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HomeMy WebLinkAbout _ 9.1(a)--Authorize City Manager to negotiate & execute change orders for ERP Implementation Services CITY OF REDDING REPORT TO THE CITY COUNCIL Recommendation Approve the following actions: (1) Authorize the City Manager to finalize negotiations and, upon completion, execute a Change Order with Graviton Consulting, moving the proposed go live date from January 1, 2024, to July 1, 2024, for an amount not to exceed $319,150 for the Oracle Enterprise Resource Planning/ Human Capital Management Implementation Services; (2) Authorize the City Manager to finalize negotiations and, upon completion, execute a Change Order with BerryDunn LLC for an amount not to exceed $87,250 for the Oracle project and change management services; and (3) Authorize the City Manager to finalize negotiations and, upon completion, execute a contract for a Managed Services Agreement with Graviton Consulting for an amount not to exceed $270,000. Fiscal Impact The change order with Graviton Consulting is based on the request to modify the go live date from January 1, 2024, to July 1, 2024, to complete the Human Capital Management (HCM) phase of the project. The fiscal impact of this change is $319,150, of which, approximately $106,000 would be from the General Fund. Another aspect of this change is needing to increase the project management and change management services with BerryDunn LLC, in an amount not to exceed $87,250, of which, approximately $29,000 would be from the General Fund. Overall the change of go live date is resulting in total additional cost of $406,400, which the General Fund is approximately $135,000. These amounts will be budgeted after final negotiations with both parties at the mid-year budget update. Upon staff compiling the final costs, staff will consider other needs and the cash position of the Information Technology internal service fund, the City of Redding (City) could utilize reserves to mitigate or eliminate the impact of this change to the City funds including the General Fund. MEETING DATE: October 2, 2023 ITEM NO. 9.1(a) FROM: ***APPROVED BY*** btippin@cityofredding.org btippin@cityofredding.org SUBJECT: 9.1(a)--Consider authorizing the City Manager to finalize negotiations and execute change orders to contracts with the City of Redding and Graviton Consulting for implementation and project management services related to change of the go live date and with the City of Redding and BerryDunn LLC for post go live support services. Barry Tippin, City Manager Report to Redding City Council September 28, 2023 Re: 9.1(a)--Authorize City Manager to negotiate & execute change orders for ERP Implementation Services Page 2 The managed services agreement was included with the Biennial Budget Development and will have no fiscal impact to authorizing the City Manager to approve the agreement. Alternative Action The City Council could choose to provide staff with alternative direction. One option is to try to maintain the current projected go live date of January 1, 2024. This option brings with it significant risk such as staff burnout, issues with project completion, and ultimately the risk of not achieving a status sufficient to go live and requiring a change to the timeline after a significant push to achieve January 1, 2024. Additionally, Council could direct staff to explore other alternative options, such as other projected go live dates. Background/Analysis The Oracle Cloud Project has three phases. The first phase, Enterprise Resource Planning (ERP)/Finance phase, went live on July 1, 2023, as scheduled. The second phase, HCM/Payroll/Time and Attendance Phase, is currently scheduled to go live beginning January 1, 2024. The third phase, the Budget phase, is slated to go-live in January 2025. The ERP Project Management Team meets weekly and reports progress to the Executive Steering Committee on a monthly basis. During the last few months, the Project Management Team has reported many risks related to the HCM/Payroll go-live date. Some of the risks included are related to project personnel and the current pace of the project as well as the configuration of the software. Both the Project Management Team and the software vendor, Graviton Consulting, are in favor of adopting a new project schedule. The Project Management Team believes that the time to re-baseline the project is now to allow rather than to incur additional costs and avoid risk at a later date. The Graviton Consulting, the system integrator for the Oracle Cloud Project, change order was prepared by the vendor’s project sponsor and includes staffing cost to allow to an extended timeline to reduce risk for the City to better prepare for accurate payroll, train staff on new timesheet processes, and complete necessary configuration for success. The BerryDunn’s, the City’s third-party project manager, change order is to extend our project management services. BerryDunn originally budgeted an average of 180 hours per month from their project management team. BerryDunn has maintained that average with the extension of the HCM/Payroll timeline and will lead change management activities for the City. The final element is to approve completion of a managed services agreement with Graviton Consulting. This agreement is designed to assist the City with full adoption of the new ERP system and make any enhancements necessary to the system. This will provide better support to the success of the project as each phase is implemented and begins use. It will help City staff get up to speed on how to support the new software while also identifying areas where the system can be improved and help the City implement changes as they are identified. This contract is designed to assist the City in fully realizing the investment made thus far in the new Oracle software. This contract will provide an additional year of support beyond the support included in the original contract. Report to Redding City Council September 28, 2023 Re: 9.1(a)--Authorize City Manager to negotiate & execute change orders for ERP Implementation Services Page 3 Environmental Review This is not a project defined under California Environmental Quality Act, and no further action is required. Council Priority/City Manager Goals • Budget and Financial Management – “Achieve balanced and stable Ten-Year Financial Plans for all funds.” • Communication and Transparency – “Improve the quality of communication with the public and City employees to enhance knowledge and increase transparency to improve public trust.”