1. Department of Information Technology Enterprise Resource Planning (ERP) Finance Committee November 25, 2013

2. Department of Information Technology Agenda What is ERP? Objectives & Benefits The Current State Tyler Munis ERP Implementation Timeline Project Oversight Measurable Success Factors Staffing Budget Council Recommendations Questions 2

3. Department of Information Technology What is ERP? ERP = Enterprise Resource Planning >Software system that can seamlessly integrate all information and processes flowing through an organization >Enables widespread data sharing from a single information repository to improve information accuracy and availability >Drives business transformation and change management efforts >Most medium/large organizations use ERP systems. Popular software vendors include: SAP, Oracle, JDEdwards, Peoplesoft, Sage/MAS, Microsoft. >Common functions of ERP systems: finance and accounting, human resources management, budgeting, payroll, cashiering, project tracking, procurement, invoicing and inventory. 3

4. Department of Information Technology Objectives & Benefits Fully integrate finance, human resources, budget and payroll functions Provide enterprise-wide reporting and decision support in real-time through a single information repository Streamline or eliminate inefficient, redundant and manual processes that increase potential of errors and inaccurate information Align financial and human resources operations to industry best practices 4

5. Department of Information Technology Objectives & Benefits continued… Establish a core system that can be reused to automate all financial operational processes Enable city staff to become more efficient, productive, and responsive to the needs of the constituents Incorporate modern technology and new functionality to eliminate paper based processes and a springboard to provide new online constituent services 5

6. Department of Information Technology The Current State Information Technology Strategic Plan (2011)  Recommendation: Implement an integrated ERP system ERP Assessment Report (2012) by SoftResources, LLC  Widespread manual process and aging systems prevent the City from keeping up with industry best practices  Extensive use of stand-alone systems that are not integrated resulting in process duplication and staff time consumed by reconciling information between systems  Fewer staff to complete workload as a result of economic downturn  Institutional process knowledge is poorly documented and long-term employees are reaching retirement age  PeopleSoft Financials version 8.4 is no longer supported by Oracle  Recommendation: Implement a new ERP system 6

7. Department of Information Technology Tyler Munis ERP Tyler Munis ERP system recommended through competitive solicitation process and due diligence Tyler Technologies, Inc. >Founded: 1966 (NYSE: TYL) >Provides software exclusively for the public sector >Employees over 2,500 employees >11,000 Customers Worldwide >30+ California cities using Tyler Munis ERP  Customers include Beverly Hills, Chino, Culver City, Santa Barbara 7

8. Department of Information Technology Implementation Timeline Project ScheduleFY 2014FY 2015FY 2016FY 2017Total Phase I Financial Modules 18 Months Phase II Human Resources / Payroll 12 Months Phase III Business License & Cashiering 6 months 8

9. Department of Information Technology Project Oversight Attachment B 9 Executive Steering Committee ACM, Finance, HR, DoIT Project Steering Committee Dept Managers Project Core Team City Staff Subject Matter Experts IT, Vendors Project Management ERP PM, DoIT PMO

10. Department of Information Technology Measurable Success Factors Developed by Project Steering Committee and Project Core Team  Reduce time to complete month-end and year-end closing  Increase availability and accuracy of data  Reduce the number of stand-alone systems  Eliminate workflow redundancy and streamline work processes allowing City staff to focus on more important tasks  Update and document all financial processes and procedures  Ability to manage and report CIP budget information from integrated financial system 10

11. Department of Information Technology Staffing Addition of six new at-will limited-term full-time equivalent (FTE) positions to support project implementation  ERP Project Manager – Responsible for overall management and delivery of the entire project  ERP Business System Analysts – Responsible for configuring the new system with new processes and data workflows  City Temporary Workers (CTW) – Backfill for existing staff assigned to the project. Flexible positions to hire interns, City retirees and other professional staff on a rotating basis  All new positions tied to project duration and funding 11

12. Department of Information Technology Budget Project BudgetFY 2014FY 2015FY 2016FY 2017Total Software (Tyler Contract)$667,398$1,493,218$825,820$0$2,986,435 Hardware$127,000$20,000$15,000$5,000$167,000 Professional Services (System Integration and Change Management) $38,651$77,394$101,160$19,881$237,085 Temporary City Staff Support$535,936$668,286$652,792$328,189$2,185,203 Project Contingencies$18,715$273,521 $273,520$839,277 Annual Fiscal Impact$1,387,699$2,532,419$1,868,293$626,590$6,415,000 12

13. Department of Information Technology Council Recommendations 1.Find that the proposed contract is exempt from the California Environmental Quality Act (“CEQA”) pursuant to State CEQA Guidelines Section 15061(b)(3); 2.Authorize the City Manager to enter into a three-year contract with Tyler Technologies, Inc. to furnish and deliver software, hardware, and services for an Enterprise Resource Planning System in an amount not to exceed $3,434,400 which includes the base contract amount and ten percent for contingencies. Competitive bidding is not required pursuant to City Charter Article X Section 1002(F), Contracts for professional or unique services; 3.Amend the Fiscal Year 2014 Capital Improvement Program (CIP) Budget to increase the total estimated cost for the Enterprise Resource Planning System (ERP) Project, 71149, by $3,415,000 to $6,415,000; 4.Authorize the addition of six new at-will limited-term full-time equivalent (FTE) positions to the Department of Information Technology FY2014 Operating Budget funded by the ERP Project, 71149 in the Project Management Fund (301), increasing the department total FTE count from 63.50 to 69.50, and authorize staff to make necessary adjustments to the budget; and 5.Establish the title and salary control rate of $115,000 for the ERP Project Manager and the title and salary control rate of $95,000 for the ERP Business Systems Analyst as unclassified (at-will) positions in the Non-Represented Management Salary Resolution. 13

14. Department of Information Technology Questions 14

15. Department of Information Technology ERP Project Funding Sources 15

16. Department of Information Technology ERP Project Funding Sources 16

17. Department of Information Technology 17 Cost Allocation Methodology Itemization of all ERP costs - $6.415 million (inc 15% contingency) Development of cost allocation groups  FY 2014 Budget  FY 2014 Budgeted FTEs  FY 2013 Cash Balance  FY 2013 Number of Purchase Orders  FY 2013 Fixed Assets Totals  # of FY 2013 Grant Revenue  FY 2013 Accounts Receivable  FY 2013 Number of Purchasing Cards Calculation and allocation based on groups and Fund

18. Department of Information Technology 18 Cost Allocation Methodology Adjustment of allocation based on special circumstances Identification of legal restrictions of allocation Identification of Funds with insufficient resources to pay allocation General Fund will advance Funds with insufficient resources and establish a receivable for repayment later General Fund provides initial funding in FY 2014 Remaining allocation requirement begin in FY 2015 through FY 2017

19. Department of Information Technology Request for Proposals Overview RFP Posted on City Website (September 18, 2012) Seven Proposals Received (October 30, 2012) On-site Demonstrations (March-April 2013)  Top four proposers conducted demos over three days each Due Diligence of Tyler Munis (May-August 2013)  Ten municipal customer references surveyed  Conference call with City of Chino, CA  On-site visit to Culver City, CA 19

20. Department of Information Technology Change Management Process 20