GS/OAS ERP Modernization OASCOREscm.oas.org/pdfs/2020/CP42389ECAAP.pdf · 2020-05-19 · The...

The content of this presentation is proprietary and confidential information of the Organization of American

States (OAS). It is not intended to be distributed to any third party without the written consent of the OAS.

GS/OAS ERP ModernizationOASCOREThe Path Forward

Presented by

Charles H. Grover, Secretary of Administration and Finance & Andrew Vanjani, ERP Executive Program Manager

May 21, 2020

1



➢ Executive Summary

➢ Background

➢ Key Developments

➢ Current Situation

➢ Path Forward

➢ Option 1 – “The Home Stretch”

➢ Option 2 – “A Phased Approach”

➢ Option 3 – “Course Correction/Hybrid Approach”

Table of Contents

2



Executive Summary

3

The purpose of this presentation is to outline the Path Forward for the OASCORE Modernization project and

to identify potential options to allow OAS Member States to make a final decision.

It is critical that we find a path forward to modernize the current ERP legacy system due to the current risk we

face, which has been identified in the last few financial audits, due to the end-of-life support from Oracle as

well as from Microsoft, which provides the current infrastructure.

After a thorough assessment of the As-Is state, the ongoing modernization effort, the project schedule delays

and cost slippage, the IG audit report and recommendations, the current Pandemic situation and what the To-

Be state would be if we continue down the current path; the following 3 potential options have been identified:

Option 1 – “Home Stretch”: define additional funds required to continue the project as planned,

Go Live with full functionality, and migrate off the current EBS system as soon as possible;

Option 2 – “Phased Approach”: divide the current project scope into 2 phases in order to provide

the OAS with partial functionality in a shorter timeframe and reduce any additional funds required

to the absolute minimum;

Option 3 – “Course Correction/Hybrid Approach”: take lessons learned and recommendations

from the IG audit report and leverage new PM’s experience to identify a best of breed solution to

transform the OAS into a modern and digital organization while implementing an integrated,

scalable and secured ERP solution.



Executive Summary

4

Original

Budget

Additional

Request

Total Project

Cost

Additional

Months

1 Year

Operating

Costs *

5 Year

Operating

Costs*

Nov 2019

Request$$5,158,528 $3,100,000 $8,258,528 9 Months 800k-900k 4M-4.5M

Option 1 $5,158,528 $1,741,260 $6,899,78811- 14

Months800k-900k 4M-4.5M

Option 2 $5,158,528 $2,072,540 $7,231,06816- 19


Option 3 $5,158,528$1,000,000 -

$1,500,000$6,158,528 -

$6,658,528**

9-11


*Note: Operating Costs are estimated and based on production licenses cost, additional integrations and DOITS support (people and infrastructure)

**Note: Range is provided with best and worse case scenario due to only 2 weeks of assessment performed for option 3.

The table below provides a high-level summary of all options and compares it to the additional $3.1 million

requested to the CAAP in November 2019:



Executive Summary

5

*Note: Operating Costs are estimated and based on product licenses cost, additional integrations and DOITS support (people and infrastructure)

Operating

Costs *

Operating

Costs *

Annual Cost

Avoidance

Annual Cost

Avoidance

Annual Cost

Avoidance

Annual Cost

Avoidance

Annual Cost

Avoidance

1-Year 5-YearOffice

365 E3

Dynamics

365

Strategic

Performance

Security

SSO/MFA

CIDH - Case

Management

Option 1 800k-900k 4M-4.5M N/A N/A N/A N/A N/A

Option 2 800k-900k 4M-4.5M N/A N/A N/A N/A N/A

Option 3 400k-500k 2M-2.5M$20,000-$40,000

(10%-20%)(2%-4%) $10,000 $50,000 – $80,000

$48,000

(80%)

The table below describes a few potential savings/cost avoidance that the OAS would realize in future IT

investments if option 3 is chosen.



6

BackgroundOn November 2019, the Fifth Report of Progress of the ERP

project was presented to the members of the Committee on

Administrative and Budgetary Affairs (CAAP), highlighting a

series of challenges during the project lifecycle that impacted

its health, resulting in schedule delays and a budget overrun.

The report also outlined a proposed solution to extend the

project an additional 9 months (figure to the right) and an

increase of 3.1 million dollars (table below) in additional funds

to successfully bring the project to fruition. While the

abovementioned proposed solution was initially presented in

late 2019, no formal decision was made and the project was

allowed to continue until the end of March 31st,2020 pending

the IG audit report revision.

Sign-Off Systems Integration

Testing (SIT)

June

29, 2020

ADDITIONAL FUNDS PROPOSED IN 2019 COST

9- MONTH EXTENSION CREOAL SERVICES $ 2,000,000

CREOAL TRAVEL $ 234,000

CRP RESOURCE POOL (9-MONTHS OF CRP POOL TIME) $ 750,000

LEGACY ORACLE EBS 2020 LICENSE RENEWAL $ 155,000

TOTAL ADDITIONAL FUNDS PROPOSED $ 3,139,150

ERP Fifth Report of Progress

presented to CAAP

Nov

2019

Sign-Off CRP3Feb 24,

2020

Sign-Off User Accessibility

Testing (UAT)

Sept 14,

2020

Jan 1,

2021Go Live

NOV 2019 PROPOSED SCHEDULE

http://scm.oas.org/doc_public/ENGLISH/HIST_19/CP41637E03.doc



7

Key Developments

It is important to note a few key developments that have occurred during the lifecycle of the project since its inception on October 12th, 2018;

● On November 2019, members of the CAAP requested the IG to perform an assessment of the project regarding 7 specific questions and to report findings and recommendations by March 2020;

● On December 10th, 2019, the ERP Executive role was temporarily filled by the Secretary of Administration and Finance (SAF), Mr. Charles Grover;

● On February 24, 2020, the SAF hired a dedicated ERP Executive Program Manager;

● On April 3rd, 2020, the IG audit report was presented to Secretary General’s advisors, the OIG and the SAF. One important finding that resulted from the IG audit report was the unrealistic new Go Live date of January 1st, 2021 considering some of the gaps and potential recommendations identified in the report;



Current Situation

8

As of May 2020, the ERP Modernization project has been paused pending decision of the CAAP on the Path Forward. Additional updates follow:

● Covid-19: This pandemic has impacted the schedule and cost of the project. Stakeholders supporting the project have been adapting to the “new normal” and currently working to support the day-to-day operations.

● Expired - Creoal Contract: The contract with Creoal expired on April 30th. A 2-Month No-Cost Extension was signed on May 13th, ,2020 to give the OAS time to decide the Path Forward. All liquidating damages required to terminate the contract were agreed upon and settled accordingly.

● Expired - Oracle Contract: The base contract expired on March 31st, and the next option year in the amount of $483,000 was not exercised due to uncertainty with Covid-19 and pending decision of the CAAP on Path Forward.

● Technology Fund: Remaining funds from the 5.1M initial budget: $2,044,000



Current Situation – Cont’d

9

PROJECT FINANCIALS

Baseline BudgetPaid as of

May 1st, 2020Balance

% Budget

Spent

Systems Integration (Creoal) $ 3,849,680.00 $ 1,924,841.00 $ 1,924,839.00 50%

Travel & Expenses (Creoal) $ 490,000.00 $ 376,416.52 $ 113,583.48 77%

Change Management (Clearing) $ 105,000.00 $ 105,000.00 $ 0 100%

Oracle Cloud Licenses (OASCORE) $ 705,588.24 $ 699,738.44 $ 5,441.59 99%

FXLoader $ 8,260.00 $ 8,260.00 $ 0 100%

$ 5,158,528.24 $ 3,114,255.96 $ 2,044,272.04 60%


States (OAS). It is not intended to be distributed to any third party without the written consent of the OAS. 10

Path Forward



Option 1 – The Home Stretch



Scope Assumptions Critical Path – 9-12 Months

• Original Scope from Baseline

• Human Capital Management

(HCM)

• Payroll Costing extension

• Payroll Integrations (TRS, TXF,

eFTPS)

• Financials

• Fixed Assets extension

• P-Card extension

• Wire Template

• Additional Test Cycle (SIT -

Systems Integration Test)

• Additional Data Conversions to

support mid-year go-live

• Payroll, absence and benefit

balance conversion

• Detailed transaction conversion

for GL and Projects

• More complex budget conversion

• Extended Production Support

• Project delays due to COVID-19 (1

month)

• SIT delayed (1 month)

• OAS engages conversion consultant to

start by 7/1/2020

• All pending decisions are complete by

7/1/2020

• All submitted deliverables are approved

by 71/2020

• DFS blackout period mid-Nov thru mid-

Jan

• Identified bugs and changes during SIT

will be resolved before UAT

• DHR, DPO, DFS, DGS resources are

available to support the testing and

training as well as complete all project

tasks (minimum 50%)

• Parallel payroll period (2 month

duration)

• Deliverables/decisions are dispositioned

within 5 days of submission

• All JIRA tickets / Oracle SR’s resolved

within specified timeframes

• Assumes Technology Fund balance

remains with 2M

12

Option 1 –Home Stretch - Timeline

12

Systems Integration Testing (SIT)Sept 21,

2020

User Accessibility Testing (UAT)Dec 19,

2020

Data Conversion and

Integrations

July 1,

2020

User TrainingFeb 21,

2020

May 31,

2021Go Live

Parallel PayrollMar 02,

2021



13

Option 1 – Home Stretch - Additional Costs

13

TOTAL PROPOSED COST - MAY 2020

Items Additional Costs

Implementation Cost (Additional)* $400,000

Travel & Expenses **

+ 2 Months - Post Production $ 295,000

Oracle Licenses $ 483,000

Data Conversion Consultant $67,000

Temp Resources to Backfill SAF $200,000

Executive Program Manager $108,000

Change Management Consultant $90,000

User Acceptance Training (UAT) Consultant $ 90,000

FXLoader (Foreign Exchange Rate Solution for Oracle ) $8,260

Total Additional Funds $ 1,741,260

* In addition to the 5.1M initially budgeted

** Note: Additional travel costs should not be necessary – current travel budget estimated to last until Jun 2021



14

Option 1 – Benefits and Risks

• Full functionality/scope goes live together at same time

• Provide post go-live support (3 months full support)

• Should be able to mitigate additional travel cost and keep within existing budget despite significant timeframe changes

• Eliminate current EBS availability risk

Risks

• Inability to identify qualified temp resources

to cover SAF support during implementation

• COVID-19 may impact OAS users ability to

support the project, especially the early

deliverables and milestones

• Oracle may increase rates and delete all

configurations made so far on their platform

if no-contract signed by June 30

• Only one (1) test cycle to test/validate the

conversion process before User Acceptance

Testing

• Increased Data Conversion Scope to support

mid-year go-live

• Significant amount of conversion and

integration/extension development remains

• OAS Infrastructure backbone may not be

able to support new traffic to the cloud since

we currently send traffic for all ERP

transaction to our internal data center.

Benefits



Option 2 – A Phased Approach



16161616

Scope Assumptions Critical Path – 9 months

• Go live with MVP (Minimal Value

Product)

• HCM Scope including Payroll from

SOW001

• Payroll - Project Costing

extension

• Payroll Integrations (TRS, TXF,

eFTPS)

• Additional Test Cycle (SIT)

• Design interim Payroll Project

Costing Extension (until full ERP

is live)

• Develop interim integrations with

EBS (until full ERP is live)

• Transfer Payroll Costs to General

Ledger (OASCORE → OASES)

• Transfer Project Payroll Costs to

Projects (OASCORE → OASES)

• MVP - Extended production

support to 3 months

• ERP limit scope- HCM/Payroll only

• Project delays due to COVID-19 (1

months)

• SIT delayed due to data conversion

issues (3 weeks)

• Parallel payroll period (3-month

duration)

• OAS engages conversion consultant to

start by 5/1/2020

• DHR/ DFS-Payroll resources available

to support production (EBS), parallel

testing and user training concurrently

during the mid-Nov thru Mid-Jan

blackout period.



• Identified bugs and changes during SIT

will be resolved before UAT


remains with 2M

16

Option 2 - Phase 1 – Timeline–HCM/Payroll Only

16

Data Conversion and

Integrations

Jul 1,

2020

Systems Integration Testing (SIT)Sep 14,

2020

User TrainingJan 16,

2021

User Accessibility Testing (UAT)Nov 14,

2020

Mar 28,

2021Go Live

Parallel PayrollFeb 1,

2020



17

Option 2 – Phase 1 / Additional Costs – HCM/Payroll Only

17



Implementation Cost (Credit) ($550,000)

Travel & Expenses *


Oracle Licenses $ 350,000







Total Additional Funds $ 287,260

* Note: Additional travel costs should not be necessary – current travel budget estimated to last until Jun 2021



181818181818

Scope Assumptions Critical Path – 10 Months

• Financials, Procurement and

Grants / Project Portfolio Scope

from original baseline

• Fixed Assets extension

• P-Card extension

• Wire Template

• Additional Test Cycles (SIT &

UAT)

• Modify Payroll Project Costing

Ext. for OASCORE

• Includes DOIT’s Toolkit to support

the following integrations

• OTS (OAS Travel Solution)

• CCOSTS (Common Costs)

• FMS (Fellowship Management

System)

• RBCS (Results Based

Contracting System)?

• Go Live extended production

support to 3 months

•

• ERP Scope– Financials, Procurement,

and Grants/Projects

• COVID-19 related delays have been

resolved

• SIT delayed due to data conversion

issues (1 month)

• OAS and Creoal project teams are

ready and available to begin work on

1/2/2021

• DFS blackout period min-Nov thru

min-Jan

• OAS has completed data cleanup in

EBS prior to Phase 2



• Identified bugs and changes during

SIT will be resolved before UAT


remains with 2M

18

Option 2 – Phase 2 – Phased Approach

18

Data Conversion and

Integrations

Jan 2,

2021

Systems Integration Testing (SIT)Mar 15,

2021

User TrainingSep 13,

2021

User Accessibility Testing (UAT)Jun 21,

2021

Go LiveNov 01,

2021



19

Option 2 – Phase 2 / Additional Costs – Complete ERP

19



Implementation Cost (Additional)* $980,000

Travel & Expenses $133,000


Oracle Licenses $ 133,000*









** Full Oracle Licenses is $483,000. Phase 1 licenses costs 350k, so Phase 2 will cost $133 for a total of $483k



20

Option 2 – Phase 1 +Phase 2 / Total Additional Costs

20



Implementation Cost (Additional)* $980,000 – (550,000) = $430,000

Travel & Expenses $133,000

+ 2 Months - Post Production $ 285,000+175,000=460,000

Oracle Licenses $ 133,000+350,000=483,000

Data Conversion Consultant $40,000+30,000=70,000

Temp Resources to Backfill SAF $50,000+$150,00=$200,000

Executive Program Manager $96,000+84,000=180,000

Change Management Consultant $80,000+70,000=150,000

User Acceptance Training (UAT) Consultant $ 80,000+70,000=150,000

FXLoader (Foreign Exchange Rate Solution for Oracle ) $8,260+$8,260= $16,520



** Full Oracle Licenses is $483,000. Phase 1 licenses costs 350k, so Phase 2 will cost $133 for a total of $483k



21


• If only Phase 1 chose, additional funds

required are minimum

• Option 2 Phase 1 provides value faster to a

subset of the business, therefore faster ROI;

• Start with first payroll cycle of year 2021 in

OASCORE

• Provide more time for incremental

enhancements, and adoption of functionality

• Go live at the beginning on 1st Quarter vs 4th

Quarter

• There is no need to continue with Phase 2, so

a better platform can be identified for

additional scope

Risks

• Current EBS risk remains until Phase 2 is completed;

• Oracle may increase rates and delete all configurations

made so far on their platform if no-contract signed by June

30

• Inability to identify qualified temp resources to cover SAF

support during implementation

• COVID-19 may impact OAS users ability to support the

project, especially the early deliv. and milestones

• Increased Conversion Scope for mid-year go-live

• Only one (1) test cycle to test/validate the conversion

process before Acceptance Testing

• Only one(1) test cycle to test/validate the conversion

process before Acceptance Testing

• Significant amount of conversion and

integration/extension development remains

• OASCORE and OASES will have different COAs

• Existing project Resources may not be available (and may

need to be replaced) for future phases

• Need to redefine Data Conversion scope due to a Phased

approach

• OAS Infrastructure backbone may not be able to support

new traffic to the cloud since we currently send traffic for

all ERP transaction to our internal data center.

Benefits



Option 3 – Course Correction/Hybrid Approach



232323232323

Scope Assumptions Critical Path – 9-11 Months

• ERP Scope– Financials,

Procurement, and Grants/Projects

• Finance, Grants/Projects

Financials, Fixed Assets,

Procurement

• Human Capital Management,

Recruiting, Leave Absence

• Payroll integration with best of

breed solution included

• Onboarding and Offboarding

extension (power app)

• Change Management and

Governance included

• Identity and Access Management

integration included

• Design workshop included

• Priority Support included

• Other integrations with current

legacy systems included

• Go Live extended production

support to 1 month

• COVID-19 related delays have been

resolved

• 2-week analysis performed with

different vendors gathered enough

data to support pricing and timeline

provided

• SAF will be able to identify resources

to backfill SAF folks supporting the

project

• Ability to train current SAF DOITS

employees to support platform,

integrations and upgrade cycles

• Ability to train and empower SAF

business users to become super users

of the system, build basic powerapps,

generate reports and communicate

directly with vendor support for any

break fix issues without relying on

DOITS


remains with 2M

23

Option 3

23

Reqs Gathering and Design

Workshops

Jul 1,

2020

Development & ConfigurationsSep 15,

2020

User Accessibility Testing (UAT)Feb 01,

2021

Data Conversion and

Integrations

Oct 30,

2021

April

30, 2021

Go LiveMay 31

– Aug

31, 2021

User Training



24

Option 3

24



Implementation Cost (Additional)* $500,000-$1,000,000**

Travel & Expenses 0

+ 2 Months - Post Production 0

Licenses 0




Change Management Consultant 80,000

User Acceptance Training (UAT) Consultant 0

FXLoader (Foreign Exchange Rate Solution for Oracle ) 0

Total $1,000,000-$1,500,000


** Includes premiere support, post production, travel and license costs



25


• Solution fits much better with the profile of the OAS (project based)

• Native integration with Microsoft Office 365

• OAS has DOITS Microsoft developers to support future

configurations, therefore no need for Oracle service support

• Users no longer need to login to multiple systems since they login

with OAS network credential. Oracle would have required multiple

logins due to no Single Sign-on capability on several modules

• Security integration with Office 365, therefore no additional cost

• API integration (no middleware) with Payroll and recruiting system

• Implementation includes one vendor for product and services, one

button to push. A lot of the delays came because Creoal would

create a ticket with Oracle and ticket would take 6 months

• Platform solution that allows business users to build basic apps to

support day to day operations

• Platform provides out of the box templates for DOITS or any

business user to edit and create power apps (no development skills

required). Oracle required developers to create new functionality or

extensions

• No need for 3 months post production as DOITS will support

platform

• Premiere support available for break-fix and t to help our

developers. Dedicated Full-Time Dynamics

• Microsoft Consulting Services (MCS) takes care of all issues with

MS premiere support during implementation, which removes

responsibility from OAS as it happened with Oracle and Creoal

• MCS provides change manager and UAT manager to support

implementation reducing OAS cost for additional resources

• Trough Premiere support, OAS has the ability to pay for unlimited

environments versus with Oracle, each environment had a high

cost.

• Hybrid implementation model with offshore and onshore resources

to reduce implementation cost

Risks

• Current EBS risk remains until Project is

completed

• Inability to identify qualified temp resources

to cover SAF support during implementation

• Option 3 defined in two weeks based on

limited meetings with vendors and OAS staff

for proper requirements gathering

• Potential morale issues with SAF members

who have already spent 18-months supporting

the project

• COVID-19 may impact OAS users ability to

support the project, especially the early

deliverables and milestones

• OAS Infrastructure backbone may not be able

to support new traffic to the cloud since we

currently send traffic for all ERP transaction

to our internal data center.

Benefits

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