Title
Finish receiving an ERP Status Report from, and support the Office of the Auditor-Controller recommendations for additional contracted services (Continued from January 19, 2018).
Report
RECOMMENDATION:
It is recommended that the Board of Supervisors:
Finish receiving an ERP Status Report from, and support the Office of the Auditor-Controller recommendations for additional contracted services (Continued from January 19, 2018).
SUMMARY:
The Enterprise Resource Planning project (ERP) is in the final stages of completion. The last estimate for go-live of the final phase of the project (HR/Payroll) was the end of February 2018. Due to the new Federal Tax law, the potential State Tax law changes, and other implementation challenges, the project is expected to be postponed an additional month, until the end of March 2018.
Additionally, the Auditor-Controller is requesting retroactive contract change request (CR) approval and funding for CenturyLink hardware standup services provided by CGI between July 2016 and November 2016.
The cost of the one month extension for CGI services is $121,000. The cost of the CGI services around the CenturyLink hardware standup is $409,325. The Auditor-Controller has negotiated the one month delay cost with CGI to $0.00 dollars.
The total cost of the ERP implementation is projected to be $18,398,056.
DISCUSSION:
The Enterprise Resource Planning project (ERP) is in the final stages of completion. The last estimate for go-live of the final phase of the project (HR/Payroll) was the end of February 2018. Due to the new Federal Tax law, the potential State Tax law changes, and other implementation challenges, the project is expected to be postponed. Given the information currently available, the best estimate for go-live the end of March 2018.
The cost of this one month extension for CGI services was $121,000. However, the Auditor-Controller has negotiated the cost of these additional services to $0.00.
Additionally, the Auditor-Controller is requesting a retroactive contract change request approval and funding for CenturyLink hardware standup services provided by CGI between July 2016 and November 2016. These services were necessary, as the hardware standup was critical to the uninterrupted progress of the project. This hardware is fundamental in that it is the platform on which the CGI software resides.
Originally, the hardware standup was planned by eCare Management, Inc. (eCare), the previous Project Management Team. The staging and specifications of the implementation were planned over a five-month period. It was estimated that a two-month effort was necessary to complete the work. The work was staged to begin on July 5, 2016. However, the eCare contract expired on June 30, 2016, one week prior to the start date. The new Project Management Team from Plante-Moran, PLLC (Plante-Moran) was not on site and even so, were not prepared to manage such an extensive project from scratch. Plante-Moran required a two-month assessment period to begin productive work. The contract expiration with eCare did not allow for any overlap or knowledge transfer. See Attachment A.
Therefore, it was necessary to contract with CGI to provide for these services. The hardware standup effort took nearly four months as CGI was not part of the original staging effort and had to start from scratch. Simply freeing up CGI technical resources on such short notice was a challenge. In July 2016, this issue was discussed with the CAO Budget Office. We jointly concluded that CGI should be contracted for such services and that a contract Change Request (CR) was necessary, because the financing was already available for other CGI services previously funded by the Board. We knew, due to the change in scope and project management, that we would soon be requesting additional resources from the Board. The cost of this CR was $409,325.
Unfortunately, the instructions provided to Project Management by the Auditor-Controller were evidently not clearly understood and the CR was not moved forward for Board approval in a timely manner. Additionally, the Project Management team did not include these funds in the ERP budget, and consequently, was not included in the ERP budget augmentation request of January 31, 2017.
The total cost of the ERP implementation is projected to be $18,398,056. Please see Attachments B and C for details.
It is important to inform the Board that a feature of this implementation is that a majority of the costs of the project will eventually be reimbursed through Federal and State programs. Assuming conservatively that 50% will eventually be reimbursed, the final cost to the County of Monterey is reduced to approximately $9,200,000.
OTHER AGENCY INVOLVEMENT:
The Information Technology Department (ITD) has been extraordinarily proficient and professional in the service provided to the Office of the Auditor-Controller on behalf of this project. The CAO Budget Office has been consulted on the financing issues.
FINANCING:
No additional financing is requested at this time. The cost of the CGI CR is absorbed in previously requested funding. Due to late submission of this Board Report, the CAO Budget and Analysis Division was not provided adequate time to fully review for potential fiscal, organizational, policy, or other implications to the County of Monterey.
BOARD OF SUPERVISORS STRATEGIC INITIATIVES:
The County Enterprise Resource Planning financial suite is the official accounting system of record for the entire County, is used to produce the Comprehensive Annual Financial Report (CAFR), prepare the County budget, produce and manage all employee benefits, the Human Resource function, produce payroll, Internal Revenues Service (IRS) reporting, manage procurement, manage debt, manage the Treasury Function and produce management reports. The ERP is the financial infrastructure of the County.
Mark a check to the related Board of Supervisors Strategic Initiatives
__Economic Development
X Administration
__Health & Human Services
__Infrastructure
__Public Safety
Prepared by: Michael J. Miller, CPA, Auditor-Controller, 755-5084
Attachments:
A - Project Management Timeline
B - Reconciliation of Project Expenses
C - SOW 12 Projected Total ERP Upgrade Costs
D - Change Request