HomeMy WebLinkAboutFCS-16-052 - SAP PO Extension March 21 2016Staff Report
rR finance and Corporate Services Department www.kitchener.ca
REPORT TO: Committee of the Whole
DATE OF MEETING: March 21, 2016
SUBMITTED BY: Joyce Evans, Director of Revenue
519- 741 -2200 x 7895
PREPARED BY: Alex Ahkoon, Manager, SAP Business Solutions
519- 741 -2200 x 7121
WARD(S) INVOLVED: n/a
DATE OF REPORT: March 11, 2016
REPORT NO.: FCS -16 -052
SUBJECT: SAP Corporate Customer Relationship & Billing Implementation
Purchase Order Extension
RECOMMENDATION:
That the purchase order issued to Capgemini Canada Incorporated for the SAP
Corporate Customer Relationship & Billing Implementation project be extended to
an upset limit of $472,213 plus HST for consultant services (SAP application
management services); and further
That the Director, Supply Services be authorized to execute contracts for SAP
application management services as required, provided the associated costs are
within the upset limit identified above and said contracts are to the satisfaction of
the City Solicitor.
BACKGROUND:
In August 2014, City Council awarded the implementation of the SAP Customer
Relationship & Billing Project to Capgemini Canada Incorporated. This project will
result in the replacement of the City's outdated Customer Information System (CIS)
which is used to bill over a half billion dollars annually in property taxes and utility
revenues. After the new system goes live in April, Capgemini will temporarily provide
application management services in conjunction with City staff to ensure that the
application is sufficiently stabilized and City staff are properly equipped to take on the
management of this complex application on a permanent basis. Based on the
experience of the City over the course of implementing SAP, it is deemed to be in the
City's interest to modify the approach to application management services from what
was originally envisioned, which will require a purchase order extension.
* ** This information is available in accessible formats upon request. * **
Please call 519- 741 -2345 or TTY 1- 866 - 969 -9994 for assistance.
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REPORT:
Application management services include applications support (e.g., resolution of new
functional defects), business user support (e.g., end user support issues that cannot be
addressed by a tier 1 help desk), operational support (e.g., application monitoring,
tuning and preventative maintenance) and minor enhancements (e.g., code,
configuration and interface changes). The responsibility for application management
services is shared between the City of Kitchener and Capgemini in the first year post -
go -live. It is expected that City staff will assume full responsibility for managing the
application thereafter. The support demands will be very high in the first year of
operation and the tolerance for error is low given the potential for customer impacts.
The original model for application management services included 3.5 FTE's from
Capgemini on -shore and 11 FTE's from Capgemini off - shore. Based on the complexity
of the design and final configuration, it has become clear that the City will substantially
reduce the risk associated with system defects after go -live by having continuity of
resources from the project into the support period. This means that many of the
Capgemini project resources which designed and built the system will continue to
support the City in the post go -live period. This results in a higher proportion of on-
shore resources than was originally anticipated which increases the cost of the support
model. The additional cost will be funded within the Council- approved project budget
and is considered a prudent investment given the critical nature of the billing system.
The second recommendation would allow the City to contract directly with key
consultant resources should it be required to ensure continuity in the support period.
There would be no net financial impact as these costs would be in lieu of amounts
otherwise included in the upset limit of the purchase order extension.
ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
The recommendation of this report supports the achievement of the city's strategic
vision through the delivery of core service.
FINANCIAL IMPLICATIONS:
The purchase order extension (upset limit of $472,213 plus HST) will be funded through
the Council- approved project budget out of the contingency balance of $1.5 million.
COMMUNITY ENGAGEMENT:
INFORM — This report has been posted to the City's website with the agenda in
advance of the council / committee meeting.
ACKNOWLEDGED BY: Dan Chapman, Deputy CAO
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