Loading...
HomeMy WebLinkAboutFIN-07-088 - Request fror Proposal P07-025 - Financial & Infrastructure Management Systems Vendor SelectionReport To: Councillor B. Vrbanovic, Chair, and Members of the Finance and Corporate Services Committee Date of Meeting: August 13, 2007 Submitted By: Pauline Houston, General Manager of Financial Services & City Treasurer Prepared By: Rosemary Upfold, Director of Accounting Dan Chapman, Director of Financial Planning & Reporting Dwayne Quinn, Director of Utilities Mike Grummett, Director of Information Technology Ward(s) Involved: All Date of Report: August 3, 2007 Report No.: FIN-07-088 Subject: Request for Proposal P07-025 Financial and Infrastructure Management Systems Vendor Selection RECOMMENDATION: That Request for Proposal P07-025, Corporate Financial and Infrastructure Management System, be awarded to IDS Scheer Canada, SAP Canada Inc, ESRI Canada Inc. and Loki Innovations (RIVA) subject to the successful negotiation of the agreement(s) satisfactory to the City Solicitor and further; That the Mayor and City Clerk be authorized to execute such agreement(s). BACKGROUND: Council has previously approved the business cases and budgets for the implementation of a new Corporate Integrated Financial System (CIFS) and an Infrastructure Management System (IMS) for the City. Over the past year, the CIFS, IMS and PSAB 3150 projects have been aligned into a single project with a single direction. The impetus and approvals for these three projects are as follows: CIFS Project-L + A business case for the project was presented to Council in December 2006. Total funding of $3.93 million has been approved for the project in the capital forecast. The benefits of the project include: • Ability to implement best practices and improve business processes • Higher level of service with respect to retrieval time of detailed information • Improved integration with other corporate systems /databases • System compliance with current technological standards at the City of Kitchener resulting in improved support, allowing for easier updates and improvements to the system • Improved reporting resulting in better and more timely information and management decisions • Reduction of manual processes, duplicate record keeping and data entry • Increased reliability and traceability of information IMS Project In November 2004, the IMS Steering Committee sought and received approval from Council for the replacement of the existing system and budgeted funds of $2.21 million are currently allocated to this project. A new system will achieve further functionality and complete implementation for the original targeted divisions plus Facilities Management. While the original RFP was prepared for distribution in the summer of 2005, it was decided to defer the request to ensure corporate integration. Subsequently, it was decided to send out the RFP for IMS jointly with the CIFS RFP to ensure the appropriate interfaces between the two systems. While preparing the joint RFP, capital asset accounting requirements for municipalities were adopted by PSAB. The passage of time and the concerted effort of staff have resulted in the opportunity for IMS to be the foundation to be built on by the CIFS system, creating an integrated system to meet provincial PSAB requirements and compliance with pending financial accountability for water & wastewater systems. Linkages to PSAB 3150 (Tangible Capital Assets) Project As part of the 2007 budget process, Council approved the business case for the Tangible Capital Assets Project (TCA) along with a $602,000 budget for the initiative. COMRIF funding of $62,853 has also been awarded to the City for this project. Subsequent to the approval of PSAB 3150 by the Public Sector Accounting Board in 2006, staff ensured that the asset reporting requirements were integrated into RFP requirements for the CIFS and IMS projects. The following steps have been taken to ensure the alignment of PSAB requirements with other financial and work management processes: • A consultant was retained to develop systems requirements for capital asset reporting that were included in the RFP's for the two systems; • The PSAB 3150 Steering Committee Chair and Project Manager have been included on the CIFS /IMS joint Steering Committee; and • A substantial review of capital asset business processes was undertaken to ensure that capital asset reporting processes are aligned with the approach to managing assets and that there is not duplication between the systems. A joint request for proposal (RFP) was issued on April 2, 2007. The RFP closed on May 7, 2007, vendor demonstrations with the short listed vendors were conducted over a three week period at the end of May and a final evaluation of the vendor products has been completed. On June 18, 2007, staff provided the Finance and Corporate Services Committee with an update on the status of the vendor selection process for new systems. In addition to the process outlined by staff in the report, Council requested that the following information be brought forward to facilitate the final award decision: ■ Schedule of project update reports; • Controls put in place to ensure budgets are adhered to; and • Legal controls put in place to ensure vendor(s) will meet their contractual obligations. The above will be addressed in this report. REPORT: Vendor Selection The joint RFP was issued on April 2, 2007 and closed on May 7, 2007. The following vendors submitted proposals: Integrated C I FS /I M S • Focus ■ IDS Scheer /SAP /ESRI /RIVA • Solutia CIFS • Oracle /Peoplesoft IMS • Oracle /SPL • The Createch Group • Hansen Bidders were evaluated on the content of the written proposals and whether the RFP specifications were addressed. Every proposal was reviewed for completeness and compliance with the RFP business requirements. The criteria and weightings used to evaluate the separate systems for short listing were: Corporate Integrated Financial System (100 %) • Finance Functional Requirements (80 %) includes: • General Ledger • Accounts Payable • Accounts Receivable • Purchasing • Performance Measurement • Activity Based Costing • Inventory • Budgeting • Investment • Tangible Capital Assets • Integration • General Requirements • Vendor Experience (10 %) • Cost (10 %) Infrastructure Management System (100 %) ■ IMS Functional Requirements (80 %) includes: • Service Requests • Work Orders • Work Order Accounting • Contracts and Projects • Infrastructure • Decision Support • Integration • General • Vendor Experience (10 %) • Cost (10 %) The following vendors were short listed: CIFS IMS Focus Oracle /Peoplesoft IDS Scheer /SAP Oracle /SPL IDS Scheer /ESRI /RIVA Createch Group The short listed bidders were invited to prepare a comprehensive presentation. The presentation format consisted of a two hour presentation by the vendor followed by a demonstration of a series of scripts which addressed the City's requirements specified in the RFP and a question and answer period. Each CIFS demonstration was allocated 3 days and each IMS demonstration was allocated 2 days. Staff evaluations of the demonstrations identified a significant preference for the IDS Scheer /SAP /ESRI /RIVA suite of products The final evaluation of each short listed vendor was determined as follows: Short list score 50% Demonstration score 30% Cost 10% Vendor references 10% In the final evaluation for both the CIFS and the IMS systems, the products proposed by IDS Scheer and SAP including ESRI Canada and Loki Innovations achieved the highest ranking. IDS Scheer will be the lead implementer and system integrator and will act as the City's main point of contact on all aspects of co- ordination and implementation. The proposed solution meets the City's defined requirements using a single integrated suite of applications. The vendors have an already established long term commitment to the Public Sector. The system meets the requirements under the PSAB 3150 for Tangible Capital Assets and is a fully integrated solution that will work seamlessly with the City's current ESRI GIS platform. Implementation of these systems will see the removal of two legacy systems that are currently not supported or pose a risk in terms of reliability and sustainability. The vendors and systems selected are established in the municipal sector and will provide a solid core of technology for the City's corporate needs. Capital and Operating Budgets Prior and Prior were retained by the City to provide an independent assessment of the total cost of ownership for the acquisition and maintenance of a CIFS and IMS, for the short listed vendors, to ensure the capital and operating costs were fully - evaluated before making an award decision. Based on this assessment, the capital cost to fully implement the IDS /Scheer /SAP and IDS Scheer /EZRI /RIVA software as well as PSAB 3150 is $7.076 million. (Appendix A). Project Funding Source Million $ Approved Capital Funding $61739 COMRIF Grant 63 Computer Reserve 206 Operating Budget 68 $7,076 The Financial and Infrastructure Management System will require two large servers which will be funded by the Computer Reserve Fund. The annual budget for this reserve is approximately $770,000 and is intended to cover these types of infrastructure costs. The 2007 operating budget of $103,124 includes annual maintenance fees for both the current General Ledger (Famis) and the current INS system. These costs continue until the new system is implemented at the end of 2008. (Appendix A). During the 2007 budget process, Council pre- approved the 2008/2009 operating budget for the new Financial and Infrastructure System which staff estimated to be $276,124 for 2008 and $363,124 for 2009. These estimates assumed that the implementation would be phased in starting January 1, 2008 and that the maintenance fees would be paid as each module moves to production. Based on the RFP responses, most vendors now charge maintenance fees when the project implementation begins. Taking this into consideration, the projected operating budgets have been revised to $302,095 and $307,823 respectively for 2008 and 2009. The vendor proposed maintenance fees will not increase during the first five years of the software agreement. The operating budget also includes functional and IT staff training and a system administrator for the financial modules. The projected operating costs do not include staff or consultants' costs for major upgrades which may occur every 5 years or so, future costs to acquire additional licenses and any applicable maintenance fees as the system is wider used, other staffing needs that can not be identified at this time and future increases in the annual maintenance fees. As indicated in the funding source table above and Appendix A, for 2007 through 2009, any operating budget excess (shortfall) will be closed out to the capital project account. The 2010 operating budget will need to be adjusted to reflect an increase of $47,615. Additional Information Requested by Council The following additional information was requested by Council to assist in the award decision: Schedule of project update reports- A detailed reporting schedule has not yet been developed. Once the contract negotiations have been completed and a project implementation plan has been agreed upon, staff will report back to Council in November /December with a detailed schedule of project updates. It is envisioned that the project update reports will include updated project schedules, project budget reporting and updated risk assessment. As risk assessor, KPMG will be involved in verifying the accuracy and timeliness of project reporting. The project implementation is currently estimated to begin at the beginning of November with an implementation date of January 1, 2009 for all modules. Controls put in place to ensure budgets are adhered to- * Prior and Prior was retained to review the requirements outlined in the RFP and provided valuable feedback which led to refinements in content, process and projected cost, reducing the risk of unanticipated overruns. o In recognition of the significant risks associated with major systems implementation as well as the high project failure rate, KPMG has been retained to provide risk assessment services for the duration of the project. KPMG will assess the risks related to the successful implementation of the project on time and within budget, review the project management process and implementation approach being applied, review the proposed vendor contracts in conjunction with the legal firm retained by the City from a risk perspective, verify the accuracy of project reporting concerning project progress to date, debrief the project upon completion, and recommend risk management strategies. KPMG is accountable to the City's Internal Audit Steering Committee. o KPMG has completed the initial project risk assessment and has provided staff with a number of recommendations which have already been addressed or will be addressed prior to the implementation phase of the project. The recommendations represent opportunities to focus effort, improve information quality and enhance project management and execution capability for the project. ■ Legal controls put in place to ensure vendor(s) will meet their contractual obligations- An outside legal firm, Blake Cassels and Graydon, has been retained by the City Solicitor to provide expert legal advice in the review of the vendor(s) contract. This firm will work with the risk assessor to ensure a comprehensive review and avoid duplication of effort. FINANCIAL IMPLICATIONS: The capital cost to fully implement the Financial and Infrastructure Management System along with PSAB 3150 is $7.076 million. No additional capital funding, beyond the funds already approved by Council, is being requested for the project. The operating budget for the Financial and Infrastructure Management System includes annual maintenance fees, functional and IT staff training and a system administrator for the financial modules. The vendor maintenance fees proposed have been fixed for the first five years of the software agreement. Not included in the operating budget are staff or consultants' costs for major upgrades (which may occur every 5 years or so), future costs to acquire additional licenses and any applicable maintenance fees as the system is wider used, other staffing needs that can not be identified at this time and future increases in the annual maintenance fees. These costs would exist for current systems and, as such, are not "new costs ". COMMUNICATIONS: Communications is facilitating the development of an internal communication plan to be rolled out in September. The implementation and the ongoing use of the Financial and Infrastructure Management System will have a significant impact on staff throughout the organization. It is intended that the Communication Plan will also address on going communication to staff regarding project implementation progress, change to current business processes, training and system rollout. As discussed above, the Joint Financial and Infrastructure Management System Steering Committee will provide Council with project update reports which will include project budget status, implementation progress and an update on risk assessment. CONCLUSION: Staff recommend that Request for Proposal P07-025, Corporate Financial and Infrastructure Management System, be awarded to IDS Scheer Canada, SAP Canada Inc, ESRI Canada Inc. and Loki Innovations (RIVA) subject to the successful negotiation of the agreement(s) satisfactory to the City Solicitor. Pauline Houston, CA General Manager of Financial Services Chair, Joint Financial and Infrastructure Steering Committee Dwayne Quinn, MBA, P.Eng. Director of Utilities Member of Joint Financial & Infrastructure Steering Committee Mike Grummett, Director of Information Technology Member of Joint Financial & Infrastructure Steering Committee Dan Chapman, CA Director of Financial Planning & Reporting Member of Joint Financial and Infrastructure Steering Committee Rosemary Upfold, CA Director of Accounting Member of Joint Financial and Infrastructure Steering Committee Financial and Infrastructure Management Systems Budget Jul-07 2007 Appendix A Capital Budget Pre 2008 2009 Total 2008 Famis (GL) Maintenance Fees Project Costs 56,162 109,650 City staffing costs 719,785 1,445,134 532,775 2,697,694 Vendor Costs 113561989 114061989 501000 218131977 Valuation Costs 1771500 771825 61000 2611325 Hardware/Other Licensing 209,261 166,000 100,000 475,261 Contingencies 2421525 2421525 - 4851050 Other 194,155 1201949 271387 342,491 Approved Proforma Budget 219001215 314591421 716,162 710751798 Funding Famis (GL) Maintenance Fees 53,488 - - Current 210241499 113651000 6401000 410291499 Gas 7641932 1981000 921000 110541932 Water 6341333 791000 341000 7471333 Sanitary 6331565 811000 311000 7451565 Doon 351695 321000 161000 831695 Rockway 321776 301000 151000 771776 Computer Reserve Funding - 102,990 102,990 205,980 COMRIF Grant - 621853 - 621853 to reflect the increase of $ 411251800 # 1 1950, 8 A r %.l 9301990 710071633 Capital Excess (Shortfall) 1,225,585 (11508,578) 214,828 (68,165) Operating Budget 2007 2008 2009 Total 2010** Operating Costs Famis (GL) Maintenance Fees 53,488 56,162 109,650 IIMS Maintenance Fees 10,800 11,340 - 22,140 New Joint FIMS Maintenance Fees - 234,593 236,966 471,559 284,428 Annual training (IT/functional staff) - 25,000 25,000 50,000 Finance System Administrator - - 45,857 45,857 94,466 641288 3021095 3071823 6741207 4281895_ Approved Proforma Budget Famis (GL) Maintenance Fees 53,488 - - 53,488 - IIMS Maintenance Fees 49,636 - - 49,636 - New Joint FIMS Maintenance Fees - 276,124 363,124 639,248 381,280 103,124 276,124 363,124 742,372 381,280 _ Operating Excess/(Shortfall) 38,836 (25,971) 55,301 68,165 (47,615) Total Annual Excess (Shortfall) 1,264,421 (11534,550) 270,128 (0) lCumulative Excess (Shortfall) 1,264,421 (2709128) (0) ** Operating Budget for 2010 will need to be adjusted to reflect the increase of $ 47,615