1. LEVERAGING SAP SOLUTIONS FOR UTILITIES AND PUBLIC SECTOR June 2004 Karen Larkin, City of Tacoma

2. CITY OF TACOMA’S CIS AND ERP SELECTION AND IMPLEMENTATION 2 CITY OF TACOMA, WASHINGTON INTRODUCTION TO OUR CITY Demographics 7 Full Services Utilities Electric, Water, Wastewater, Surface Water, Solid Waste, Cable TV/Internet, Railroad Basic City Services Police, Fire, Public Works, Library, Economic Development, Human services Support Departments Legal, Human Resources, Finance, General Services, CIS Demographics 7 Full Services Utilities Electric, Water, Wastewater, Surface Water, Solid Waste, Cable TV/Internet, Railroad Basic City Services Police, Fire, Public Works, Library, Economic Development, Human services Support Departments Legal, Human Resources, Finance, General Services, CIS

3. CITY OF TACOMA’S CIS AND ERP SELECTION AND IMPLEMENTATION 3 THE VALUE OF EXISTING SYSTEMS WOULD DIMINISH OVER TIME TIME 2002 Risk VALUE Functionality Cost

4. CITY OF TACOMA’S CIS AND ERP SELECTION AND IMPLEMENTATION 4 WHAT IS REPLACING BUSINESS SYSTEMS REALLY ABOUT? Redesign business processes Standardize processes across organization Clean-up old data Modernizing the processes and systems –Customer-centric –Capability to grow –Long term partnership Redesign business processes Standardize processes across organization Clean-up old data Modernizing the processes and systems –Customer-centric –Capability to grow –Long term partnership “It’s more than just software!”

5. CITY OF TACOMA’S CIS AND ERP SELECTION AND IMPLEMENTATION 5 SELECTION PROCESS STEP 3: MAKING A DECISION Project Costs O&M Costs Software Vendor Implementer Project Approach Contract Terms Stakeholder Acceptance Ongoing Management Functionality Technical Architecture Rating Costs Risks Benefits Main selection considerations

6. CITY OF TACOMA’S CIS AND ERP SELECTION AND IMPLEMENTATION 6 TUI-SAP WAS SELECTED FOR LOWER COST AND GREATER BENEFITS PROJECT BENEFITS Fully integrated enterprise solution Long-term partnership for continuous improvement Flexibility and commitment of TUI Team Technical architecture flexible and scalable Customer responsiveness Ability to drill down and navigate within one system Fully integrated enterprise solution Long-term partnership for continuous improvement Flexibility and commitment of TUI Team Technical architecture flexible and scalable Customer responsiveness Ability to drill down and navigate within one system

7. CITY OF TACOMA’S CIS AND ERP SELECTION AND IMPLEMENTATION 7 THE SCOPE ENCOMPASSED THE CITY’S DIVERSE NEEDS PROJECT SCOPE OVERVIEW 102 Legacy Systems Replaced CIS – Utility billing (5 utilities on one combined statement) Financials (ARMS) Human Resources (PeopleSoft) Various Work Management (e.g. Hansen) Budget (BRASS) Permitting (Tidemark) Tax & License (TALIS) Fleet Services (Ultra Main) Retirement Manual Processes Replaced (e.g., Field) 102 Legacy Systems Replaced CIS – Utility billing (5 utilities on one combined statement) Financials (ARMS) Human Resources (PeopleSoft) Various Work Management (e.g. Hansen) Budget (BRASS) Permitting (Tidemark) Tax & License (TALIS) Fleet Services (Ultra Main) Retirement Manual Processes Replaced (e.g., Field)

8. CITY OF TACOMA’S CIS AND ERP SELECTION AND IMPLEMENTATION 8 SAP PROVIDED A COMPREHENSIVE SOLUTION Accounting Logistics Industry Solutions Human Resources

9. CITY OF TACOMA’S CIS AND ERP SELECTION AND IMPLEMENTATION 9 592,046 utility bills mailed (less than 1%)592,046 utility bills mailed (less than 1%) 15,100 notifications created, 10,679 completed15,100 notifications created, 10,679 completed 13,000 citizens have enrolled in tacomaservices.org (over $1M paid online)13,000 citizens have enrolled in tacomaservices.org (over $1M paid online) Online citizen requests for non-bill related matters are regularly used and processedOnline citizen requests for non-bill related matters are regularly used and processed CCS SYSTEM PERFORMANCE After 60 days

10. CITY OF TACOMA’S CIS AND ERP SELECTION AND IMPLEMENTATION 10 IMPACT OF IMPLEMENTATION Challenge of Big Bang approach City Employees stretched thin Service impacts Business rules vs. system rules Go-live bumps Boundaries on work changing Authorizations and access to data Challenge of Big Bang approach City Employees stretched thin Service impacts Business rules vs. system rules Go-live bumps Boundaries on work changing Authorizations and access to data EFFECTS OF GO LIVE ON THE ORGANIZATION

11. CITY OF TACOMA’S CIS AND ERP SELECTION AND IMPLEMENTATION 11 SAP IMPLEMENTATION COST/BENEFIT PROFILE Benefits Cost Implementation 18 months Stability 18-36 months Long-term

12. CITY OF TACOMA’S CIS AND ERP SELECTION AND IMPLEMENTATION 12 BENEFITS TO THE CITY One clean data base Not printing/distributing most employee time cards Not printing and distributing green bar reports One call crew efficiencies Purchasing automated routing, 3-way match and tracking Open purchase order process replaced One clean data base Not printing/distributing most employee time cards Not printing and distributing green bar reports One call crew efficiencies Purchasing automated routing, 3-way match and tracking Open purchase order process replaced EARLY BENEFITS HAVE BEEN SEEN CITYWIDE (I)

13. CITY OF TACOMA’S CIS AND ERP SELECTION AND IMPLEMENTATION 13 BENEFITS FROM CIS Automated credit card verification Security deposits on utility invoice, automated on final bill Joint invoicing of service at the same address, and collective invoicing of services at different addresses Reduce days between meter reading and billing Collection agency weekly, not monthly Third-party vendor no longer needed for Tax and License printing Automated credit card verification Security deposits on utility invoice, automated on final bill Joint invoicing of service at the same address, and collective invoicing of services at different addresses Reduce days between meter reading and billing Collection agency weekly, not monthly Third-party vendor no longer needed for Tax and License printing IMMEDIATE BENEFITS HAVE ALSO BEEN SEEN FROM CIS

14. CITY OF TACOMA’S CIS AND ERP SELECTION AND IMPLEMENTATION 14 AREA: INTERNET SELF SERVICE VALUE MEASURES Online activities Bill payment Solid waste services Downloading Tax & License forms Citizen notifications On-site activities Service counters Calls Paystations Online activities Bill payment Solid waste services Downloading Tax & License forms Citizen notifications On-site activities Service counters Calls Paystations

15. CITY OF TACOMA’S CIS AND ERP SELECTION AND IMPLEMENTATION 15 VALUE MEASURES UTILITY CUSTOMER ONLINE BILL PAYMENT 250,000 utility accounts in total At 5%, there are 7,500 ISS users At $4.00 each for 12 months Savings ofSavings of -$360,000 per year -10% of 60 CSAs saves 6 FTEs or reduces 5.9 minute call time to 5.3 minutes UTILITY CUSTOMER ONLINE BILL PAYMENT 250,000 utility accounts in total At 5%, there are 7,500 ISS users At $4.00 each for 12 months Savings ofSavings of -$360,000 per year -10% of 60 CSAs saves 6 FTEs or reduces 5.9 minute call time to 5.3 minutes SAMPLE VALUE: INTERNET SELF SERVICE