Approve a consulting services agreement with Acuent for the upgrade of the Human Resources / Payroll System from May 23, 2001 to June 30, 2002, in an amount not to exceed $897,200.
The City currently utilizes PeopleSoft version 7.02 to facilitate human resources and payroll processes. This version of PeopleSoft is scheduled to be retired and will not be supported by PeopleSoft after December 2001. The Human Resource / Payroll Project (HRPR) Steering Committee comprised of members from the departments of Human Resources, Information Technology, and Finance and the City Manager’s Office have reviewed alternatives to upgrading the system. Based on this analysis, in January 2001, the HRPR Executive Steering Committee determined that the City needs to begin planning for an upgrade of the existing PeopleSoft System to the upgraded version 8.0.
A Request for Qualifications (RFQ) was issued in March 2001, seeking an upgrade consultant. Responses to the RFQ were received on April 12, 2001. After an extensive evaluation process, including an assessment of technical capacity, consultant interviews and reference checks, it was determined that Acuent would provide the City with the best consulting services at a cost-effective price.
PeopleSoft, the City’s current software provider of the Human Resource / Payroll System, released version 8.0 of its application in September 2000. As a result of issuing this new release, the City’s current PeopleSoft application version 7.02 is scheduled to be retired, and therefore, will not be supported by PeopleSoft after December 2001. PeopleSoft’s stated policy is to support a major release for twelve months after the release of a second new version of the system. PeopleSoft had released version 7.5 prior to release of version 8.0. The City did not see the need to upgrade to version 7.5 upon its release because the functionality changes did not justify the upgrade costs and PeopleSoft was still supporting the 7.02 version.
Generally, PeopleSoft and other competing vendors release new versions of their software every 12 to 18 months. It is important to note the City and all other PeopleSoft customers will be faced with a major product upgrade project on the average of every 24 months. This upgrade schedule from the vendor is driven by the competitive nature of the software business and is consistent from vendor to vendor. The City has included in the RFQ, as a result of the necessity to conduct future upgrades, a deliverable requiring an appropriate level of knowledge transfer from the upgrade partner to City project staff. The knowledge transfer process will enable the City to perform future, routine upgrades as required.
The City conducted extensive analysis on the PeopleSoft upgrade options. Representatives from the core user departments of Human Resources, Finance and Information Technology attended the PeopleSoft annual user group conference to gain insight of the new release and received input from other agencies also considering the upgrade. The HRPR Steering Committee also received a presentation from RSA, one of the consulting firms that had assisted the City in its initial implementation of PeopleSoft on the upgrade considerations. In addition, an independent analysis was conducted by Cerrera-MAXIMUS in which they reviewed the viability of the PeopleSoft project upgrade.
Given the critical nature of the City’s HRPR system to pay our employees accurately and in a timely manner, the risk of experiencing problems producing an accurate payroll beginning as early as December 2001, and a 100% certainty of problems producing W-2’s in January 2002 with the current PeopleSoft version, it is imperative that the City move forward with an upgrade strategy.
The HRPR Steering Committee reviewed a number of options including: doing nothing; upgrading to the next level, version 7.5 instead of going to version 8.0; replacing the PeopleSoft system with another software product; and upgrading to PeopleSoft version 8.0.
Based on the analysis conducted, the HRPR Steering Committee determined the most efficient and cost effective approach would be to upgrade to PeopleSoft version 8.0, enabling the City to take advantage of the most updated functionality available.
Benefits of upgrading to PeopleSoft version 8.0:
1. Assurance of continued application maintenance support through at least September 2003.
Support for the City’s current version of PeopleSoft expires in December 2001. Upgrading to the most current version assures that the City will be supported at least through the expiration of the version released subsequent to version 8.0.
2. Strategically embracing the City’s e-government initiative by taking advantage of PeopleSoft version 8.0 Internet architecture.
PeopleSoft version 8.0 re-deploys all current Human Resource and Payroll applications onto the Internet. No longer will end-users be required to have PeopleSoft application software installed on their Personal Computers (P/C’s) – they will only need access to the Inter/Intranet. PeopleSoft version 8.0 uses “portal technology”, providing end-users with role-based and personalized information required to perform specific objectives.
3. Built-in functionality encouraging the use of “self-service” applications allowing employees to initiate certain human resource and payroll changes.
PeopleSoft version 8.0 employs strategic “e-applications” comprised of self-service web transactions designed to streamline business processes throughout the application. Version 8.0 functionality resident in the e-pay, e-benefits, e-compensation and e-profile modules allows application end users to initiate certain transactions, reducing paper-flow and processing time.
4. Opportunities to streamline human resource and payroll business processes currently in place.
Upgrading to version 8.0 of PeopleSoft provides the City with an opportunity to thoroughly review current procedures and practices inherent in the current version (7.02), including reducing the significant customizations that were developed to accommodate the City’s HRPR processes in the existing system. All existing business processes will be thoroughly reviewed to take advantage of re-engineering the efficiency and effectiveness of the current application in the new version. A significant effort will be made to streamline the City’s existing 167-step process to produce bi-weekly payroll. Additionally, strategic “vision” sessions will be held immediately prior to the start of the upgrade, providing all key stakeholders with an opportunity to express ideas and concerns related to the impending upgrade.
On March 16, 2001 the City issued a Request for Qualifications (RFQ) seeking an upgrade consultant with demonstrated experience in performing upgrades of the PeopleSoft Human Resource Management System (HRMS) applications. A voluntary pre-proposal conference was conducted on March 30, 2001, in which ten consulting firms attended. Eight responses to the RFQ were received on April 12, 2001. Proposed consulting services costs from the eight respondents ranged from $547,340 to $2,985,105.
An extensive evaluation process of the proposals was conducted, including an assessment of technical capacity and the quality of the proposals by a Technical Committee of the HRPR Project after which the viable proposals were narrowed down to three consulting firms for further consideration.
Evaluation criteria used by the Technical Committee included:
Ø Consultant experience relevant to implementing and/or upgrading PeopleSoft HRMS software in a public agency environment;
Ø Experience base of consultant and proposed project manager to carry out project scope and deliverables;
Ø Overall quality of the technical solution planned (project plan);
Ø Total cost of the project;
Ø Consultant success in delivering upgrade and/or implementation services on-time and on-budget; and
Ø Enhancements and/or deficiencies impacting the overall quality of the proposal.
Upon recommendation of the Technical Committee, the HRPR Executive Steering Committee conducted interviews of the three firms (proposed cost included):
Acuent ($897,200) RSA ($1,009,685) Cedar ($1,297,717).
The Committee unanimously recommended Acuent subject to reference checks. After the reference checks were conducted, it was determined that Acuent would provide the City with the best consulting services at a cost-effective price. Acuent best demonstrated an ability to provide the City with a high level of expertise and knowledge specifically relating to PeopleSoft upgrades. Acuent’s qualifications include:
Ø Assisting PeopleSoft with a beta-test of Version 8.0 prior to its release in September 2000;
Ø Registration as a PeopleSoft Implementation Partner since 1992, conducting more than 350 successful PeopleSoft implementations and upgrades;
Ø A demonstrated ability to provide City staff with knowledge to perform future, routine upgrades;
Ø Extensive exposure of consultant staff to PeopleSoft version 8.0 applications;
Ø Demonstrated success in assisting public sector clients with PeopleSoft upgrades and implementations.
Throughout the selection and negotiation process, Acuent has demonstrated an ability to not only assist the City with the PeopleSoft upgrade, but also to ensure the City and staff ultimately benefit from the value-added functionality in the new version. Acuent has proposed to assist the City with the strategic “visioning” sessions and will work closely with the project staff to assure a high level of knowledge transfer takes place throughout the project. Acuent’s proposed project team includes a knowledgeable Project Manager who has successfully led the deployment of other public sector PeopleSoft upgrades. Additionally, the technical and functional staff proposed by Acuent to assist with the upgrade carry a wide array of PeopleSoft experience, including extensive training with PeopleSoft Version 8.0.
The City’s proposed agreement with Acuent, which is included in the Council packet, provides for a seven-month upgrade process leading to an upgrade of the City’s PeopleSoft HRMS system by the end of December 2001. Services performed under this agreement include an upgrade assessment and planning, system upgrade, system retrofit, system integration, and system upgrade deployment. The proposed contract is “deliverables” based as opposed to simply “time and materials”. The contract includes a detailed project plan that clearly identifies tasks and resources (City and Consultant). The payment process in the contract is tied to City sign off of major key deliverables as identified in the project plan.
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This memorandum has been coordinated with the Departments of Finance, Human Resources and Information Technology, the City Attorney’s Office and the Manager’s Office.
This agreement will be funded from the General Fund (001) from monies currently allocated to the Payroll / Human Resources Project Citywide appropriation.
Fund: General Fund – 001
Amount: $897,200
Budget Document: 2000-2001 Proposed Operating Budget
Page 646 – Human Resource Payroll Project Allocation
SCOTT P. JOHNSON
Director, Finance Department
NONA TOBIN
Director, Human Resources Department
WANDZIA GRYCZ
Chief Information Officer