+ All Categories
Home > Documents > CMR # 3947

CMR # 3947

Date post: 22-Jul-2016
Category:
Upload: prasanta-sanyal
View: 34 times
Download: 1 times
Share this document with a friend
49
City of Palo Alto (ID # 3947) City Council Staff Report Report Type: Consent Calendar Meeting Date: 10/7/2013 City of Palo Alto Page 1 Summary Title: SAP Maintenance Contract Extension Title: Approval of a Three Year SAP Software Maintenance Contract in the Amount of $258,260.66 per year, Not To Exceed $774,781.98 for the Support and Maintenance of SAP, Including Industry-Specific Solution for Utilities (IS- U), SAP Enterprise Central Component (ECC 6.0), Customer Relationship Management System (CRM), Business Intelligence System (BI), Utilities Customer Electronic Services (UCES), and Business Software, Inc. (BSI) U.S. Payroll Tax From: City Manager Lead Department: IT Department RECOMMENDATION Staff recommends that the Council: Motion: Approve and authorize the City Manager or his designee to execute the attached purchase order, extending for three years the software maintenance schedule (SAP Enterprise Support Schedule.pdf) with SAP Public Services Inc. in the amount not to exceed $774,781.98. The contract will be for calendar years 2013 to 2015. BACKGROUND The City’s history with SAP began in 2002, when the City selected SAP as its preferred vendor for an Enterprise Resource Planning system. The purpose was integrating various business processes within the City, which enabled Staff to move in the direction of Electronic Government. The SAP system has been running since 2003, supporting Accounting, Finance, Purchasing, Project Management, Plant Maintenance, Budgeting, Payroll, Human Resource Management, and Service Order Management. In 2009, the City completed a major upgrade and replaced the former utility billing system (Banner) with the implementation of the SAP Industry Solution Utilities (IS-U) module, Customer
Transcript
Page 1: CMR # 3947

City of Palo Alto (ID # 3947) City Council Staff Report

Report Type: Consent Calendar Meeting Date: 10/7/2013

City of Palo Alto Page 1

Summary Title: SAP Maintenance Contract Extension

Title: Approval of a Three Year SAP Software Maintenance Contract in the Amount of $258,260.66 per year, Not To Exceed $774,781.98 for the Support and Maintenance of SAP, Including Industry-Specific Solution for Utilities (IS-U), SAP Enterprise Central Component (ECC 6.0), Customer Relationship Management System (CRM), Business Intelligence System (BI), Utilities Customer Electronic Services (UCES), and Business Software, Inc. (BSI) U.S. Payroll Tax

From: City Manager

Lead Department: IT Department

RECOMMENDATION

Staff recommends that the Council:

Motion: Approve and authorize the City Manager or his designee to execute the attached purchase order, extending for three years the software maintenance schedule (SAP Enterprise Support Schedule.pdf) with SAP Public Services Inc. in the amount not to exceed $774,781.98. The contract will be for calendar years 2013 to 2015.

BACKGROUND

The City’s history with SAP began in 2002, when the City selected SAP as its preferred vendor for an Enterprise Resource Planning system. The purpose was integrating various business processes within the City, which enabled Staff to move in the direction of Electronic Government. The SAP system has been running since 2003, supporting Accounting, Finance, Purchasing, Project Management, Plant Maintenance, Budgeting, Payroll, Human Resource Management, and Service Order Management. In 2009, the City completed a major upgrade and replaced the former utility billing system (Banner) with the implementation of the SAP Industry Solution Utilities (IS-U) module, Customer

Page 2: CMR # 3947

City of Palo Alto Page 2

Relationship Management, Utilities Customer Electronic Services (also known as My Utilities Account customer portal), and Business Intelligence systems.

By supporting the critical business processes in Finance, Procurement, HR, and Utilities’ Meter Read – Billing – Payment - Collection, SAP has become an integral part of the City’s business continuity.

Examples of the value generated by SAP include:

Manages and maintains a City budget of over half billion dollars

Issues 11,000 A/P checks, processes 2,200 purchases documents, and issues 36,000 payroll checks each year

Generates 370,000 utilities invoices and collects approx. $220M for 30,500 utilities accounts

Currently, 14,000 active customers are registered to use “My Utilities Account” for e-bills and online payments

Provides concise business information to support 38,000 incoming calls into the Utilities Customer Service Center

Interfaces with City Business Partners such as Wells Fargo, Check Free, JP Morgan (procurement card services), Green Waste (refuse), Hartford, and ICMA as well as to non-SAP City systems

The original contract with SAP was signed in July 2002. In July 2007, a new five-year contact was entered into, which expired on December 31, 2012. We are requesting approval of a contract with SAP, which has provided services on an on-going basis, though the contract term has expired because of an oversight due to staff turnover in the SAP manager position. Although the contract extension was not processed in a timely manner, SAP has agreed to continue maintenance support. Recent process improvements in the IT department have been put in place to avoid similar lapses in the future

DISCUSSION

SAP is a highly complex system with processes integrated between various modules. SAP requires a high degree of specialized expertise to provide effective ongoing maintenance and support.

The current SAP contract encompasses basic SAP maintenance and support of standard software. This includes, programming defect corrections (i.e. Service Packs), functionality upgrades, and legally mandated enhancements (i.e. HR/Payroll).

Page 3: CMR # 3947

City of Palo Alto Page 3

The extension of the SAP maintenance contract comes at a time when Staff is conducting an assessment of our current SAP environment, business processes, support resources needs, and developing a strategic plan for the Enterprise Resource Planning systems. The assessment is one of the approved FY 2014 projects. Until the full assessment report and Enterprise Resource Planning strategic plan is ready, staff recommends extending the contract with SAP for four years to maintain current maintenance and support levels. As in previous contracts, there is an early termination clause if required.

RESOURCE IMPACT

With the new on-going Information Technology funding structure, funds for this project will come from the Technology Internal Service Fund. Funds for this contract are available in the current 2014 budget.

POLICY IMPLICATIONS

Approval of these contracts is consistent with current City policies.

ENVIRONMENTAL REVIEW

This is not a project under the California Environmental Quality Act (CEQA).

Attachments:

Attachment A: SAP Enterpirse Support Schedule (PDF)

SAP Software Maintenance PO# C14151181 (PDF)

Page 4: CMR # 3947
Page 5: CMR # 3947
Page 6: CMR # 3947
Page 7: CMR # 3947
Page 8: CMR # 3947
Page 9: CMR # 3947
Page 10: CMR # 3947
Page 11: CMR # 3947
Page 12: CMR # 3947
Page 13: CMR # 3947
Page 14: CMR # 3947
Page 15: CMR # 3947
Page 16: CMR # 3947
Page 17: CMR # 3947
Page 18: CMR # 3947
Page 19: CMR # 3947
Page 20: CMR # 3947
Page 21: CMR # 3947
Page 22: CMR # 3947
Page 23: CMR # 3947
Page 24: CMR # 3947
Page 25: CMR # 3947
Page 26: CMR # 3947
Page 27: CMR # 3947
Page 28: CMR # 3947
Page 29: CMR # 3947
Page 30: CMR # 3947
Page 31: CMR # 3947
Page 32: CMR # 3947
Page 33: CMR # 3947
Page 34: CMR # 3947
Page 35: CMR # 3947
Page 36: CMR # 3947
Page 37: CMR # 3947
Page 38: CMR # 3947
Page 39: CMR # 3947
Page 40: CMR # 3947
Page 41: CMR # 3947
Page 42: CMR # 3947
Page 43: CMR # 3947
Page 44: CMR # 3947
Page 45: CMR # 3947
Page 46: CMR # 3947
Page 47: CMR # 3947
Page 48: CMR # 3947
Page 49: CMR # 3947

Recommended