries from state/federal
grants or reimbursements and County non-general funds via the Countywide Cost
Allocation Plan (CWCAP). An initial and preliminary analysis estimates that at
least 50% of the implementation expenses qualify as indirect costs, which may
be recoverable through federal and state grants or reimbursements. The ERP implementation qualifies as a County
indirect cost within CWCAP that supports various grant-funded and County-funded
enterprise activities.
STAFFING
IMPACT:
N/A
REVIEWING
AGENCIES:
County
Executive Office (CFO, CIO, CPO)
ATTACHMENT(S):
Attachment
A - Request for Proposal 003-2365101-LB
Attachment B - ERP CAPS+ Analysis by Intueor Consulting
Attachment C - ERP Requirements Diagram
Attachment D - MA-003-23011335 with GFOA