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HomeMy WebLinkAbout10C ERP Project Management Consultant O � PRIp� !� � V � 4646 Dakota Street SE Prior Lake, MN 55372 �jNNESO�� CITY COUNCIL AGENDA REPORT MEETING DATE: DECEMBER 9, 2013 AGENDA #: 10C PREPARED BY: CATHY ERICKSON, ACCOUNTING MANAGER JERILYN ERICKSON, FINANCE DIRECTOR PRESENTED BY: JERILYN ERICKSON AGENDA ITEM: CONSIDER APPROVAL OF A PROFESSIONAL SERVICES AGREEMENT FOR AN ENTERPRISE RESOURCE PLANNING (ERP) PROJECT MAN- AGEMENT CONSULTANT DISCUSSION: Introduction The purpose of this item is to approve a Professional Services Agreement for an Enterprise Resource Planning (ERP) Project Management consultant. ' This consultant will provide project management oversight services, and guide � the City through the ERP implementation process. Hi StOry The software currently used to track the financial activities of the City is United Software Technology (UST) which was acquired around 1984. The software is very limited on its functionality and its expandability to other staff outside of the Finance Department. The 2030 Vision and Strategic Plan includes the goal implement an ERP system that improves the collection, use and report- ing of financial software. On November 13, 2012, during the discussion on the 2013 budget and tax i levy, the City Council discussed the resources needed to acquire and imple- �, ment a new financial system. The Council agreed an outside consultant ' should be utilized to develop the RFP for the new system. The Council also agreed outside resources should be used to provide project management ser- vices to implement the new software system. In both cases, the Council asked staff to bring these contracts to them for funding authorization. On December 10, 2012, the City Council approved a timeline and process for the acquisition of the financial system. On November 25, 2013, the City Council approved a resolution authorizing BS&A Software Inc., to provide software and implementation services for the City of Prior Lake. Original Project Schedule • Council approval of contract for new ERP Software System: Novem- ber 2013 • Council considers approval of Contract for Project Management Ser- vices: December 2013 • Project Manager and selected vendor begin work on implementation: December, 2013 •"Go-live" with core financial modules: October 1, 2014 •"Go-live" with Human Resources/Payroll modules: January 1, 2015 Current Circumstances Staff prepared and released a Request for Proposals (RFP) for the project management consultant in September, 2013. The proposal outlined the scope of services as follows: 1. Become familiar with City business system owners' current and future business requirements; assess existing IT infrastructure, business practices and business objectives to identify gaps and opportunities. 2. Lead and assist in the development of business process documenta- tion of current and future state, where necessary. 3. Development of and administration of project communications plans and associated communications documents. 4. Development of detailed implementation plan (in collaboration with , City staff and contracted systems and implementation resources). 5. Assign tasks, set milestones and deadlines, oversee and document project activities and deliverables for ongoing management of project schedule, dependencies and critical path. 6. Monitor and report on status and Key Performance Indicators (KPI) for implementation activities biweekly to City's Project Team. 7. Communicate and negotiate on expectations and issues with a cross- section of City staff and officials. 8. Collaborate with City to identify skills, resources, and teams needed for project execution, and to define and assign roles and responsibili- ties, including assessing the need for additional resources when ap- propriate. 9. Take a proactive approach to the identification, management and miti- gation of project risks and ongoing maintenance of the risk register. 10. Develop and administer change control protocols for project scope ', change requests. � 11. Review and report on vendor contract performance and issues. 12. Identify, establish and ensure quality assurance processes including development of a testing plan, and lead and participate in all testing and QA activities. 13. Present recommendations for correction of issues, deviations, or prob- lems, including recommendation of remedies to be applied by the City, providing an in-depth review and description of any identified deficien- cies, related issues, and nonconformities, and a recommendation re- garding acceptance, non-acceptance, or appropriate corrective action. 14. Develop and administer an implementation training plan. 15. Assist the City in planning and establishing go-live activities including ongoing application support. 16. Manage the closure of the project, including ensuring receipt of all de- liverables due to the City, creating a project close report which shall in- clude lessons learned and recommendations for future improvement. 17. Other ad hoc management tasks related to the project as may be rea- sonably requested by the City. The consultant is required to deliver the following: 2 1. The Contractor shall be required to submit regular progress reports consistent with the agreed upon communications plan. 2. Business process documentation of current and future state, where necessary. 3. Project communications plans and associated communications docu- ments. 4. Detailed implementation plan. 5. Detailed implementation training plan. 6. Project close report. The City received proposals from four vendors. One vendor was eliminated because they did not meet the minimum qualifications. One vendor was elimi- nated because they did not submit a complete proposal. The following table identifies the firms and the cost proposals for all vendors who provided a pro- posal. Firm Base Price Travel Ex ense Total Cost Abeam $240,000 $52,500 $292,500 ' Ber Dunn $218,400 $30,000 $248,400 lnnovative Computer $99,900 Not provided $99,900 without Professionals travel costs Vendita $195,900 $39,100 $235,000 � As the Council is aware, the cost came in higher than anticipated. Therefore, Staff reviewed options and alternatives to assure we receive only the services necessary for an effective implementation, while managing the cost. To achieve this, staff modified the scope of services to take into account twelve months of assistance anticipated (vs. 15 in original proposal), travel expenses shown separately, pricing and hours detail by service, an all-inclusive maxi- ' mum price not to exceed $150,000 (including travel and any out-of-pocket costs), and further detail on project manager and city staff roles. The follow- ing table identifies the revised hours and cost proposal for the two remaining vendor options. ' Firm Original Re�rised Origin�l Cost Revised Hours Hours Cost Ber Dunn 1,200 706 $248,400 $149,98C Vendita 1,670 1,070 $235,000 $149,97� With a reduction of 500 hours in the revised proposal from Berry Dunn, re- sponsibility for some ERP implementation tasks (business process documen- tation, user acceptance testing scripts) will fall on City staff. Berry Dunn will still be involved in the development of scripts, final acceptance, etc. To insure that our budget was reasonable, and that we were on the right track for the service level requested, we contacted Robert Half Management Con- sulting Services to discuss our RFP. They provided examples of multiple con- sultants ranging in cost between $103 and $150 per hour. Based on the $103/hour cost, a consultant for x weeks at 20-30 hours/week Staff deter- mined that the cost range would be $107,000-$160,000 so we are confident that our budget is reasonable for service level requested. Within days of receiving the revised proposals, we were notified that Vendita's principal partner was no longer with the company. Based on this, we are not 3 confident in their ability to meet the proposed requirements of the consultant, and have eliminated them as a possible consultant candidate. This left Berry Dunn as the only remaining candidate that submitted a proposal. Robert Half Management Consulting Services did not submit a proposal for the RFP, but we have included them in our decision making process when re- viewing our options. We even considered dividing the tasks between Robert Half and Berry Dunn. The more we considered this option though the more we realized that is created greater opportunity for miscommunications, lost time, duplication and potentially greater costs. There are advantages and disadvantages in any decision. Below are some other pros and cons for each firm. Pras Cons Berry Dunn . Experience as the City's ERP • The proposal puts more em- Software Selection Consultant. phasis on facilitation of the pr They are a known commodity. cess than on assistance in • Familiar with the functional and completing ERP specific task technical requirements of the (chart of accounts develop- ERP, and having a working ment, user acceptance testin� knowledge of the City and etc.) Staff. • With a reduction of 500 hour: '• At least three years of experi- in the revised proposal, respc ence within the last five years sibility for some of the ERP in with ERP software implemen- plementation steps will fall on tation consulting for local gov- the City. ernments with populations of 25,000 or larger • The company has a CPA back- bone • There are multiple resources within the company in addition to the assigned staff l • The fee is a"not to exceed" ' amount, meaning there will be no surprise additions • Proposal included specific cost breakdown, hours, and work plan. Robert Half . The fee is the lowest of the re- • The consultanYs expertise fo- Manage- maining firms. cused on ERP task completic ment Con- . The consultant we met (recom- (chart of accounts, user ac- sulting Ser- mended by Robert Halfl had ceptance testing, etc.) rather vices ERP implementation experi- than a project management ence, but did not have any PM role. certification. • Reliance on one individual. • The consultant we met (recom- mended by Robert Halfl did not have government account- ing experience or GASB knowled e. 4 Staff have been impressed by the quantity and quality of the Berry Dunn work in their capacity as the ERP Software Selection Consultant. The representa- tives had a good grasp of the project, and the hours for each segment were appropriate. They have a great deal of experience with public sector clients, including municipalities similar in size to Prior Lake. If they believed that time could be saved on a portion of the work they said so. They also have signifi- cant experience with ERP software implementation. They have the advantage of developing the functional and technical requirements of the ERP, and hav- ing a working knowledge of the City and Staff. The cost proposal is appropri- ate and is a not-to-exceed cost. A copy of the partially executed contract is included with this agenda report. Conclusion Staff recommends entering into a contract with Berry Dunn to provide the ser- , vices as outlined in the RFP. ISSUES: As the City Council is aware, under State Statute, the selection of a consulting firm of this sort is considered a professional service. Accordingly, criteria in addition to cost are considered. As noted above, we considered an alterna- tive resource, Robert Half Management Consulting Services, to insure that we were considering viable options. The comparison between Berry Dunn and Robert Half Management Consult- ing Services highlighted one main difference. With Robert Half, the consultant would provide a"hands on" approach to complete the necessary implementa- tion tasks, but not the same level of project oversight as Berry Dunn. With Berry Dunn, the consultant would assume a project management oversight role, but City staff would take on a larger role as project lead working through specific ERP implementation tasks. Although Berry Dunne would be playing a smaller role than originally proposed, they have a vested interest in our suc- cessful implementation of the ERP system. We have reviewed the risks/ben- efits of both vendors, and we are comfortable with Staff playing a larger role as project lead. FINANCIAL An estimated cost of $150,000 for the ERP project management services has IMPACT: been included in the proposed 2014 budget. It is anticipated the majority of the costs will be incurred in 2014 although there may be some minimal costs incurred in 2013 for initiating the planning phase of ERP project. ALTERNATIVES: 1. Consider approval of a resolution selecting Berry Dunn as the project management consultant and authorizing the Mayor and City Manager to execute the City's standardized professional services agreement. 2. Direct the staff to prepare additional information for City Council consider- ation at a future meeting. RECOMMENDED Alternative 1. MOTION: 5 o � Pxro� ti � U �y 4646 Dakota Street SE `��Nx�so��' Prior Lake, MN 55372 RESOLUTION 13-xxx A RESOLUTION AUTHORIZING THE MAYOR AND CITY MANAGER TO EXECUTE THE CITY'S STANDARDIZED PROFESSIONAL SERVICES CONTRACT FOR AN ENTERPRISE RESOURCE PLANNING (ERP) PROJECT MANAGEMENT CONSULTANT Motion By: Second By: WHEREAS, The City of Prior Lake's current financiai system was installed in approximately 1984, and the City is seeking to update this system; and WHEREAS, The City approved a contract with BS&A Software for an ERP Software System; and WHEREAS, The City requires assistance from an outside consultant to implement the ERP Software System; and WHEREAS, The City seeks to provide the highest quality service for the best value; and WHEREAS, The City of Prior Lake solicited "Requests for Proposals" for professional services on the League of Minnesota Cities Website; and WHEREAS, The City received and reviewed four proposals, conducted an oral interview and recommends that the firm of Berry Dunn McNeil and Parker, LLC, be hired to provide professional services for an ERP project management consultant. NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA as follows: 1. The recitals set forth above are incorporated herein. 2. Berry Dunn McNeil and Parker, LLC, is hereby authorized to provide professional services for the City of Prior Lake for software selection consultant services in the maximum amount of $149,980.00, 3. The Mayor antl City Manager are authorized to execute the City's Standardized Professional Services Agreement with Berry Dunn McNeil and Parker, LLC, on behalf of the City. 4. Funding for these professional services will be the General Fund Technology Department budget. PASSED AND ADOPTED THIS 9T" DAY OF DECEMBER 2013. YES NO Hedber Hedber Keene Keene McGuire McGuire Morton Morton Souku Souku Frank Boyles, City Manager