HomeMy WebLinkAboutFCS-14-152 - P14-023 - SAP Corporate Customer Relations Billing ImplementationStaff Report
rTC.�r R finance and Corporate Services Department www.kitchener.ca
REPORT TO: Committee of the Whole
DATE OF MEETING: 2014 -08 -25
SUBMITTED BY: Larry Gordon, Director of Supply Services, 519 - 741 -2200 ext.
7214
PREPARED BY: Steve Rudak, Buyer, 519 - 741 -2200 ext. 7213
WARD(S) INVOLVED: N/A
DATE OF REPORT: 2014 -08 -15
REPORT NO.: FCS -14 -152
SUBJECT: P14 -023 — SAP Corporate Customer Relationship & Billing
Implementation
RECOMMENDATION:
That Proposal P14 -023 — SAP Corporate Customer Relationship & Billing Implementation,
be awarded to Capgemini Canada Incorporated, Toronto, Ontario, at their estimated fee
of $12,206,049., plus H.S.T. of $1,586,786.37, for a total of $13,792,835.37, based on a
satisfactory contract being negotiated and an upset fee being established.
BACKGROUND:
Council approved SAP Customer Relationship & Billing (SAP) as the replacement for the
existing Customer Information System (CIS) as part of the 2014 budget process. CIS is a
critical application used at the City of Kitchener to manage and bill over a half billion dollars of
revenue in property tax and utilities annually. An external assessment of CIS concluded that the
existing application is approaching the end of its lifecycle and cannot be sustained. Council's
final decision to replace the aging CIS system with SAP resulted from four years of detailed
analysis and extensive discussions with Council, which included:
• An external assessment of CIS leading to Council direction to pursue due diligence on
the acquisition of SAP tax and utility solutions to replace CIS in 2010
• Further detailed research into SAP solutions and other alternatives from 2011 to 2013
• Definition of business requirements and the fit with SAP through a "mini- blueprinting"
process in 2012, based on an Expression of Interest process awarded by Council
• Findings and recommendations presented through three staff reports and a budget issue
paper in 2012 and 2013
Upon receiving Council's final approval to proceed with the project, City staff issued a Request
for Proposal on May 7, 2014 for SAP systems integration services. Systems integration
services represent the extensive and highly technical configuration and customization of the
SAP software to meet the City's specific business requirements, including all property tax, gas
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utility, water, sewer and storm water billing functionality. These services also include related
functions such as end -user training and "post -go -live" support.
The project budget represents the total estimated cost for the implementation project, including
systems integration fees, project management and change management fees, software and
hardware costs, staff secondments to the project team, contingency, HST, and other charges.
The purchase price negotiated with SAP for the SAP software was approved by Council on
June 16, 2014. Tenders /proposals for project management, hardware and other project
components will be brought to the Committee of the Whole for Council' s approval in the future,
with the project management Request for Proposal scheduled for the September 15 meeting.
REPORT:
Proposals were requested from five (5) known bidders, as well as advertised publicly on the City
of Kitchener website and the Internet through the Ontario Public Buyers Electronic Tendering
Information System. Proposal documents were downloaded by thirty -one (31) interested
parties, and by the closing date of Wednesday June 4, 2014, three (3) proposals had been
received.
The proposals were reviewed by D. Chapman, Deputy CAO & City Treasurer (Finance and
Corporate Services), J. Evans, Director of Revenue & Deputy City Treasurer, S. Saleh,
Supervisor - Collections & Payment Processing, L. Gordon, Director of Supply Services, A.
Ahkoon, Manager, Enterprise Resource Planning, C. Zinn, Business Analyst, M. Bolger,
Manager — Business Systems & Database Administration, L. Piotrowski, Business Systems
Project Manager and S. Rudak, Buyer, who concur with the above recommendation.
The following proposals were received:
Capgemini Canada Incorporated Toronto, ON
KPIT Austin, TX
SAP Canada Incorporated Toronto, ON
ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
Theme: Financial Management
Strategic Direction: Ensure responsible use of public funds within a supportive policy
framework.
The City of Kitchener's purchasing policies and practices ensure openness, fairness and
transparency in the procurement of goods and services.
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FINANCIAL IMPLICATIONS:
The net cost for this expression of interest (A), is fair and reasonable for a purchase of this
scope and the upset limit is within the budget allowance (B) provided within the budget.
Funding for this purchase is included within the approved capital budgets. The estimated
surplus (D) will remain within the SAP Implementation Project budget, and will be used to fund
future phases of this project.
Proposal P14 -023
SAP Corporate Customer Relationship & Billing Implementation
The total budget for all phases of this project is $ 19,912,661.00
Estimated Cost for this Phase of Work
Tender P14 -023 costs including HST 13,792,835.37
less: HST rebate on tender (1,371,959.30)
Net Cost Being Awarded 12,420,876.07 A
Costs Incurred to Date -
Total Estimated Cost for this Phase of Work 12,420,876.07 C
Budget for this Phase of Work
Contribution from Revenue
1,758,755.88
Gas Utility
6,658,147.26
Sanitary Utility
1,381,879.62
Stormwater Utility
1,381,879.62
Water Utility
1,381,879.62
Total Budget for this Phase of Work 12,562,542.00 B
Estimated Surplus /(Deficit) for this Phase of Work (B - C) 141,665.93 D
Intellectual Property Model — Municipal Property Tax
Capgemini has proposed a revenue - sharing model for the intellectual property which will be
developed from the Municipal Property Tax portion of this project. This represents an innovative
partnership opportunity for the city which will yield future benefits to the City either by way of
Capgemini investment in a Kitchener -based centre of innovation or a future stream of payments
from Capgemini to the City as the Municipal Property Tax functionality is implemented in other
jurisdictions within the Province or the global marketplace.
COMMUNITY ENGAGEMENT:
INFORM - Potential vendors are informed of bid opportunities through the public posting of bid
documents as outlined in the City's Purchasing By -Law. Vendors, local media and the general
public are informed of purchasing recommendations to Council through the public reports which
are included with the Council agenda the week prior to the Council meeting.
ACKNOWLEDGED BY: Dan Chapman, Deputy CAO & City Treasurer, Finance and
Corporate Services
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