HomeMy WebLinkAbout03-21-2017 Item 13 - Authorization of Execute contract with Government Finance Officers Association Meeting Date: 3/21/2017
FROM: Xenia Bradford, Interim Finance Director
Prepared By: Vinay Jathanna, Technology Projects Manager
SUBJECT: AUTHORIZATION TO EXECUTE CONTRACT WITH GOVERNMENT
FINANCE OFFICERS ASSOCIATION
RECOMMENDATION
Authorize the City Manager to enter into a Contract with Government Finance Officers
Association (GFOA) in the amount of $65,970 to engage GFOA for Enterprise Resource
Planning (ERP) system implementation.
DISCUSSION
Council authorized one-time expenditure in 2016-17 with the Supplemental Budget as part of the
Efficiency, Effectiveness & Transparency Initiative to allocate $65,000 for Government Officers
Association (GFOA) to work with the City as an advisor to develop requirements and assist with
selection of software for the Enterprise Resource Planning system implementation. The attached
proposal from GFOA provides a breakdown of their consulting services and their cost to help the
City design best practices for core business processes, document requirements that will be used
in the preparation of an RFP to solicit bids from qualified ERP software vendors and help in the
selection and contract negotiations. The proposal has seven task sections with costs broken down
for each task:
1. Task 1: Project Planning
2. Task 2: Process Design and Requirements
3. Task 3: RFP Document
4. Task 4: System Selection Services
5. Task 5: Discovery
6. Task 6: Contract Negotiations
7. Task 7: Ongoing Advisory Services
Background
As part of the Organizational Efficiency, Effectiveness & Transparency Initiative, the City
contracted with the GFOA in 2015 to conduct an assessment of the Finance Department. In their
key recommendations, GFOA identified “ripple effects” often negative impacts on other parts of
the organization from issues in Finance. The “ripple” effect creates redundant process and
additional work required in other departments. It identified the use of inadequate systems driving
an over-reliance on manual or “side” systems, complicated business processes, and confusion
around assignment of duties as responsibilities and expectations expanded without additional
staff (e.g. new or additional work is given to a person because of availability not skill set or work
flow) and a lack of processes and tools to effectively communicate with the public.
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Following recommendations were made by GFOA:
1) Immediately address the lack of a complete financial system, 2) Align a chart of accounts with
business requirements and system capabilities, 3) Streamline ineffective business policy and
process, 4) Clarify roles and responsibilities and implement service level agreements for all
central functions.
GFOA concluded that these core issues represent the most significant problems faced by the
City’s Finance function and cause ripple effects throughout all City departments. An outdated
financial system inhibits the department’s ability to improve efficiency and effectiveness with
temporary resources.
The GFOA report was presented to Council on April 19, 2016 with the above four
recommendations.
A Significant Operating Program Change that was approved with the 2016-17 Supplemental
Budget for the ERP project includes an $80,000 for continued consulting services from GFOA to
ensure implementation of their recommendations.
FISCAL IMPACT
The amount requested was approved with the 2016-17 Supplemental budget. There are no
additional fiscal impacts.
ALTERNATIVES
If the request is not approved, the Motion project team will proceed without the GFOA’s
expertise and knowledge of the methodology required for the to-be process design, RFP
requirement gathering, identifying the best vendors who fit City’s ERP requirements. GFOA’s is
a national organization with proven expertise. GFOA has experience in implementation of ERP
systems and has worked with many jurisdictions on similar project. GFOA has implemented
hundreds of ERP systems throughout North America.
GFOA is an organization that develops best practices to advise governments across the nation.
GFOA insight into the credibility and reputation of vendors and considerable experience is
invaluable to ensure that the City selects a vendor who would make the Motion project
successful and meet our community and organization needs.
Attachments:
a - GFOA Proposal SLO-ERP Assistance
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PROPOSAL TO:
City of San Luis Obispo, CA
Business Process Improvement and ERP
Advisory Services
Research and
Consulting Center
Government Finance Officers Association
(GFOA)
September 14, 2016
Note: This proposal and description of GFOA methodologies is for the entity listed above. All
information herein is confidential and proprietary to GFOA.
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Government Finance Officers Association
203 North LaSalle Street, Suite 2700
Chicago, IL 60601-1210
312.977.9700 fax: 312.977.4806
Washington, DC Office
1301 Pennsylvania Avenue, N.W., Suite 309 Washington, DC 20004 202.393.8020 fax: 202.393.0780
www.gfoa.org
September 14, 2016
Derek Johnson
City of San Luis Obispo
990 Palm Street
San Luis Obispo, CA 93401-3249
EMAIL: djohnson@slocity.org
Dear Derek,
The Government Finance Officers Association (GFOA) is pleased to present this proposal to the
City of San Luis Obispo for ongoing services to assist with the City’s ERP replacement project.
This proposal follows GFOA’s recommendation during an earlier engagement where GFOA
recommended that the City replace its ERP system. With this project we are excited about
continuing GFOA’s relationship with the City and look forward to assisting the City with helping
to establish the foundation for its financial, purchasing, human resource, and payroll processes.
More than 450 governments, including many in California, have found value in our high level of
expertise and our detailed approach to ERP projects. As one of the premier membership
associations for public-sector professionals, GFOA can offer independent, objective, and best
practice-focused consulting services consistent with our mission to improve government
management.
If you have any questions or would like to discuss the proposal, please let me know.
Sincerely,
Mike Mucha
Director, Research and Consulting
Government Finance Officers Association
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GFOA
Business Process Improvement and ERP
Advisory Services
TABLE OF CONTENTS
Overview of Proposal .................................................................................................................... 4
Task 1: Project Planning............................................................................................................... 5
Task 2: Process Design and Requirements ................................................................................. 5
Task 3: RFP Document ................................................................................................................. 7
Task 4: System Selection Services ................................................................................................ 8
Task 5: Discovery .......................................................................................................................... 9
Task 6: Contract Negotiations ...................................................................................................... 9
Task 7: Ongoing Advisory Services ........................................................................................... 10
Project Schedule .......................................................................................................................... 11
Price .............................................................................................................................................. 12
Project Assumptions .................................................................................................................... 13
Appendix: GFOA Profile ............................................................................................................ 14
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GFOA
Business Process Improvement and ERP
Advisory Services
Overview of Proposal
ERP system implementations offer a great deal of promise for improving business processes,
empowering employees with tools to become more effective, and ultimately transforming the
entire organization. However, implementing these systems is a complex effort, and many
organizations struggle to realize many of the promised benefits. Based on GFOA’s experience,
one critical success factor is proper preparation and a structured approach to project readiness.
GFOA has assisted numerous governments in planning for ERP projects and has developed an
approach that embeds these important steps within other activities such as the procurement
process. In addition, GFOA’s approach includes a number of sequential steps that build on each
other, ultimately resulting in a detailed contract and statement of work that is centered on public-
sector best practices for ERP contract management and detailed functional requirements.
This proposal for ERP advisory services will focus on an important initial first step in ERP
preparation, process design, project governance, definition of functional requirements, and
support during the selection process..
GFOA has divided this proposal into the following tasks:
Task 1: Project Planning
Task 2: Process Design and Requirements
Task 3: RFP Draft
Task 4: System Selection Services
Task 5: Discovery
Task 6: Contract Negotiations
Task 7: Implementation Transition
GFOA consultants assigned to this project include:
Barry McMeekin, Consulting Practice Manager (Project Manager/Project Lead)
Eva Olsaker, Senior Manager (Consultant)
Mike Mucha, Director, Research and Consulting (Engagement Manager)
GFOA has selected these resources because of their knowledge of the City, knowledge of
comparable organizations and experience with business process improvement and change
management projects. GFOA staffs all projects with experienced and capable consultants who
have a proven track record of managing projects independently as well as working effectively
within a project team. As a result, the City can feel confident in turning to any consultant
assigned to the project to provide quality guidance on issues related to any of the tasks included
in this proposal.
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GFOA
Business Process Improvement and ERP
Advisory Services
Task 1: Project Planning
No project can succeed without proper planning and tools to manage the effort. Working together,
GFOA and the City project manager will prepare the following tools, which will be essential to
project coordination. We anticipate using the City’s long term schedule for its Motion project and
adding in detail related specifically to the ERP procurement and ERP readiness portion of the
project.
Project Plan –This document (typically created in Microsoft Project, although it can be
developed in Excel if the City is not familiar with Microsoft Project) identifies all the
detailed tasks for the project, the people who responsible for executing those tasks, the
estimated time required to complete them, and any ways in which a given task may be
dependent on other tasks.
Project Documentation Procedures – At the beginning of the project, GFOA and the
City will identify procedures for communication and posting/sharing of documents. If the
City uses a website for project and document management, GFOA consultants can post to
that site. If desired, GFOA can also host a website with collaboration tools specifically
for this project.
Task 1: Project Planning
Phase Duration: 2 weeks
Cost Included
Deliverables D0: Project Plan
Task 2: Process Design and Requirements
GFOA will work to document standard business processes and develop functional requirements
representing the City’s needs for a new system. At each step in the business process, we will
determine both the system requirements and implementation requirements, and document them
using a Microsoft Excel template that will be included in the eventual request for proposals (RFP.
Requirement development focuses on functional requirements that define what needs to be
completed (such as tasks, outputs, interfaces, calculations, processing, etc.) rather than how the
system or the organization handles tasks currently. This allows for future improvement and full
utilization of the system tools and built-in processes to make the City more efficient. The
expected scope of the project and scope of business process requirements is listed below.
Included in this phase is assistance to help with the City’s chart of account re-design. GFOA
strongly recommends that all organizations evaluate their chart of accounts prior to embarking on
an ERP replacement project. Based on GFOA’s review of the City’s chart of accounts, GFOA
feels that this will be an essential component of project success.
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GFOA
Business Process Improvement and ERP
Advisory Services
Process List
Process Task / Topics
Accounting Chart of Accounts
General Ledger Transactions
Grant / Project Tracking
Financial Reporting
Budget Operating Budget
Capital Budget
Budget Adjustments / Amendments
Procure – Pay Vendors
Purchase Requisitions
Purchase Orders
Contract Management
Change Order
Receiving
Accounts Payable
Customer Billing Customer File
Billing
Accounts Receivable
Treasury Cash Receipts / POS
Disbursements
Bank Reconciliation
Investments
Asset Management Asset Acquisition
Asset Lifecycle (Facilities, Fleet, Equipment)
Depreciation
Transfer / Disposal / Retirement
Human Resources Positions
Employee File
Benefit Enrollment
Personnel Evaluations
Disciplinary Actions / Grievance
Risk Management (Injury / Workers Comp)
Training / Certifications
Personnel Actions Recruitment
New Hire
Personnel Actions (Salary Adjustment / Position Change)
Time Entry – Payroll Time Entry
Time Approval
Payroll Calculations
Payroll Processing
Leave Management (FMLA)
Task 2: Requirements Development
Phase Duration: 1-2 months
Cost $ 20,250
Deliverables D2: Process Design
D3: Requirements
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GFOA
Business Process Improvement and ERP
Advisory Services
Task 3: RFP Document
In parallel with Task 2, GFOA will work with the City to prepare an overall procurement strategy
designed to accomplish the organization’s requirements and business goals, and mitigate risks
during the project.
The procurement strategy will define the scope of the RFP and the strategic choices for how the
RFP is written, and identify a specific plan for moving forward into the procurement process.
In this phase, GFOA will also develop a detailed RFP document. GFOA’s RFP format is
designed to remove disparity between proposals and to provide as much of an apples-to-apples
comparison as possible. In addition, GFOA develops all RFPs with the end goal in mind – a
contract that mitigates risk and leads to a successful project.
GFOA has a template RFP that was specifically designed for ERP procurements and has been
continually updated, as required by changes in the ERP market. However, we are flexible and can
either use this template or a City RFP template, and we can work with City staff to accommodate
essential information, questions, and terms.
When complete, the RFP document will include information to help communicate the following
to potential ERP vendors:
1) Procurement terms and conditions.
2) Detailed vendor response templates.
3) Functional requirements.
4) To-be process definition.
5) Interface definition.
6) Technical documentation.
7) Key objectives / goals / critical success factors for the project.
8) Service-level expectations.
9) Other information necessary for vendors to prepare detailed response s that meet the
City’s needs.
Task 3: RFP Document
Phase Duration: 1-2 months
Cost $4,700
Deliverables D4: RFP Document
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GFOA
Business Process Improvement and ERP
Advisory Services
Task 4: System Selection Services
GFOA will provide ongoing project advisory services to help the County coordinate and manage
its ERP selection project. GFOA consultants assigned to this project have managed many similar
projects with other local governments and will bring that experience to the County’s project.
Similarly, GFOA will pull examples from training seminars, other governments, and ongoing
research, along with consulting templates that are regularly used in “more involved” GFOA
projects.
GFOA’s system selection and procurement methodology relies on principles of fairness, attention
to detail, and competition, yet remains flexible enough to adapt to local procurement laws or
other unique situations. In addition, the approach is continually enhanced by feedback from the
hundreds of public-sector clients we work with, our own staff experience, and the vendor
community.
For this part of the project, GFOA will provide coaching, overall guidance, and planning
assistance. The County will be responsible for facilitating the proposal assessment portion of the
project. GFOA expects that the County use an approach similar to the one below.
GFOA Approach
GFOA’s methodology is based on a series of elevations that “promote” proposals to the next level
of evaluation. Through defined steps, vendors will be evaluated and scored according to pre-
defined criteria, with the top vendors moving on to compete at the next step. GFOA’s standard
evaluation process includes four steps, shown in the table below.
Written Proposals:
The County will review all written proposals and identify three (3) proposals to elevate to
software demonstrations. Vendors will be notified and scheduled for demos after the County’s
elevation meeting.
Software Demonstrations and Implementation Presentations
Approximately two (2) weeks prior to each vendor’s scheduled software demonstration, the
County will send the demo scripts to the vendor. Demos will be heavily scripted and require the
vendor to go through system business processes. The focus of the software demos should be to
evaluate system features and capabilities rather than to look at the “bells and whistles.” It is
expected that demonstrations will last approximately three (3) days per vendor. At the conclusion
of software demonstrations, the County will evaluate the demonstrations and elevate two (2)
proposals for the Discovery phase. Software demonstrations will be a combination of vendor
presentations on software features and a discussion of implementation issues.
Step Vendors
Written Proposals Unlimited
Software Demonstrations 3
Discovery 2
Final Contract Negotiations 1
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GFOA
Business Process Improvement and ERP
Advisory Services
Task 4: Ongoing Advisory Services
Phase Duration: Duration of Engagement
Cost* $16,000
Deliverables D5: High-Level Proposal Assessment
D6: Templates, Example Documents
D7: Demo Scripts
D8: Ongoing Project Management and Regular Check-In
Meetings
* Note: GFOA will invoice for this task upon completion of Task 6.
GFOA can provide additional services such as performing a detailed proposal analysis of an
proposals received by the City ($2,500 per proposal) or facilitate vendor demos and interviews
($4,500 per vendor).
Task 5: Discovery
During Discovery, the City will begin working with any remaining vendors to prepare a statement
of work for the implementation. For many organizations, the Request for Clarification (RFC) and
Discovery process acts as the final opportunity to clarify unresolved issues before making a final
elevation decision. Before the Discovery phase, each vendor is asked to provide a written
response to an RFC letter outlining any remaining issues (typically focused on implementation
issues). Then, during Discovery, each remaining vendor is invited back onsite for one more day
of presentation. During this presentation, any remaining issues with software functionality,
implementation approach, data conversion, contract terms, or scope are clarified, and vendors are
asked to make any necessary revisions to their proposals. At the conclusion of Discovery, the
City will enter contract into negotiations with one vendor.
Task 5: Discovery
Phase Duration: 1-2 months
Cost* $ 9,300
Deliverables D6: Clarification Documents
D7: Discovery Staffing
* GFOA assumes that the City will go through a Discovery process with two (2) vendors. If
additional vendors are included, additional costs will apply. If the City goes through Discovery
with just one vendor, GFOA will reduce its Discovery fees by 40%.
Task 6: Contract Negotiations
One of the most valuable services that GFOA provides its clients is the negotiation of software
contract and implementation service agreements. Too often, governments are pitted against
software vendors that have negotiated contracts many times before. Understandably, software
vendors and their implementation partners want to maximize profit and minimize risk. GFOA has
developed a unique contracting methodology, using our membership network, to benchmark
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Business Process Improvement and ERP
Advisory Services
prices and terms. We propose to use this methodology – which also ensures that GFOA’s best
practices are included in the contract – for this engagement.
GFOA will be involved with developing a software license contract, software maintenance
agreement, and implementation services agreement. In addition, GFOA will take the lead in
developing the statement of work, a critical document. The statement of work outlines
responsibility for the implementation, and it is the primary reason GFOA consultants provide
such a high level of detailed analysis throughout the procurement . GFOA will ensure that the
City’s statement of work is defined to a fine level of detail in order to prevent any unnecessary
issues or misunderstandings during implementation.
Task 6: Contract Negotiations
Phase Duration: 1 -2 months
Cost $15,720
Deliverables D8: Contract Negotiations
D9: Statement of Work Development
Task 7: Ongoing Advisory Services
GFOA will provide ongoing project advisory services to help the City coordinate and manage its
ERP selection project. GFOA consultants assigned to this project have managed many similar
projects with other local governments and will bring that experience to the City’s project.
For this part of the project, GFOA will provide coaching, overall guidance, and planning
assistance.
Task 7 Ongoing Advisory Services
Phase Duration: 1-2 Months
Cost $225 per hour (other)
Deliverables As necessary
GFOA also has provided additional implementation advisory services – focused on business
process design (best practice implementation), quality assurance, and contract compliance
through the duration of the implementation – for other clients. These services can be contracted at
a rate of $225/hour or the approximate equivalent in fixed-fee deliverables.
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GFOA
Business Process Improvement and ERP
Advisory Services
Project Schedule
GFOA has proposed the following high-level schedule for completing all the work described in
this proposal. Based on conversations with the City, GFOA believes that this schedule is
consistent with the City’s plans, but we would modify our schedule to better sync with the City’s
overall project schedule if necessary. GFOA would be prepared to begin work approximately one
(1) month after contract signing.
Proposed Schedule
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Task 1: Project Planning
Task 2: Process Design / Requirements
Task 3: RFP
Task 4: Ongoing Advisory Services
Task 5: Discovery
Task 6: Contract Negotiations
Task 7: Ongoing Implementation Advisory
Services (optional)
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GFOA
Business Process Improvement and ERP
Advisory Services
Price
Unless noted, all pricing is provided as a fixed fee, inclusive of all travel costs incurred by
GFOA staff. GFOA will invoice for project deliverables upon completion of project deliverables.
Summary of Fees by Task
Phase/Deliverable Milestone Price
1 Project Planning Included
D1 Project Plan
2 Process Design and Requirements $20,250
D2 Process Design
D3 Requirements
3 RFP $4,700
D4 RFP Document
4 System Selection Advisory Services $16,000
D8 Ongoing Project Management and Regular Check-In Meetings
5 Discovery $9,300
D9 Clarification Questions (RFC Letters)
D10 Discovery Staffing
6 Contract Negotiation $15,720
D11 Contract Negotiations
D12 Statement of Work Development
7 Implementation Transition
Ongoing Advisory Services ($225/hour)
TOTAL $65,970
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Business Process Improvement and ERP
Advisory Services
Project Assumptions
GFOA assumes that City staff will be available to participate in meetings and provide
information necessary to the project.
GFOA will complete tasks in this proposal with a combination of onsite and off-site
work. Work performed off site will include review of project deliverables and the
development of GFOA reports.
Each site visit will include one or two GFOA consultants and last approximately two to
three days (depending on planned activities). GFOA site visits will be scheduled in
advance with the City’s project manager. The City will be responsible for inviting
appropriate stakeholders to meetings, based on agenda topics.
GFOA has proposed all services listed for a fixed fee, based on completion of
deliverables (unless noted). The fixed fee amount and hourly rate includes all expenses
including travel. GFOA will invoice monthly for the amount listed in this proposal for
tasks/milestones completed within the previous month.
When performing work onsite, GFOA staff will be provided with appropriate office
workspace.
If it becomes necessary for the City to request additional resources or expand scope
beyond what is listed in this proposal, such additional work product will be secured as an
amendment to the contract between the City and the GFOA, and the work will be
performed at rates of $200 / hour.
As an educational, nonprofit, professional membership association, GFOA reserves the
right to publish non-confidential documents describing the results of, or created during,
the services described in this scope of work. GFOA will not publish any item that
identifies the City without obtaining prior written consent of the government.
GFOA is a nonprofit membership association made up of members representing
organizations like the City. GFOA’s liability and indemnification under any agreement
reached with your organization will be limited to the extent of fees paid by insurance
coverage currently in force. This limitation applies to all exposures under this
engagement.
The City recognizes that GFOA’s role is to provide information, analysis, and advisory
services. As such, GFOA bears no responsibility for the performance of the software,
hardware, or implementation service suppliers.
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Business Process Improvement and ERP
Advisory Services
Appendix: GFOA Profile
Company Information
Official Company Name: Government Finance Officers Association of the United
States and Canada
Company Ownership:
GFOA is a 501(c)3 nonprofit association governed by an
18-person executive board made up of public-sector
professionals.
Location of Company Offices
203 North LaSalle Street
Suite 2700
Chicago, IL 60601
1301 Pennsylvania Avenue, N.W.
Suite 309
Washington D.C. 20004
Location of Office Servicing CA
Accounts:
GFOA’s primary office is in Chicago. All research and
consulting staff are located in the Chicago office.
Number of Employees:: GFOA has approximately 60 employees.
Location from which employees will be
assigned: Chicago, IL
Contact Information
Mike Mucha
Director, Research and Consulting
203 North LaSalle Street
Suite 2700
Chicago, IL 60601
Office: 312-977-9700
Direct: 312-578-2282
Email: mmucha@gfoa.org
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