ERP Needs Assessment - BidNet

City of Carlsbad, CA ERP Needs Assessment May 9, 2016

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Contents

ERP Needs Assessment CITY OF CARLSBAD, CA | MAY 9, 2016

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Table of Contents 1. Executive Summary ............................................................................................... 3

1.1 Introduction ............................................................................................................................... 3

1.2 Project Goals ............................................................................................................................. 3

1.3 Project Scope ............................................................................................................................ 3

1.4 Current Systems Environment .................................................................................................. 5

1.5 Assessment Summary .............................................................................................................. 6

1.6 Opportunities For IMprovement ................................................................................................ 8

1.7 Options Analysis ....................................................................................................................... 9

1.8 Cost Benefit Analysis .............................................................................................................. 10

1.9 Recommendations Summary .................................................................................................. 14

2. Current State Assessment .................................................................................. 18

2.1 Assessment Methodology ....................................................................................................... 18

2.2 Assessment Scope ................................................................................................................. 18

2.3 Current ERP Environment ...................................................................................................... 19

2.4 Key Strengths and Opportunities for Improvement ................................................................. 21

3. Key Process Performance Indicators ................................................................ 43

3.1 Introduction to Key Process Performance Indicators .............................................................. 43

3.2 Considerations for Implementing Key Process Performance Targets .................................... 43

3.3 Sample Process Performance Measures ............................................................................... 46

3.4 Important Notes for Going Forward ........................................................................................ 51

4. Options Analysis .................................................................................................. 52

4.1 Option 1: Maintain and Upgrade Existing Enterprise Applications ......................................... 52

4.2 Option 2: Upgrade and Integrate Existing Best of Breed Enterprise Applications .................. 53

4.3 Option 3: Leverage Single Existing ERP Solution and Retire Redundant Applications ......... 55

4.4 Option 4: Competitively Procure a Replacement ERP Solution and Retire Redundant Solutions ................................................................................................................................. 57

5. Cost Benefit Analysis of Options ....................................................................... 58

5.1 Cost Analysis .......................................................................................................................... 58

5.2 Comparative Summary ........................................................................................................... 62

Appendices

A: Application Inventory ............................................................................................................... 67 B: Interface List ............................................................................................................................ 74 C: Issues and Opportunities ........................................................................................................ 76 D: High Level “To-Be” Business Processes .............................................................................. 132 E: ERP Marketplace Overview .................................................................................................. 163 F: Cost Assumptions ................................................................................................................. 169


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1. Executive Summary 1.1 INTRODUCTION

The City of Carlsbad prides itself on providing top quality services to a growing population. Although just 39 square miles, the City’s 674 employees deliver a full suite of government services to more than 110,000 residents – a population that has grown over five percent since 2010 and 12 percent over the last 10 years.

The City of Carlsbad, often referred to by locals as “The Village by the Sea,” was incorporated in 1952. Today, with an operating budget of $244.9 million, more than 20 city departments provide public safety, fire safety, community and economic development, housing and neighborhood services, library and cultural arts, parks and recreation, public works, and other general government services.

1.2 PROJECT GOALS

The City is reviewing its financial and procurement management, human resources and payroll, service and work order management, and asset management processes with the objective of improving business outcomes and operational agility. The goals of this Business Process Improvement project include:

1. Continue to provide excellent customer service by developing streamlined, standardized processes to eliminate redundant workflows and improve operational efficiency

2. Identify key indicators to measure the performance of core financial, human resource, and asset management business processes

3. Identify policy, procedure, and technology changes required to support business process change

4. Evaluate the costs and benefits of alternative technology solutions to support business process change

To support these goals, in February 2015 the City engaged Plante & Moran, PLLC (Plante Moran) to:

Conduct a review of existing business processes and identify issues and opportunities for improvement

Develop high level “to-be” business processes to support streamlined, standardized workflows

Identify sample key performance indicators (KPI) used by peer municipalities to measure business process efficiency

Analyze the total cost of ownership (TCO) and return on investment (ROI) of alternative enterprise resource planning (ERP) solutions to support business process change

1.3 PROJECT SCOPE

Included in the scope of this assessment were 28 key business processes spanning three major business functions.


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Business Functions Business Processes

Financial Management (Finance and Cash/Procure to Pay). This includes all business processes necessary to receive and account for cash, as well as to plan, formulate, create, execute against, control, and report on the budget and business activities of the City. It also includes all business processes necessary to define a need for, procure, and pay invoices for goods, professional services, and construction contracts, and coordination of annual project and purchase order roll forward. Additional processes include maintaining vendor master data, 1099 reporting, and various associated reporting.

1. Accounts Payable

2. Accounts Receivable and False Alarm Billing

3. Bank Reconciliation

4. Budget/Forecasting

5. Cash Handling (i.e., Cash Receipts)

6. Contract Management

7. Debt Management

8. Fixed Assets

9. General and Job Ledger

10. Grants Management

11. Project/Cost Accounting

12. Treasury/Cash Management (i.e., Currency)

13. Utility Billing

Human Resource Management (Hire to Retire). This includes all business processes necessary to plan for, hire, develop, assign, sustain, and separate staff throughout their tenure of employment with the City.

14. Employee Scheduling (Library)

15. Employee Scheduling (Parks & Recreation)

16. Leave of Absence

17. Onboarding

18. Offboarding

19. Payroll

20. Personnel Action Form

21. Position Control

22. Timekeeping (CyberShift)

Asset Management (Acquire to Retire). This includes all business processes required to obtain, manage, and dispose of fixed assets and assets under construction.

23. Asset Lifecycle Management

24. Inventory Management

25. Preventive Maintenance

26. Purchasing/Online Requisitions

27. Receiving

28. Service (Work Order) Management


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1.4 CURRENT SYSTEMS ENVIRONMENT

The City currently relies upon nearly 40 separate automated systems to support these core and extended ERP functionalities. In addition, the City has developed more than 30 standalone shadow systems, mostly Microsoft Access databases and Excel spreadsheets, to further support business processes in areas where existing systems do not provide the required functionality.


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Figure 5: City of Carlsbad ERP Systems Environment illustrates the key systems in use at the City.

Figure 1: City of Carlsbad ERP Systems Environment

A number of paper forms and manual process also exist throughout the City to support key finance, human resources, and asset management operations.

1.5 ASSESSMENT SUMMARY

The City continues to invest in technology in efforts to modernize operations. For example, during the course of this review, HP Records Management was being implemented for document management. However, many manual and isolated document management processes were still in place and Plante Moran’s observations reflect the environment that existed at the time.

In general, most city staff expressed significant frustration with current finance and human resources related systems. Many business processes require the use of more than one software system. Systems lack adequate interfaces and reporting capabilities, and as a result employees research multiple systems or conduct workarounds to answer basic questions.

Departments that use the City’s asset management systems were generally more satisfied, although the benefits of these systems could be better realized if they were used more consistently to track citywide assets.

The following summarizes key issues associated with the business processes and systems in scope of this assessment.


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Decentralized Business Operations

City departments have a great amount of independence in regular business operations. This independence can result in decisions that may be optimal for the individual department but suboptimal for the organization as a whole. Examples include multiple scheduling systems, lack of standardization for timekeeping, and tracking of key business information external to centralized systems.

Limited Access to Data and Information

Throughout interviews, requests were made for employees to report “how many” and “how often” various business activities occur. Current systems are not configured in such a way as to track transactional activities in this way, which makes it difficult for employees to monitor the effectiveness and efficiency associated with core business processes.

Duplicate Systems/Lack of System Integration

The City’s ERP related application portfolio is much larger than in other similar situated municipalities and the data required to solve a problem may exist in several separate software applications and/or standalone shadow systems. As an example, if a vendor calls to inquire about a payment, the financial system will not have supporting information related to invoice or contract language. This requires significant time researching information among several different systems.

Reliance on Manual Processes Several key processes require many additional handoffs and authorizations than similar processes in other organizations. One of the causes of this is limited automated workflow capabilities in current systems. A similar but less common issue is the complexity of paper-driven processes and uncertainty related to the status of those processes. These processes tend to have a high error rate as well as a high inquiry rate. As an example, Human Resources estimates that the personnel action form (PAF) process has an error rate higher than 50 percent.

Incomplete System Implementations

Several interviews revealed a similar trend of technology procurement: a system selection process was structured with either limited breadth (fewer perspectives than advisable), or limited depth (limited project scope). Both approaches result in a system implementation that is insufficient and a business need that remains unmet. Rather than procure or implement additional functionality, employees innovatively create work-arounds which require additional work effort and institutional knowledge to maintain.


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Limited Training Due to the decentralized nature of business services in Carlsbad, accountability at a department level is increased. However, with many processes, Finance or Human Resources noted that service departments may not be aware of proper procedure, policy, or system functionality and that this lack of awareness results in non-value added activities. An increase in the amount of training for business operations will have a positive impact on standardization, organizational efficiency, and system utilization.

Limited Process Documentation While extensive online system user guides and training manuals are available for IFAS and Lawson payroll, most processes do not have written documentation to explain the standard method for using these systems to follow City policy. An investment in process documentation and desktop procedures, related training, and annual updates as necessary should increase standardization, reduce unnecessary re-work, and ensure that polices are followed. These procedures should be updated as technologies are upgraded or replaced.

Inconsistent Enforcement of Policies and Procedures

The extent to which policies are followed is difficult to ascertain due to lack of reporting capabilities of the various data systems. However, several interviews with city staff revealed that policies may be circumvented in favor of simplified process flow. As an example, the City’s grants policy requires city manager approval prior to requesting council approval but this is seldom followed. Updating policies to reflect accepted practice or enforcing existing policies would help bridge this gap.

1.6 OPPORTUNITIES FOR IMPROVEMENT

This assessment identified nearly 250 discrete items in which existing systems do not meet the City’s operational requirements, user needs, and/or best industry practices supported by current, well integrated ERP solutions. The following summarizes common themes among these opportunities for improvement that city staff expressed as most significant.

1. Replace redundant and isolated ERP-related systems with an integrated, citywide ERP solution that enables streamlined business processes and more timely access to data and information.

2. Create interfaces with non-redundant systems to minimize the need for regular data reconciliation activities.

3. Standardize and streamline business processes. Automate processes whenever possible to reduce errors, unnecessary delays, and costs associated with frequent status queries and error correction.

4. Train employees in city policies, procedures, and ERP functionality so that the City can realize maximum value from its investment.

5. Where possible, use systems to enforce compliance with business processes and ensure accuracy of information. When an automated solution cannot be used to enforce city policy, establish compensating mechanisms to ensure compliance.


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6. Formalize the decision making model for technology investments so that city technology builds toward a shared goal of reducing the overall cost of doing business. This governance model should adopt principles to guide decisions, and its membership and operating procedures should reflect those principles.

7. Improve efforts to measure process efficiency, effectiveness, and organizational success. Adjust budget development and budget monitoring processes to incorporate discussion of status of business objectives, including operational performance as demonstrated by key performance indicators.

8. Institute auditing for key business processes. Establish a periodic audit of fixed asset inventory as well as an audit of reported performance measures.

1.7 OPTIONS ANALYSIS

Plante Moran worked with the City to identify the following four options for evaluation.

Option 1

Maintain and Upgrade Existing Enterprise Applications

Ability to address improvement opportunities in this report:

Low

This option upgrades the City’s financial (SunGard IFAS), human resources (Infor Lawson), and cash receipting (CORE) systems in order to maintain vendor support. It also maintains the nearly 40 vended systems and more than 30 standalone shadow systems, mostly Microsoft Access databases and Excel spreadsheets, to further support business processes in areas where existing systems do not provide the required functionality.

Option 2

Upgrade and Integrate Existing Best of Breed Enterprise Applications


Moderate

Like Option 1, this option upgrades the City’s financial (SunGard IFAS), human resources (Infor Lawson), and cash receipting (CORE) systems in order to maintain vendor support. Also like Option 1, it maintains the nearly 40 vended systems and more than 30 standalone shadow systems, mostly Microsoft Access databases and Excel spreadsheets, to further support business processes in areas where existing systems do not provide the required functionality. However, it implements an integration engine – a tool to enable integration among disparate systems, eliminating the need for many point-to-point interfaces that are prone to error and require more work to maintain.

Option 3

Leverage Single Existing ERP Solution and Retire Redundant Applications


High

Like Options 1 and 2, this option upgrades the City’s financial (SunGard IFAS), human resources (Infor Lawson), and cash receipting (CORE) systems in order to maintain vendor support in the near term. However in this option, the City leverages its contract with an existing vendor to purchase additional software modules in order to implement a fully integrated, citywide ERP solution, including finance, utility billing, human resources, and asset management. This option retires all redundant applications and develops interfaces to those critical systems identified in Appendix B.


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Option 4

Competitively Procure a Replacement ERP Solution and Retire Redundant Applications


High

Like Options 1 and 2, this option upgrades the City’s financial (SunGard IFAS), human resources (Infor Lawson), and cash receipting (CORE) systems in order to maintain vendor support in the near term. However in this option, the City conducts a competitive RFP process to procure and implement an integrated ERP solution, inviting vendors to propose on core ERP functionality (finance and human resources) as well as extended functionality including utility billing, asset management, timekeeping, and treasury management. Like Option 3, this option retires all redundant applications and develops interfaces to those critical systems identified in Appendix B.

A data warehouse – a centralized repository of data from disparate systems – can be layered on any of the above options to improve data analytics and dashboard reporting. However, this was not included in our options or cost analysis.

1.8 COST BENEFIT ANALYSIS

Plante Moran conducted a preliminary cost benefit analysis for each of the options identified above. The purpose of this analysis was to determine the potential financial impact of each of the options and to provide high level cost estimates, suitable for budgeting. This analysis included two major components: cost projections (i.e., the investment required by the City for each option) and cost savings (i.e., the potential benefits to the City if the investment is made). Cost projections considered one time software and hardware purchases, implementation services, other professional services such as procurement assistance and project management services, and internal labor as well as ongoing maintenance and support, professional services, training, and IT support. While we estimate significant cost savings to come from streamlined business processes, existing systems and business practices do not currently track cost and labor effort by business process. As a result, we were unable to include these soft cost savings in the cost benefit analysis here. Cost savings considered only the hard dollar savings associated with retiring redundant systems.


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Figure 2: Estimated One Time Implementation Costs on the following page summarizes estimated one time implementation costs for each of the options analyzed. Costs for Option 1 are based on estimates provided by the City and adjusted by Plante Moran based upon our experience. For Options 2, 3, and 4, Plante Moran estimated one-time costs based upon actual vendor pricing included in proposals for similar solutions for public sector organizations of similar size and complexity, and our implementation and consulting experience.


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Figure 2: Estimated One Time Implementation Costs

Figure 3: Average Estimated 10 Year Costs below identifies the median estimated total 10 year cost of ownership of each of the options analyzed, including both one time implementation costs and ongoing annual expenses.

Figure 3: Average Estimated 10 Year Costs

$930,000

$3,190,000

$7,650,000

$8,630,000

$995,000

$5,315,000

$12,755,000

$14,380,000

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

Option 1 Option 2 Option 3 Option 4

Low High

2.76M

4.28M

5.85M

7.46M

9.12M

10.83M

12.59M

14.40M

16.26M

18.19M

2.76M

6.10M

8.00M

9.95M

11.97M

14.04M

16.18M

18.39M

20.66M

22.99M

5.10M

11.71M

13.26M14.86M

16.50M

18.20M19.94M

21.74M

23.60M

25.51M

2.88M

10.18M

14.65M

16.29M

17.99M

19.73M

21.53M

23.38M

25.28M

27.24M

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

1 2 3 4 5 6 7 8 9 10

YearOption 1 Option 2 Option 3 Option 4


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Table 1: Relative Cost Benefit Analysis of Alternatives (Average Estimate) below provides a summary of the relative total 10 year costs and savings of each of the four options. The retirement of legacy systems can be quantified and are included in the cost savings line item below. Softer cost savings associated with labor savings resulting from reducing the need for maintenance of standalone, shadow systems and streamlining business processes are expressed as low, moderate, or high opportunities for savings.

Table 1: Relative Cost Benefit Analysis of Alternatives (Average Estimate)


Total 10 Year Cost $18,185,000 $22,990,000 $25,505,000 $27,240,000

Total 10 Year Cost Savings (legacy system maintenance) $0 $0 $4,840,000 $4,840,000

Net Cost $18,185,000 $22,990,000 $20,665,000 $22,400,00

Labor Savings (shadow system maintenance) Low Moderate High High

Labor Savings (business process redesign) Low Moderate High High

While we were not able to quantify cost savings resulting from streamlined business processes for the reasons described above, we would anticipate them to be significant in the latter three options, especially in Options 3 and 4.

Table 8: Typical Labor Savings by Process below provides typical labor savings by business process experienced by similarly situated municipalities implementing fully integrated, citywide ERP solutions (Options 3 and 4). These savings are often attributed to new streamlined, automated work processes, reduced errors, reduction in time spent researching issues, and easier to use reporting tools. However, it is important to note that these savings estimates can vary widely depending on process complexity, transaction volumes, and other factors.

Table 2: Typical Labor Savings by Process

Business Function Business Process Typical Labor Savings

Financial Management (Finance and Cash/Procure to Pay)

1. Accounts Payable 10-25%

2. Accounts Receivable & False Alarm Billing 5-10%

3. Bank Reconciliation 10-50%

4. Budgeting and Forecasting 5-15%

5. Cash Handling (i.e., Cash Receipts) 20-40%

6. Contract Management 20-30%

7. Debt Management 0-5%

8. Fixed Assets 5-10%

9. General and Job Ledger 10-20%

10. Grants Management 0-10%

11. Project Cost Accounting 10-20%

12. Treasury/Cash Management 0-5%

13. Utility Billing 10-20%

14. Employee Scheduling (Library) 0-5%


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Human Resource Management (Hire to Retire)

15. Employee Scheduling (Parks & Recreation) 0-5%

16. Leave of Absence 10-20%

17. Onboarding 5-15%

18. Offboarding 5-15%

19. Payroll 15-30%

20. Personnel Action Form 50-75%

21. Position Control 10-20%

22. Timekeeping (CyberShift) 20-30%

Asset Management (Acquire to Retire)

23. Asset Lifecycle Management 0-10%

24. Inventory Management 5-15%

25. Preventive Maintenance 0-10%

26. Purchasing/Online Requisitions 5-15%

27. Receiving 0-10%

28. Service (Work Order) Management 0-10%

1.9 RECOMMENDATIONS SUMMARY

While maintaining and upgrading existing enterprise applications (Option 1) is the lowest cost option, it does not address the significant functional gaps identified in this needs assessment. Nor does it address the City’s desire for streamlined business processes, easy access to data and information, and improved internal controls.

Plante Moran recommends conducting a competitive request for proposals (RFP) process to procure and implement an integrated ERP solution (Option 4), inviting vendors to propose on core ERP functionality (finance and human resources) as well as extended functionality including utility billing, asset management, timekeeping, and treasury management. This option (Option 4) offers the City the potential for significant labor savings, the benefits of an integrated ERP environment, the ability to explore the entire ERP market, and mitigates the City’s risk in circumventing a competitive procurement process (Option 3). It allows the City to more closely evaluate market options considering a number of factors, including demonstrated functionality; vendor viability; firm cost proposals; sustainability of solution; and best, long term fit for the City.

Should the County elect to forego an RFP process and pursue Option 3, it is important to consider the significant risks associated with this option:

No Warrantee on Functionality. Without the detailed functional and technical requirements typically developed for a Request for Proposal, and subsequently included in a vendor contract, the City risks an effective warrantee on software functionality.

User Resistance and Lack of User Adoption. Without broad city staff participation in an open selection and evaluation process, many city staff may feel alienated from the decision making process and resist the changes made as a result of new systems and work processes.

Potential for Increased Cost. Without an RFP processes, the City may lose its ability to effectively negotiate price among competing vendors.

Vendor Protest. Without a competitive process, one or more vendors may protest the City’s selection.


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However, leveraging and expanding an existing ERP solution (Option 3) can be a viable option if the City effectively mitigates these risks. Should the City elect this option, it should develop and implement a thoughtful and comprehensive due diligence plan, including the development of functional and technical requirements; demonstrations and interviews with multiple vendors; broad city staff participation in evaluation activities; and a best and final offer process to negotiate price.

The recommendations provided in this report are part of a multi-year, long-range plan for the City. Based on our experience, the process and system improvements that result from these recommendations could take three to five years to fully implement, estimating one to two years for financial management, one to two years for human resource management, and one to two years for asset management. Furthermore, external factors such as technology changes, regulatory changes, etc. may ultimately dictate that some recommendations do not need to be implemented or only need to be partially implemented. Management at the City of Carlsbad must ultimately decide which recommendations are implemented and how they are implemented in order to provide the most value to the City.

1.9.1 Benefits

Option 4 will provide the City with the following benefits.

1. Opportunity to Leverage Technology for Business Process Improvement. Many of the benefits of a new integrated, citywide ERP system are derived from the system-wide features built into each of the system modules. Examples of such features include the following:

Common database

Robust development tools

Versatile ad-hoc reporting

Flexible Chart of Accounts (COA) and budgetary structures

Audit trails/drill down capability

Workflow for automation of business processes

“Cross module” integration

Content management

Built-in “best practices”1

The strategy of moving toward an integrated solution will provide the opportunity to standardize business processes across the City. Because customization increases both current and future software costs, the City can adopt the “vanilla” processes and best practices embedded in the software. An added benefit of this is greater discipline and adherence to policies and procedures across departments.

2. More Robust Management Reporting. The current portfolio of ERP related applications does not address critical reporting requirements. Thus, there are a myriad of manual processes and reconciliations required to support current reporting processes. A robust data integration and reporting strategy associated with the new application environment will provide the City with a platform for the management reporting it requires. This strategy should address the need for process performance reporting, including tracking of the City’s key performance indicators.

1 Over time, most software vendors continually enhance their products to take advantage of ‘best practices’ which then become an inherent part of their solution, if implemented properly. Examples include automated work flows, reporting of key performance indicators, employee self-service, etc.


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3. Provide Comprehensive Functionality. The strategy of moving to a new solution is to provide the majority of functional and technological needs of the City in a comprehensive suite of integrated applications. The core components of an enterprise resource planning solution include accounting and finance; payroll/human resources management, and purchasing. Unique requirements for utility billing, asset management, timekeeping, and treasury management may be met via “extended” ERP software modules or interfaced best of breed solutions, based on the City’s due diligence research of the market options.

4. Reduced Software Fragmentation. Compared to the multitude of best of breed and supplemental applications, and shadow systems that comprise the current ERP environment, a new integrated solution would be the backbone of a comprehensive administrative systems strategy. In addition, the selection of a new system will guide future IT investment decisions, as those investments would need to interface with the chosen software solutions.

1.9.2 Next Steps and Action Plan

The following provides a high level list of next steps to implement the recommendations presented in this ERP Needs Assessment report.

1. Obtain approval for system replacement. Enterprise systems impact every city employee and will require support of the City’s executives and City Council.

2. Obtain funding. Significant funding will be required for any ERP solution that replaces the City’s existing ERP related application portfolio. The City should invite vendors to submit detailed cost proposals to better evaluate one time and annual recurring costs.

3. Establish project governance. During the implementation there will likely be many decisions which will need to be made that will have significant impacts to the City. A successful implementation will require strong project governance to facilitate timely decision making and project management structure to scope, schedule, and budget as well as daily implementation activities. Governance should include a business sponsor, executive steering team, project manager, functional leads, technical leads, designated subject matter experts, and a lead for change management and communication.

4. Develop a change management strategy. Users have become very familiar and comfortable with existing applications and work processes. A new ERP will introduce new technologies and business practices, and will require significant change.

5. Begin business process redesign. There are nearly 250 opportunities for process improvement that will need to be addressed through a future state process redesign, and some of the resultant changes can be implemented with a new ERP system. The City should review the issues and opportunities identified in this ERP Needs Assessment Report and identify the process and policy, people, and technology issues. For each, the City should identify those opportunities that require process redesign (process and policy, and people issues) and new system implementation (technology issues). The City can use this to develop a specific improvement plan.

6. Identify a selection team and develop a detailed procurement plan. As previously stated, the implementation of a new enterprise system impacts every city employee. The City should establish a selection team that is representative of the City’s major users to evaluate and recommend the selection of the replacement solution. This team should then work in conjunction with the City’s steering team to develop a detailed procurement plan that defines minimum requirements, the evaluation process, criteria and weights as well as the specific roles and responsibilities of the selection team and any other city staff who may be involved in the


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evaluation process. Based on the City’s portfolio of projects, staff availability, and available in house expertise, the procurement plan should also consider independent, third-party assistance with the selection, contract negotiation, and implementation efforts.

7. Define functional and technical requirements. A “right fit” ERP solution begins with a clear articulation of requirements. Functional and technical requirements should be detailed for inclusion in the request for proposals. Subject matter experts from the City should be engaged to leverage their institutional knowledge and begin the change management process.

8. Develop and issue a request for proposal. A well-structured request for proposal can support a competitive procurement process, allowing the City to evaluate a variety of solution options and negotiate a fair price for the City.

9. Identify finalists and conduct due diligence. After selecting two to four finalist vendors based upon the proposal responses, the City should conduct additional due diligence to select the “right fit” solution. Activities can include software demonstrations, implementation team interviews, reference checks, site visits, marketplace research, and more.

10. Negotiate contracts. Contracts will include software license and maintenance agreement and implementation services. The City will want to negotiate these contracts to mitigate its risk, while giving consideration to its long term relationship with the selected vendor. Risk mitigating terms and conditions, a detailed scope of work, defined deliverables and deliverable acceptance criteria, and clear roles and responsibilities will be critical elements of these contracts.

11. Develop a detailed staffing plan. Enterprise system implementations often require staff beyond typical operational levels. This will require the City to consider alternative staffing strategies, including the use of temporary employees, temporary project employees of a limited duration, retirees, consultants, and staff augmentation to backfill or staff project positions.

12. Develop a detailed implementation plan and begin implementation. The City will need to work closely with the selected vendor to develop a detailed implementation schedule that gives consideration to city business cycles and staff availability, dependent and critical path activities, and provides a contingency for unexpected events.


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2. Current State Assessment This chapter documents Plante Moran’s review of the City of Carlsbad’s current financial, human resources, and payroll systems environment, organized as follows:

Assessment methodology

Assessment scope

Current systems environment

Key strengths and opportunities for improvement

2.1 ASSESSMENT METHODOLOGY

The City of Carlsbad engaged Plante Moran to review its existing business processes and associated systems environment for financial and procurement management, human resources and payroll, service and work order management, and asset management with the objective of improving business outcomes and operational agility. The following summarizes the key components of Plante Moran’s current state assessment approach.

Document Review. The City provided a significant number of relevant documents and background information. These included city organization charts, budget documents, performance measures, existing as is process documents, policy and procedures documents, an application inventory, systems architecture diagrams and requirements documents, related cost information, and more.

Business Process Questionnaires. Plante Moran distributed questionnaires to business process owners and user departments representing all 28 business processes in scope of this review. These questionnaires collected data on strengths and weaknesses of existing processes, key performance measures, associated reporting requirements, systems, interface requirements, and data conversion requirements as well as opportunities for business process and automation improvement.

Subject Matter Expert Interviews. Plante Moran conducted 28 interviews with 65 city staff to review the business process questionnaires and further identify strengths of existing business processes, opportunities for improvement, and potential challenges or barriers to change. This chapter documents the high level process and systems environment strengths and weaknesses identified during these interviews.

Issues and Opportunities and To Be Business Process Documentation. After reviewing the completed questionnaires and meeting with city staff, Plante Moran documented the issues, opportunities for improvement, and potential high-level “to-be” process workflows related to the City’s current in scope business processes.

Follow Up Working Sessions. Plante Moran conducted follow up working sessions with city staff to review and validate the issues, opportunities for improvement, and potential high-level “to-be” process workflows. Appendices D and E document these issues and opportunities, and high-level “to-be” process workflows, respectively.

2.2 ASSESSMENT SCOPE

Included in the scope of this assessment were 28 key business processes spanning three major business functions.


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Business Functions Business Processes

Financial Management (Finance and Cash/Procure to Pay). This includes all business processes necessary to receive and account for cash, as well as to plan, formulate, create, execute against, control, and report on the budget and business activities of the City. It also includes all business processes necessary to define a need for, procure, and pay invoices for goods, professional services, and construction contracts, and coordination of annual project and purchase order roll forward. Additional processes include maintaining vendor master data, 1099 reporting, and various associated reporting.

29. Accounts Payable

30. Accounts Receivable and False Alarm Billing

31. Bank Reconciliation

32. Budgeting and Forecasting

33. Cash Handling (i.e., Cash Receipts)

34. Contract Management

35. Debt Management

36. Fixed Assets

37. General and Job Ledger

38. Grants Management

39. Project Cost Accounting

40. Treasury/Cash Management (i.e., Currency)

41. Utility Billing

Human Resource Management (Hire to Retire). This includes all business processes necessary to plan for, hire, develop, assign, sustain, and separate staff throughout their tenure of employment with the City.

42. Employee Scheduling (Library)

43. Employee Scheduling (Parks & Recreation)

44. Leave of Absence

45. Onboarding

46. Offboarding

47. Payroll

48. Personnel Action Form

49. Position Control

50. Timekeeping (CyberShift)

Asset Management (Acquire to Retire). This includes all business processes required to obtain, manage, and dispose of fixed assets and assets under construction.

51. Asset Lifecycle Management

52. Inventory Management

53. Preventive Maintenance

54. Purchasing and Online Requisitions

55. Receiving

56. Service (Work Order) Management

2.3 CURRENT ERP ENVIRONMENT

Today’s enterprise resource planning (ERP) marketplace is organized around traditional or “core” functionality (i.e., finance or human resource management) and “extended” functionality (i.e., utility billing, asset management, time and attendance, treasury management, business licensing and permitting). Each of the City’s 28 business processes listed above can be considered as core or extended ERP functionality as illustrated in Figure 4: Core and Extended Marketplace ERP Functionality below.


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Figure 4: Core and Extended Marketplace ERP Functionality

The City currently relies upon nearly 40 separate automated systems to support these core and extended ERP functionalities. In addition, the City has developed more than 30 standalone shadow systems, mostly Microsoft Access databases and Excel spreadsheets, to further support business processes in areas where existing systems do not provide the required functionality. Figure 5: City of Carlsbad ERP Systems Environment on the following page illustrates the key systems in use at the City.


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Figure 5: City of Carlsbad ERP Systems Environment

A number of paper forms and manual process also exist throughout the City to support key finance, human resources, and asset management operations.

Appendix A provides a comprehensive application inventory as provided by the City. Appendix B provides a list of required financial, human resource, and asset management related interfaces as identified during this ERP needs assessment.

2.4 KEY STRENGTHS AND OPPORTUNITIES FOR IMPROVEMENT

One of the key strengths of the City’s current business processes is that they enable the City to perform its core administrative operations reasonably well – funds are budgeted and accounted for, bills are generated and collected, purchases are made and vendors are paid on time, applicants are hired, employees are paid on time, and financial reports are produced. However, a number of issues and opportunities for improvement associated with existing business processes also exist. The following sections further detail the strengths and issues associated with the business processes in scope of this review as identified by city subject matter experts in interviews and working sessions with Plante Moran.

2.4.1 Financial Management

Accounts Payable

The City relies primarily on SunGard’s Integrated Financial and Administrative Solution (IFAS) and a variety of Microsoft Access databases and Excel spreadsheets to support its accounts payable processes. The City processes approximately 13,800 checks annually. Invoices are received at a central location (the Faraday building) where they are manually sorted and delivered to departments for review and approval before payment is issued.


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Strengths The strengths of the existing accounts payable business process and associated systems environment include:

1. Separation of Duties. Although the accounts payable approval workflow is not automated through the use of an enterprise system, the City has taken the appropriate measures to ensure that separation of duties exists within department approval processes before payments can be posted.

2. Few Complaints. Based on conversations with staff, it appears that vendors are paid in a timely manner – early in most cases.

Issues Issues related to the existing accounts payable business process and associated systems environment include:

1. Limited Process Control. The decentralization of the accounts payable process allows for limited visibility over the extent to which city policies are enforced. Using an automated system to manage the process would enable the City to standardize its decentralized process through the use of workflows and approvals making it easier to enforce standardization in a decentralized environment.

2. Lack of Vendor Self-Service. The absence of a vendor self-service function has prevented vendors from being able to submit invoices electronically, increasing reliance on paper invoices received through the mail. Vendor self-service would support the automation of three-way matching that can tie an invoice back to the purchase order that initiated the purchase, and inventory item, if applicable. It also could allow vendors to make updates to their own vendor record.

3. Employee Reimbursement Documentation. California Public Records Act requests related to employee reimbursements makes it vital that supporting documentation is available and easily accessible. The absence of an integrated document management system creates the need for shadow systems and shadow processes – often maintained at the department level in Excel spreadsheets, which then need to be separately forwarded to Accounts Payable.

4. Ability to Age Invoices to Maximize City Cash Flow. The City currently pays all of its invoices in full each week. Often this means that vendors are paid in 10 days or less, even when they provide payment terms of net 30 days. The ability to age invoices to fully leverage payment terms could optimize the City’s cash flow.

Appendix C details the issues and opportunities associated with this business process and all business processes in scope of this assessment, as identified by city staff during interviews with Plante Moran. Appendix D presents the high level “to-be” business process workflows developed in conjunction with city staff, in response to the identified opportunities for improvement.

Accounts Receivable and False Alarm Billing

Accounts receivable is affected by a number of recurring payments such as monthly lease rentals, interagency leases and Section 8 billings as well as false alarm bills and one time miscellaneous payments. Payments for these services are processed through SunGard’s IFAS financial system.

Strengths The strengths of the existing accounts receivable and false alarm billing business processes and associated systems environment include:


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1. Adaptability. The City appears to be adaptable to the unique needs that miscellaneous accounts receivable can present. The Accounts Receivable accounts cover a wide range of services and Finance is able to accommodate these needs.

2. Timely Collection of Delinquent Accounts. Delinquent accounts are sent to collections quickly. This likely increases collections, as the longer that the City holds on to debt, the less likely it will be collected. Outsourcing this responsibility is in the benefit of the City.

Issues Issues related to the existing accounts receivable and false alarm billing business processes and associated systems environment include:

1. Aging Calculations. IFAS is unable to recognize special characters that are used to determine business logic for aging calculations. Because of this, an older version of IFAS, Insight, must be used to accomplish aging transactions.

2. Duplicate Records. Multiple customer records may exist in the Financial System. Thus, the reporting of owed and paid amounts from IFAS is difficult to track by customer.

3. Manual Tracking. The City manually tracks annual renewal dates that permit rate increases because notifications/alerts do not exist. Currently this tracking is managed with the use of shadow spreadsheets.

4. Future Dating. Future dated transactions is an issue in IFAS. Capabilities exist to set up recurring billings as of a future date but the system does not create an invoice when billings become due. There are also issues related to processing payments prior to due dates.


Bank Reconciliation

The City relies primarily on SunGard’s IFAS and a number of manual processes to support its bank reconciliation processes. Eight separate bank reconciliations make up the monthly bank reconciliation process at the City of Carlsbad. Reconciliations include:

Dental benefits

Family self-sufficiency account

Housing authority

Investment account

Library account

Payroll account

Workers compensation

General account

The majority of reconciliations take a few hours or less to conduct. The City’s general account reconciliation requires the most time and can take up to one week to finalize.

Strengths The strengths of the existing bank reconciliation business process and associated systems environment include:


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1. Limited Issues. Seven of the eight processes are routinely completed with minimal issues in a timely manner.

Issues Issues related to the existing bank reconciliation business process and associated systems environment include:

1. Paper Statements Received from Wells Fargo. Bank reconciliation activities are extremely manual at the City of Carlsbad. Wells Fargo provides paper bank statements, which only increase the manual work required to associate bank transactions to financial statement transactions. In addition, the City’s cash receipts originate outside of the financial system and are maintained in an Excel spreadsheet before being uploaded into IFAS in batches. As a result, significant time can be spent locating individual transactions.

2. Disconnected Systems Environment. If a variance is detected during the bank reconciliation process it is difficult for staff to locate the origin of the variance as transactions originate in multiple disconnected systems and are accumulated in an Excel workbook.


Budgeting and Forecasting

The City relies primarily on SunGard’s IFAS and a variety of Microsoft Access databases and Excel spreadsheets to support its budgeting and forecasting processes. The City’s annual forecasting process begins by evaluating revenue estimates within which Finance works with revenue departments to project revenue from five major revenue streams: property taxes, sales taxes and transient occupancy tax (TOT), capital improvement program (CIP) revenue projections, business license revenue, and franchise fees. Minor General Fund revenues are forecasted by Finance in conjunction with supporting departments. Expenses are estimated through the evaluation of personnel, maintenance, and operating expenses, and capital projects planned.

During the annual budgeting process departments receive their allocated budget based on the amount received the previous year, adjusted by a potential inflation factor. Changes are made only if the city manager or department requests one.

Strengths The strengths of the existing budgeting and forecasting business processes and associated systems environment include:

1. Forecasting. The City’s budget forecasts are very close to accurate. The thorough process in place for estimating revenues and expenditures has contributed to the City’s forecasting successes.

2. Budgeting Process. The City’s budget polices require little centralized monitoring. Similarly, the budget development process requires little evaluation on the part of Finance. Therefore the total budget workload on the City of Carlsbad is less than other similar organizations.

3. Reporting. The City has over 300 standard IFAS reports, including real time budget to actual data.

Issues Issues related to the existing budgeting and forecasting business processes and associated systems environment include:


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1. Drill Down Reporting. While real time budget to actual data is available from IFAS, the system can only drill down to transactional data that is available in the system. Since IFAS does not support the scanning and saving of source documents (such as invoices), users are unable to drill down to this level of information.

2. Performance Measures. During the budgeting process, many organizations will link budget allocations to workload and quality. This is absent from Carlsbad’s budgeting process. The City may wish to initiate a more strategic budgeting process.


Cash Handling

The CORE cash receipting system is the primary cash receipting terminal for the City, although payments are also received through ActiveNet, Harris eCare, and Permits Plus (soon to be EnerGov). Transactions are batched before they are loaded into SunGard’s IFAS. Payments arrive at the City using a variety of methods. Cash is collected at the Faraday building, and by various departments (e.g., Parks and Recreation, Police Department); online payments are also available for utilities.

Strengths The strengths of the existing cash handling business process and associated systems environment include:

1. Documented Procedures. The City’s cash handling procedure is documented in detail and is available for reference within the department. This is extremely beneficial considering the decentralized nature of cash receipts at the City of Carlsbad.

2. Multiple Receiving Methods. The current set of systems accommodates various receiving methods (e.g., cash, credit card, check, and ACH payments).

3. Revenue Collections Controls. Strong controls appear to be in place, such as unique log-ons in CORE and individual cash drawers for each cashier.

Issues Issues related to the existing cash handling business process and associated systems environment include:

1. Manual Transmission of Bank Data. Daily bank pays can range from 100 to 1,000 payments. Payments accepted at the bank are downloaded at the City for manual analysis and entry into the system.

2. One Sided Transactions. CORE payments for parking tickets and business licenses are one sided as the accounts receivable balance for these functions does not interface to CORE. Ideally, cashiers would be able to view the accounts receivable balance as payments are being accepted.

3. Disconnected Environment. The cash receipting process is dependent on a number of dual entry transactions due to the disconnected nature of receipting systems. The City would realize savings of staff time if this were addressed.



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Contract Management

The City relies primarily on a variety of Microsoft Access databases and Excel spreadsheets and its recently implemented HP Records Management (HPRM) system to support its contract management processes. The City has two types of service contracts: Public Works (property improvement projects), and Professional Service Agreements and goods. Both have distinct sets of rules and reporting guidelines that must be followed. Contracts are governed by State Code, Administrative Order 12, Procurement of Professional Services Order 6 as well as other portions of the City Municipal Code.

Strengths The strengths of the existing contract management business process and associated systems environment include:

1. Controls. City staff report that an inspection of work quality is a standard occurrence prior to invoice payment.

2. Templates. Staff have developed standard templates to assist departments in contract development and contract management. These were not evaluated by Plante Moran for their effectiveness. Staff indicated there may be opportunities to improve these templates as well as increase awareness of them throughout the organization.

3. Document Management. Through the implementation of the new HP Records Manager (HPRM) system, the City has been able to electronically file contract documents making them more easily accessible for reference. The City will soon be able to leverage automated workflows, as HPRM Phase 2 is implemented.

Issues Issues related to the existing contract management business process and associated systems environment include:

1. Lack of Contract Management Module. The City did not purchase the contracts module available within IFAS. This has limited the ability for Finance to manage the execution of contracts using system controls, alerts, and reminders. Dates, milestones, warranties, and specific contract guidelines are currently tracked through ticklers in Outlook, Access databases and Excel spreadsheets.

2. Licenses, Insurance and Warranty Tracking. Vendor licenses, insurance expiration, and warranty expiration dates are tracked manually in Outlook and other systems. Contract management systems are able to track specific expiration dates and notify users when an expiration date is approaching.

3. Less than Fully Implemented HPRM System. The implementation of document management will be beneficial to the City. However, its functionality is limited and it currently lacks system benefits such as approval workflow (with the exception of workflow for purchasing, which is implemented), flagging for non-standard process, and alerts for invoicing and insurance expiration.



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Debt Management

The City relies primarily on SunGard’s IFAS and Emphasys SymPro for treasury and debt management to support its debt management processes. The City manages little traditional debt. The majority the debt that the City assumes is on behalf of private developers.

Strengths The strengths of the existing debt management business process and associated systems environment include:

1. Automation. SymPro is a versatile and appropriate system for managing the City’s investment portfolio.

2. Cash Flow. Because there is little debt, Carlsbad does not have the need to plan cash flow in the way that many other municipalities do.

Issues Issues related to the existing debt management business process and associated systems environment include:

1. Systems Integration. Typically an integration with cash modeling and investment system would reduce administrative overhead involved in creating journal entries for account updates in the general ledger and provide greater line item control options.

2. Lack of Notifications. Under the current environment, users are not notified of key dates for when bond payments are due or when investments mature.

3. Paper Invoices. Invoices are not filed electronically which is a disadvantage for staff as they prepare supporting documentation for debt and loans.


Fixed Assets

The system of record for fixed assets reporting is SunGard’s IFAS, although other inventories are maintained in Public Works and Utilities.

Strengths The strengths of the existing fixed assets business process and associated systems environment include:

1. Asset Inventory. Assets acquisitions are generally added to inventory at the time of receiving.

Issues Issues related to the existing fixed assets business process and associated systems environment include:

1. Asset Tagging. Entering assets into IFAS is currently a manual process and has opportunities for errant data. If purchases are coded incorrectly and not associated with a capital purchase account, accounts payable staff may not see the purchase to tag the asset into fixed assets. Because of this, accounts payable must manually review transactions to verify that assets have been identified.

2. Use of Shadow Systems to Track Costs. Staff find it difficult to tie inventory items to purchase orders, making it challenging to track assets and asset costs at the time of purchase.


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3. Fixed Asset Verification. Annually, Finance sends a fixed assets spreadsheet to departments to verify that the spreadsheet aligns with inventory on hand. There are often times many additions and/or deletions that need to be made to this master list.


General and Job Ledger

The City uses SunGard’s IFAS for its general and job ledgers. The majority of the City also uses IFAS for basic financial reporting. However, many departments utilize Excel spreadsheets for budget tracking and reporting to compensate for IFAS’s limited reporting capabilities.

Strengths The strengths of the existing general and job ledger business processes and associated systems environment include:

1. Recurring Journal Entries. The system has functionality to support automatic and recurring journal entries, which is being used.

2. Pre-Population of Data. If a transaction is entered into the job ledger, the corresponding general ledger is pre-populated. This reduces the chance for error.

Issues Issues related to the existing general and job ledgers business processes and associated systems environment include:

1. Complexity of Account Structure. The chart of account structure currently used allows for greater levels of complexity than needed. This may allow for items to be coded incorrectly due to human error.

2. Chart of Account and Validations. Users are able to record transactions to any account and errant entries are not immediately apparent. This makes it difficult to accurately report on how much is spent on a specific cost category.

3. Difficult Reporting Tools. It is difficult for the casual system user to write new reports or know the reports that are already available to them. Operational departmental staff indicated that the current financial system is not user friendly and provides limited ability to query, extract, manipulate, and analyze data.

4. Limited Drilldown Functionality. Drill down functionality in IFAS is limited to transactional data in the system. Since IFAS does not support the scanning and saving of source document (such as invoices), users are unable to drill down to this level of supporting information.

5. Limited Electronic Document Management. Reviewing backup documentation is currently a manual, paper process. Although the City has recently implemented a new document management system (HP Records Management) there are still opportunities to be recognized through the use of a document management system that is integrated with the financial system and transactions.

6. Grant Tracking. Grants cannot be identified through their own account, making it difficult to identify grants without intimate knowledge of an account.

7. Limited Training. Items may be incorrectly coded due to lack of training in data entry and expectations.


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8. Security. Security is not tied to user role, which becomes an issue if an employee switches departments and their security credentials are not only updated for the new position but also removed for the previous position.

9. Limited Knowledge Transfer. Knowledge transfer across departments is limited due to the City’s decentralized nature. As departments experience turnover and become dependent on shadow systems to conduct processes, knowledge of current and available functionality may be lost.


Grants Management

The City relies primarily on a variety of Microsoft Access databases and Excel spreadsheets to support its grants management processes. As is the case with many municipalities, grants management is almost entirely decentralized. Unlike many other municipalities, there is not a formal work process consistently employed by departments. Although an administrative order required the city manager’s approval prior to submitting a grant application, city staff report that this is not consistently practiced or enforced.

Strengths The strengths of the existing grants management business process and associated systems environment include:

1. Institutional Knowledge. Users involved with the grant application and management process have a deep understanding of the system and are able to locate grant accounts. These users have developed methods, which vary by user, to track grant milestones in place of an automated system to manage grants.

Issues Issues related to the existing grants management business process and associated systems environment include:

1. Grant Tracking. The current financial system does not provide capabilities for tracking grant activities, key dates, or deadlines. Because of this, grants are tracked at the department level using Excel spreadsheets or other shadow tracking methods. Many enterprise resource planning systems with integrated grant management modules provide functionality for tracking grant activities as well as provide for notifications/alerts as important dates approach.

2. Disconnected Information. Supporting information is not easily accessible through a grants master file or account where documentation can be attached and easily referenced through the financial system.

3. Lack of Visibility of Grant Applications. There is limited structure over the grant application process, specifically related to tracking grant applications and pre-award grant activities.



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Project and Cost Accounting

The City relies primarily on a variety of Microsoft Excel spreadsheets and manual processes to support its project and cost accounting processes.

City Council has a stated priority of having the ability to report on costs for services and projects. The level of expectation associated with cost accounting is greater than many other municipalities. Systems have been put in place to enable cost accounting from a time-capture and expense-capture perspective.

Strengths The strengths of the existing project cost accounting business process and associated systems environment include:

1. Cost Capture. Some departments are dedicated to ensuring that costs are accurately reflected in reports and make it a priority for employees to track their time and enter timesheets according to projects. However, significant variance was reported throughout departments in the City.

Issues Issues related to the existing project cost accounting business process and associated systems environment include:

1. Project Budget Tracking. Tracking of real-time project budget or contract balances is a challenge as the project or ‘job’ in IFAS captures an insufficient level of detail. To compensate for this project managers develop spreadsheets to track cost information.

2. Change Order Tracking. Accounting for change order amounts is done manually. The IFAS system does not differentiate between contract change orders and contract approved funds so the differentiation must be tracked at the department level. As a result, there are no controls to prohibit users from spending project contingency dollars that are included in the initial purchase order that is opened when a project is initiated.

3. Disconnected Information. Since IFAS does not support the scanning and saving of supporting documents, these documents are maintained on each department’s network drive.

4. Limited Drill Down Capabilities. Since IFAS does not support the scanning and saving of supporting documents (such as invoices) city staff are unable to drill down to this level of project expense detail in IFAS.


Treasury and Cash Management

The City relies primarily on Emphasys SymPro for treasury and cash management to support its cash management processes. Bank statements are downloaded from the bank daily for reconciliation against cash deposits made by the City.

Strengths The strengths of the existing treasury and cash management business processes and associated systems environment include:

1. Daily Reconciliation. The daily reconciliation process is working well and no real pain points were identified.


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Issues Issues related to the existing treasury and cash management business processes and associated systems environment include:

1. SymPro Integration. Additional automation may be available with an interface between SymPro system the general ledger.

Utility Billing

The City relies primarily on Harris’ NorthStar for utility billing. Carlsbad supports 13 billing cycles, each cycle is defined by a different geographic region throughout the City. Monthly meter reads are collected by cycle (approximately four cycles each day) starting on the first of each month. It takes the City one week to complete readings before readings are audited in the North Star system.

Strengths The strengths of the existing utility billing business process and associated systems environment include:

1. Rolling Process. Usage is tracked on a monthly basis throughout the City but different parts of the City are tracked during different times of the month. This allows for a predictable and consistent level of workload throughout the month.

Issues Issues related to the existing utility billing business process and associated systems environment include:

1. Difficult Reporting. In order to audit monthly meter reads, a number of custom reports have been created using the data mart or Crystal Reports as the reporting module for North Star was never purchased. Reports must be configured and run for each billing cycle, which is both time consuming and challenging without the use of an integrated reporting tool. This is the process limitation that takes the most time during the monthly billing process.

2. Lack of Interfaces. Transactions are posted from the utility system to the financial system in batches that are manually created as the two systems are not interfaced.

3. Limited Visibility of Usage Data. Daily usage data is collected but is not available for customers to access through self-service, although customers are able to call the department for inquires. Citizens may be able to identify points of irregularity if they were able to view usage data through self-service.


2.4.2 Human Resources Management

Employee Scheduling (Library)

The When to Work (W2W) system was recently implemented to address the business need for a flexible but simple scheduling tool. The library uses W2W to manage schedules, leave requests, and shift trades for its approximately 200 part-time employees.

Strengths The strengths of the existing Library employee scheduling business process and associated systems environment include:

1. Mobility. With When to Work, employees are able to view their schedules via a mobile application.


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2. Trade Board. When to Work provides capabilities for part-time employees to post shifts to trade boards and pick up shifts.

3. End User Satisfaction. Reportedly, end users are very satisfied with the ease of use of When to Work as well as the functional capabilities of the product.

Issues Issues related to the existing Library employee scheduling business process and associated systems environment include:

1. Lack of Payroll/Time Keeping System Integration. The scheduling system does not support any interfaces, making it a manual process to report on employee attendance trends or enforce time keeping business rules as schedules are being created (e.g., part-time employees max out at 1,000 hours per year).

2. Lack of Supervisor Notifications. Supervisors are not notified when shifts are posted to trade boards. It would benefit supervisors to have the ability to make approvals as an employee posts or trades shifts in order to manage expected staffing for the day.


Employee Scheduling (Parks and Recreation)

Parks and Recreation uses When to Work (W2W) to manage schedules, leave requests, and shift trades for 150 to 300 part-time employees. Staffing varies seasonally.

Strengths The strengths of the existing Parks and Recreation employee scheduling business processes and associated systems environment include:

1. Mobility. With When to Work (W2W), employees are able to view their schedules via a mobile application.

2. Trade Board: W2W provides capabilities for part-time employees to post shifts to trade boards and pick up shifts.

Issues Issues related to the existing Parks and Recreation employee scheduling business processes and associated systems environment include:

1. Lack of Payroll/Time Keeping System Integration. The scheduling system does not support any interfaces, making it a manual process to report on employee attendance trends or enforce time keeping business rules as schedules are being created (e.g., part-time employees max out at 1,000 hours per year).

2. Lack of Supervisor Notifications. Supervisors are not notified when shifts are posted to trade boards. It would benefit supervisors to have the ability to make approvals as an employee posts or trades shifts in order to manage expected staffing for the day.

3. Limited Mobility. The system has some capability limitations as its mobile application is not compatible with all phone types and data can be pushed to Gmail calendars but not Outlook.

Appendix C details the issues and opportunities associated with this business process and all business processes in scope of this assessment, as identified by city staff during interviews with Plante Moran.


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Appendix D presents the high level “to-be” business process workflows developed in conjunction with city staff, in response to the identified opportunities for improvement.

Leave of Absence

The current leave process is not supported through the use of any leave management software. The City relies primarily on Microsoft Excel spreadsheets and manual processes to support its leave of absence (LOA) processes. At any time, there are an average of 30 open leave cases at the City of Carlsbad. Employee leave cases are both occupational (worker’s compensation) or non-occupational (Family and Medical Leave Act [FMLA] and other).

Strengths Due to the lack of automation and highly manual nature of this business process, city staff identified no significant strengths in interviews and working sessions with Plante Moran.

Issues Issues related to the existing leave of absence business process and associated systems environment include:

1. Lack of Documentation. A documented LOA policy does not currently exist; however, city staff report that this documentation is in development.

2. Manual Leave Management. The Infor Lawson system for human resource management does not include integrated capabilities for managing leave. Because of this many manual processes exist. These include monitoring employee leave balances, tracking leave status, and managing leave rules through the use of custom developed shadow tools.

3. Communication and Training Challenges. Due to the absence of an automated leave management solution at the City, Human Resources relies on supervisors to communicate any changes in employee leave status in order to reactivate employees in the Lawson system. Some city staff report that there is little training provided to supervisors to inform them of these responsibilities.


Onboarding

The City relies primarily upon a combination of NeoGov, Infor’s Lawson Human Resource Information System (HRIS), and Halogen for talent management to support its employee onboarding processes. On average, 150 new employees are hired at the City each year. Many training components contribute to the employee onboarding process on Day 1. Onboarding activities are initiated at various points in time prior to an employee’s start date.

Strengths The strengths of the existing onboarding business process and associated systems environment include:

1. Onboarding. The onboarding process at the City is efficiently managed using the resources that are currently available.

Issues Issues related to the existing onboarding business process and associated systems environment include:

1. Integrated Onboarding Capabilities. The Lawson HRIS does not support pre-hire activities, driving the City to use NeoGov for recruiting. This creates a disconnect between recruiting and


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onboarding, which at times results in a delay in the onboarding process. The current process is dependent on a series of paper forms that are stored in an employee’s physical file following onboarding.

2. Limited Process Documentation. The onboarding process is not clearly documented. There is some confusion over the roles and responsibilities of the departments and Human Resources.

3. Multiple Employee Files. The Human Resources system (Lawson) maintains one master employee file. However departments must keep paper files outside the system to be able to capture the level of employee information they require.

4. Licenses and Certifications. The City uses multiple, varied methods across departments to track required licenses and certifications.

5. Training. The City currently employs a very decentralized approach to training new employs in enterprise systems such as IFAS. There is an opportunity to deliver more standardized training in a centralized manner during the onboarding process.


Off Boarding

The offboarding process is managed outside of the Infor Lawson HRIS environment. Employee offboarding activities differ if an employee is leaving voluntarily, involuntarily, or retiring (types of retirement include industrial, disability, and service).

Strengths The strengths of the existing offboarding business process and associated systems environment include:

1. Employee Payout. When Human Resources (HR) is notified that an employee is leaving, appropriate payroll and HR personnel make it a priority to make the final payment to the employee an accurate one.

Issues Issues related to the existing offboarding business process and associated systems environment include:

1. Manual Asset Tracking. Supervisors are responsible for manually monitoring and tracking assets assigned to employees throughout their employment with the City. The process for collecting assets during offboarding is not clearly communicated nor consistently executed.

2. Manual Leave Calculations. Payouts for vacation and compensation time are manually calculated when an employee leaves the organization.

3. Security. IT access is granted at the employee level and must be removed as employees switch roles or departments. Supervisors are responsible for tracking access granted to an employee and notifying IT when access should be removed. Systems that are configured using role-based security help reduce the chance of an employee having access to areas they should not.

4. Dated Process Documentation. The offboarding process is not clearly defined. Reportedly, an offboarding checklist was previously used but is now dated and needs updating before it can be distributed to users.

5. Multiple Employee Files. The Human Resources system (Lawson) maintains one master employee file. However departments must keep paper files outside the system to be able to capture the level of employee information they require.


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Payroll

The City relies primarily upon Infor’s Lawson and CyberShift for timekeeping to support its payroll processes. The City’s 123-step payroll process supports between 800 and 1,100 employees and five different association agreements. Managers are responsible for approving timecards for salary staff and correcting errors as required. Payroll processing is bi-weekly and all staff are paid on the same pay cycle regardless of classification. All employees are paid through direct deposit and receive their pay advices through email and employee self-service.

Strengths The strengths of the existing payroll business process and associated systems environment include:

1. Documented Process and Procedures. The City’s 123-step payroll process is documented, consistently executed and continuously updated.

Issues Issues related to the existing payroll business process and associated systems environment include:

1. CyberShift Implementation. CyberShift was implemented to meet the City’s then current payroll process and did not address process improvement opportunities. Additionally, some functionality identified for “Phase 2” was never implemented due to funding constraints. As a result, staff have compensated by creating workarounds and increasing the number of process steps required to validate data.

2. Difficult Data Validation: Pay code detail can only be viewed during time entry, not during approvals. Because of this, managers must be familiar with all of the different compensation codes applicable to the staff they manage.

3. Lack of Electronic Workflow. The payroll process is dependent on each individual manager’s approval of his or her staff’s time cards during the period. However, there current is no automated workflow to streamline this review and approval process.

4. Lack of Workflow Notifications. Timecard edits after approval do not trigger a re-approval workflow or notify managers that edits have been made. Managers are dependent on employees to notify them of these changes or the change may go unapproved.

5. Calculations and Coding. Manual intervention is required to meet the City’s unique requirements for payroll calculations leave type coding.

6. Use of Activity Based Timekeeping. CyberShift currently does not provide pre-populated templates for CIP or non-CIP projects to allow staff just enter their time. As a result, multiple Access databases have been created to track time on projects.


Personnel Action Forms

The City relies primarily upon a combination of Infor’s Lawson and paper files to support its personnel action form (PAF) process. The PAF process is the formal process for initiating an HR/Payroll personnel


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action. The purpose of the PAF is to capture information on employee transactions for routing and approvals in Human Resources in order to initiate a personnel change. PAFs are initiated at the department level and are prepared by administrative staff or analysts in each department. The City processes approximately 8,300 PAF transactions each year.

The PAF is designed to handle multiple HR and Payroll based processes including:

New hire (full or part-time)

Separation (voluntary, excluding retirement, retirement, and involuntary)

Promotion, reclassification, bifurcation, demotion

Out of class (start, extend, stop)

Step increase

Work schedule, supervisor or “orgkey only” change

Strengths The strengths of the existing personnel action forms business process and associated systems environment include:

1. PAF Forms. The PAF form is designed to support all personnel actions. Consolidating work processes is a step toward automating workflows in a new systems environment.

Issues Issues related to the existing personnel action forms business process and associated systems environment include:

1. Lack of Electronic Workflow. All personnel actions are paper driven processes that are labor intensive and time consuming. The paper process results in multiple copies of the form and uncertainty about whether approvals have been made, which leads to duplicate requests for the same action, errors, and multiple status inquiries.

2. Lack of Electronic Document Management. Personnel action forms are paper as the current system does not accommodate scanned images or attachments to the employee file.

3. Position Budgeting. Finance is not involved in the budget checking process for changes in personnel. Decisions are made regarding position requests without Finance review or approval. It is unclear where employee-related non-personnel costs are evaluated in the decision making process.

4. Limited Reporting Capabilities. Reporting capabilities are limited requiring manual extraction of data to meet reporting needs. Data is exported from Lawson to Microsoft Excel in order to analyze position changes throughout the year and actual budget/salary information.


Position Control

The City relies primarily upon a variety of Microsoft Excel spreadsheets and paper forms to document authorized positions and position changes.


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Strengths The strengths of the existing position control business process and associated systems environment include:

1. Reconciled Positions. No inconsistencies were identified between the position control list and actions by City Council to enable these positions.

Issues Issues related to the existing position control business processes and associated systems environment include:

1. Disconnected Environment. The position request process exists entirely outside of the Human Resources and Financial systems. In an integrated environment, reconciliation time would be reduced.

2. Lack of Documentation. City staff report that the position control process is not clearly documented or well understood. Reportedly, miscommunication among parties is common throughout the process.


Timekeeping (CyberShift)

Kronos’ CyberShift for timekeeping was implemented five years ago. Daily employee schedule data is loaded using an automated process. A web-based version is available for full-time employees to enter time. Temporary employees clock-in their time. All employee entered time requires supervisor approval.

Strengths The strengths of the existing timekeeping business process and associated systems environment include:

1. Data Integration. Employees that manage the time keeping process have developed sophisticated procedures and reports to ensure that the correct timekeeping data enters Infor’s Lawson payroll module.

Issues Issues related to the existing timekeeping business process and associated systems environment include:

1. Inconsistent Compliance. Most supervisors follow the process for approving employee time within the prescribed schedules for a pay period. Some supervisors are less compliant and request approvals outside of CyberShift. Payroll complies with these requests provided that the documentation is supplied for audit purposes.

2. Inconsistent Project Time Tracking. Some departments appreciate the ability to track employee time by projects. Not all departments consistently require project-related time entry.

3. Cumbersome User Interface. CyberShift has a low level of satisfaction from employees. This is largely due to a cumbersome user interface for project employees in which selecting a project is not intuitive.

4. Manual Notifications. Notifications are manually created and distributed to remind supervisors to approve time sheets at the end of pay periods.



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2.4.3 Asset Management

Asset Lifecycle Management

The City has decentralized asset management responsibilities involving multiple departments. Public Works, Utilities, Community and Economic Development, Parks and Recreation, and Administrative Services are key service providers with responsibilities to ensure the City’s infrastructure assets provide reliable, predictable levels of service at the lowest cost possible.

Today, the City relies primarily upon a number of systems to support its enterprise asset lifecycle management processes:

Infor’s Hansen for asset management, inventory preventive maintenance, and timekeeping (Public Works)

Asset Works for asset management analysis and inventory (Public Works)

MaintStar for asset management, work order management, and inventory (Public Works)

Geoconnect for mobile work orders (Public Works)

Lucity for pavement management (Public Works)

Granite for pipe inspections (Public Works)

Intellex for work order management and inspections of contractor compliance (Parks and Recreation)

A variety of Microsoft Access databases and Excel spreadsheets.

Strengths The strengths of the existing asset lifecycle management business processes and associated systems environment include:

1. Project Planning. The City’s 15 year Capital Improvement Plan (CIP) documents planned capital projects, expected costs, and replacement schedules. Detailed planning for future capital investments is an asset management best practice.

2. Organizational Priority. Most of the departments who are responsible for managing the assets of the City approach asset management as a priority and take pride in their work. This could not be confirmed for all departments, as several were not included within the scope of the project.

Issues Issues related to the existing asset lifecycle management business processes and associated systems environment include:

1. Inconsistent Asset Valuations. Asset values are not consistently updated following capital improvement activities or asset condition assessments. Doing so provides for valid measures of remaining asset life and replacement valuation so that the City’s investments are recognized to their full potential.

2. Inconsistent Inventories. Multiple, disconnected inventory listings are maintained across the organization. Some city staff report that asset inventories are incomplete and therefore do not represent a comprehensive picture of the asset holdings for each service area. In addition, staff identified significant gaps between fixed asset inventories in Finance and those in operational


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departments. Asset removals should be communicated as the City is currently dependent on a decentralized asset management environment.

3. Asset Segmentation. Assets are not currently segmented and assigned an asset ID for each segment in Finance. The ability to represent asset information based on the dynamic segmentation of linear features will provide more accurate information about assets specifically for which work orders are completed on varying segments.

4. Replacement Schedules. Replacement schedules are not systematically coordinated across asset groups (e.g., aligning pipe and street replacement schedules). Enterprise-wide systems can provide capabilities to help manage and coordinate replacement activities to best benefit the operations and productivity of the City.


Inventory Management

In addition to those systems used for inventory management identified in section 2.4.3.1 above, the City relies primarily upon a variety of Microsoft Excel spreadsheets and manual processes to support its very decentralized inventory management processes.

Strengths The strengths of the existing inventory management business processes and associated systems environment include:

1. Barcoded Inventory Items. Although the City is not able to take advantage of barcoding capabilities in the current environment, utility inventory items have been barcoded in an effort to reduce the manual nature of the current process.

2. Structured Procedures. Departments appear to have a well-controlled procedures for adding items to inventory at the time of receipt. Maximum and minimum stock amounts are kept in at least one department.

Issues Issues related to the existing inventory management business processes and associated systems environment include:

1. Process Standardization. Due to the decentralized nature of warehousing functions at the City, several inventory systems exist across the organization. Some of these are best practices that should be modeled by the other departments. Standardization allows for greater control over inventorying processes, visibility over inventory usage, and real time inventory valuations.

2. Manual Tracking. Inventory management processes outside of fleet and utilities require manual tracking of stock assets without the benefit of any automated controls such as stock replenishment limits to trigger reorders, warranty tracking and coverage, and many others.

3. Barcoding Capabilities. Utility inventory items have been barcoded but the City is unable to recognize the benefit of barcoding capabilities due to lacking Hansen functionality. This functionality would enable the City to accurately receipt and issue inventory stock to work orders eliminating the current dependence on manual tracking processes.



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Preventive Maintenance

The City relies primarily upon Infor’s Hansen and a variety of databases for preventive maintenance. Preventive maintenance for vehicles or facilities was outside the scope of this review.

Strengths The strengths of the existing preventive maintenance business process and associated systems environment include:

1. Organizational Focus. Preventive maintenance is viewed as a core responsibility for the asset classes that were reviewed and scheduling by supervisors focused on preventive activities. Emergency and non-preventive activities account for a minority of work assignments.

Issues Issues related to the existing preventive maintenance business process and associated systems environment include:

1. Number of Databases. A number of databases are used to manage preventive maintenance planning/activities. Using fewer systems will help increase the availability of maintenance data and contribute to efficient management of maintenance activities to extend the life of assets and plan for future work.


Purchasing and Online Requisitions

The City relies primarily upon SunGard’s IFAS for purchasing and online requisitions. Services under $30,000 do not require a formal bidding process while any purchases over $30,000 requires a formal solicitation process.2

Strengths The strengths of the existing purchasing and online requisitions business processes and associated systems environment include:

1. RFP Template. Some departments have developed an RFP template to streamline the bidding process. Templates tend to control variance in RFP development.

2. Workflows. The City is working to develop 22 workflows within the new HP Records Management system to automate the purchasing process and move away from the City’s current, paper based routing and approval process.

Issues Issues related to the existing purchasing and online requisitions business processes and associated systems environment include:

1. Purchase Requests. Not all purchases are made formally following the City’s purchasing policy and may be made without a purchase requisition. Formal and informal staff training is

2 At the time of publication. This services threshold was being increased to $35,000.


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necessary for staff to ensure that purchasing processes are understood and enforced uniformly throughout the City’s operations.

2. Notifications. IFAS has some capabilities to notify users of requisitions awaiting approval in an approval queue. Unfortunately, the scheduling portion of this functionality has stopped working and now manual email reminders are required in place of an automated tool.

3. Supporting Data. Purchase orders and supporting data are disconnected as many supporting documents are retained in paper form. The HPRM document management system can maintain supporting documentation for purchase orders. However, there is a lack of integration with IFAS to review supporting documents associated with a transaction.


Receiving

Purchases are received primarily in two locations: Public Works and the Faraday building. The Faraday building acts as a clearinghouse for most of the rest of the city and deliveries that are received at Faraday are then routed via inter-office mail to the appropriate department. Deliveries are logged into a tracking system called Q-Track. The City’s Sage system is used for central store inventories.

Strengths The strengths of the existing receiving business processes and associated systems environment include:

1. Inventory Receiving. The City’s internal delivery confirmation system, Q-Track, is used to effectively acknowledge the receipt of orders and notify users when items are received.

Issues Issues related to the existing receiving business processes and associated systems environment include:

1. Asset Storage. There is limited storage space for IT assets; storage space is a continuing challenge.

2. Asset Tagging. Not all asset purchases are tagged and added to inventory upon receipt.


Service (Work Order) Management

The City relies primarily upon Infor’s Hansen for service and work order management, although it also utilizes several other systems and a variety of Microsoft Access databases and Excel spreadsheets as well as manual processes and paper forms to support its service and work order management process.

Strengths The strengths of the existing service (work order) management business process and associated systems environment include:

1. Mobility. Utilities is able to use mobile capabilities to capture work order data in the field.

2. Scheduling. The systems that are used allow a supervisor the flexibility to adjust employee schedules to accommodate for emergency work orders and other changes in prioritization.


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Issues Issues related to the existing service (work order) management business process and associated systems environment include:

1. Paper Forms. Mobile capabilities range across departments. For departments that do not have a mobile solution, field data is captured on paper sheets which is then transferred by a second employee to Infor Hansen when the employee returns to the office.

2. Limited Access for Contractors. Contractors are unable to access work orders or update data in the system. Because of this, costs for contractor work are not captured on work orders.

3. Disconnected Environment. Infor Hansen is not interfaced with Infor Lawson requiring the upload of employee data to support labor costing on work orders.

4. Delayed Work Order Creation. Requests for work do not always initiate a work order. Some issues are reported directly to department supervisors. In these situations a work order is often created once the work has been completed.



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3. Key Process Performance Indicators This chapter presents sample key performance indicators (KPIs) measures compiled from Plante Moran’s experience, peer practice research, and working sessions with city staff, organized as follows:

Introduction to key process performance indicators

Considerations for implementing key process performance targets

Sample key process performance indicators and targets

Important notes for moving forward

3.1 INTRODUCTION TO KEY PROCESS PERFORMANCE INDICATORS

The City of Carlsbad prides itself on providing top quality services to a growing population. For more than a decade the City has formally measured its performance against service delivery benchmarks spanning more than a dozen service areas, including community and economic development, housing and neighborhood services, library and cultural arts, parks and recreation, public safety, transportation, utilities, and more. The City is now reviewing its financial and procurement management, human resources and payroll, service and work order management, and asset management processes with the objective of improving internal operational agility.

Key performance indicators (KPIs) are a vital component of increasing the efficiencies and effectiveness of business processes. Through measuring outcomes, the City of Carlsbad can identify areas for, and pursue, improvements. In the absence of such measure, it can become difficult for the City to gauge its performance and risks allocating valuable resources to lower value activities.

3.2 CONSIDERATIONS FOR IMPLEMENTING KEY PROCESS PERFORMANCE TARGETS

Organizations and people tend to manage what they measure. By using KPIs, measuring current-state, and considering the desired future state, the City of Carlsbad can identify areas in need of improvement and establish and pursue plans for reaching their desired future state. It is also important to identify appropriate KPIs, so that the City does not encourage unintentional behaviors.


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Figure 6: Hierarchy of Key Performance Indicators on the following page shows a hierarchy for determining indicators to measure. This hierarchy aligns community needs with staff performance.


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Figure 6: Hierarchy of Key Performance Indicators

Overarching priorities and objectives are set through a planning process, along with high-level performance measures and targets. Strategies for achieving the objectives are then set through a strategic planning or budget processes. Program, service, or organizational unit objectives and measures are also developed that align with overarching objectives and strategies. Individual performance objectives, strategies, and measures may also be part of a cascading system.

Plante Moran added a layer for Support Services to the hierarchy, to illustrate the importance of ensuring that the performance objectives and measurements of internal departments, such as Finance and Human Resources, support those departments that directly serve communities.

Unfortunately, widespread use of KPIs is not yet a reality in the public sector. Although software vendors are beginning to create applications for business, the majority of public sector organizations have not yet acquired or learned to fully leverage such software. Those organizations that are using KPIs tend to track them manually. Further, because tracking KPIs within organizations is not yet fully automated, finding useful comparisons among organizations is even more challenging.

For the time being, until measuring KPIs becomes more widespread and automated, organizations that recognize the value of utilizing KPIs and have the means to measure them need to put more of their own effort into the process than would be anticipated in the future.

Fortunately, several organizations have already laid some groundwork and have begun reaping benefits as well. Those organizations beginning to use KPIs, or looking to further streamline or increase their use of KPIs such as the City of Carlsbad, can look to these organizations for insight and comparisons.

However, it is important to note that rarely are two governmental organizations alike. Even if governmental organizations are grouped into their population sizes, we know that their operations can differ because of the types of services that their populations have sought from them over time. As a result, it is important to consider ratios for targets, especially for comparing results to another, somewhat different, organization.

In addition, targets cannot necessarily be applied across the board to all organizations, for the following reasons:


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Improving is a process, and takes several iterations over time. The City may have an idea of its long-term targets, but realistic targets need to be used in the short-term to guide the path to the long-term targets. This helps ensure that the goals are achievable and that staff are not overwhelmed during the process.

Perfection costs more for some than others. For some targets, it might not be too challenging to reach a 100% goal (such as paying invoices within 30 days); while it might be extremely difficult to reach another (such as collecting all revenues within 60 days). For challenging targets, the City might be better off striving for a lower target, and focusing any additional resources on achieving other targets that provide a greater return on its investment. Targets can be adjusted over time to reflect new realities such as changes in technology, regulatory landscape, etc.

For these reasons, the City should select its KPIs and performance targets with care, with the aim of keeping the list short and simple, with indicators that can be easily measured, and that staff can directly impact. Too much complexity in a performance measurement system can be counter-productive.

Thus, the targets presented in the following section are samples that the City should consider as a starting point as various business processes are redesigned. In order to appropriately utilize KPIs, the City should take the following steps during process redesign:

1. Determine which measures the City wants to manage (in other words, what key performance indicators to use), ensuring that these measures are linked to the City budget and strategic objectives

2. Measure the current state for these KPIs

3. Determine short-term achievable targets based on redesigned processes

4. Determine what changes can be made within the short-term to reach these targets

5. Regularly reassess the City’s performance and adjust its targets as necessary, as changes occur in technology, the regulatory landscape, etc.

3.3 SAMPLE PROCESS PERFORMANCE MEASURES

The following key performance indicators have been compiled from Plante Moran’s experience, peer practice research, and working sessions with city staff. They encompass:

Financial management

Human resources management

Asset management

These KPIs are provided as samples only, for the City’s consideration.

When applicable, “As low as optimal” and “As high as optimal” are used to indicate the best practice that a city should strive for. “Optimal” is used to indicate that it may be valuable to strive for a high or low amount but not maximize or minimize that amount, given costs versus benefits.

CITY OF CARLSBAD, CA ERP NEEDS ASSESSMENT MAY 9, 2016

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3.3.1 Financial Management

Peer Benchmark City Suggested Benchmark

Process Area Sample KPI Sample Target Sample KPI Sample Target

General Financial Management

# days to close the books (year-end) 30-45 days None identified N/A

# days to close the books (monthly) < 5 days

Accounts Payable

% invoices paid within 30 days Highest possible % invoices paid within 30 days Highest possible

% invoices paid without error Highest possible % invoices paid without error > 75%

% invoices received electronically 100% % invoices received electronically Highest possible

% payments made electronically 100% # invoices processed None identified

# invoices processes per FTE processing invoices

As high as optimal # challenges (re-work) As low as optimal

AP department $ per vendor invoice processes

As low as optimal Total $ late fees None identified

Liquidity ratio As high as optimal # transactions processed None identified

$ processed None identified

Accounts Receivable

% uncollected revenues As low as optimal # accounts receivable None identified

# days receivable ratio (AR turnover) 30 days $ accounts receivable None identified

# transactions per FTE processing receivables

As high as optimal % outstanding accounts receivable As low as optimal

% receipts in electronic form Highest possible

Cash receipts processed per FTE processing receivables

As high as optimal

Bank Reconciliation

% bank reconciliations prepared and reviewed within one week of month end

100% # days to complete reconciliation 30 days from the end of the month

Budget/ Reporting/ Forecasting

# days to distribute CAFR after fiscal year end

< 180 days None identified N/A

% approved budget adjustments entered within 2 days

Highest possible

# budget amendments processed per FTE processing budget amendments

As high as optimal


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Total budget and analysis cost as a % of revenues

As low as optimal

Debt/Investment Management

% available cash invested Highest possible None identified N/A

Net investment income (interest earned plus market value changes) compared to benchmark rates

As high as optimal

Administrative costs as a % of total debt

As low as optimal

Debt ratio As low as optimal

Bond rating Highest possible

Cost of debt issuance and ongoing interest expense

Monitor against prevailing rates

Fund balance Greater than or equal to 2 months

Fixed Assets N/A N/A Customer satisfaction/public opinion (parks)

Highest possible

General Ledger

% system generated journal entries As high as optimal % system generated journal entries As high as optimal

# manual journal entries per FTE processing journal entries

As low as optimal # unused accounts to archive As low as optimal

# corrections As low as optimal

Project Cost Accounting

N/A N/A Time processing invoice approvals As low as optimal

Time researching status of project budgets

As low as optimal

Treasury / Cash Management

# days from receipt to deposit 1 day # investments None identified

Average $ of investments None identified

Utility Billing N/A N/A Service request response time As low as optimal


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3.3.2 Human Resource Management



Benefits Management

# data anomalies in benefit vendor files Al low as optimal None identified N/A

General Human Resource Management

Employee turnover As low as optimal None identified N/A

# employees per HR FTE (i.e., HR coverage)

As high as optimal

Leave of Absence

N/A N/A Absenteeism None identified

# worker’s compensation claims total and by department

None identified

$ worker’s compensation claims total and by department

None identified

Days from incident issuance to determination of status

< 2 weeks

Onboarding N/A N/A Days to complete onboarding < 90 days

Payroll/ Timekeeping

% payroll checks and mileage/travel reimbursements paid without error

Highest possible % payroll checks and mileage/travel reimbursements paid without error

Highest possible

% personnel using direct deposit Highest possible % personnel using direct deposit Highest possible

# payroll checks processed per payroll department FTE

As high as optimal % payroll checks issued timely Highest possible

Payroll and time and attendance cost per employee

As low as optimal Total payroll $ None identified

Personnel Action Form

N/A N/A % PAFs processed without error As high as optimal

Time to complete PAF by type (e.g., new hire, change)

As low as optimal

Position Control

# FTEs per position code (e.g., greater than 1:1 relationship between employees and position codes)

As high as optimal # reclassifications None identified

Recruiting # new positions filled with qualified candidates from within

As high as optimal None identified N/A

# days to complete hiring process

Al low as optimal


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Scheduling N/A N/A Time to create/maintain schedules As low as optimal

% unassigned shifts As low as optimal

3.3.3 Asset Management



Asset Management

Administrative cost per capital asset class

As low as optimal None identified N/A

Net book value 50%

Capital assets added at time of entry 100%


$ of ownership for inventory items Less than the cost of purchasing a new item

# days to complete inventory, G/L adjustments

Monthly

Inventory turn (annual $ inventory / average inventory balance)

As low as optimal

Purchasing Average # days from PR to PO As low as optimal # requisitions in PR status None identified

% POs and revisions distributed electronically

Highest possible Time to create requisition/PO As low as optimal POs issued per FTE processing POs As high as optimal

Solicitation opportunities published per FTE involved

As high as optimal

$ per PO As low as optimal

Warehouse Management

Space utilization As high as optimal None identified N/A

Order picking productivity As high as optimal

Warehouse damage ratio As low as optimal


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3.4 IMPORTANT NOTES FOR GOING FORWARD

Performance management is not a mechanical process that can be set in motion and left to run unattended. Benefits are not realized without engaged leadership and a strong organizational commitment to changing inadequate decision-making processes, structures, and culture. Practitioners of performance management have learned that achieving better results through the principles and practices of performance management requires a sound technical approach, strong leadership, ever-improving expertise, and a culture that constantly reinforces a focus on results and continuous improvement.


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4. Options Analysis Plante Moran evaluated the following four options for the City’s future ERP environment:

Option 1

Maintain and Upgrade Existing Enterprise Applications

Upgrade the City’s financial (SunGard IFAS), human resources (Infor Lawson), and cash receipting (CORE) systems in order to maintain vendor support. Maintain all remaining best-of-breed ERP-related applications.

Option 2

Upgrade and Integrate Existing Best of Breed Enterprise Applications

Purchase a business analytics middleware solution to centralize data from the City’s best of breed systems into a shared data warehouse and reporting tool.

Option 3

Leverage Single Existing ERP Solution and Retire Redundant Applications

Leverage the City’s contract with an existing vendor to purchase a fully integrated ERP solution and retire all redundant applications.

Option 4

Competitively Procure a Replacement ERP Solution and Retire Redundant Solutions

Go to market to competitively procure a fully integrated ERP solution or best of breed ERP, utility billing, and asset management solution and replace all redundant applications.

This chapter further details each of these options, including their relative advantages and disadvantages and other key factors for the City’s consideration.

4.1 OPTION 1: MAINTAIN AND UPGRADE EXISTING ENTERPRISE APPLICATIONS

This option upgrades the City’s financial (SunGard IFAS), human resources (Infor Lawson), and cash receipting (CORE) systems in order to maintain vendor support, per the City’s established application upgrade plans. It also maintains the nearly 40 vended systems and more than 30 standalone shadow systems, mostly Microsoft Access databases and Excel spreadsheets, to further support business processes in areas where existing systems do not provide the required functionality.

Plante Moran does not view this option as a viable long term strategy primarily due to the unmet business needs summarized in Chapter 2 and detailed in Appendix C, and the complexities of maintaining such a significant ERP-related application portfolio.

The following sections summarize the most significant advantages and disadvantages of this option.

4.1.1 Advantages

The most significant advantages of this option include:

1. Simplified Decision Making. If the City decides to maintain status quo, the costs and various complexities of a system replacement could be avoided or delayed until a later date.

2. Minimum Financial Investment Required. While there are costs associated with the three system upgrades, they are less than developing integration between current applications (Option 2) or a full scale system replacement (Options 3 and 4).


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3. No Change Management. City users would continue to face the unmet needs that are associated with maintaining the status quo, but would not have to address the multitude of change management activities that are associated with a system replacement.

4. Vendor Independence. The fragmented approach which the City has taken towards its finance, human resources, and asset management systems does not commit the City to any single vendor, allowing the City to replace a single system over time if its functionality becomes obsolete.

5. Lowest cost option. The City would avoid the significant capital investment required to interface current applications (Option 2) or implement a new ERP system (Options 3 and 4).

4.1.2 Disadvantages

The most significant disadvantages of this option include:

1. Functional Limitations. Appendix C of this report details nearly 250 discrete examples in which existing systems do not meet the City’s operational requirements, user needs, and/or best industry practices supported by current, well integrated ERP solutions.

2. Limited Opportunity for Process Improvement. Limited by existing system deficiencies, users have created shadow applications and workaround business processes. Maintaining status quo misses an opportunity to streamline business processes and increase productivity with new automation.

3. Lack of Timely Data to Support Decision Making. The lack of user friendly reporting capabilities and integration across disparate systems currently limits the City’s ability to access real time or near real time data and information to support decision making in a timely manner. Staff members either are forced to rely on outdated information or create and utilize inefficient shadow systems to track accurate and up to date information outside of the systems of record.

4. Reliance on Standalone, Shadow Systems. Appendix A lists nearly 70 separate systems currently supporting the City’s financial, human resources, and asset management related functions, more than one-third of which could be considered for replacement by an integrated ERP solution. Continued reliance on these disparate systems perpetuates the existing challenges of dual data entry, higher probability for data error and the greater need for data reconciliation, and as a result, data that is often delayed or outdated.

5. Disparate Technology Initiatives. If the city departments must support their own business needs and meet certain internal and external requirements, departments will continue to internally develop and/or externally purchase systems to support their unique business requirements. While this accomplishes the short term goal of the specific department, it adds another standalone system to the growing “footprint” of application systems that are currently supporting the City. Without an integrated ERP solution to capture a majority of the city data within one database the ongoing proliferation of shadow systems is likely to progressively intensify over time.

4.2 OPTION 2: UPGRADE AND INTEGRATE EXISTING BEST OF BREED ENTERPRISE APPLICATIONS

Like Option 1, this option upgrades the City’s financial (SunGard IFAS), human resources (Infor Lawson), and cash receipting (CORE) systems in order to maintain vendor support. Also like Option 1, it maintains the nearly 40 vended systems and more than 30 standalone shadow systems, mostly Microsoft Access databases and Excel spreadsheets, to further support business processes in areas where existing systems do not provide the required functionality. However, it implements an integration engine – a tool to


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enable integration among disparate systems, eliminating the need for many point-to-point interfaces that are prone to error and require more work to maintain.

While this option offers some benefit over Option 1, Plante Moran does not view this option as a viable long term strategy primarily due to the complexities of maintaining such a significant ERP-related application portfolio.


4.2.1 Advantages


1. Vendor Independence. The continued fragmented approach towards the City’s finance, human resources, and asset management systems does not commit the City to any single vendor. While any system integration would essentially need to be re-designed and redeployed, over time the City would be able to replace a single system if its functionality was inadequate or became obsolete.

2. Ability to Increase Integration and Reduce Manual Processing. The City could mitigate the various manual processes that exist today to reconcile information within systems.

4.2.2 Disadvantages


1. Partial Realization of Integration Goals. Developing a “many to one” shared data warehouse of data from disparate best of breed applications will not likely be as robust as integrations delivered between the corresponding modules of an integrated ERP system. This is partially due to the disparate data models of separate systems as well as native benefits realized by ERP systems due to the iterative nature of module integration over time.

2. Opportunity Cost of Choice. Overall City staff have not expressed a significant preference toward the strengths of the SunGard IFAS or Infor Lawson systems – the primary financial and human resource management systems. The investment to develop the integrations and redeploy the existing systems practically commits the City to continue with an outdated approach, without significant business process change, for the foreseeable future.

3. Reduced Likelihood of Process Improvement. Should the City conclude to proceed with this option, end users may tend to focus on the technical aspects of the integration and spend less focus on process improvement.

4. Risk of Limited Development Resources. There is a risk that if the City loses internal development staff responsible for developing system interfaces, that the technical understanding of the interface, and the ability to maintain it, would be greatly reduced.

5. Additional Cost Considerations. Cost implications of systems development projects are challenging to realistically estimate. Generally, cost estimations provided by software developer / integrator firms would require the City to perform a significant portion of the inventory and system interface development planning in order to provide these firms the appropriate level of scope and details adequate to develop their projections with any level of reliability. Regardless, it is appropriate to consider the factors which would influence the costs that the City would effectively incur over time, should it embark on this option. It is important to note that some factors have a capital impact and others have an operational impact in terms of increased internal staff to maintain and support the system interfaces. Such factors include system interface costs, such as:


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Interface opportunities assessment

Interface planning

Business requirements gathering

Data architecture analysis cost

Data transformation planning cost

Interface development cost

Testing

Data conversion toolset and related technical environment

Impacts to maintenance agreements

Interface analysis, redesign and re-development based on vendor product upgrade schedules

6. Greater Total Cost of Ownership to Maintain Integrations. Such an effort would require significant internal resources to plan, execute, and control the development deployment and maintenance of each system integration point. Over time, as each existing point solution software vendor may release version upgrades and discontinue support for legacy versions, the City would be required to evaluate the release notes of the product upgrade, reverse engineer changes to the application’s data schema, and re-design and redeploy the custom built interface to maintain the value of the integration.

4.3 OPTION 3: LEVERAGE SINGLE EXISTING ERP SOLUTION AND RETIRE REDUNDANT APPLICATIONS

Like Options 1 and 2, this option upgrades the City’s financial (SunGard IFAS), human resources (Infor Lawson), and cash receipting (CORE) systems in order to maintain vendor support in the near term. However in this option, the City leverages its contract with an existing vendor to purchase additional software modules in order to implement a fully integrated, citywide ERP solution, including finance, utility billing, human resources, and asset management. This option retires all redundant applications and develops interfaces to those critical systems identified in Appendix B.

While this option offers the potential for significant labor savings the benefits of an integrated environment, Plante Moran does not recommend this option due to the significant risks of circumventing a competitive procurement process. These risks include:

No Warrantee on Functionality. Without the detailed functional and technical requirements typically developed for a Request for Proposal, and subsequently included in a vendor contract, the City risks an effective warrantee on software functionality.

User Resistance and Lack of User Adoption. Without broad city staff participation in an open selection and evaluation process, many city staff may feel alienated from the decision making process and resist the changes made as a result of new systems and work processes.

Potential for Increased Cost. Without an RFP processes, the City may lose its ability to effectively negotiate price among competing vendors.

Vendor Protest. Without a competitive process, one or more vendors may protest the City’s selection.

However, this option can be a viable option if the City effectively mitigates these risks. Should the City elect this option, it should develop and implement a thoughtful and comprehensive due diligence plan,


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including the development of functional and technical requirements; demonstrations and interviews with multiple vendors; broad city staff participation in evaluation activities; and a best and final offer process to negotiate price.


4.3.1 Advantages


1. Enhanced Functionality. Based on Plante Moran’s experience, most ERP vendors (both Tier 1 and Tier 23) can provide much of the functionality identified as unmet needs by City staff.

2. Optimized Business Processes. The implementation of a new ERP system will provide the City the opportunity to review its current business processes and identify efficiencies that could be achieved by streamlining or via enhanced automation or better integration. We believe significant savings and a significant portion of the realized project ROI will result from process redesign.

3. Increased Efficiency and Productivity. With enhanced functionality, expanded automation such as workflow management and self-service, and less time spent on data reconciliation across disparate systems, users can be more efficient and productive.

4. Improved Support for Operational Decision Making. Tier 1 vendors provide a variety of canned reports and specialized reporting tools. In addition, Tier 2 vendors have also improved reporting capabilities beyond what they have offered historically. Leveraging the capabilities of an integrated ERP system can offer more flexible reporting, access to real time or near time data, and business analytics – to support more timely and effective decision making.

4.3.2 Disadvantages


1. Implementation Effort. A typical implementation can take 24 months or more and require significant city resources for project management, design decisions, data conversion, interface development, testing, training, transition activities, and change management. Additionally, during that time, SunGard IFAS, Infor Lawson, and CORE will still require technical upgrades to maintain vendor support.

2. Significant Change Management. Users have become very familiar and comfortable with existing systems and current business processes. A new ERP will introduce new technologies and work practices, and will require significant change. Additionally, during the implementation there will likely be many decisions which will need to be made that will have potential impacts to organization policies. A successful implementation will require strong project governance and change management.

3. Implementation Risk. The implementation of a new system will entail significant risk – of budget and schedule overruns as well as not meeting business requirements or user expectations. Effective project management, assigning staff to support the project, and the selection of a quality software and implementation firm are key elements of a successful project.

4. Significant Capital Investment. This option represents a significant capital investment as it requires a sizable investment in application software, hardware, implementation and other professional services, and internal labor.

3 See Appendix D for an ERP Marketplace Overview and further description of Tier 1 and 2 ERP vendors.


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4.4 OPTION 4: COMPETITIVELY PROCURE A REPLACEMENT ERP SOLUTION AND RETIRE REDUNDANT SOLUTIONS

Like Options 1 and 2, this option upgrades the City’s financial (SunGard IFAS), human resources (Infor Lawson), and cash receipting (CORE) systems in order to maintain vendor support in the near term. However in this option, the City conducts a competitive RFP process to procure and implement an integrated ERP solution, inviting vendors to propose on core ERP functionality (finance and human resources) as well as extended functionality including utility billing, asset management, timekeeping, and treasury management. Appendix D provides and ERP marketplace overview that summarizes the advantages and disadvantages of different ERP solution strategies, including “Tier 1” and “Tier 2” vendors as well as fully integrated and best of breed options. Like Option 3, this option retires all redundant applications and develops interfaces to those critical systems identified in Appendix B.

Plante Moran recommends this option due to the significant benefits of an integrated environment, the ability to explore the entire ERP market, and the mitigation of the City’s risk of circumventing a competitive procurement process.


4.4.1 Advantages

All of the most significant advantages of Option 3 also apply to this option. A competitive procurement process offers the following additional advantages:

5. Ability to Explore the Full Range of ERP Solutions. The City will have the opportunity to explore the entire ERP market by releasing an RFP with the City’s unique needs. This option will allow the City to explore all Tier 1 and 2 vendors, and combination of fully integrated and best of breed solution – and determine which solution best meets the City’s overall needs.

6. Risk Mitigation. Engaging key stakeholders in the competitive procurement process can have a positive effect upon the likelihood of success of the implementation process of a future ERP environment.

4.4.2 Disadvantages

All of the most significant disadvantages of Option 3 also apply to this option. A competitive procurement process offers the following additional disadvantage:

1. Implementation Timeline. A competitive procurement can add six to 12 months to the overall implementation of a new ERP solution.


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5. Cost Benefit Analysis of Options Plante Moran conducted a preliminary cost benefit analysis for each of the following four options:

Option 1: Maintain and Upgrade Existing Enterprise Applications

Option 2: Upgrade and Integrate Existing Best of Breed Enterprise Applications

Option 3: Leverage Single Existing ERP Solution and Retire Redundant Applications

Option 4: Competitively Procure a Replacement ERP Solution and Retire Redundant Applications

This chapter reviews the quantifiable costs and benefits of these four options, organized as follows:

Cost analysis

Comparative cost benefit summary

5.1 COST ANALYSIS

5.1.1 Option 1: Maintain and Upgrade Existing Enterprise Applications

Maintaining and upgrading existing enterprise applications is the least costly of the four options evaluated. One time software upgrade costs for SunGard IFAS, Infor Lawson, and CORE were provided by the City and adjusted based upon Plante Moran’s experience. Associated labor assumptions and ongoing maintenance costs were validated with city staff. Appendix F details Plante Moran’s cost assumptions.

One time implementation costs are estimated to range from approximately $930,000 to $1,555,000, including software, professional services, a 15% contingency, and internal labor. Annual costs, including software maintenance, training, miscellaneous external support, and internal labor are estimated to range from $1,140,000 to $1,895,000. Hardware costs were assumed to be immaterial and were thus excluded from this analysis.

Total 10 year costs for this option range from approximately $13,650,000 to $21,945,000, including 3% annual inflation. The following table summarizes total one time project costs and annual recurring operations costs of this option.


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Table 3: Estimated Cost Summary (Option 1)*

Low High

Estimated One Time Implementation Costs

Software $0 $0

Implementation Services $225,000 $375,000

Additional Professional Services** $65,000 $110,000

Project Contingency (15%) $45,000 $75,000

Business and IT Internal Labor $595,000 $995,000

Total Estimated One Time Costs $930,000 $1,555,000

Estimated Ongoing Annual Costs

Software Maintenance and Support $380,000 $630,000

Third Party Software Support Services $5,000 $10,000

Training $25,000 $40,000

IT Internal Labor $730,000 $1,215,000

Total Estimated Annual Costs $1,140,000 $1,895,000 * All numbers rounded to the nearest $5,000. ** Includes project implementation management assistance.

5.1.2 Option 2: Upgrade and Integrate Existing Best of Breed Enterprise Applications

This option represents the highest annual software maintenance costs due to the continuation of redundant systems and the introduction of new interfaces.

One time software upgrade costs for SunGard IFAS, Infor Lawson, and CORE were provided by the City and adjusted based upon Plante Moran’s experience. Associated labor assumptions and ongoing maintenance costs were validated with city staff. Integration costs, including software and implementation services, were based upon Plante Moran’s experience. Appendix F details Plante Moran’s cost assumptions.

One time implementation costs are estimated to range from approximately $3,190,000 to $5,315,000, including software, professional services, a 15% contingency, and internal labor. Annual costs, including software maintenance, training, miscellaneous external support, and internal labor are estimated to range from $1,385,000 to $2,305,000.



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Low High


Software $430,000 $720,000

Implementation Services $1,085,000 $1,085,000



Business and IT Internal Labor $1,195,000 $1,990,000

Total Estimated One Time Costs $3,190,000 $5,315,000



Third Party Software Support Services $20,000 $35,000

Training $25,000 $45,000


Total Estimated Annual Costs $1,385,000 $2,305,000 * All numbers rounded to the nearest $5,000. ** Includes project implementation management assistance.

5.1.3 Option 3: Leverage Single Existing ERP Solution and Retire Redundant Applications

This option represents the highest annual software maintenance savings over Option 1, considering the retirement of redundant systems and the ability to leverage an existing software license.

One time software upgrade costs for SunGard IFAS, Infor Lawson, and CORE were provided by the City and adjusted based upon Plante Moran’s experience. Associated labor assumptions and ongoing maintenance costs were validated with city staff. New software costs were calculated based on similarly situated implementations, based upon Plante Moran’s implementation and consulting experience, and database of vendor price proposals and negotiated contracts. Appendix F details Plante Moran’s cost assumptions.

One time implementation costs are estimated to range from approximately $7,650,000 to $12,755,000 , including software, professional services, a 15% contingency, and internal labor. Annual costs, including software maintenance, training, miscellaneous external support, and internal labor are estimated to range from $1,130,000 to $1,880,000.



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Low High


Software $1,045,000 $1,745,000








Third Party Software Support Services $0 $0

Training $30,000 $45,000


Total Estimated Annual Costs $1,130,000 $1,880,000* All numbers rounded to the nearest $5,000. ** Includes project implementation management assistance.

5.1.4 Option 4: Competitively Procure a Replacement ERP Solution and Retire Redundant Applications

This option is slightly more costly than Option 3 due to the additional one-time procurement costs and the potential missed opportunity to leverage an existing software license.

One time software upgrade costs for SunGard IFAS, Infor Lawson, and CORE were provided by the City and adjusted based upon Plante Moran’s experience. Associated labor assumptions and ongoing maintenance costs were validated with city staff. Procurement and new software costs were calculated based on similarly situated implementations, based upon Plante Moran’s implementation and consulting experience, and database of vendor price proposals and negotiated contracts. Appendix F details Plante Moran’s cost assumptions.

One time implementation costs are estimated to range from approximately $8,630,000 to $14,380,000, including software, professional services, a 15% contingency, and internal labor. Annual costs, including software maintenance, training, miscellaneous external support, and internal labor are estimated to range from $1,160,000 to $1,935,000.



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Low High


Software $1,190,000 $1,985,000



Project Contingency (15%) $695,000 $1,160,000





Third Party Software Support Services $0 $0

Training $30,000 $50,000


Total Estimated Annual Costs $1,160,000 $1,935,000* All numbers rounded to the nearest $5,000. ** Includes project implementation management assistance.

5.2 COMPARATIVE SUMMARY


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Figure 7: Estimated One Time Implementation Costs on the following page summarizes estimated one time implementation costs for each of the options analyzed.


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Figure 7: Estimated One Time Implementation Costs

Figure 8: Average Estimated 10 Year Cumulative Costs below identifies the average estimated total 10 year cost of ownership of each of the options analyzed, including both one time implementation costs and ongoing annual expenses.

Figure 8: Average Estimated 10 Year Cumulative Costs

$930,000

$3,190,000

$7,650,000

$8,630,000

$995,000

$5,315,000

$12,755,000

$14,380,000

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000


Low High

2.76M

4.28M

5.85M

7.46M

9.12M

10.83M

12.59M

14.40M

16.26M

18.19M

2.76M

6.10M

8.00M

9.95M

11.97M

14.04M

16.18M

18.39M

20.66M

22.99M

5.10M

11.71M

13.26M14.86M

16.50M

18.20M19.94M

21.74M

23.60M

25.51M

2.88M

10.18M

14.65M

16.29M

17.99M

19.73M

21.53M

23.38M

25.28M

27.24M

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

1 2 3 4 5 6 7 8 9 10

YearOption 1 Option 2 Option 3 Option 4


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The costs related to a project are a useful but incomplete method for analyzing and considering a change-based project. In addition to understanding the estimated costs for a project, the City of Carlsbad should consider the quantified benefits that will result from the expenditures (or, in other words, the “cost benefit” or “return on investment”).

Considering the quantified benefits offers significant value, such as:

Communicating the impact that the project will have on the City’s bottom line to the City’s leadership and stakeholders

Enabling the project and city leadership to compare the relative merits of the project to other potential projects

Identifying those processes, software systems, and staff that will be impacted by the project, as a roadmap for implementation

The purpose of Plante Moran’s cost benefit analysis was to determine the potential financial impact of each of the options and to provide high level cost estimates, suitable for budgeting. This analysis included two major components: cost projections (i.e., the investment required by the City for each option) and cost savings (i.e., the potential benefits to the City if the investment is made). Cost projections considered one time software and hardware purchases, implementation services, and internal labor as well as ongoing maintenance and support, professional services, training, and IT support. While we estimate significant cost savings to come from streamlined business processes, existing systems and business practices do not currently track cost and labor effort by business process. As a result, we were unable to include these soft cost savings in the cost benefit analysis here. Cost savings considered only the hard dollar savings associated with retiring redundant systems.

Error! Reference source not found. below provides a summary of the relative total 10 year costs and savings of each of the four options. The retirement of legacy systems can be quantified and are included in the cost savings line item below. Softer cost savings associated with labor savings resulting from reducing the need for maintenance of standalone, shadow systems and streamlining business processes are expressed as low, moderate, or high opportunities for savings.

Table 7: Relative Cost Benefit Analysis of Alternatives (Average Estimate)


Total 10 Year Cost $18,185,000 $22,990,000 $25,505,000 $27,240,000

Total 10 Year Cost Savings (legacy system maintenance) $0 $0 $4,840,000 $4,840,000

Net Cost $18,185,000 $22,990,000 $20,665,000 $22,400,00

Labor Savings (shadow system maintenance) Low Moderate High High

Labor Savings (business process redesign) Low Moderate High High

While we were not able to cost savings resulting from streamlined business processes for the reasons described above, we would anticipate them to be significant in the latter three options, especially in Options 3 and 4.

Table 8: Typical Labor Savings by Process below provides typical labor savings by business process experienced by similarly situated municipalities implementing fully integrated, citywide ERP solutions (Options 3 and 4). These savings are often attributed to new streamlined, automated work processes, reduced errors, reduction in time spent research issues, and easier to use reporting tools. However, it is


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important to note that these savings estimates can vary widely depending on process complexity, transaction volumes, and other factors.

Table 8: Typical Labor Savings by Process


Financial Management (Finance and Cash/Procure to Pay)

1. Accounts Payable 10-25%

2. Accounts Receivable & False Alarm Billing 5-10%

3. Bank Reconciliation 10-50%

4. Budgeting and Forecasting 5-15%

5. Cash Handling (i.e., Cash Receipts) 20-40%

6. Contract Management 20-30%

7. Debt Management 0-5%

8. Fixed Assets 5-10%

9. General and Job Ledger 10-20%

10. Grants Management 0-10%

11. Project Cost Accounting 10-20%

12. Treasury/Cash Management 0-5%

13. Utility Billing 10-20%

Human Resource Management (Hire to Retire)

14. Employee Scheduling (Library) 0-5%

15. Employee Scheduling (Parks & Recreation) 0-5%

16. Leave of Absence 10-20%

17. Onboarding 5-15%

18. Offboarding 5-15%

19. Payroll 15-30%

20. Personnel Action Form 50-75%

21. Position Control 10-20%

22. Timekeeping (CyberShift) 20-30%

Asset Management (Acquire to Retire)

23. Asset Lifecycle Management 0-10%

24. Inventory Management 5-15%

25. Preventive Maintenance 0-10%

26. Purchasing/Online Requisitions 5-15%

27. Receiving 0-10%

28. Service (Work Order) Management 0-10%


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Appendix A: Application Inventory This appendix provides an inventory of financial, human resources, and asset management related applications as compiled during this ERP needs assessment. For each existing application, the table in this appendix identifies current maintenance costs (used for the return on investment analysis included in this report) and a preliminary migration plan based upon the recommendation to pursue a replacement ERP solution and the legend below.

Legend (Preliminary Application Migration Plan)

Replace (R) The City should Replace this application with a citywide ERP solution.

Consider (C) The City should Consider replacing this application with a citywide ERP solution, based on the strength of the selected solution and final cost/benefit of the replacement module.

Maintain (M) The City should plan on retaining and Maintaining the application.

Interface (I) The City should plan on retaining the application and Interface it with a mainstream ERP solution.


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Current Application Business Function Description Owner

Annual Maintenance Costs

Migration Plan

Access DB Contract Management Administrative reports PW Contract Administration

$0 R

Access DB Contract Management Professional service agreement tracking for business licenses/insurance

PW Contract Administration

$0 R

Access DB Contract Management Bid database PW Contract Administration

$0 R

Access DB Contract Management Consultant agreement database PW Contract Administration

$0 R

Access DB Contract Management Tracking Database - Minors and LOAs PW Contract Administration

$0 R

Access DB Contract Management PSA tracking database PW Contract Administration

$0 R

Access DB Contract Management Kevin's contract tracking database PW Contract Administration

$0 R

Access DB Contract Management 03 - PW bid reports PW Contract Administration

$0 R

Access DB Contract Management 2011 contractor listing PW Contract Administration

$0 R

Access DB Service (Work Order) Management

Backflow PW Water $0 R

Access DB Service (Work Order) Management

Recycled PW $0 R

Access DB Timekeeping Timecard database PW $0 R

Access DB Accounts Payable Positive pay Finance $0 R

Access DB Accounts Payable Credit card Finance $0 R

Access DB Budget / Forecasting Position budgeting Finance $0 R


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Migration Plan

Access DB Onboarding Recruitment (for reference use only) HR $0 R

ActiveNet Accounts Receivable, Cash Handling / Cash Receipts, Inventory

Parks and Recreation system Parks Not Provided M or I

AdiTaaS Receiving Service delivery system IT $30,000 M

Asset Works Asset Lifecycle Management and Analysis, Inventory

Asset management PW $7,622 C

CAD Accounts Receivable Alarm system Police Not Provided M or I

CORE Accounts Receivable, Cash Handling / Cash Receipts

Cash Receipting and Transient Occupancy Tax (TOT) data

Finance $19,203 M (Upgrade),C

Crystal Reports

Utility Billing Report writer IT $7,700 C

CyberShift Grants Management, Payroll, Project / Cost Accounting, Timekeeping, Employee Scheduling (CyberShift)

Timekeeping PW $56,405 C

Daptiv Project / Cost Accounting Project portfolio management software Project / Cost Accounting

$46,000 M

Data Hub Personnel Action Form, Payroll Business intelligence for HR/Payroll HR Not Provided M or I

EnerGov Business licensing and permitting

Replacing Permits Plus for business licensing and permitting

$98,637 M or I

Esri ArcGIS Asset Lifecycle Management and Analysis, Service (Work Order) Management

GIS IT $44,100 M or I


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Migration Plan

Excel Asset Lifecycle Management and Analysis, Service (Work Order) Management

Asset inventory PW 0 R

Excel Contract Management Pay estimate spreadsheet for payment timing

Contracts $0 R

Excel Contract Management Warranty data for contracts Contracts $0 R

Excel Work Orders Mapbook (Trees) PW $0 C

Excel Track CIP balances for yearly financial report

Finance $0 R

Excel Retentions held Finance $0 R

Excel Used to balance GL to JL to check for user miscoding

Finance $0 R

Excel Budget / Forecasting Draft budgets (data downloaded from Lawson, uploaded to IFAS)

Budget / Forecasting $0 M, C

Excel Asset Lifecycle Management and Analysis

IT asset inventory IT $0 R

Excel Position Control Salary estimates model Finance $0 R

Excel Project / Cost Accounting Project plan data Finance $0 C

Excel Project Status Report State of Effectiveness Report Various $0 C

Excel Planning Records Project planning $0 C


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Migration Plan

Excel Asset Works Financial Piece Department fuel expenditures PW $0 C

Excel Vehicle Procurement/ Replacement

Procurement Fleet $0 C

Excel Vehicle outfitting cost tracking Expenditure tracking Fleet $0 C

FAAP Accounts Receivable False alarm analysis Police N/A M

Fischer Offboarding, Personnel Action Form

Active Directory access system IT $15,000 M/I

Geoconnect Service (Work Order) Management

Mobile work orders PW N/A M/I

GHD Asset Management Tool

To identify the status of assets and the projected cost to manage assets

Spreadsheet Public Works $0 M

Granite Service (Work Order) Management

Pipe inspections Public Works N/A I

Halogen Onboarding, Personnel Action Form

Talent management HR $39,470 M/I

Infor (Hansen) Asset Lifecycle Management and Analysis, Inventory, Preventive Maintenance, Timekeeping

Work management Public Works $71,270 R or I

Harris (NorthStar)

Accounts Receivable, Utility Billing

Utility billing Utility Billing $63,611 R or I

HP Records Management

Contract Management, Purchasing / Online Requisitions

Document management PW Contract Administration

$18,524 M/I


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Migration Plan

IFAS Accounts Payable, Accounts Receivable, Asset Lifecycle Management and Analysis, Bank Reconciliation, Budget / Forecasting, Cash Handling / Cash Receipts, Contract Management, Debt Management, Fixed Assets, General / Job Ledger, Grant Management, Position Control, Purchasing / Online Requisitions, Utility Billing

FMS Finance $54,898 R

Intellex Work Orders Mobile tracking for inspectors to evaluate contractor work/performance and contract compliance

Parks N/A M/I

Itron MV-RS Utility Billing AMI - meter reads Utility Billing N/A M/I

Infor (Lawson) Budget / Forecasting, Leave of Absence, Offboarding, Onboarding, Payroll, Personnel Action Form, Position Control

HRIS HR $56,718 R

Lucity Asset Lifecycle Management and Analysis

Pavement management PW $1,600 C

MaintStar Asset Lifecycle Management and Analysis, Inventory, Service (Work Order) Management

Work management PW $4,002 C

NeoGov Onboarding HRMS HR $16,500 M/I

Permits Plus Debt Management Being replaced $0 Retire

Q-Track Receiving Internal delivery confirmation Receiving N/A M/I

Sage Inventory, Receiving Inventory for central store Receiving N/A M/I

SharePoint Timekeeping Time tracker PW $0 R


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Migration Plan

SIRSI Cash Handling / Cash Receipts Library cash receipting Library $96,110 M

SymPro Treasury / Cash Management Treasury management Finance N/A M/I

TeleStaff Timekeeping Scheduling PTO Police $5,100 M/I

When 2 Work (W2W)

Employee Scheduling (Library), Employee Scheduling (Parks and Recreation)

Scheduling tool Parks N/A M/I


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Appendix B: Interface List This appendix provides a list of required financial, human resources, and asset management related interfaces as identified during this ERP needs assessment.

Data Flow Description Source

Application/Module Target

Application/Module Currently Exists?

Import bank statement for reconciliation Wells Fargo Bank Bank Reconciliation Yes

Yearly 1099 and W2 submission Accounts Payable/ Payroll

US Treasury Yes

Send positive pay files to bank Accounts Payable/ Payroll

Wells Fargo Bank Yes

Vendor payment ACH file Accounts Payable Wells Fargo Bank No

Import cash receipts from ActiveNet to ERP cash receipts (in summary)

ActiveNet Cash Receipting (apply payments to all applicable module)

Yes

Import a file from Bank of America Works procurement card software to ERP accounts payable

Bank of America Works Accounts Payable No

Integration with barcoding software and the inventory module for tracking items

Barcode Scanner /Inventory

Inventory/Barcode Scanner

No

Import/export employee demographic and benefit election information to/from the benefit providers and to/from human resource module

Benefit Providers/ERP HR

HR/Benefit Providers Yes

Import cash receipts from Police CAD system to ERP cash receipts (in summary) for alarms billings

CAD Vendor Cash Receipting (apply payments to all applicable module)

No

Import time and attendance information from CyberShift to payroll

CyberShift Payroll/HR No

Import cash receipts from EnerGov to ERP cash receipts (in summary)

EnerGov Cash Receipting (apply payments to all applicable module)

No

Import cash receipts from NorthStar to ERP cash receipts (in summary)

Harris NorthStar Cash Receipting (apply payments to all applicable module)

Yes

Active Directory security credentials Halogen ERP Various No

Document management HP Records Management (HPRM)

ERP Various No

CalPERS enrollment and payroll contribution files

HR/Payroll CalPERS Yes


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Data Flow Description Source

Application/Module Target

Application/Module Currently Exists?

ICMA enrollment, contribution files and loan deduction set up files

HR/Payroll ICMA No

Export of payroll direct deposit data Payroll Wells Fargo Bank Yes

Send positive pay files to bank Payroll Wells Fargo Bank Yes

Import cash receipts from Sirsi to ERP cash receipts (in summary)

Sirsi (eLibrary) Cash Receipting (apply payments to all applicable module)

No

Treasury management SymPro General Ledger No

Import time and attendance information from TeleStaff to Payroll

TeleStaff Payroll/HR No

Online payments Virtual Merchant/ Vendor's suggested online payment provider

Cash Receipting (apply payments to all applicable module)

No


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Appendix C: Issues and Opportunities The following provides a list of issues, opportunities, and decisions related to the 28 in scope business processes as identified by city subject matter experts in interviews with Plante Moran. The opportunities are both short and long term and impact one or more of the following:

People

Policy

Process

Technology

This should not be viewed as a comprehensive list of all issues. Rather, it represents the issues and opportunities that were noted during the interview sessions with city staff as being of significant nature that will likely require discussion among the City’s executive management team. When reviewing these, the City should give consideration to impact, priority, resource requirements, timing, and cost.


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FINANCIAL MANAGEMENT

# Process Area Issue Opportunity Decision

1 Accounts Payable

Invoices are received at the Faraday building where they are manually sorted and delivered to departments. The approval process is manual and decentralized in the departments. Some departments may be verifying a three-way match but no system functionality is used to support matching. (13,800 invoices are processed.)

Vendor self-service in a new ERP system environment would allow vendors to submit invoices electronically to be approved and paid by department reviewers. Automating the AP process would also enable the City to take advantage of three-way matching functionality available in newer ERP systems (tying invoices to POs and inventory items received).

Include vendor self-service capabilities in the requirements for a new ERP system. Communicate to vendors that a new system has been implemented and they are encouraged to enroll in vendor self-service to be paid and for invoice delivery. Invoices received through self-service can then be routed for review, approval and payment.

2 Accounts Payable

Significant manual work is required to verify invoice batch totals and transactions.

This process can be automated in a new financial system environment.

Take advantage of AP functionality available in a new ERP system.

3 Accounts Payable

In some uncommon, exception processes, departments do not have access to certain account numbers. In these cases, once invoices are approved, they are sent to AP to be added manually.

Automating the invoice process from receipt through approval and posting will eliminate manual routing and transaction entry speeding up the overall length of the process. Policy requirements can be implemented through workflow approvals.

Determine the appropriate workflow paths and requirements to configure within an ERP system that supports automation of the AP process.

4 Accounts Payable

Separation of duties is present in the departmental batch approval processes and multiple reviews occur in AP before posting.

The City is doing a good job carrying out best business practices and reviewing work before it is entered into the system.

Continue these practices.

5 Accounts Payable

Fixed assets are not always identified at the time of purchase or receipt. Typically when an invoice is received it is reviewed, and if the invoice applies to an asset (purchase amount and verification) the asset is manually assigned a fixed asset tag by Finance. Finance forwards a tag to departments to attach to the asset.

The ability to identify fixed assets during the PO process reduces the manual work/research required now to identify assets. ERP systems provide for additional capabilities such that the creation of a fixed asset shell once the asset is identified through the purchasing process.

Evaluate functionality to identify fixed assets at the purchase initiation stage, whether it be on the purchase requisition or purchase order. The City can also establish approvals/notifications around these requests/orders as appropriate.


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6 Accounts Payable

Employee expenses and reimbursements are very time consuming. Currently, employees fill out an excel form that is then printed for routing and approval signatures. Once the reimbursement is approved at the department level documentation is delivered to AP for payment.

Expense reimbursements can be managed through an ERP system. Using a system with these capabilities would allow employees to submit expenses and any associated documentation through the system for routing and approval.

Include requirements for employee expense submission and reimbursements through employee self-service in an RFP for a new ERP system.

7 Accounts Payable

Employee travel advances are tracked manually in a binder.

The ability to associate an employee with a travel advance through an ERP system would enable the City to track balances owed. Then when an employee submits their expenses this outstanding balance would be adjusted. Any overpayments/underpayments could also be managed through the system.

Evaluate functionality for managing employee travel advances through employee self-service in the requirements for a new system.

8 Accounts Payable

The process for reconciling city credit card expenses is entirely paper based. Throughout the month credit card charges are reviewed for appropriateness of purchase and flagging. When credit card statements are received at the end of the month they are signed for approval by the credit card holder and supervisor before being sent to AP for review and entry. This process is extremely time consuming.

Newer systems are able to interface with credit card providers for verification and payment, allowing approvers to review/flag transactions in the system.

Include an interface with the City's credit card vendor in the RFP for a new system. Evaluating the vendor’s ability to meet this integration need as well as support the verification and review of transactions and payment.

9 Accounts Payable

The AP process is decentralized in departments allowing little visibility into the extent to which city policy is followed.

Using a system to manage the AP process will enable the City to standardize its decentralized processes making it easier to identify areas for improvement or bottle necks. In the short term, expectations for this decentralized process can be documented and communicated to facilitate standardization.

Update current policy/procedure documentation to begin to standardize departmental AP processes. With the implementation of a new financial system standardization can be managed.


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10 Accounts Payable

Reportedly, some purchases that require a PO do not always have a PO attached to the purchase.

Procurement policy should always be followed.

Communicate purchasing expectations related to purchases without a PO. Once a new system is selected implement controls around the PO process that prevents users from making purchases that require a PO without a PO.

11 Accounts Payable

The purchasing system does not capture sales tax for credit card purchases (i.e., amazon). Sales tax estimates are maintained on a piece of paper and are reported to the State quarterly.

Many ERP systems are able to provide functionality for capturing sales tax through the purchasing process. Using functionality within the system would reduce the reliance on paper estimates that exist outside of the financial system.

Include requirements for capturing sales tax in the RFP document for a new ERP system.

12 Accounts Receivable and False Alarm Billing

Hard copies of EFT remittance documents from the bank are maintained as the source document for the three to four vendors that submit payments through EFT.

Using a system to remit EFT notifications will eliminate the City's reliance on hard copy documents.

Evaluate capabilities for automating the remittance documents for EFT transactions to eliminate the reliance on paper documents.


The IFAS system is unable to accurately perform aging calculations or report on aging by fund. To accomplish aging finance uses Insight, an older version of the IFAS system. IFAS does not recognize special characters that are used to determine business logic.

Account aging should not be an issue for financial systems. ERP systems provide capabilities for account aging and reporting.

Include functionality for aging of accounts receivable data and aging reports in the requirements for a new ERP system. Plan to implement and take advantage of functionality when available.


A number of duplicate customer accounts may exist. Also, a single customer may have multiple accounts in various systems.

Implementing a new system will allow the City to clean up its customer file and institute new policies and procedures to guide its maintenance.

Develop appropriate policies and procedures guiding maintenance standards for the customer file during implementation. Further, the City will need to determine the level of conversion that will be considered for the customer file.


The City must manually track annual renewal dates (that permit a rent increase) and expirations because notifications/alerts do not exist. These items are tracked 30 days prior to an expiration/annual increase.

Alerts/notifications can reduce the amount of time spent tracking event occurrences allowing departments to focus on other more value added processes.

Take advantage of date driven alerts/notifications that can be implemented in a new solution.


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Future dating is an issue within IFAS. Capabilities exist for setting up recurring billings as of a future date but the system won't create an invoice when the billing becomes due, it just creates a statement. Issues also exist with processing payments prior to due dates.

An ERP system should be able to manage prepayments and recurring billings with little intervention.

Take advantage of functionality available in a new ERP system.


There is nowhere to include comments/flags on invoices created. Users would find it beneficial to be able to make note of a customer who notifies the City that a payment will be made on a certain date.

Many ERP systems support the ability for city personnel to make comments/notes on transactions created within the system.

Include functionality for maintaining internal comments/notes/flags/reminders on invoices (and other transactions) in the requirements for a new ERP system.


False alarms are tracked using a green screen application called FAAP. A report from the police CAD system is reviewed to identify false alarms that qualify for billing. The process to determine fee amount owed is time consuming and manual.

Many ERP systems provide capabilities through miscellaneous billing and AR modules to automate the calculation of alarm billing fees according to a fee schedule that is reflective of the City's billing policy and implemented during implementation.

Evaluate miscellaneous billing functionality and the ability to support false alarm billings during the selection of a new integrated ERP system.


Customers are unable to pay miscellaneous billing/AR bills online.

Accepting payments online increases the turnaround time for cash collection.

Plan to offer online payment capabilities with the implementation of a new ERP system.

20 Bank Reconciliation

Paper statements from Wells Fargo are used to manually reconcile bank data with city transactions. This reconciliation includes reviewing excel spreadsheets and digesting data by examining cell formulas to determine where a specific transaction originated. The process of matching transactions can take a week. Currently there is no interface with the financial institution and reportedly an "automated statement is not available" per Wells Fargo.

Using bank reconciliation functionality in a Financial system can automate many steps for posting financial institution transactions and preparing bank reconciliations. In the short term the City should reach an agreement with its financial institution to obtain an electronic statement file to reduce the amount of time that is spent reconciling with the bank.

Negotiate delivery format with the City's financial institution. The bank should be able to provide transactions via automated statement. Obtaining an electronic statement is one step towards automation and can reduce the amount of time spent manually checking back and forth between the banks statement and city transactions. Bank reconciliation functionality, in a new financial system environment, can support the automation of this process.


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21 Bank Reconciliation

Because the City's application environment is so disconnected it can become very difficult to find supporting information in various payment systems.

An integrated environment would eliminate the amount of research that is currently required in the bank reconciliation process. Best of breed systems that are maintained following the implementation of a new system should be integrated.

Move towards the use of an integrated ERP system for cash receipting. Be sure that the selected vendor can support an interface with any best of breed products that are maintained.

22 Budgeting and Forecasting

Forecasting for budget expenditures is consistently thorough. Revenue forecasts are prepared using four main inputs; updating gross projections from the previous years’ CIP, meeting with revenue departments to predict revenue from five major streams (property taxes, CED, CIP, business license revenue and franchise fees), estimating personnel expenses by reviewing union contracts and reporting on HR/Payroll data, and estimating maintenance and operating expenses.

Budget forecasting provides the City with a general understanding of financial position for the upcoming year. The City of Carlsbad uses a number of inputs and analysis methods to forecast for budget. The City is diligent and accurate in the development of projections to actuals.

Continue to conduct forecasting activities and update predictions annually.


Currently there is no link between productivity and budget allocation.

Performance measurement when linked to the budget and strategic planning process can assess accomplishments on a citywide basis. When used for long term planning it can help organizations identify program results, evaluate past resource decisions and facilitate qualitative improvements in future decisions.

Identify key productivity metrics to track based on the City's mission, goals and objectives. Plan to use these metrics to support budgeting by measuring efficiency and effectiveness for continuous improvement.


Payroll transactions do not perform a budget check to verify that funds are available before coming over to the financial system. Work arounds are used to double check that sufficient funds are available before a payroll transaction is posted. If this check is not conducted and funds are not available the City won't know until after payroll fails.

An integrated ERP system would eliminate the disconnect of payroll and budgeting data by performing budget checks before transactions are posted and notifying users of insufficient funding situations.

Evaluate integrated ERP systems to support the flow of data between functions.


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It is extremely cumbersome to drill down on transaction data.

Integrated ERP systems make data more readily accessible. Newer systems provide additional capabilities for easily accessing supporting data.

During vendor demonstrations evaluate the different user interfaces. As the vendors demonstrate different processes, evaluate the time spent accessing data.


Budget estimates require the use of data from the Financial system, the HR system and the Payroll system. Reconciling data across these systems can be difficult.

The ability to report on data maintained in key systems is extremely important in supporting organizational decision making. Many newer HR and Payroll systems provide intuitive capabilities for reporting and analysis. Further, using an integrated system provides additional capabilities such as automating payroll projections for budget.

Use an integrated ERP system to support payroll, HR and budgeting processes. Plan to take advantage of reporting capabilities for decision making.


Users would benefit from the ability to perform more complex 'what-if' capabilities to identify the impact of items that could be negotiated (e.g., what impact would a 3% salary increase have on SS payouts).

Newer ERP systems have functionality that will allow the City to analyze revenue and spend activity using 'what-if' analysis to evaluate different budget scenarios to be used for planning/projections.

Include requirements in an RFP for a new financial system. During vendor demonstrations be sure to evaluate vendor 'what-if' capabilities to get a better understanding of the functionality offered across various vendor solutions.


During the annual budgeting process departments receive their allocated budget based on what was received the previous year. Changes are made if the city manager or department requests one.

Consider implementing a biennial, triennial, or quadrennial budget/ planning process. Doing so will help ensure an alignment between resource decisions and city goals.

Plan to update budget allocations periodically based on business needs taking a more analytical approach to how the budget is allocated.

29 Cash Handling Multiple systems are used to manage cash receipts throughout city departments. Reconciling these systems as well as payments accepted at the bank is an extremely cumbersome process that is managed in excel and reconciled to the penny. In order to balance the reconciled cash receipt transactions to the Financial System transactions are loaded to Insight (GUI) before loading to IFAS because IFAS does not recognize special characters.

An ERP system with integrated cash receipting functionality would automate the processing of different types of payments simultaneously and would eliminate the need to reconcile balances across systems providing for real time general ledger data.

Determine which departments will use the ERP's cash receipting and accounts receivable modules and which will need to interface the functions within their departmental systems to the ERP system. For those departments that will use the ERP module, consolidate the departments' citizen account information. Maximize standardization of cash receipting processes based on use of the ERP.


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30 Cash Handling CORE system payments cannot be accepted online. Other systems used throughout the City (ActiveNet, Harris, Ticketing system) are able to accept online payments. Currently, compliance is expected within 12 months.

Accepting payments online typically results in the receipt of cash more quickly and a reduction in late payments.

If it is decided that cash receipting will be within the scope of the ERP solution the City should evaluate systems that provide for online payment capabilities.

31 Cash Handling The City is currently upgrading the CORE system in order to become compliant with PCI standards for EMV credit card chip technology.

PCI compliance is essential for keeping credit card data secure throughout the entire transaction process. The financial impact of a potential security breach while the City is not compliant could be detrimental.

Complete the steps required for the City to become PCI compliant in cash receipting activities, replacing any activities that violate PCI standards.

32 Cash Handling On any given day there can be anywhere between 100 and 1,000 bank pays. Payments accepted at the bank are downloaded from the bank into Harris at the City for manual analysis and entry into the system.

Automating the transmission of cash receipt data at the bank to the Financial System would eliminate manual rework currently required.

Determine if there is an ability to automate this transaction using a file format that is acceptable in the financial system. While evaluating a new solution be sure to include an interface with financial institutions in the RFP to eliminate the manual amount of work required in recording bank payments.

33 Cash Handling The cash handling procedure is documented in detail and is available for reference within the department.

Documenting current processes and procedures is a great benefit to the City. This reduces the risk of a valuable employee leaving the City without having processes documented.

Continue this process. Documented processes and procedures can serve as training materials as well.

34 Cash Handling Payments accepted in CORE for parking tickets and business license are currently one sided as the A/R balance for these functions does not interface to CORE.

Best of breed systems used for cash receipting should interface with the main cash receipting module of an ERP system to eliminate the need to conduct dual entry transactions. Reportedly, there is an interface being built with EnerGov to address this.

Continue with the City's plans to integrate Business Licenses with the cash receipting system once the EnerGov system is live. The City should evaluate the parking ticket system in use and see if it is able to interface with a newer financial systems cash receipting module. Depending on the capabilities of this system this process may be able to be improved.


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35 Cash Handling SIRSI, the City's Library payment system is unable to interface with CORE for cash receipts. Because of this, it is a manual process to record summary transactions in the CORE system.

An integration between the Library cash receipting and the City's core cash receipting module or a future ERP system would eliminate the current need to create manual transactions between the two systems.

Determine if it is possible to create an interface between the Library's cash receipting system and the CORE system. The City may also wish to evaluate potential integration opportunities in a new financial system environment.

36 Cash Handling Changes made to accounts in Harris (A/R for UB) must be recreated in IFAS because the two systems are not interfaced.

An interface between the Utility Billing receiving system and the City's cash receipting module would enable users to make changes in one system and have those changes pushed to/reflected in the other system.

Evaluate the steps required to create an interface with the Harris UB system and the City's cash receipting module.

37 Contract Management

The City is not using a contracts module to manage contract management. It is quite manual to track important dates, milestones, warranties and specific contract guidelines. Tracking may exist through ticklers in outlook, access databases and excel spreadsheets.

Contract management modules are able to track expected contract activities. This tracking is supported by notifications and reminders. Tracking contracts with a contracts module increases the availability of contract data across the organization.

Include requirements for contract management in an RFP for a new ERP system. Plan to leverage the benefits these systems can offer through alerts, notifications, reminders, project progress tracking and an integration with payables and the general ledger.


Field inspection results are communicated through email.

An integrated system with functionality to manage inspection assignment and findings can help manage and streamline the process for retaining data obtained during an inspection.

Include requirements for inspection management within an RFP for a new system.


A pay estimate spreadsheet is developed to predict payment timing throughout the contract's life cycle.

Contract management systems provide robust functionality for tracking and predicting payments based on contract terms and conditions (or milestones) maintained electronically.

Include the ability to track payments against contract terms and conditions or milestones as a requirement in the contract management functional specifications of an RFP. Evaluate offered functionality during the vendor demonstrations once proposals are received and evaluated.


Vendor licenses and insurance expiration dates are tracked manually in outlook and other systems.

Contract management systems are able to track specific expiration dates and notify users when an expiration date is approaching. Reducing the liability that an important date is missed.

Include the ability to track contractor licenses and insurance expiration dates in contract management requirements for a new ERP system.


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Reportedly, the contracts module has not been purchased.

The benefits an integrated system provides can only be recognized if a complete installation is conducted. Eliminating the need to maintain shadow systems or processes that are disconnected from the main source of information.

Include contract management within the scope of a new ERP and plan to implement once a vendor product has been selected.


Moving forward, contract documents will be maintained in the City's new HPRM document management system. This central repository will increase the availability of contract information. Electronic document retention is a step in the right direction. However, there is still a disconnect between "static" contract data and actual dollars.

The ability to associate contract terms to actual dates and dollars will enable the City to automate the contract tracking process to present real time actuals for analysis and decision making.

Take advantage of contract management functionality available in a new ERP system.


All supporting documentation for contracts is disconnected. It may require up to four separate searches to locate the supporting information necessary.

In a new ERP system environment Contracts can be associated with POs and Payables including images minimizing the amount of research currently required to locate supporting data for contracts.

Include requirements for the ability to view POs and Payables associated with a Contract within the contracts module of a new system. Evaluate functionality available across vendor solutions during the selection of a new system.

44 Debt Management

Invoices are not filed electronically. This is a disadvantage for the City when putting together supporting documentation for debt or loans.

Electronically filed invoices are easy to access as they can be associated with a particular project account. This would reduce the amount of time it takes to locate supporting documentation in paper files. The City could also take advantage of vendor self-service which would allow contractors to submit invoices electronically. Speeding up the payment process and increasing customer satisfaction.

If invoices are in scope for the in process document management system implementation plan to migrate paper invoices to an electronic format. A process for maintaining invoices should be documented to support this transition. The City should also investigate the capabilities software vendors offer for supporting vendor self-service activities and associating electronic documents to transactions within the financial system.

46 General and Job Ledgers

The City's chart of account structure allows for greater levels of complexity than needed. The complexity of the account structure may allow for items to be coded incorrectly due to human error.

The City's chart of account structure can be reevaluated and simplified during the implementation of a new system. The account structure should be built to support business needs to better enable workflow.

Evaluate the use of a new account structure and eliminate any unused/unnecessary digits during the implementation of an ERP.


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Grants cannot be identified through their own account making it difficult to identify grants without an intimate knowledge of an account.

Creating a grant specific account would allow the City to easily track and report on grants.

During the implementation of a new system identify an account structure that allows for a grant account.


The City is able to track projects separately through their own account. However, the system does not force the entry of a job ledger key when a project GL account is entered. If a charge is not tied to the CIP through the use of a job ledger number then these costs cannot be reported on and lead to underestimated CIP expenses.

Train users to begin data entry in the Job Ledger as it maps directly to the General Ledger. Validation rules would limit the accounts that can be charged based on the type of expense incurred.

Users should be trained on the data entry process to mitigate the risk of recording transactional errors. Conduct user training. Include the ability to establish validation rules during data entry to prohibit users from posting incorrect transactions.


The overall functionality of the system is limited to the end users knowledge of system functionality.

Training and ongoing training can assist with encouraging staff to identify opportunities to further increase the use of systems and streamline operations as system knowledge and appropriate use is communicated.

Continuously evaluate opportunities to provide additional training to staff, including on-site training, and annual vendor trainings. Many vendors in the market place provide tools for ongoing training such as: online videos, training databases and classroom style training.


User security is not tied to roles. If an employee switches departments they may be granted security for the new role as well as maintain previous security rights if the employees supervisor does not notify IT to remove access.

Role based security in an integrated system assigns certain permissions and access rights to an employee based on their job title. This way, when an employee changes roles their security is automatically changes as their role changes eliminating the risk associated with manually tracking employee access rights.

Newer integrated systems are configured so that employee roles are tied to security rights to eliminate risks. Evaluate using a newer system with role based security and implement when available.


Org keys from IFAS are manually added into Lawson creating an opportunity for error and necessity for reconciliation.

An integrated ERP system would eliminate the potential for differing org key records.

Include functionality as a requirement in a new ERP system.

52 Grants Management

Department analysts are responsible for tracking grant activities. Many analysts use excel spreadsheets to track deadlines and reporting due dates. If grant dates/deadlines are missed the City can be negatively impacted. For example, non-compliance may result in a requirement of returning grant funds.

Many ERP systems with integrated grant management modules provide functionality for the tracking of grant activities as well as notifications and alerts.

Include the ability to generate notifications based on expiration dates for grant activities in the requirements for a new ERP solution.


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There is little structure over the grant application process specifically related to tracking pre-award grant activity and grants that have been applied for. Insufficient oversight of grant activity can lead to noncompliance with grants or other potential loss of grant funding.

Functionality for managing pre-award grant activities is commonly available within newer ERP systems. Tracking this activity can assist staff with grant applications, complying with grant requirements, and obtaining timely funds.

Include functionality for tracking pre-award grant activities in the RFP for a new system. This will allow the City to track and manage grants that have been applied for.


Grants are not designated by a unique account structure. Because of this, it can be difficult to find grant data and even harder to report on it. Reportedly, 90% of grants are segregated in special revenue funds.

Incorporating grants into the account structure may make it easier for staff to forecast trends and report financial information.

During the implementation of a new system identify an account structure that allows for a grant account.


Per policy, the City Manager should be notified of a grant application prior to submitting for the grant. There is confusion within the organization about the application of this policy.

City policies and procedures should be communicated and followed. Consistent "leniency" over the enforcement of policies gives employees the notion that following policies is not required. Although the official process is not always followed, this did not appear to cause issues with Council.

Train users over City policies and procedures and hold them responsible for following these guidelines. Either the grants process should reflect policy or the policy should reflect the process.

56 Project Cost Accounting

Budgetary needs for the fiscal year are estimated using project request forms. These forms are due by the end of January and are approved in June with the Capital Program. Over this time period, Finance may make some adjustments.

Automating the form submission process would reduce the possibility that forms are lost as well as communicate any changes made to departments’ original submission.

Plan to automate the project request form in a new ERP system environment.


The system does not prevent users from entering incorrect job ledger codes. When users enter the JL account first, it auto-populates the GL account; however, the reverse is not the case. Reportedly, not all users are aware of this requirement which leads to errors.

Data entry rules in a new system can force the entry of corresponding JL accounts and require that a transaction may only be submitted if the account number is correct.

Continue identifying projects through their own account in a new system environment. In order to support this process include data entry rule requirements in the RFP for a new solution. In the interim, training users on the auto-populate feature can reduce error rate.


Users are unable to drill down on project expenses. In order to identify expenses lots of research is required.

Modern ERP systems provide capabilities to easily drill down on transactions and transaction supporting details.

Evaluate vendor drill down capabilities during the demonstration portion of system selection.


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The Job captures insufficient level of detail. To compensate for this, project management support staff develop spreadsheets to track cost information.

Determining appropriate levels of detail for the departments to utilize can help increase efficiency and effectiveness for each of the departments.

Determine appropriate levels of detail for the departments to utilize within the chart of accounts, and whether departments can have flexibility to setup lower levels of detail as desired within a new ERP system environment.


Project administrative costs are not consistently included in project capital costs.

All costs associated with the execution of a project should be captured.

Require consistent time entry for projects in order to accurately capture costs associated with a project.


Tracking change orders is done manually.

ERP systems with integrated project/contract management functionality provide capabilities to support the change order process. Retaining contracts electronically, increasing access Organization-wide, as well as tasks, milestones, deadlines, and change orders.

Include requirements for managing change orders in the requirements for a new Financial system.


Supporting project documents (e.g., POs, Scope of Work) are maintained on each departments network drive.

Electronic documents can be associated with projects in a new ERP system environment. Increasing the accessibility of project data.

Evaluate document attachment functionality available within a new ERP solution.

63 Purchasing and Online Requisitions

Some departments use their own templates for RFP sections when they are developing an RFP for services. However, a standard city RFP template does not exist.

Using a citywide RFP template can help standardize the City's solicitation process. Standard RFP terms and conditions can expedite the solicitation to contract process, and a standard format would decrease the time it takes to prepare an RFP.

There is already good detail around the City's RFP expectations and reportedly some departments have developed section templates for use. Use these sources to develop a standard city RFP template. This template can be posted to the intranet once complete.


The City is using electronic signatures for POs. There is an expressed interested in expanding the use of electronic signatures.

Electronic signatures can help automate processes and reduce approval cycle times. Note: ECM improvements

Evaluate vendor capabilities to support electronic signatures and plan to use in a new system.


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Reportedly, purchase orders may be created after an invoice is received. This can cause problems if the vendor is new and the City doesn't have the appropriate vendor information on hand such as tax ID. When finance notices these transactions have occurred, they assist departments in resolving this through a workaround process.

The amount of purchases made outside the financial system should be reduced. Even if a purchase does not require a requisition a PO should be created in the system for tracking purposes and to ensure that AP has enough vendor information to proceed. Users should be responsible for abiding by the City's purchasing policy.

Train users in the City's purchasing policy and establish accountability standards to ensure that this policy is followed. Users should be required to follow city policy and procedures. Communicate this expectation during training.


IFAS has an email notification process to notify users of any requisitions awaiting approval in their queue, the scheduling portion of this functionality stopped working. Manual email reminders are sent in place of an automated scheduling tool.

Many ERP vendors provide support/maintenance services to address "broken process items," in addition, this functionality can be leveraged in a newer system environment.

Determine if the current vendor is able to resolve the issue related to scheduling reminders for approvals. If not, plan to take advantage of these capabilities in a new ERP system.


Purchases can be made without a requisition. Payment cannot be authorized

Holding users responsible for following city policies and procedures will increase the likelihood that employees follow processes. In turn, increasing the efficiency of processes overall.

Users should be required to follow city policy and procedures. Communicate this expectation during training.


Credit card activities are more frequent at the City of Carlsbad than other organizations.

Credit card policies should be consistently updated to be reflective of industry best practices.

Re-examine the City's credit card policy to verify that it is representative of best practices.


Purchase orders and supporting data are disconnected as many supporting documents are retained in a separate enterprise content management (ECM) system or paper form.

Many integrated ERP systems provide capabilities to attach documents to transactions that can be viewed and referenced directly in the system.

Include the ability to attach/view documents to transactions in the requirements for a new ERP system.


The HPRM document management system can maintain supporting documentation for Purchase Orders. However, there is a lack of integration with the Financial System to review supporting documents associated with a transaction.

Using a system that allows for the integration of supporting documentation to transactions enables employees to quickly access and review documents.

Evaluate potential integration points of the new document management system with a future ERP system environment. The City may also be able to take advantage of the ability to attach documents to transactions in a new ERP system environment.


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Vendors that have an interest in doing business with the City fill out an online form that is submitted though the City's bid site, PlanetBids. Vendor submissions are stagnate/not imported into the ERP system for approval. Departments are able to review submissions and transfer those that may be of internet to a "vendor registry" maintained in excel. When it comes time to solicit a procurement the department will access their independent listing to contact vendors.

Once a requisition is submitted there is no notification or alert when a PO has been denied.

With the use of a robust vendor self service module integrated with purchasing/bidding functionality within an ERP system, vendors would be able to submit their information (address, phone number etc.) and designate their specialty (construction, supplies etc.) so that when the City posts an opportunity that targets a particular specialty all vendors that are added to the City's vendor registry that qualify for the opportunity are notified.


Once a requisition is submitted, notification or alert when a PO has been denied is currently done outside the Finance system.

Approval or denial notifications give requisitioners timely notification of the status of their requisitions.

Evaluate ERP system notification capabilities related to the purchasing process.

73 Receiving The City's asset refresh policy has not been updated. A number of computer assets are out of date and are ready to be replaced.

An effective refresh policy will guide IT and Finance personnel through the analysis needed to balance the trade-offs between capital spending, operating efficiency and risk mitigation.

Begin an initiative to update the City's asset refresh policy. Use this plan to budget for technology approaching the end of its expected life.

74 Receiving Once a year Finance sends a fixed asset spreadsheet to departments. The departments are responsible for verifying that the spreadsheet aligns with the actual asset inventory on hand. Reportedly, departments will have inventory additions/deletions to make to the master list.

Departments should be responsible for receiving their goods, tagging them, and setting them up in the inventory listing. Items that are disposed of should be taken off the books to reflect that this item is no longer on hand.

Finance may benefit from additional inventory reporting capabilities available in a new ERP system environment, to eliminate the use of excel spreadsheets. Documenting the receiving process, and the responsibilities for inventory management will set structure over the expectations for managing goods received.

75 Receiving IT's computer inventory is maintained in Excel. Because the City does not have an integrated system tying POs to inventory is time consuming.

In a new system environment POs can be associated with an asset at the time of creation, this functionality may enable the City to more easily track IT assets at the time of purchase.

Plan to track IT assets within a new system. Evaluate functionality for relating a PO to an asset using automated processes available.


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76 Receiving Q-Track is the City’s internal delivery confirmation system. Mainly the system is used for acknowledging the receipt of orders and notification of arrival.

The ability to scan items into the City's asset inventory upon arrival can automate the process of adding goods to inventory quickly.

The receiving process can be further automated with capabilities available through barcode scanning.

77 Receiving A paper purchase requisition form is being used to request products from a catalog of items located on the City's intranet.

The current process is working however, there's room for efficiencies to be gained. Using an electronic purchase requisition process within an ERP system would allow the City to keep a history of requisitions tied to purchases made electronically. Eliminating the need to store paper forms.

Work to automate the current paper requisition process in a future new ERP system environment.

78 Utility Billing Service orders are manually assigned to technicians based on employee availability and other criteria.

If one doesn't exist the City should incorporate a prioritization scheme to facilitate quicker City response times and increase customer satisfaction. A newer system would be able to automatically assign service orders provided it has access to employees work schedules.

In the near term, consider identifying a way to prioritize service requests in the current process (if one does not exist). If the City decides to evaluate newer UB solutions, requirements for implementing a service order prioritization schema and the ability to systematically assign service orders should be included in the RFP.

79 Utility Billing The City uses an add-on for the North Star system called Mcare that supports mobile service orders. Employees are able to download service orders and capture data in the field but they are unable to view supporting customer information.

The ability to access customer data in the field gives technicians an extra level of information that may support the work being performed.

Evaluate mobile capabilities available within the North Star system to determine if it is possible to access customer information with a particular system extension etc. In the longer term, additional capabilities available in newer Utility Billing modules/systems can be evaluated.

80 Utility Billing Daily a report is run from the Permits Plus system to identify new accounts. Once these accounts are identified customers are set up in North Star and a service order is created to turn on services.

Streamlining the transfer of data from the permitting system to North Star would automate the account set up process. If there is a way to establish this connection users would take on a verification role and focus on verifying that all new accounts have been identified and created.

Investigate potential integration points between the two systems to reduce the amount of data entry required in the process.


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81 Utility Billing Auditing utility billing reads takes all month. It's difficult to configure and run reports and a number of reports must be run for each billing cycle (13 cycles). Reports are built using the data mart and crystal reports because the North Star reporting module was never purchased.

The Utility Billing reporting module may provide out of the box reports to support the City's meter read audit process. Currently these reports are custom developed contributing to the amount of time it takes to audit reads for each billing cycle.

Plan to use a Utility Billing system with integrated reporting capabilities, whether it be through the purchase of Harris' reporting module or with a new system.

82 Utility Billing The North Star system is unable to un-post batches. Employees are aware of this and spend extra time evaluating transactions to ensure that only accurate data is posted, so this hasn't been a real issue but the functionality is unavailable.

The ability for authorized employees to un-post batches should exist provided there is audit trail functionality.

A newer system should provide capabilities for transaction reversals.

83 Utility Billing Capabilities for supporting reoccurring credit card payments are available but cannot be used (currently) as the City is not PCI compliant. Compliance is a work in process.

The ability to support reoccurring credit card payments will allow the City to recognize cash more quickly.

Currently the City is working towards becoming PCI compliant. Once the City is in compliance plan to take advantage of reoccurring credit card payments for utility bills.

84 Utility Billing Customers are unable to access daily usage data. This information is picked up with monthly meter read but cannot be communicated to citizens. Some work is required for the City to drill down to daily usage data using BI.

Daily usage data can be beneficial for customers to identify irregular activities that may explain an unexpected billing amount. The availability of this data can reduce the amount of customer calls that come into UB. Efforts are underway by Utility Billing to address this.

Usage data is already being collected through monthly meter reads. Evaluate capabilities for presenting this data to customers through the use of a new system. Many utility systems provide self service capabilities for customers to evaluate usage trends. Plan to include this functionality in the requirements for a new system.

85 Utility Billing The utility system does not interface with the financial system. Posting is done through the manual posting of batches.

An integration between the Utility system and Financial system would eliminate the need to manually post batches from one system to the other.

Include the requirement for interfacing the new ERP system with the Utilities system in an RFP for a new system. Verify that the selected vendor is able to meet this need in order to eliminate manual batch posting.


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86 Utility Billing The current permitting system (Permits Plus) does not include data fields that are easily exported to other systems.

Decentralized environments make it more difficult to maintain accurate data as multiple disconnected sources of data may exist. Each independent source of data needs to be updated in order for changes to be reflected across systems.

The inaccuracy of data in Permits Plus may be due to the disconnected application environment or the unavailability of fields necessary to maintain the data needed to support Utility Billing needs. The specific data points of concern should be evaluated to determine the next steps.

87 Utility Billing Twice a day, a report from Permits Plus is run to identify any new accounts that have been added and need to be serviced.

In a newer integrated environment, the City may be able to take advantage of features that automate the relationship between Permitting and Service Order creation/initiation.

Evaluate capabilities provided through the new Permitting system to determine options available.

88 Utility Billing Payments accepted at the bank are forwarded to the City as checks. This requires the manual entry of these payments to the Financial system. In addition to a delay in deposit, this creates a customer service issue for the City, as customers believe the payment has been made prior to it being received by the City. This results in an application of late fees.

The bank should be able to provide payments electronically to help minimize the amount of data entry required once payments are received at the City. This would also reduce the amount of rework required in evaluating late fees.

Re-negotiate service/delivery terms with the bank to determine a more automated process to support the transmission of data between the two entities.


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HUMAN RESOURCES MANAGEMENT

# Process Area

Issue Opportunity Decision

1 Employee Scheduling (Library)

Part time employees max out at 1,000 hours per year. It is manual to track employees reaching the 1,000 hour limit as the scheduling system does not interface with timekeeping to determine actual hours worked.

Time keeping systems with integrated scheduling management capabilities are able to prohibit employees from being scheduled once they've reached a defined hours limit. Alerts and rules can are set during system implementation.

Use notifications and alerts in an integrated system to notify supervisors when an employee scheduled is approaching the 1,000 hour mark.


New hires and terminations/leaves are manually added to the W2W system.

An integrated system will eliminate the manual work currently needed to transfer data from one system to another.

Use an integrated system to eliminate dual entry processes.


Because of the disconnect between the scheduling system and timekeeping it is almost impossible to report on an employee’s attendance trends (i.e. the employee has a tendency to call off on Sunday mornings).

Many vendors in the market provide capabilities for reporting on employee attendance trends within an integrated timekeeping and scheduling tool.

Depending on the departments need to evaluate this data some benefit may be realized by taking advantage of an integrated time keeping and scheduling solution to report on employee trends.


Library employees may be scheduled at various locations depending on need. The system is set up so that supervisors are able to view schedules of all Library employees. The only disadvantage to this structure is that if a supervisor in one location publishes their schedule before other supervisors have finished theirs, all employees are notified that their schedule is complete, even if it is not.

This is not a huge issue however, it would be nice to publish schedules separately.

Evaluate capabilities available in a newer scheduling system.


The scheduling system is a stand-alone system and does not have the capability to connect with or interface with other solutions. The disconnect between the City's timekeeping system and W2W has limited supervisors abilities to analyze employee trends and warn supervisors when an employee is reaching their hour limit.

Using an integrated scheduling and timekeeping system would allow supervisors to evaluate employee attendance trends while scheduling, alert supervisors when an employee has reached their hour limit and auto populate time cards for approved time off.

Replace the current, stand-alone scheduling system with a new system that is integrated with timekeeping and payroll capabilities.


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# Process Area



Supervisors are not notified when shifts are posted to the tradeboard.

In a new scheduling system supervisors could be notified when an employee posts their shift, or even request that shifts are approved prior to posting. These capabilities will help keep supervisors informed of any changes in the schedules that they originally created.

Include these capabilities in the scheduling requirements for a new solution.

7 Employee Scheduling (Parks and Recreation)

Part time employees max out at 1,000 hours per year. It is manual to track employees reaching the 1,000 hour limit as the scheduling system does not interface with timekeeping to determine actual hours worked.

Time keeping systems with integrated scheduling management capabilities are able to prohibit employees from being scheduled once they've reached a defined hour’s limit. Alerts and rules can are set during system implementation.

Use notifications and alerts in an integrated system to notify supervisors when an employee scheduled is approaching the 1,000 hour mark.


New hires and terminations/leaves are manually added to the W2W system.

An integrated system will eliminate the manual work currently needed to transfer data from one system to another.

Use an integrated system to eliminate dual entry processes.


Because of the disconnect between the scheduling system and timekeeping it is almost impossible to report on an employee’s attendance trends (i.e. the employee has a tendency to call off on Sunday mornings).

Many vendors in the market provide capabilities for reporting on employee attendance trends within an integrated timekeeping and scheduling tool.

Depending on the departments need to evaluate this data some benefit may be realized by taking advantage of an integrated time keeping and scheduling solution to report on employee trends.


Unable to publish on different time frames based on the business needs of the shift.

Newer scheduling systems allow for publishing based on different time frames.

Include in the requirements for a new scheduling system.


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# Process Area



The scheduling system has some compatibility limitations as its mobile application is not computable with all phone types and data can be pushed to Gmail calendars but not outlook.

Many solutions in the market provide for mobile capabilities across phone types and can push data/events to Outlook.

Evaluate vendor mobile capabilities during the selection of a new solution. Verify that the vendor’s solution is compatible with all phone types the City deems in scope for the solution. Evaluate vendor solutions for the capability to export/push events from scheduling to outlook/Gmail. Include both of these needs in the requirements for a new solution.

12 Leave of Absence

HR is often unaware when employees returned to work after a period of leave. This can cause issues when an employee returns and the appropriate HR actions have not taken place. I.e., after 30 days of leave employees that are randomly drug tested are taken out of the testing pool. If the employee returns and they are not added back to the pool they may pose a risk if an accident happens and they have not been tested.

Using notifications, warnings and reminders to alert HR of certain activities (I.e., when an employee on leave records time/returns to work) would help reduce the liability associated with the current processes (that require manual monitoring of data).

Include functionality in the request for a new integrated solution. Evaluate functionality available through vendor demonstrations and configure notifications, alerts, and reminders during implementation.

13 Leave of Absence

City owns the Lawson leave module but it was never implemented.

The Lawson leave module would provide additional automated capabilities for tracking and monitoring employee leave time.

Evaluate the cost (configuration to implement) and benefit of implementing Lawson's leave module. The decision to acquire a new system with a more robust leave module will be dependent on the cost, effort and additional efficiencies available.


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# Process Area


14 Leave of Absence

The HRIS system does not track who is out on leave, why they are on leave, and when the leave is expected to expire. Because of this, an employee’s status must be changed to "Active" in Lawson when they return to work. On occasion, HR is not notified when an employee returns to work.

Automated leave management functionality within an integrated ERP system would allow the City to monitor the number of workers off at any given time through pre-configured rules.

In the short term, communicate to both employees and supervisors that notifying HR is a condition of returning to work. Detail this process within the City's leave of absence policy as appropriate and communicate this expectation to staff members as appropriate. Evaluate leave functionality available within the leave module purchased (but not implemented) within Lawson. It will be important to evaluate costs associated with vendor professional services to get this module configured to meet the City's needs. If the decision is made to move to a new system the City should include leave management capabilities specifically monitoring and reporting requirements in an RFP.

15 Leave of Absence

Each employee group has multiple (~5) different rules that determine the course of action required for each.

Rules can be set up in an integrated leave management module to help streamline managing the leave process for each employee group.

Include functionality expectations for various employee groups in the RFP for an integrated ERP system. During the implementation of a new system rules will need to be configured for each employee group. Take advantage of "blue printing" sessions with the selected vendor to map out the leave process for each employee group.

16 Leave of Absence

HR is unable to access employee leave balance history. This data may be requested from employees or workers comp bureaus and is important in the case of an employee reinstatement. It takes from thirty minutes - several hours of research and manual calculations to present this data.

Newer time keeping systems have reporting/monitor capabilities supporting the ability to view employee attendance history including leave balances.

Include the ability for authorized employees to view an employee’s complete wage/payroll/attendance history including overtime, comp time and leave balances. During vendor demonstrations evaluate vendors capabilities for meeting this met.


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# Process Area


17 Leave of Absence

Users are unable to conduct accrual projections to evaluate how long leave balances will last.

Accrual projections will help support leave analysis by both employees and HR. Many ERP systems have analysis capabilities such as this to facilitate decision making and planning initiatives.

Include the ability to perform accrual projections in the requirements for a new integrated solution.

18 Leave of Absence

The City's leave policy is a work in process, the development and implementation of a leave policy is a huge undertaking. Without an established leave policy processes that rarely occur can take a significant amount of time.

Documented policies and procedures for leave will help to streamline leave activities as well as communicate expectations and responsibilities to all City employees.

Continue to develop the leave policy. Once the policy is complete it should be communicated to all employees and implemented.

19 Leave of Absence

The extent of communication between HR and employee related to benefits, expectations, and return to work criteria appears appropriate.

Communication is key to managing the leave of absence process.

Continue current communication practices; improve tracking mechanisms to ensure these interactions are measured.

20 Leave of Absence

HR staff must coordinate the completion of an employee's timecard while they are on leave. The responsibility for completing timecards is sometimes HR and sometimes the department.

Many time keeping systems provide capabilities to enforcing leave balances and usage rules for dates that an employee's leave is scheduled. Automating time keeping for employees on leave would reduce the amount of time HR spends updating timesheets.

Include requirements for tracking/monitoring leave time in a RFP for a new system.

21 Leave of Absence

All leave information is tracked in hard copy FMLA/benefit/personnel file, word and excel files.

Leave modules provide capabilities for tracking key dates, leave status, and other leave monitoring activities. This would give the City the ability to electronically store employee leave data. In addition, workflows and document management capabilities could be used to store currently physical files electronically and increase efficiencies (such as reduce the time required to conduct an approval) related to document routing and approvals.

Include this functionality in a request for a new system to automate document retention processes, data storage and workflows.


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# Process Area


22 Leave of Absence

Many manual processes exist, some include monitoring employee leave balances so that when an employee that exhausts their leave balance they can be switched to "no pay" status. Additionally, FMLA eligibility is verified manually by running timesheet history reports.

Tracking and monitoring of leave activities could be automated using an integrated system. For instance, leave administrators in HR can be notified if there is a potential FMLA qualifying absence.

Detail leave management requirements and include in an RFP for a new integrated system. Many current manual processes can be automated in a new system environment such as, automatically identifying employees as ineligible to receive pay upon the exhaustion of leave balance.

23 Onboarding Employees are able to select their benefits using employee self-service in Lawson. The City also maintains paper benefit forms with an employee’s elections in file cabinets. This physical form is a safety net for situations when Lawson does not save an employee’s elections. Which happens on occasion. In addition employees are unable to sign or "approve" when they choose to opt out of benefit coverage.

The City should be able to rely on data stored in the system. This system processing error could be eliminated with an ERP system that has tight integration between the Employee Self Service module and HCM. Allowing the City to become less dependent on paper processes. Newer systems provide functionality to track employee decisions as it relates to open enrollment and benefit elections. The City should be able to track when an employee opts out of benefit coverage.

Detail requirements for the open enrollment process in the RFP for a new ERP system. Include the ability to manage enrollment through ESS, approvals and reporting capabilities.


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# Process Area


24 Onboarding HR tracks new hire trainings in excel outside of the system. The Lawson HR system stores hire dates, training registration, and tracking dates but it does not piece all of the parts together so it’s tedious to track training in Lawson. Because of the limited tracking capabilities in Lawson departments are often unaware of the trainings employees have been or have not been offered.

In the short term, HR could communicate to supervisors of new hires data from the training spreadsheet to inform them of the trainings their employees have completed. In the longer term a newer HR system with integrated capabilities for training, learning and performance management could be used to manage employee trainings, certifications and skills. These systems include the ability to report on employees who have not completed a training, certification expiration dates and much more. The City would also be able to maintain a centralized listing of skills that the departments can reference if they need an employee with a unique staffing requirement (i.e. need someone fluent in a certain language, with a certain certification, etc.).

Learning Management modules within an ERP system provide various capabilities for managing trainings as well as follow up training activities such as performance reviews etc. Include requirements for tracking learning, training, skills, certifications etc. in an RFP for a new ERP system.

25 Onboarding There are many decentralized components that contribute to the onboarding process on day 1 (i.e. multiple forms, training, assets to be assigned, employee’s computer, etc.). All of the items that contribute to an employee’s onboarding process are initiated at a different point in time (i.e., supervisor initiating requests through a help desk ticket or filling out a PAF to request that the employee is set up in Lawson).

Packaging (centralizing) the activities that take place during an employee’s onboarding can reduce the risk of activities being overlooked or conducted at various times. Keep in mind the following objectives for onboarding: 1. Everything is available on day 1 2. Help new employees assimilate into organization 3. Onboarding is the first impression of the organization

Work towards developing a "day 1 onboarding packet" that encompasses the forms, documents and any information applicable to the hire. In the longer term, onboarding processes can be automated using robust functionality available in ERP or best of breed HR systems.


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# Process Area


26 Onboarding HR is unable to track an employee’s status (incomplete or complete) for training sessions in Lawson. This makes it almost impossible to follow up on employees who are missing a training and need to be notified of this requirement.

Learning management capabilities would allow HR to have greater oversight when managing employee development processes. Tracking completion status will enable the City to provide better development opportunities for its employees resulting in more efficient processes and capable employees.

Include functionality for learning management in the RFP for a new system including the ability to notify employees of incomplete or overdue trainings, reports, alerts and notifications within these requirements.

27 Onboarding Employees are not automatically assigned to email groups. Employees can be added manually but this is done through various processes including filling out a help desk ticket to request access.

Distribution groups should be tied to an aspect of an employee’s position. For example, employees located in the Faraday building could be automatically added to a "faraday distribution list" based on the location field within the employee file.

Distribution lists can be set up using employee data through Microsoft 365. Evaluate the requirements for setting up email groups using Microsoft 365. In the long term, plan to integrate 365 with a new ERP system.

28 Onboarding PAFs initiate the setup of an employee’s user ID, phone access, computer access and more. PAFs are not always submitted before an employee’s start date which negatively impacts the onboarding process and is very inefficient providing for a useless day 1 and "firefighting" to get the employee set up in systems and granted access/assigned various assets.

Decisions made through the hiring process and "recruiting activities" should trigger onboarding activities such as account set up and notifications to applicable departments (IT, facilities, HR, Payroll). Increasing communication and decreasing activity lag time.

In the short term, supervisor’s responsibilities need to be communicated through supervisor training and process documentation. It is the supervisor’s responsibility to consistently follow policies. There should be a seamless transition from recruit to active employee. Using one system for recruiting and onboarding can facilitate this transition. Notifications and onboarding activities can be initiated at point when a recruit becomes an 'active employee' in the system. The City should evaluate onboarding functionality available in NeoGov to support the use of one recruiting/onboarding system.


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# Process Area


29 Onboarding Because of resource constraints, computers (PC's and Laptops) are only moved on Wednesdays, this is not widely known which can be a disservice if a supervisor has not planned in advance prior to an employee’s start date.

Streamlining the onboarding process including instructions (steps) in the process can help minimize the amount of last minute "fires" supervisors/HR/IT becomes responsible for during the onboarding process.

Detailing the onboarding process and supervisor responsibilities will communicate performance expectations. In addition, incorporating all onboarding activities (PC and phone set up, devices, working area, ID's etc.) into a "day 1" package can also streamline activities. Technology can help to enable this process with notifications to IT and reminders for supervisors. Until then, the short term solution should be communicated.

30 Onboarding Supervisors are unable to view skills and capabilities of employees. It’s critical in public works that certifications and trainings information is available. It is a huge risk if an employee is not qualified to work in a certain position.

Make skills data, certifications and trainings data that is stored in a new system environment available to authorized users. The accessibility of this information can reduce risk associated with certain positions as well as can serve as a tool i.e. if the City needs an employee that speaks a different language to translate something.

Develop requirements for tracking applicant/employee skills and the accessibility of this information for authorized users. Include this functionality in an RFP for a new system so that skill data can be tracked centrally in an employee’s file and easily accessible by managers, payroll or HR.

31 Onboarding Lawson does not have any "pre-hire" or recruiting capabilities. There is a disconnect when a recruit becomes an active employee which may delay processes. NeoGov is being used for applicant tracking and recruiting but not for onboarding. Onboarding processes are monitored by a series of paper forms that end up stored in the employee’s physical file.

Using one system for recruiting and onboarding would streamline activities that are initiated following an employee’s hire. NeoGov is a best of breed system that can support both processes seamlessly.

Evaluate onboarding functionality available in NeoGov to integrate with the recruiting and applicant tracking process. NeoGov is a best of breed HR system that is likely able to interface with common public sector ERP system providers. Desired onboarding functionality can also be included in functional requirements for a new ERP system. There is great benefit to using a fully integrated system to track the City's end to end business processes.


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# Process Area


32 Onboarding The departmental onboarding process is not clearly defined leading to the assumption that onboarding activities are the responsibility of/being managed by of HR. There are a number of activities that should occur at the department level.

Departmental expectations should be clearly defined and documented. A checklist can be developed to help supervisors remember their responsibilities during the onboarding process. Technology can be used to set notifications/alerts but training is key to supporting efficient processes.

Continue working on this checklist (currently in development). One the checklist is complete it should be communicated to supervisors through supervisor training and used as the source of reference for managing the onboarding process.

33 Onboarding Employee pictures are maintained in the ID system (IDMX) and are not currently integrated to the HRIS system although some interest in doing so has been expressed.

Staff would like to have access to these pictures.

Pictures could be loaded to the intranet or added to an employee’s profile in Office 365.

34 Onboarding Data is manually entered into the CALPERS system. This database was compared to the Lawson HR database which showed that a number of discrepancies existed across the two systems (i.e. hire dates may differ than Lawson hire dates).

The decision to automate this process using a flat file was postponed when CALPERS migrated to a new system. Reevaluating this decision may allow the City to expedite the data entry process and reduce for inaccuracy in data maintained.

Evaluate integration options for data in Lawson vs. CALPERS. Work to reduce the amount of manual data entry that is required.

35 Onboarding Each department tracks employee training and certifications manually using excel or some other tracking method outside of the HRIS. This makes it a manual process to keep up with expiring certifications and licenses, and decentralized information.

An integrated system with one centralized location for employee training, licenses, and certifications can help the City monitor compliance requirements.

Include training and certification as part of the vendor demonstration scripts. Departments may also wish to start compiling training, licensing, and certification records in anticipation of the data conversion process during system implementation.

36 Onboarding Key process users have ideas for ways to improve the current process but these ideas are not often followed up on.

Meeting regularly (once a quarter) to discuss ideas for improving current processes is extremely beneficial. Users that are immersed in daily processes are familiar with pain points. These discussions will also help increase departmental communication and knowledge sharing.

Begin to schedule quarterly meetings (whether they are department or process specific). Communicate any changes in process/policies and any ideas for improvement here. These ideas should be documented, those that are agreed upon should be assigned to an employee for implementation and followed up on.


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# Process Area


37 Offboarding In the past, an online survey tool was used to manage exit interviews. When the City switched vendors this capability was lost. Today, there is no defined process for conducting an exit interview although the process is not completely absent as some employees will request an exit interview.

Exit surveys are an opportunity for the City to receive feedback about an employee’s experience with the City. This information can be used to improve processes, determine areas of weakness and better satisfy employees to increase retention.

Re-implement the exit survey process. Identify an online survey tool or vendor to manage exit survey data. An online tool is beneficial for employees that may not be onsite to have an in person interview. Both an in person and electronic survey can be offered. A new vendor may need to be identified to support online surveys.

38 Offboarding CyberShift is unable to remove accruals/balances and calculate payout for vacation/comp time when an employee leaves the organization, these calculations are manual.

Integrated payroll and time keeping systems can automate the calculation of employee payouts owed at the time of leave.

Include requirements for calculate payouts in the requirements for a new system.

39 Offboarding Loan details included in the email notification to finance during offboarding are vague. Some manual work is required to find out what an employee owes and when the last payment was made, although this information is available in Lawson.

If the correct data (available in Lawson) is presented in the email notification to Finance the department would be able to spend less time searching for this data.

Determine if it’s possible to reconfigure the email notice to pull the data that exists in the Lawson system to eliminate the manual work required in identifying any balances owed. Options for potentially "closing" out the loan were discussed, and could be evaluated. In a new ERP system environment reminders could be set for employees that have an outstanding balance owed to the City.

40 Offboarding Upon leaving the City some employees' might owe the City for tuition reimbursement, the City invoices separately (manually created) outside of an employees' last pay check for this debt.

Changing the City Policy to support a reduction of an employee’s last paycheck by any debt balance owed to the City would help reduce outstanding receivables while minimizing potential associated liabilities.

This process is currently being addressed with legal. Continue to communicate any decisions/changes made to the process.


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# Process Area


41 Offboarding If an employee switches roles or moves departments it is the supervisors' responsibility to contact IT/help desk to request that their access is removed, if they do not the employee may still have access information from their previous role. Tracking this data (from the point of onboarding!!) and contacting IT following a role change/leave is dependent on the supervisor remembering to do so.

In the short term, make sure that technology assigned to, and access granted for employees during onboarding is tracked, even if it’s manual. Supervisor responsibilities during on/offboarding should be documented and communicated. Role based security in an integrated system assigns certain permissions and access rights to an employee based on their job title. This way, when an employee changes roles their security is automatically changes as their role changes eliminating the risk associated with manually tracking employee access rights.

Define offboarding processes in an offboarding checklist. Once this process is finalized communicate documentation and processes (maybe through training) to supervisors to ensure that processes are followed and nothing falls through the cracks. Newer integrated systems are configured so that employee roles are tied to security rights to eliminate risks. Evaluate using a newer system with role based security and implement when available.

42 Offboarding Current systems provide limited ability to track City assets/property (keys, uniforms, cars, phone, laptop etc.) electronically. Supervisors are responsible for manually monitoring and tracking assets.

HR modules can track, store, and report on assets assigned to a city employee. This also integrates with other ERP modules (i.e. Fixed Assets). In the short term verify that a policy exists to collect city assets in the formal offboarding process. If it does not, one should be developed. The City should clearly communicate the current process for collecting assets.

Confirm a policy exists to collect city assets in the formal offboarding process, if one does not exist it should be developed and communicated to those responsible. Incorporate this process into a new Financial/Human Resources system, including functionality for associating assets to an employee and tracking the return status.

43 Offboarding Departments may not turn in a PAF for an employee that’s left the organization. These situations may go unnoticed as it is not verified that a PAF was completed. If this process is not followed someone that left the organization may accidentally be paid or may not be paid payouts owed.

Supervisors should be trained on their responsibilities during the offboarding process to avoid these risks. Notifications in a new system may be able to prompt employees to conduct certain activities but in the short term increasing the awareness of the process can reduce liabilities.

An out-of-date supervisor handbook exists, this document can be updated to communicate current processes. Once the offboarding process is documented supervisors should be trained on their responsibilities during employee offboarding. Documentation can be stored on SharePoint for easy access.

44 Offboarding For retirees, employee leave dates, details of separation, PAF details and benefit elections made etc. are tracked in an excel spreadsheet.

Offboarding data should be tracked centrally in an ERP system. This would allow for integrated reporting.

Include functionality for tracking employee offboarding data in the request for a new system.


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# Process Area


45 Offboarding Inactive employee records are stored in physical files for 10 years (to comply with document retention guidelines). This poses a risk if these documents are destroyed (i.e. natural disaster).

Storing paper documents within a document management solution would reduce the risk associated with maintaining physical files. Looking forward, the City could use an ERP system to maintain employee data related to personnel reviews, evaluations, certifications, asset tracking, licenses etc.

Store employee records in a document management solution (HPRM). In the longer term, include tracking needs and desires in the requirements for a new solution.

46 Offboarding Memos included with the employee’s last check and offboarding packet are manually created. Payroll specific data prints with the employees account number which is erased with white out. This process is extremely time consuming.

Memo/letter templates are available in newer systems. Templates can be populated with specific employee data (avoiding the printing of unnecessary data fields) and city specific policy terms/conditions. Using templates would reduce the amount of time spent developing offboarding materials.

Include requirements for templated communications in the RFP for a new system.

47 Offboarding Benefits are manually stopped once the employee’s last paycheck is processed. The Lawson HR system is unable to assign an end date to benefits requiring manual processes.

Newer systems are able to assign end dates to benefit transactions and automate the process for transmitting data to benefit providers.

Include interfaces with benefit providers in the RFP for a new systems and evaluate vendor’s capabilities during software demonstrations.

48 Offboarding Retirees have the option to retain benefits with the City when they leave. Currently a benefits retention form is filled out in addition to the PAF.

The benefits retention form should be a part of the PAF for retiree offboarding. Including the form with the PAF would help to streamline the offboarding process for retirees. These forms can both be moved to an electronic format in a new ERP system environment. Eliminating the need to maintain multiple forms.

In the short term, process specific PAFs can be used to ensure all activities applicable to a certain request occur and information is centralized. Include the benefits retention form with the PAF process for retiree offboarding. Look to automate benefit management processes (along with other PAF activities) using functionality available in ERP systems.


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# Process Area


49 Offboarding For various reasons (i.e., potential return to work) Part time employee leaves are not consistently communicated to HR. Months may go by before a leave is communicated which may be a huge liability risk.

This communication should be documented in the City's leave possibility. These situations pose a legal risk to the City and it is the supervisor’s responsibility to communicate any employee status changes to HR. In a new environment the City may be able to take advantage of various employee statuses such as in-activations.

There should be more structure over the employee leave process to avoid potential liabilities. Document expectations in the City's leave policy and communicate responsibilities to users. Formal training will help ensure policies are followed.

50 Offboarding A Lawson - Fischer interface was built to restrict access to employees that are involuntarily terminated. This interface is able to restrict access to terminated employees "most of the time."

Using a reliable interface between the two systems can reduce the risk associated with terminating employees being able to access City data. Employee status should drive security and access and this dependency should not be a problem. An integrated system would prevent this.

Take advantage of security capabilities within an integrated ERP system to ensure access rules and rights are maintained throughout the whole environment.

51 Payroll When the CyberShift system was implemented a number of items were identified for "Phase 2 implementation" because of funding these items were never implemented resulting in lost functionality and some information disconnect.

A plan should be created detailing the functionality requested in a new system, this way when vendors respond to proposals their cost is inclusive of the functionality requested and based on functionality available and cost the City can determine which solution to implement.

Revisit “Phase II” items. Some might be able to be addressed by IT or might no longer be relevant. Including desired functionality in a request for a new system will help vendors price out their solutions and associated service costs to meet the City's needs. A detailed planning and implementation approach can ensure that no important pieces are overlooked before a system is acquired.

52 Payroll Documentation for payroll process is primarily a checklist of steps with target dates for completion. There are a total of 123 steps in this payroll documentation.

This documentation is thorough and can be used as a model for documentation in other administrative functions that currently lack sufficient documentation.

Continue to update and refer to the payroll process checklist until a more automated process with less steps can be adopted.


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53 Payroll Some employee overtime needs to be calculated to a PERS-able pay code. Hours must be manually offset to balance out overtime.

Many integrated payroll systems can support complex earning scenarios based on employee time worked, especially those governed by federal law. Calculations could be automated with a time system that is able to differentiate PERS hours from overtime hours.

Include specific complex payroll calculations in the requirements for a new system. Many systems are able to support complex calculations but those that are state/organization specific should be highlighted and evaluated separately.

54 Payroll Human Resources enters pay for some individuals who are on paid leave or receiving compensation via settlement. The audit trail for these changes was not clear through the interviews, as it appears this step occurs concurrently with their administrative check.

Newer systems are able to address leave time recording/processes related to leave, as well as provide supporting audit trails.

Ensure that audit standards are being met currently. This might be an issue with data entry of benefit information as well.

55 Payroll Audit reports are created in crystal reports. The data produced is static and does not offer drill around capabilities. On occasion, these reports can produce conflicting totals.

The City's current, disconnected environment may be contributing to the differentiation in audit reports. Many integrated ERP systems provide robust reporting capabilities that support additional analysis through drill down capabilities and associations to related transactions. The City may also evaluate the role of business intelligence/data analytics.

Evaluate reporting capabilities available, specific to audit reports, when evaluating the use of a new ERP system.

56 Payroll Currently, Payroll is unable to validate any retroactive entries, as information is tracked only by report date and not by data entry date.

The ability to report on changes would provide payroll analysts with the appropriate information needed to evaluate a change. The City may also evaluate the role of business intelligence/data analytics.

Verify that audit functionality is not available. Although there are compensating controls to verify changes above 5 percent, it appears that City is unable to identify small discrepancies. Plan to take advantage of audit trail capabilities in a new system environment.

57 Payroll Currently, supervisors can request a change in employee timesheet after they are locked out of the system at 8:30 on Tuesdays. With documentation, this is granted.

Strictly enforcing policies can reduce unnecessary re-work.

Enforcement policy should be established and implemented.


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58 Payroll Comparing payroll periods is difficult because data is printed and kept in a packet.

BI can be used to compare data elements from payroll to payroll. Standard reports should address the common issues.

Determine if BI can be used now to compare payroll periods.

59 Payroll The PERS system supports four decimals while Carlsbad's supports two for employer contribution.

Using a system that supports 4 digits would eliminate the need to round and increase data accuracy.

Include a requirement to support the use of 4 digits for PERS data in the functional specifications for a new ERP system.

60 Payroll The payroll system does not support employer pay so SDI tax and CALPERS survivor benefit programs are addressed using manual work arounds (supplemental pays or reimbursements).

Newer ERP systems are able to support employer pay programs through payroll.

Include functionality to support employer pay in the request for a new integrated solution. Evaluate functionality available through vendor demonstrations.

61 Payroll Reportedly, according to queries, the amount charged to departments for payroll is not equal to the amount employees are receiving.

These two queries should be equal. The City may also evaluate the role of business intelligence/data analytics.

Evaluate queries developed to identify what the discrepancies are.

62 Payroll The payroll system rounds calculations differently when loading into IFAS. This creates minor balancing issues and confusion regarding what the official record is.

Calculations should be identical. However, configuration of current systems does not allow for calculations to be identical.

Ensure that this interface is robustly tested during a future system implementation.

63 Payroll The City receives vendor support from Velocity. Reportedly, the level of support provided is inadequate to fix root issues.

The City may require increased support levels.

Consider increasing support levels or using an alternate vendor.

64 Payroll It was mentioned that Payroll is unable to access root data used for taxable calculations. There is no certainty that calculations are correct.

Authorized users should be trained on the database design of the system. This will aid in the understanding of calculations being performed behind the scenes and enable staff to attest to those calculations. The City may also evaluate the role of business intelligence/data analytics.

Investigate opportunities for database design training.

65 Payroll Leave of absence codes set up in the leave module are not detailed to the level required by the City. For example, leave with pay may not have accrual associated with it in all cases and the City needs to be able to distinguish between the types.

Define additional leave codes to differentiate between types of leave. Once defined, plan to apply these codes.

Gather information on different types of leave and how accruals are calculated for each. Reportedly, this is in process.


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66 Payroll A retroactive change in pay may be missed because reports pick up effective date of the change and not entry date.

This is an audit concern, as the system currently cannot connect the change to who made the change and when the change was made. The City may also evaluate the role of business intelligence/data analytics.

Ensure stronger audit capabilities in future environment, reporting based on entry date.

67 Personnel Action Forms

Personnel action forms are handled using a manual paper routing process and tracking. At times, multiple copies of the personnel action form being created. This leads to confusion about which document is the source document or which document is the most recent.

In the short term, approvers could include the date reviewed with their approval signature to track timelines associated with a particular PAF. In the longer term version control can be used if this process is moved from a paper based submission to electronic. Newer systems will contain workflow processes and tracking features that can help eliminate the need for manual tracking, multiple copies and reduce paper.

Identify workflow processes in a new system to utilize for tracking and entering personnel actions and incorporate into City personnel action process.


PAFs may be submitted with errors in a rushed attempt for departments to meet payroll deadlines or without an employee signature to approve the final version of a PAF. The PAF may go through multiple iterations as it flows through the approval chain the City must be able to track/require employee signatures on the final version of a PAF to certify that a personnel action was approved.

Supervisors should be trained over PAF submission process to eliminate the knowledge gap that currently exists. Incomplete forms should not be accepted, the practice of doing so communicates that inefficiency is accepted. In an automated environment employees may be able to use e-signatures or approvals to certify their approval of personnel actions. These approvals would be stored within the system and easy to access.

Aim to accept fully completed forms to minimize rework, duplicate copies of forms, and communicate consistency. Policy should be updated to stress that only complete forms will be accepted. Communicate this change to supervisors and conduct supervisor training as required to meet this expectation. Automate the approval process using an ERP system to verify that an employee signs of on any personnel actions that impact them.


HR reports that PAFS are submitted with errors 50-80% of the time (this is an estimate).

Training supervisors will reduce the amount of errors that are submitted on the PAF. Many ERP systems support form submission and document routing. Drop down lists can be created for a particular field and capabilities exist to restrict the submission of incomplete forms.

Train supervisors so they understand expectations for the submission of Personnel Action Forms. In a future ERP environment, require departments to complete all fields before submitting. In the interim return incomplete forms to the departments.


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Due to system limitations and constraints retroactive changes are tedious to apply so there is an urgency to complete PAFs prior to an effective date. Some actions can only be effective on the 1st day of a pay period while others can be effective at any time during the pay period. This adds confusion, complexity and delays to the process. This is especially important because Lawson triggers actions in Fischer (network security and file access, e-mail address, etc.)

Newer payroll systems are able to accommodate mid-period employee changes. This includes the ability to pay an employee for part of a pay period at one rate and for the rest of the pay period at a different rate if the employee's rate change is effective dated during the middle of a pay period.

Include functionality to support mid pay period changes in the system requirements for a new system. Determine where the main pain points are now for PAFs that cannot be supported during a pay period and evaluate the vendor’s ability to satisfy these processes with a new system during vendor software demonstrations.


Department reps that create the PAF don't have easy access to employee information required to complete the form. The system does provide manager self-service but security is restricting. In addition, personnel rules apply to many actions and these reps do not have knowledge of all of the rules so PAFs may be submitted that are incorrect or do not depict the true nature of the request being initiated.

Visibility of employee data for authorized users will support decision making. Technology will help enable users to be more aware in decision making. However, processes won't be fully maximized if employees are not trained over processes. Communicating detailed instructions for the PAF process through employee training will help reduce the amount of time spent preparing PAF forms and making decisions.

Document the situations that require a PAF in the City's leave policy. Instructions for filling out the form can be included with the PAF or loaded to the City's intranet for reference. Take advantage of the types of information/data available through manager self-service in a new system environment. Although the functionality is available through Lawson it has not been able to be fully recognized.


Some personnel actions are driven by HR rules and should originally come from the HRIS system to route to the dept. for approval, then to HR for final review. Currently these changes must be requested through the PAF process (e.g., out of class extension, bifurcation of a position that goes from level 1 to level 2 “automatically”).

In a new ERP system environment certain changes that occur in the HR system (for example position changes) could initiate approval workflows, eliminating the dependency on departments for acknowledging a change and submitting a PAF to address the change.

Evaluate vendor capabilities for handling system initiated approvals during the system selection process.


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Departments are not always aware of situations that require a PAF (i.e. when an employee resigns) in these cases HR may create the PAF for the customer department but the guidelines for this process are loosely defined.

Training users on the PAF process can help the City move from its reactive process to a proactive one. In addition, situations that require a deviation from the adopted "PAF Initiation process" should be detailed in the City's policies and procedures along with the expected PAF process. These guidelines can help ensuring the PAF is managed appropriately. A new system can trigger and automate the process via configured business rules and automated workflow.

Update policies and procedures to communicate the expected process. Once the process has been documented training should be conducted to help facilitate a proactive approach.


The majority of PAFs are approved by the same HR employee (the HR Manager). This person is often the only source of information related to departmental requests.

For this process, having a single individual responsible for approvals can become a risk to the organization.

Consider cross training to allow for an organizational redundancy. Also, ensure that appropriate documentation exists to guide decision making should a vacancy in the position occur.


There are 23 types of personnel actions. Each has unique steps, routing, required fields and requirements. Because the process is dependent on a routing process that exists outside of a system maintaining these 23 types of personnel actions adds to the complexity of managing the PAF process.

Automating the PAF submission process would allow the City to set up workflow routing based on the type of request submitted. Some systems even provide capabilities to require certain data attributes based on the type of action required.

The need to support 23 types of personnel actions with unique steps, routing, and fields required and requirements should be detailed and included in the request for a new system.


Changes to a PAF must be initialed, it’s tough to track changes made to forms without this signed approval.

Workflow capabilities could be used to automate the approval process, benefits of a workflow system besides automation include audit trail capabilities where any comments or changes that an approver makes is captured, notifications, alerts and many others.

In the short term communicate the expectation that all changes should be initialed. Update any associated policies as necessary. In the longer term, audit trails and workflows can be used to track changes within a new ERP environment.


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77 Position Control

The position control process is not strictly implemented. Departments may skip over HR (and submitting the appropriate forms) and go directly to the City Manager for approval. HR in these cases can be unaware that a request was even presented for approval.

Enforce the prescribed position control process to ensure that HR is aware of any requests that are being presented to the city manager. Controlling the request process will make it easier for the City to track processes from end to end with supporting documentation to show decisions made.

Make sure that the process for requesting positions is clearly defined in the City's policies and procedures. Update if necessary. Communicate the appropriate process to departments to discourage "shadow requests" from existing. In the longer term, document management capabilities within a new system may be able to strengthen controls over this process as well as provide an audit trail of decisions made.

78 Position Control

Position control forms are not electronic. When a position control form is submitted for approval copies of the form are often made. This makes it difficult to track forms throughout the manual workflow process as various iterations of a form may exist.

An HCM system integrated with document management capabilities would allow the City to store forms electronically. The City could streamline the position control processes by routing electronic forms through the approval process using workflow functionality.

In the short term - Discourage copying forms to minimize the possibility of tracking multiple copies of a request. Longer term - Evaluate position control modules within a HCM suite as well as the system’s ability to integrate with document management systems.

79 Position Control

The City has a difficult time tracking the position control process. Some of this is due to paper routing of forms, lack of functionality and disconnected systems making budget data tough to access for analysis. The City is currently tracking this data manually.

Implementation of a new financial system will allow the opportunity to revisit the processes related to position control, workflows and streamline what data is entered and how it is used.

Develop requirements for the RFP to assist the City in evaluating position control functionality during the selection process and plan to utilize the functionality when available.


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80 Position Control

Departments don't have access to salary data and are unable to estimate the budgetary impact of a position request. A spreadsheet of salary estimates exists in Finance so HR will consult Finance to determine the estimated budgetary impact in evaluating a position request.

The integration between payroll and budgeting data would be improved with an ERP system. This may improve the availability and accuracy of real time information to be used for determining of a certain position request is viable from a budgetary perspective. Alternatively, making the salary estimate spreadsheet available to departments will allow for more accurate position request forms to be submitted.

Evaluate moving to a more integrated Financial/Human Resources environment that will facilitate an intuitive relationship across departments. In the short term, consider making the salary estimate spreadsheet available to departments for reference while preparing position requests to eliminate the amount of time it takes to hunt down salary estimate data.

81 Position Control

The current process relies on one employee for various approvals and decisions. This employee also serves an advisor role to departments because they don't have the information/data needed to fill out position request forms. This may slow down the process.

Consider exploring redundancies in HR so that others become responsible for facilitating discussions with departments. If departments had the ability to access employee and budget data stored in an integrated system they would be able to reduce the dependency on this employee. In the longer term, new technology can support automating the request and approval process. Specifically, workflow capabilities within an integrated system can be configured to default to an alternative approver if the primary approver is out of the office or is inactive after a certain period of time, so processes keep moving.

Having another employee with the ability to make approval decisions may expedite the position request process. In addition an integrated ERP system with position budgeting functionality will increase the accessibility of employee budget data facilitating decision making.


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82 Position Control

During the year, when an agenda bill adding new headcount is approved HR is not notified. HR becomes aware of changes only if they review council meeting minutes or agenda. Notification to other departmental staff typically occurs on Monday when HR meets to debrief. Discussion regarding the bill and any changes is inconsistent.

Improve the process in which Council action is shared with departments. In many jurisdictions, notifications to departments are sent from the Clerk. During regular HR meetings, add a standard agenda item to discuss any additions to the headcount as approved by council.

Request that the city clerk (or another department) notify HR of additions to headcount following council hearings. HR may be able to leverage workflow capabilities being implemented with the new HPRM system.

83 Position Control

Positions approved during the budget process are entered into salary projections. In order to identify any changes, HR must compare the previous budget to the new one. The org keys in the HR system are then updated.

Using an integrated system to automate the position request process through the approval workflow and to completion would eliminate the need for employees to compare budget line items one-by-one to identify changes. Many systems also provide reports that quickly conduct this analysis for employees.

Evaluate position control functionality available in ERP systems to streamline/automate the position budgeting process.

84 Position Control

Once the city manager approves a position request the original form and supporting documentation is brought back to HR and stored in a physical file. It is sometimes difficult to track down forms once a request has been approved.

Using a document management solution for document retention would allow staff (with the appropriate credentials) to quickly access forms supporting a transaction or approval through the system.

Determine if approved position request forms can be stored in the new HPRM system. If appropriate identify requirements, and security/access rights for the new, electronic process.

85 Position Control

Position requests are not tracked in the HR system. The first time any data is entered into Lawson is once an agenda bill has been approved. An employee in HR then implements the code change into the Lawson HR system to reflect the approved change.

Tracking position requests through a robust position control module would allow the departments to initiate requests through the system. Initiating the process in HR following the process through to approval. This would allow the City to view a detailed history of requests, supporting data and resolutions.

Use a position control module to manage the request and approval process. Allowing the City to refer back to these transactions and decisions made.


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86 Position Control

Limited reporting/analysis capabilities are available in the current HR system. Departments may submit requests where they want to trade out 3 positions of 1 type for 2 positions of another type. The system does not support this type of "what-if" analysis. Users also do not have access to the information needed to conduct such a calculation so many discussions with HR are needed in order to determine if this type of request is feasible with the current allocated budget.

An integrated ERP system would allow for real-time budget-to-actual comparisons with general ledger details.

Select an ERP system that meets the City’s needs, minimizing the use of shadow systems, manual interfaces and administrative time.

87 Position Control

Most position requests occur concurrently with the budget process. Recently, the number of department reorganizations that occur non-concurrently with the budget process has increased.

ERP systems with robust position control functionality support streamlined/real-time processes for reorgs that would automatically move/update certain pieces of information in the event of a reorganization.

Include the processing of reorgs as a requirement in the RFP and as a potential demo script item to be evaluated during system selection.

88 Position Control

Denied requests are not communicated departments.

It is important that any decisions made are communicated to those who are impacted by decisions, whether it be the department who initiated the request or HR/Finance who are responsible for implementing an approved request.

Formalize notification in a new system. In the interim, establish a protocol of notifying departments of all approvals and denials.

89 Position Control

Decisions made regarding position control requests are not recorded. This makes it difficult to report on approved/denied requests and also difficult to tie positions to Council action.

Tracking results of the position control process will be helpful for evaluating the process, identifying efficiencies and viewing request history.

Begin to track decisions made regarding position control requests using a shadow system (excel). Share this centrally with Finance so that all position creations, eliminations, and modifications are tied to Council action. Newer ERP systems with position control functionality provide capabilities to help manage the position request process. These systems are able to track the status of a request (open, in process, various approvals and final decision) and would support reporting on approved/denied requests.


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90 Position Control

Finance becomes involved in cost estimations late in the position request process.

Inform Finance on position requests, as there may be financial constraints that will inform the decision of whether or not to create or reclassify positions.

Increase the communication between Finance and HR. Consider including finance in the approval process before the City Manager decision.

91 Position Control

Finance is not informed of position reclassification requests or decisions made.

Finance should be informed when a position reclassification is approved. Reclassifications can have cost implications beyond the cost of personnel.

An ERP system could be used to manage position reclassifications and push information to Finance. In the short term, a step should be added to the current process to notify Finance when a position reclassification is approved.

92 Position Control

There can be multiple temporary employees who occupy single position control numbers. In addition, employees on leave or close to retirement can have their positions backfilled by others through the use of the same position control number.

Improve the position numbering system. A single position number should remain with an extension identifying TEMP, PERM, etc. for multiple employees under the same position.

Reconfigure position control numbering system so that these "special" situations are apparent in the assigned number.

93 Position Control

Position control numbers are often times assigned to multiple employees. For example, if an employee is out on leave of absence their back-fill replacement will be assigned using the same number or part-time employees with the same job title are assigned the same number to make up 1 FTE.

A numbering extension can be used to distinguish between employees. It is best practice that each employee be distinguishable using a unique identification scheme.

Determine if it is possible to add an extension to the end of current position control numbers to differentiate between employees. Discuss "best practice" numbering schemas during the selection of a new system. Plan to implement the decided upon position control numbering structure during implementation.

94 Time Keeping - CyberShift

Daily employee schedule data is loaded using an automated process referred to as the "HR refresh." This data is based on the hours an employee is expected to work based on their defined schedule and position. The refresh does not conduct backdating. Because of this, payroll employees are required to update any deviations from an employees expected schedule to the employee’s timesheet.

Newer time keeping solutions are able to maintain multiple employee schedules types as well as enforce rules configured by the City to be applied to time keeping. These solutions can be tightly integrated with Payroll modules where an employee’s job role/data is maintained. This tight integration would reduce Payroll's reliance on the refresh to load employee scheduling data.

Include functionality for scheduling needs in the requirements for a new system. Evaluate scheduling capabilities during the selection process and plan to utilize when available.


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# Process Area



The City does not have a cohesive Leave of Absence policy. The lack of one can cause a risk to the City, as the opportunity exists for an inconsistent application of standards.

Implementing a leave policy at the City will reduce the risk associated in operating without a policy and will support streamlining of leave processes.

Continue to develop the leave of absence policy. Plan to communicate to employees and implement once the policy is finalized.


Email notifications are manually created and distributed to remind supervisors to approve timesheets at the end of a pay period. The system lacks the ability to set reminders, alerts and support workflows.

Notifications/reminders for supervisors can help keep processes on schedule for a smooth payroll run. Notifications can also be used to alert supervisors of any timesheets adjustments that are made requiring a second approval.

Evaluate ERP systems with integrated payroll and timekeeping functionality. Include desired notifications and alerts in the requirements of an RFP for a new solution.


The process for identify outstanding supervisor timesheet approvals is cumbersome and requires an employee in Payroll to review system transactions in order to determine where outstanding approvals exist.

Many time keeping systems have the ability to run reports on unapproved items, taking advantage of this functionality would eliminate the need to conduct manual review steps. Notifying supervisors that they have an outstanding review can also be automated when a new system is set up.

Evaluate reporting and notification functionality available in a new integrated solution. During system implementation plan to set up notifications and take advantage of reporting functionality available.


Employees are able to make changes to timesheets after they are approved. Supervisors are not notified of additional changes made which often leads to timesheets being unapproved until Payroll notifies the supervisor.

In a new environment, workflows or alerts could be used to notify supervisors of timecards requiring approval. Audit trails can be used to track changes, timing of changes, date of changes etc. providing supervisors with the appropriate capabilities to identify/evaluate any changes that have been made.

In the short term, hold supervisors responsible for verifying that all timesheets have been approved. This expectation should be communicated to all supervisors through formal documentation or training. In a new integrated solution the City should plan to implement and take advantage of alerts, reports, and workflow capabilities and audit trails to minimize outstanding approvals that go unnoticed.


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Some end users have access to both a physical time clock and web clock. However the two do not communicate accurately and will override data tracked in the other system if both are used in the same day so employees must use the same method to clock in as they do to clock out.

Typically software providers can be held liable for supporting the integration of its own product through software support and maintenance agreements. Solving the integration issue between the time clocks and web clocks would give users flexibility in choosing how they clock in/out as well as eliminates manual calculations required to fix any errors that currently occur.

When evaluating vendor timekeeping solutions it will be important to determine the vendor's ability to provide a seamless integration between data collected on hardware and data collected via internet portal.


Payroll is unable to see who an employee's supervisor is within the approval screen. If an employee's timecard needs to be approved, payroll will contact the appropriate supervisor and notify them of this outstanding approval. However, identifying the appropriate supervisor requires payroll to refer back to the employee file to obtain the data needed.

The employee to supervisor relationship is an important part of the time keeping process at the City of Carlsbad - especially considering that an employee’s timesheet cannot be finalized until it is approved by their supervisor. Payroll is the final step in the process and with limited visibility over the approval chain and a lack of automated controls this process is time-consuming focusing on administrative tasks.

Newer integrated time keeping and payroll systems may increase the visibility throughout the timekeeping process and can help standardize timesheet approval workflows. In addition, workflow functionality could completely eliminate the need for HR to manually create notifications providing dashboards for supervisors’ outstanding approvals and automating reminders when a deadline is approaching.


In the current time keeping system employees are unable to forecast leave. Employees institute several workarounds including the use of "scheduled sick" time to conduct analysis activities.

Functionality for forecasting leave time is common among many timekeeping systems.

Include the ability to forecast leave time in the requirements for a new integrated system.


Audit trail capabilities were previously robust and available within the CyberShift system. Currently, users are unable to access a detailed audit trail of changes made in the system. This function "broke" following the application of an extension to the system.

The ability to refer to an audit trail of events helps depict the actions that an employee conducted to complete a process. Using a system with an audit log of activities, changes, users, timing etc. provides decision makers with the appropriate data to identify/evaluate any changes. The City may also evaluate the role of business intelligence/data analytics.

Include audit trail capabilities in the requirements for a new system, evaluate functionality during selection and plan to implement when available.


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# Process Area



Employees request time off using various methods (i.e. carbon copy form, email, verbal communications) and supervisors manually track time that employees have requested off.

Standardization will help ensure compliance. Ideally, all employees could request time off electronically eliminating the need to maintain shadow request logs.

Automate leave requests and management with functionality available within a leave of absence module of an HCM solution. In the short term, determine where gaps currently exist and aim to automate once functionality is available.


System does not force correct entries or present data in a consistent or intuitive manner (some data elements are presented in percentages, some are in minutes) this requires employees to do their own math. The system does not calculate hours based on data entry which makes it easy for users make mistakes if they aren't extremely familiar with the ins and outs of how the system processes calculations.

Newer systems can provide automated, consistent and accurate presentation of data and calculations of leave time accrued and available for employees based on rules established during the implementation of a new solution. A new solution should be configured to enforce the City’s associated business rules and MOUs.

Define the need for employees to have access to consistent, intuitive data including the need to view real-time balances in the RFP.


The number and complexity of time keeping permutations is cumbersome to track for both payroll and HR.

Additional efficiencies may be recognized by involving payroll/timekeeping early on during union negotiations.

Increase communication and knowledge sharing with the departments that are affected by union negotiations. The upfront discussions give departments more time to plan and think through the overall impact of a change.


Time keeping data gets into the payroll system through a manual file upload.

The transfer of (review and approved) time and attendance data to the payroll module can be seamless in an ERP environment. This integration would eliminate the need for the payroll to conduct manual file uploads in order for the payroll system to reflect accurate up to date data. The City may also evaluate the role of business intelligence/data analytics.

Develop requirements for an integrated ERP system to eliminate the need to transfer data from the time keeping to the payroll system.


User lock out periods (for payroll) are manually conducted at the exact same time every week.

Automating processes can improve the City's efficiency and effectiveness. Integrated timekeeping and payroll solutions provide more capabilities to support on time timecard submission.

Evaluate integrated payroll and time keeping solutions during the selection of a new system. The City should include the ability to automate or manually manipulate user lock out periods within the requirements developed for a new solution.


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The City has developed a number of shadow processes (in excel) to identify time card errors. This spreadsheet is refreshed every Friday, Monday and Tuesday in an attempt to address errors early on and prevent the payroll process from stalling.

A new integrated payroll and time keeping system can be configured to support city time keeping procedures forcing correct entries with data integrity. The City may also evaluate the role of business intelligence/data analytics

Vendors should demonstrate their systems ability to support data integrity rules during vendor demonstrations.


Activity based time keeping is a council directive and should be followed. The process in the current time keeping system is complex and time-consuming for employees.

The current system is not user friendly for activity based time keeping. Users are more likely to be compliant with activity based time keeping rules if recording their time was more intuitive. Newer systems may be support more user friendly activity based time keeping functionality.

Include specifications for activity based time keeping in the requirements for a new system. It will be important for the City to focus on how vendors can meet this need during demonstrations to evaluate user friendliness of the solution.


The City has previously experienced issues granting accruals if the system goes down. In these cases, accruals must be "granted" to each employee one-by-one which is an extremely time consuming process.

Newer time and attendance system are able to grant (future) accruals.

Evaluate time and attendance solutions that are able to support payroll management of accruals.


Some groups are still using paper time cards.

Time keeping kiosks, clocks or internet portals can be used for workers to track time spent on work. Tracking work performed in more detail through a time keeping system is more efficient.

Include requirements to support mobile time entry for field workers in the Time and Attendance specifications of an RFP for a new ERP system.


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ASSET MANAGEMENT


1 Asset Lifecycle Management

The City's 15 year CIP plan is a best practice with planned capital projects identified with cost estimates. Due to the rapid population growth, significant infrastructure investments have occurred within a short timeframe. Much of this infrastructure may require replacement a similarly short timeframe beyond 2030.

A coordinated replacement schedule beyond 15 years may identify potential infrastructure needs that may impact near-term financial decisions.

Begin to evaluate asset replacement schedules so that long range projects are appropriately timed.


There is no process to relate fixed asset identification numbers (in Finance) with the asset identification numbers in the City’s asset management systems.

Create a workflow for the assignment of fixed asset IDs at all stages of the asset management lifecycle (new, refurbished, or replaced) that allows for relating fixed asset IDs in the financial management system to asset IDs in the asset management system.

Create an indexing scheme enforcing the relationship between fixed asset ID’s (in Finance) to be related to asset ID’s (in Lucity, MaintStar, Hansen, etc.). This is especially important when asset disposals are involved.

3a Asset Lifecycle Management

The City needs to recognize there are two viable approaches (depreciation vs. modified) to asset valuation depending upon the business requirements of the service area involved. These approaches may represent inconsistent results because they represent different measures of remaining asset life. Reporting the status on both to city council is based upon the depreciation approach at this time. Finance uses the straight-line depreciation approach according to accounting rules. Operations areas perceive this to undervalue assets, especially earlier in their life.

Determine which approaches are most suitable for the asset infrastructure types involved using GASB 34 rules of asset depreciation for finance.

Create an indexing scheme enforcing the relationship between fixed asset IDs (in Finance) to be related to asset ID’s (in Lucity, MaintStar, Hansen, etc.) in City service areas to represent the combined measures of remaining asset life.


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3b Asset Lifecycle Management

Condition based asset valuations are not consistently applied where necessary in all service areas. This approach can produce a valid measure of remaining asset life and replacement valuation.

Identify assets that have well defined condition based assessment cycles (e.g. streets, pipes). Assets may also require from a consistent condition assessment cycles as determined by their corresponding asset management plans as represented by and ISO 55000 and other applicable industry standards.

Determine how remaining asset life can be effectively determined for assets being managed in departmental EAM systems. Consider using public works and utilities asset condition assessment approaches as a template for other service areas to follow so they obtain meaningful information on a predictable basis. Knowing the differentials between Finance and Operations so that replacement costs and remaining asset life can be accurately represented can be possible when this approach is applied.


Staff represented a significant gap between Fixed Asset inventories in Finance in comparison to those in Operations. There is no workflow to update asset registries in the Fixed Asset Systems in Finance when capital assets are retired or replaced by Operations projects.

Eliminate the gap between fixed asset inventories and operations inventories during asset retirements or replacements.

Establish a workflow for updating the valuations in the Fixed Asset systems as determined by the activities in the EAM systems at all stages of the asset management lifecycle (including retirement and replacement).


Asset holdings registries or inventories of assets are incomplete in many service areas (especially outside of public works and utilities) and therefore do not represent a comprehensive picture of the asset holdings for each business area.

Without establishing a comprehensive asset registry, it becomes very difficult to accurately project future maintenance and asset replacement costs for any given asset type or utility. Consider leveraging the City’s GIS System to maintain this registry for assets that are not currently inventoried to date.

Continue leveraging the City’s GIS resources to maintain this registry.


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Asset management plans are available for many but not all assets being managed in EAM systems within the City.

Developing an asset management plan for every asset type will help the City further manage asset life and maintenance activities. Asset management plans for each asset type help determine what the annual O&M actually is and to determine the degree to which an asset’s service life is reduced when ongoing maintenance is not performed. Asset management plans also represent the capital refurbishment schedule or opportunities for extending asset life should they be defined.

Create a matrix of key assets by service area to determine which do and do not have a current asset management plan. Consider the following service areas including: IT, Finance, Public Works, Utilities, and Parks & Recreation.


The valuation of assets or life span is not always adjusted following capital improvement activities.

Preventative maintenance activities ensure asset achieve their forecasted lifespans. Capital asset improvements add value to and increase the useful life of assets. The time, effort and cost for conducting improvement activities should be reflected in the overall value of an asset.

For all enterprise funds, incorporate capital asset improvement activities into the cost of assets maintained and extend useful life. This will help the City accurately determine the replacement value of assets owned. It will ensure replacement projects are properly scheduled and represented through fee schedules.


Assets are not currently segmented and assigned an asset ID's for each segment in Finance. Doing so would allow for greater precision of replacement needs as well as depreciation of assets.

The ability to represent asset information based on dynamic segmentation of linear features will allow the City to have the most accurate information about assets (i.e. streets, sidewalks) specifically for which work orders are completed on varying segments.

Represent asset segmentation relationships between operations and finance systems in a future asset management system environment.


Replacement schedules are not systematically coordinated across asset groups. For example, a street may need to be removed to replace a pipe. There is great benefit to aligning the pipe replacement schedule with the street replacement schedule as the street would need to be replaced at the time the pipe is replaced anyways.

Managing replacement schedules in an EAM system can help management coordinate replacement activities to best benefit the operations and productivity of the City.

Aim to coordinate asset maintenance/replacement activities for assets that have mutual dependencies. This does occur prior to the implementation of an EAM system through planning coordination and constant communication.


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There is no connection between the capital asset condition assessments performed by consultants at a high level for buildings and the replacement costs determined by the operations/management systems maintaining those same assets.

The asset management programs in use at the City have a very tactical (short-term) focus and are not presently used for strategic planning.

Linking condition assessment to projecting remaining asset life for those assets in the City’s EAM systems should continue to be priority focus whenever possible.


Asset performance reporting is very limited outside of the water/wastewater and public works (streets) service areas at this time.

Performance measures should be used to represent past performance achieved and predict future performance so operations can effectively manage these resources. Consider expanding upon the "State of Effectiveness Report" representing an example of a formal report deliverable that could be expanded for the City.

Plan to begin using performance measures to represent performance. This will help the City target areas for improvement.


The City has not formally established responsibilities for staff resources to manage asset information throughout the organization.

The City has recently hired a staff member in Utilities whose duties could serve as a template for other City services areas in terms of asset management performance reporting and valuation. This template could be used to support the business needs throughout the City in addition to representing the opportunities identified by this process assessment.

Follow the Utilities template in moving forward the City can pursue an enterprise-wide asset management vision and program. This will allow the City to represent asset management program objectives consistently throughout the organization.

13

Asset Management / Fixed Assets (e.g., Infrastructure)

Determining an accurate measure of replacement cost is necessary for many types of fixed assets but there is no method or frequency currently applied to determine a consistent replacement cost.

Knowing the replacement value of utility assets protects the City’s long-term interests to know the proper reinvestment as the utility system ages.

Determine if there is a compelling business interest to calculate the amount an asset system is consumed each year, and if yes, represent the reinvestment costs necessary to properly sustain the services the given fixed asset / utility system provides. Examples of business interests might include insurance coverage, capital maintenance/replacement bond issuance, determining the annual reinvestment necessary to sustain the City’s infrastructure operation, etc.


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14 Asset Management / Fixed Assets (e.g., Infrastructure)

There are many sources of asset inventory data with the system of record for financial fixed asset reporting being IFAS. However, there are other inventories being maintained in the public works and utilities service areas.

It is likely that the City will continue to maintain at least two sources of fixed asset data: one in Finance and one in the Asset Management system environment. These data sets should be reconciled on a regular basis.

Plan to reconcile sources of fixed asset data periodically.


There are two valuation methods used for fixed assets. However, Finance's method for depreciating assets is legitimate for their needs while departmental asset depreciation is based on asset conditions which is relevant to their needs.

The two separate and legitimate determinations of value serve different business needs.

Data presented to Council/Leadership should be consistent and explain what the objective is for recording depreciation in a particular way.


Asset degradation schedules are based on the national average not necessarily based on the physical condition of the roads in Carlsbad.

The national degradation average for streets is impacted by conditions that are not present in Carlsbad such as freezing temperatures, snow, areas that get heavy rains, factors that typically deteriorate roads more quickly. Basing degradation schedules on these factors may speed up replacement plans for roads that don't need to be replaced.

The City should plan to develop degradation schedules based on the condition of roads in Carlsbad.


Mobile capabilities are lacking. Some mobile operations have mobile tools while others do not.

The ability for field workers to access data needed to conduct work in the field in an intuitive way will support the data gathering process.

In consultation with the City's Information Technology Team, identify the business needs requiring field mobility access to establish the necessary security safeguards and processes. Additionally, evaluate the mobile device options the City will support moving forward to ensure compatibility with security measures (e.g. mobile VPN clients) and related practices.


In some areas, replacement costs are estimated on asset costs today vs. what they will cost in a future state. Reportedly, this becomes an issue when assets are replaced and funds are underestimated.

Future value costs are calculated based on inflation assumptions or material cost increases. Inputs for this formula should be communicated so that all departments affected by asset replacements are able to plan for an asset replacement appropriately.

Communicate appropriate methods for future valuation of assets in order to predict asset replacement value.


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IT's computer inventory is maintained in Excel. Because the City does not have an integrated system, tying POs to inventory is time consuming.

In a new system environment POs can be associated with an asset at the time of creation, this functionality may enable the City to more easily track IT assets at the time of purchase.

Plan to track IT assets within a new system. Evaluate functionality for relating a PO to an asset using automated processes available.


Vehicle outfitting costs are tracked in excel and are not automatically attributed to a specific vehicle. Finance identifies expenditures related to a particular vehicle by reviewing invoices for applicability.

Asset Works is able to track expenditures related to a particular asset. This information can be shared with Finance to reduce the amount of review/research required to identify vehicle outfitting expenditures.

Determine the process for obtaining vehicle expenditure information from Asset Works in Finance. Asset Works may be able to be interfaced with a Fixed Assets module in a new financial system environment.

21 Inventory Management

Reportedly, the inventory management process outside of fleet and utilities involves manual tracking of stock assets without the benefit of any automated controls.

Inventory management systems are able to address the following business needs and controls to prevent loss or lead time delays including: - Using bar code readers to accurately receipt and issue inventory stock to work orders - Establishing stock replenishment limits that trigger reorders to avoid stock outs due to excessive lead times or unplanned activities increasing stock consumption rates. - Linking the purchasing, inventory, and work order management systems so controls can be enforced to prevent shrinkage. - Warranty tracking and coverage - A materials master file that allows for vendor part number histories and contracts to be referenced

Fully implement the Hansen inventory management module or evaluate requirements to replace the Hansen system.


Public works evaluates usage to determine when an item needs to be re ordered. These estimates are usually pretty accurate however, the City may benefit from using reorder points in a new system.

Managing inventory in system that is able to track inventory levels (as items are removed from inventory) and identify reorder points as inventory levels drop will help the City avoid these situations.

Determine the City's needs for tracking inventory and inventory reorder points within an ERP system. Review software vendors' functionality and conclude on whether to purchase an inventory management module.


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In an effort to reduce the manual nature of the current process, utilities has barcoded all inventory items. However, without Hansen's barcoding module these capabilities have not been recognized.

Barcoding capabilities integrated with the City's inventory and work order systems would allow for real time updates of items that are taken out of inventory and used on work orders.

Plan to acquire and implement Hansen's barcoding module.


Inventory items are manually added to work orders as they are removed from inventory and used on a project/repair.

Barcode scanning can be used to identify when an item is removed from inventory as well automate the ability to assign inventory items to work orders as items are picked up from the warehouse.

Use barcoding capabilities to associate inventory items to work orders to eliminate the manual work currently required.


Inventory levels may be inaccurate if items are removed from inventory and not recorded - particularly in departments that track inventory manually. Reportedly, items can be removed from inventory without notification and the inventory listing can be inaccurate.

Although an inventory system with barcoding capabilities will reduce the frequency of these occurrences the process will still have gaps if users do not follow inventory policies and procedures. Users should be trained on and responsible for identifying any items they remove from inventory.

Communicate expectations/the process for putting an inventory item into service. Employees should be responsible for abiding by City policies and procedures. Once barcoding capabilities become available continue to improve tracking and management of inventory items.


Multiple inventory systems and manual tracking processes exist across the City. These systems do not integrate with the financial system.

There are benefits to tracking inventory centrally in a single system that integrates with the general ledger. These include: increasing visibility of inventory usage, real time inventory values, increases the use of the inventory on-hand, potentially reducing excess inventory levels (e.g., departments ordering the same types of inventory). It can also help the City efficiently calculate its inventory levels for financial reporting purposes.

Evaluate the costs and benefits of using one system to manage inventory across all City departments.


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Several different inventorying processes exist within the City. Standardization varies considerably.

Centralizing warehousing functions within the City would allow for greater control over inventorying processes.

Consider a centralized warehouse function to control inventory processes or develop common inventorying practices.

28 Preventive Maintenance

A number of databases are used to manage preventive maintenance and maintenance planning.

Tracking preventive maintenance in fewer systems will help increase the availability of maintenance data and contribute to efficient management of preventive maintenance to extend the life of assets, plan future work, and keep track of work performed for warranty reimbursement.

Begin tracking all preventive maintenance in one EAM/work order management system.


The City appears to be efficient in planning preventive maintenance activities for infrastructure. However, no analysis was done for fleet or facilities.

Plan to standardize preventive maintenance activities for fleet and facilities to the City's own internal best practices used for infrastructure preventive maintenance.

Continue preventive maintenance activities.


When workers are in the field conducting preventive maintenance activities asset condition information could be captured. This is currently being done in Tree maintenance and Street maintenance. Some, but not all city employees have mobile access.

To the extent possible, ensure that field workers conducting preventive maintenance work orders gather information related to asset condition and activities contributing to the extension of an assets life.

Take advantage of the opportunity to gather data that may help support other functions while workers are in the field.

31 Service (Work Orders)

Tracking of changes through the GIS ESRI extension is limited. When Geoknx is updated Asset techs take screenshots to communicate changes to departments.

Users would benefit from the ability to be notified when a change is recorded in the system.

Evaluate system capabilities to see where improvements can be made.


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Parks workers who do not have a mobile solution capture data on summary sheets or paper while they are in the field. This data is then transferred by a second employee to Hansen work orders when the field employee returns to the office.

A manual transfer increases chance of data entry error. The ability for a worker to access their assigned work orders in the field and note findings in real time would eliminate the dual entry process that currently exists.

In consultation with the City's Information Technology Team, identify a solution that supports mobile work order capabilities. Additionally, evaluate the mobile device options the City will support moving forward to ensure compatibility with security measures (e.g. mobile VPN clients) and related practices.


Physical documents that require a signature are used in the field for field work as, mobile signature capabilities are unavailable.

Many systems that support mobile service orders also support capabilities that allow for e-signatures.

In a new EAM environment include the need to obtain signatures on electronic plan documents while in the field (using an ipad for example…) in the requirements for a new system.


Reportedly, hard copy maps are used in the field.

The development of the maps and all subsequent workflows that use of this information could be automated.

In a new EAM environment include maps to be viewed using mobile capabilities in the field.


Reportedly, there may be some resistance to the integration of SCADA data with work orders.

Consider importing SCADA data into a work order management system to attach this data to assets, so that a history can be created and work orders can be created based on it.

Consider interfacing or importing the SCADA system in a new EAM or work order management environment.


Some sections of the City do not use mobile capabilities for field inspections.

Inspections are a type of work activity that can be easily accommodated by work order management applications. Inspections can feed the planning and execution of work processes tying together inspection data and work order data.

Evaluate inspection capabilities within a new EAMs.


In some departments, it is unclear if a formal work order prioritization plan is being used to schedule resources.

Document current practices, establishing pre-determined work priority according type of work order can be used to establish a precedence for standard operating procedures and facilitate escalation when necessary. This can be used to meet and when necessary, automatically escalate work orders (e.g. exceeding a set number of day’s threshold, etc.)

The building maintenance function is centrally managed with staff assigned to designated facilities. Review the types of routine and non-routine work to create a facility specific, operational performance standard in partnership with the constituent department.


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A request for work does not always initiate a work order as some issues are reported directly to department supervisors. In these situations a work order is created once work has been completed.

Consider tying work orders to customer self-service.

Consider the inclusion of customer self-service in future technology acquisitions.


Third-party contractors are unable to access work orders or update data in the system. Not all contractor work is included in the system. These instances are manually keyed into Hansen.

Many EAM systems provide capabilities for third-party contractors to access and update the EAM system with work activities, detail of work performed, and work order status. The City can review/approve contractor data before a work order is finally closed.

Include requirements to support the need for third-party contractors to access the EAMS in the requirements for a new EAMS solution.


Because contractors are unable to access the WO system, costs for contractor work are not captured on a WO. This underestimates the cost required to complete a WO.

Many EAM systems provide capabilities for third-party contractors to access and update the EAM system with work activities and time spent on work activities.

Include requirements to support the need for third-party contractors to access the EAMS in the requirements for a new EAMS solution.


Employee data is loaded into Hansen (from Lawson) for labor costing on work orders.

Using an integrated ERP system would eliminate the dependence on stored procedures/manual interfaces to load employee data for costing.

Take advantage of seamless integrations using an ERP system.


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Appendix D: High Level “To-Be” Business Processes

This appendix provides the “to-be” business process workflows developed in conjunction with subject matter experts during interviews with Plante Moran. These encompass:

Financial management

Human resource management

Asset management

These process maps should not be viewed as final, end-state targets for business process change. Rather, they represent high level business process improvement opportunities that were identified during interview sessions with city staff as being of significant nature that will likely require discussion among the City’s executive management team. When reviewing these, the City should give consideration to organizational change, policy and procedure impacts, requirements for technology investment, priority, resource requirements, timing, and cost.

City of Carlsbad ERP Needs Assessment May 9, 2016

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FINANCIAL MANAGEMENT

Accounts Payable

Accounts Payable (to be)

Department

Finan

ce

VER. 010815

StartReceive invoice

through vendor self‐service

3 way match?

Conduct research to identify if goods/services have been

received

No

Route invoice for review and approval

Workflow

Apply paymentConduct check run

System

Is it a fixed asset?

Yes

Assign asset ID

System

Note: The City can establish additional criteria for workflow management, such as requiring multiple approvals if the dollar figure exceeds specified thresholds.

End

Does an asset ID already exist?

Yes

NoNo

Yes

Receiving

Audit? Perform auditYes

No


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Accounts Receivable and False Alarms

Accounts Receivable & False Alarm Billings (to be)

Accounts Receivable

Department

Customer

VER. 122315

4. ReceivablesPay bill (in

person, mail, online)

Is this a new account?

2. Recurring monthly billings

1. False Alarm Billings

3. Misc. Billing

Review Report from Police CAD system

automated integration with Police CAD system if possible

Prepare request for billing form and attach appropriate

documentation

System

Receive request for billing form

System

Identify false alarm offenses

System

Set up account

System

Yes

Locate accountNo

System

Apply Fee

System

Post transaction and initiate billing

System

Receive printed invoice

Receive electronic invoice

End

Create monthly billings using templated JEs

System

Post transaction and initiate billing

System

Receive paymentand reconcile

Post transactionAnd print receipt

System

Communicate any balances owed to

dept’s and customer

Receive printed receipt with details of balances

owed (if any)

The City’s false alarm fee schedule will be applied based on rules defined during system implementation.


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Bank Reconciliation

Bank Reconciliation (to be)Finance

Bank

VER. 010816

Send electronic file statement

Receive electronic statement from

bank

Load statement into system for

reconciliation

ERP System

Start

Do any discrepancies

exist?

Conduct month end close processNo

End

Identify reconciliation exceptions

Yes

Conduct reconciliation

ERP System

This process will essentially be the same for all reconciliations. Note‐ there are 8 different reconciliations currently occurring

Reconcile

ERP System

Close current month then reconcile with previous month


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Budgeting/Forecasting

Budgeting/Forecasting (to be)

Finance

Department

City Cou

ncil/Manager

BudgetingForecasting

StartStart – Operating

budget

Update cost projections

VER. 010616

Update revenue projections

Departments will participate in revenue/expense projections as required

Finalize forecasts

Send budget packet to

department heads

ERP System

Review and complete budget

packet*

Submit budget packet to Budget

Refine budget estimates

Provide draft operating budget summary to City Manager for approval

Approved?

End

No

Finalize operating budget

Yes

End

Compare budget estimates with department

performance and City goals

*budget packet will include information on personnel, finances and performance.

10 year forecast is presented to council


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Cash Handling

Cash Handling (to be)Finan

ceDepartment

VER. 012016

EndStartReceive payment

Record payment transaction in cash receipting

system

System

Receive payment

Record payment transactions

in department best of breed system

BOB System

*Interface could be through web service, file transfer (FTP server) etc

There are a number of best of breed systems used across the City (e.g., EnerGov) some of these systems will be retained and will need to interface with the City’s main cashiering function.

Daily GL posting

Cash receipting will be tightly integrated with a new ERP system, whether the City’s current CORE system is maintained or a cash receipting module is included in the scope of a new ERP system this relationship should be completely intuitive eliminating dual entry processes.

*interface

ERP System

Run Report to review transactions from

best of breed system

ERP

Errors?

Conduct research to identify error

Yes

No


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Contract Management

Contract Management (to‐be)Project M

anager

Contract Adm

inistrators

Finan

ceClerk

VER. 010516

StartReceive contract

initiation workflow

ECM System

Open PO’s and assign

authorizations

Monitor project to determine work

completed to‐date

Receive notification of Project Completion

Receive notification of Contract Finalization

Receive notification of

Contract Finalization

ECM System

ECM System

Receive notification of PO

establishment/adjustments

System

System

Any changes needed?

Complete change request form

Receive notice of change request

initiation

Receive notice of change request

initiation

System

System

Adjust PO’s

No

Yes

System

Conduct Final Review

Punch list items?Close Project

System

No

Yes

Receive notification of Project Completion

System

System

File notice of completion (NOC) with the County

End

Evaluate* (approvals vary)

System

Complete Project

*if requested change is above the approved contingency it may require council action


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Grants Management

Grants Management (to be)Departm

ent

City Manager

Grant ClosePre‐award Activity Monitoring

Start

Identify Grant Opportunity

Approve?Receive Notification of intent to apply

Apply for Grant

Grant Approved?

Receive Notice of Award

Enter as project

Apply for grant?

EndNotify council Yes

Yes

Yes

VER. 010816

ERP System

No

No

Monitor grant activities

Follow grantor reporting

requirements

Complete project

Grant closed

ERP System

Report to council*

No

*Project closeout report activities concurrent with year end financial activities


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Project and Cost Accounting

Project & Cost Accounting (to be)

Department

Council

Finance

Employee/Vendor

TrackingSet up

StartPresent project plan to council

Yes

Approve project?*

Set up project

ERP System

End

No

Assign project codes

ERP System

Payroll, timekeeping, scheduling End

Start

Set up contracts and purchase

orders

ERP System

Assign work

Receive work order assignment and conduct work

Project reconciliation

ERP System

Conduct periodic audit

Project Closeout

Receive notification of project closeout

ERP System

ERP System

*the majority of projects are approved in the CIP

VER. 012016

Work order, timekeeping and inventory processes exist here.


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Purchasing and Online Requisitions

Purchasing/Online Requisitions (to be)

Finan

ceDepartment

Vendor

VER. 011016

End

StartIdentify

inventory need

Department fills out online requisition

ERP System

Receives requisition

Periodically audits online requisitions

Prepare goods and invoice for

shipping

Receives goods Receives invoice

Vendor system

Vendor system

AP process

Add goods to inventory “if applicable”

ERP System

*Throughout the year goods are requested and purchased off of an open PO set up with designated vendors.

Is it a fixed asset?

No

Assign asset ID

System

Yes

AP process


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Receiving

Receiving (to be)

Departm

ent

Finance

VER. 011016

StartDepartment

receives deliveryIs item a fixed

asset?

Send invoice to finance for processing

No

Enter into fixed asset inventoryYes

AP

Tag asset

ERP System


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Utility Billing

Utility Billing (to be)Customer

Utility Billing

Field Technician

Account Set up Billing

Start – new customer

Establish new customer account

System

Conduct additional verification

steps for NEW set up

VER. 012016

Identify need to set up an account

Assign service order for field

workers

Receive SO

Conduct field work (activate meter) and Close SO

System System

Conduct meter reads (13

billing cycles)

System

Audit reads (run reports to identify discrepancies)

Errors? Resolve errors

No

Yes

Start – existing customer

Receive E‐billReceive bill

Pay bill (online, in person or

mail)

Send file to bill printer

System

Print or email bills?

Print

Email

End

Receive payment

Does address exist?

No

Change address to reflect new owner

Yes

Create service order

End

Receive update of

service order

System

System


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Treasury/Cash Management


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HUMAN RESOURCES MANAGEMENT


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Employee Scheduling – Library

Employee Scheduling – Library (to be)

Library

Employee

VER. 011416

Start

Develop schedule

End

Are employees over 980 hours?

Finalize and publish schedule

Conflicts?

No

Schedule alternative employee

Yes

Receive schedule to

work

System

Go to work

Post shift to trade board

Yes

No

Note: supervisors would be able to see employees that have approved time off and predefined conflicts while developing the schedule

Define availability

System

System

System

Supervisor approval


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Employee Scheduling – Parks and Recreation

Employee Scheduling – Parks and Recreation (to be)

Parks and Recreation

Employee

VER. 011416

Start

Develop schedule

End

Do employees exceed hourly

limit?

Finalize and publish schedule

Conflicts?

No

Schedule alternative employee

Yes

Receive schedule to

work

System

Go to work

Post shift to trade board

Yes

No

Note: supervisors would be able to see employees that have approved time off and predefined conflicts while developing the schedule

Define availability

System

Supervisor approval

System

System


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Leave of Absence

Regular Leave of Absence

Employee

Hum

an Resou

rces

Supervisor

VER.122115

End

Complete hard copy request form

LOA elidgable?

Long Term LOA?

YesYes

Approved?No

Yes

No

LT LOA

Manage & approves leaves usage

Authorize & track FMLA/LT Leave

Record absence, vacations, accruals & entitlements

Record absence, vacations, accruals and entitlements

Receive notification

Employee notified

Updated, tracks

absence

HRIS

Able to initiate request?

Start

Yes Initiate requestComplete online request form

ESS

No

No

HRIS

Monitor and approve employee data and update payroll

Yes

No

Request unpaid time off?


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Long Term Leave of Absence (to‐be)City Manager

Hum

an Resou

rces

VER.122115

Regular LOA

Review pertinent information, may discuss

with city attorney and make final decision

Requires city manager approval?

Yes

Need more information?

Approved?

EndNo

No

Receives long term LOA request

Sent back to HR to recast with requested

information; notify employee

Notify employee and

supervisor, track status

Yes

HRIS

Yes/No

Determine employee group

Determine leave type

Apply rules and update systems

HRIS


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Onboarding

Onboarding (to‐be)IT

Hum

an Resou

rces

Employee

Supervisor

Facilities

VER.12182015

End

Office space available?

Enter and verify all relevant info via ESS

Receive new‐hire to‐do list and welcome packet. Including list

of mandatory trainings, etc. System

Start

Greets employee and assigns

mentor/buddy

Conduct new hire orientation

Provide access keys, create access

badge

Create email account and set up

permissions

Yes

Internal hire?

Benefit eligible?

Brief employee on eligible benefits,

provide compliance forms

Provide temporary workspace, create

access badgeNo

YesUpdate employee data payroll system

System

No

System

System

Receive request to set up account/permission,

order IT assets

System

Receive request and based on position

classification, create the employee record, send out welcome package w/ first day information

System

Arrive for first day of work

System

Internal Hire Orientation

Update system with assets disbursed to

employee

System

OR Gate

No

Yes

Update system with assets disbursed to

employee

Issue pre‐hire request package; system sends out request to relevant depts. based on position

Receive request and order relevant assets based on position

System


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Offboarding

Off boarding (to‐be)Facilities

Hum

an Resou

rces

Departm

ent/

Employee

Inform

ation

Techno

logy

VER.122115 x

End

Update payroll system; mail employee last

check minus any owed amount

System

Voluntary separation?

Immediate termination?

No

Suspension/admin leave, investigation?

No

Complete necessary actions in

conjunction w Corp. Counsel; provide

Return to Work date

Notify supervisor/HR re: intention to separate w final

workday information

Initiate notification to departments and City attorney if appropriate

System

Yes

Adjust/terminate/remove system access

and permissions

Notify relevant outside parties (e.g.

CALPERS) of separation

On final on premise workday, conduct exit interview, collect city property (badges etc.) and communicate

balances owed (if any)


Identify assets to be collected by HR and update systems

System

Start

Yes

System

System

In person or electronic exit interview?

Conduct transactional

interview to advise benefits and address final payment info

Attend transactional interview

In person

Take electronic exit interview survey

Electronic

On final on premise workday collect City property (badges etc. and communicate

balances owed (if any)


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Personnel Action Form

Personnel Action Forms (to‐be)Various

VER.122115

StartNew Full Time

StartNew Part Time

Start Voluntary Termination

StartPay Change

StartOut of Class

StartLow Impact

StartRetiree

Supervisor completes online

PAF form

System

Approve?

HR review and various approvals

Supervisor adjusts PAF form

No

Yes

System

Approve?

No

Supervisor receives notification

YesCity Manager approval required?

NoFinance review and update Payroll/Time Keeping systems

City Manager review Approve?Yes

Resubmit?

Yes

System

No

Supervisor receives notification

Yes

End No

System

End

Employee receives notification and

confirms acceptance.

Etc. (23 PAF’s total)


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Payroll

Payroll (To Be)

Payroll

HR/Department

VER.01152016

Review and reconcile data, ensure payment/benefits processed

based on position type

System

Exception noted?

Receive notification and, correct variance, and resubmit

Yes

Process payroll

Exception Report

No

HR System

Start

Hourly time data

Salaried time data Document and reconcile overtime and/or irregular

pays

Update ESS with employee cumulative

information

System

Transmit payroll data to bank/payroll

processor

Transfer and reconcile all external payments (e.g. tax, SS, judgement,

CALPERS)

Update Financial system (AP) with

upcoming payroll data

System

End

Payroll maybe adjusted for new training/education


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Position Control

Position Control (to‐be)Finance

Department

Hum

an Resou

rces

VER.122115

Is this an overstaffed

fill?

Screen for primary approval and forward to City Manager; notify

Finance

Does this position exist?

Critical position? End

Provide exception justification

Yes

No

Current Position and Vacancy Report

Create new job class

Yes

P2

Modification/reclassification?

Yes

Dept. Notified

Yes

Further analyze and conduct market

research to create new job class/title

No

No

Send to City Council for approval

Review fiscal impact, provide costing

data, total $ impact information

Start Inquire re: availability

System

Complete position request form; forward to HR via workflow

System

New classification/job

title?

Is the position Budgeted?

No

Yes

No

Yes

No

System


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Position Control (to‐be)City Manager

City Cou

ncil

Hum

an Resou

rces

Department

VER.122115

Review salary/budget impact and make final decision



Approved?

Approved?

End

No

New Job Class Approval Request

No

No

Yes

HR addresses variance and recasts

Address variance and recast


No

Requires city manager approval?

YesAdd request to council agenda

Yes No

System

Updates HRIS w new Position Control Number

Assign position control number(s) to approved position(s)

In conjunction w/ Finance, annually review positions to match w/ budget,

payroll

P1

Yes


Yes


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Time Keeping – CyberShift

Timekeeping (Cybershift) (to‐be)

Employee

HR/Supervisor

Payroll

VER.122115

Complete request and resubmit

Absence Mgmt.

Work‐ force Mgmt.

Enter times for current period

System

Access system

Start

Apply business rules

Review time

Missing information?

Notification is sent to the employee

YesApprove times No

Compliant with submission time requirements?

Justification for late submittal

Process time data according to

business rules & time type

System

Yes

No

Exception noted?

Yes

Adjustment to prior pay period

needed?

No

Approve and process times

System

NoMake necessary adjustments

Yes

Generate time report(s)

End

Depending on timing of the change required, this process may skip over the employee and changes would be made by payroll.


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Asset Management Lifecycle (to be)

Departm

ent

Finance

Field Workers

DisposalCreate/Replace Maintain

VER. 01062016

Start

Project construction completed and asset ready for service

Identify and assign asset segment ID’s

Determine asset life and record

Assign capitalized valuation and set depreciation schedule

EAM System

ERP System

End

Determine restorative (corrective)

maintenance or refurbish per AMP

EAM System

EAM System

Initiate workflow to capture all

project costs for reporting to Finance

Conduct preventative maintenance

Is asset life extended?**

Initiate WO to conduct

maintenance activities

Receive WO and conduct maintenance activities

EAM System

EAM System

* High level view of work order process

No

Update asset condition status

EAM System

EAM System

EAM System

If necessary, update asset ID and fixed asset ID relationship table

Update and use asset management plans (AMP) to determine appropriate maintenance activities

Yes

Retire old asset when new project

is deemed complete

Remove old asset from finance fixed assets inventory

Finance/ERP System

Conduct inspection

Replacement project under construction

Asset refurbish, replaced, or retired?

Replace

RefurbishIs maintenance necessary?

Yes

Update WO to reflect


EAM System

End

Operations reports updates to Finance |

Updates to asset ID and fixed asset ID relationship table performed

Asset planning and design

phase activities performed

Retire asset

EAM System

Retired

Start

No

End** Asset life is materially improved and valuation needs to be captured w/in existing asset record in fixed asset system.

ASSET MANAGEMENT

Asset Management Lifecycle


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Asset Management/Fixed Assets

Asset Management/Fixed Assets (to be)Departm

ent

Finance

Field Workers

VER. 012016

Initiate WO to conduct


Receive WO and conduct maintenance activities

EAM System

* High level view of work order process

** Asset life is materially improved and valuation needs to be captured w/in existing asset record in fixed asset system.

Start

Use approved asset management plans (AMP) to determine

appropriate maintenance activities

Enter date for refurbish/capital replacement

EAM System

Enter date for asset management

EAM System

Run monthly report on scheduled activities

Need to reschedule?

Enter re‐scheduled date

EAM System

Does asset condition need to be updated?

Adjust the Asset value

ERP System

Update asset ID and fixed asset ID relationship table

Yes

No

Update asset value

EAM System

Close work order

EAM System

Yes

No

End

This is not CIP related.

Extend life of asset?

Yes

No


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Inventory (to be)Departm

ent (warehouse)

Employee

Finan

ce

AuditPlan Operate

VER. 010816

Start

Establish inventory warehouse and ID items

Identify shelf needs

(min/max)

Restock inventory items?

Create PO to purchase or replace items

Yes

Approve and release PO

System

System

End

End; full supply for operations

No

Start

Identify inventory need

Place order for inventory item

System

Assign part to appropriate work order

Remove item from inventory

Barcode Scan Barcode Scan

Pick up inventory item and put to use

End; close project

Reconcile with inventory report from sytem

Start

Count inventory

Missing inventory items?

EndNo

Conduct investigation

Yes

Locate items?

Assign inventory item to

appropriate work order or add back

to inventory

Yes

Write off loss

Barcode Scan

No

System

Receive and assign number

Return unused parts


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Preventive Maintenance

Preventive Maintenance (to be)

Department

Fieldw

orker/Contractor

VER. 122115

StartEstablish Preventive Maintenance Plan for Each Asset

New Issues Identified?

Generate Report on PM Items due for

time period

Trigger

Sort by Expertise, Adjacency and Location*

Establish Work Orders and Assign

Perform workCreate repair Work

Order

Notice of Completion, update asset condition

Yes

No

End

*Dependent on how the City decides to configure

EAM System

EAM System

Verify work and close the work

order

EAM SystemEAM System


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Service (Work Order) Management

Service(Work Orders) (to be)Department

Field W

orker

Contractor

VER. 012016

Start

Establish a work order and work order type

EAM System

Assign priority and staff based on work order

type

EAM System

Receive work order

assignment

Place order for inventory item

System


Inventory Mgt

EAM System

Notice of completion

Inventory needed?

Yes

Is Contractor needed?

Perform work

Receive work assignment and perform work

EAM System

Yes

No

No

EAM System

End

Perform work

Verify work and close the work order

AP

Notice of completion

EAM System

Verify work and close the work order

Is City providing parts?

Inventory Mgt

Yes


No

Are all parts used?

Drop off inventory items at warehouse and update inventory

No

Yes


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Appendix E: ERP Marketplace Overview This appendix provides an overview of the ERP marketplace, organized as follows:

Marketplace overview

Vendor consolidation

Summary comparison: Tier 1 vs. Tier 2

Summary comparison: Integrated vs. best of breed

MARKETPLACE OVERVIEW

Generally, enterprise system solutions evolved out of a desire to provide the functionality of two or more systems, such as financials and human resources, in an integrated software solution. Enterprise software solutions experienced its first major growth in private sector businesses in their manufacturing and supply chain operations. Many of these “Tier 1” ERP solution providers offer broad solutions designed specifically for the private sector. Over the past several years, these solutions were enhanced, configured, and tested in public sector organizations. With these enhancements, these solutions originally developed for private sector organizations could now be deployed in a public sector setting.

There are also a number of “Tier 2” ERP software providers that originated and offer specific vertical solutions designed for the public sector including fund accounting, encumbrance accounting, sophisticated budgeting, grants management, etc. and capabilities which are pervasive in this segment. These solutions are typically characterized as “Tier 2” solutions and are normally deployed in medium sized public organizations. Over time, there has been increased focus from these Tier 2 vendors towards developing niche solutions designed to compete with the Tier 1 providers. A third tier of software providers (i.e., “Tier 3”) also exists that are implemented in small organizations and will not be discussed in this report due to the lack of relevance to the City of Carlsbad. Medium size government agencies, such as the City of Carlsbad, generally select financial management solutions identified as either Tier 1 or Tier 2 solutions. The most basic differentiation between Tier 1 and Tier 2 providers lie within the depth of functionality, breadth, and complexity of the software.

VENDOR CONSOLIDATION

Consolidation among public sector software vendors has left a fewer number of vendors providing customized services to the public sector than in prior years. Organizations such as Harris, Oracle, SunGard Public Sector, and Tyler Technologies have acquired competing software offerings over time and, to varying extents, marketed, licensed, implemented, and supported each of them. As such, the remaining vendors have a larger installed base per vendor. It is anticipated that, over time, these vendors will reduce, not increase, the number of ERP solutions that they will maintain and support for the public sector. This consolidation of solution offerings is typical in the software industry as a result of their desire to create a sustainable business model. Thus, it is important during the due diligence and contract negotiation process to consider any future product plans available from software providers, with the purpose of maximizing solution longevity and avoiding expensive capital outlays for upgrades and for replacements.

SUMMARY COMPARISON: TIER 1 VS. TIER 2

Tier 1 providers have a broader offering that often include modules for customer relationship management (CRM), enterprise asset management (EAM), learning management, analytics and reporting, data warehousing, and project management modules. While Tier 1 providers offer robust core


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financial modules, as well as human resources and payroll, typically they rely on third party vendors for functionality specific to government activities in other functional areas. Most, but not all, Tier 1 providers have a large network of implementers available to implement their solution, many of which have dedicated public sector practices. The most significant challenge with Tier 1 solutions is that government agencies often find that they are not able to dedicate enough technical resources to leverage expansive capabilities of the system to meet their needs. Due to their flexibility (thus complexity) Tier 1 implementations are most successful at organizations with structured IT software governance and/or ERP process governance, not typically demonstrated in organizations which have implemented a fragmented software approach. In addition to the necessary governance, strong IT project management is also critical for Tier 1 deployment. In several instances, Plante Moran has worked with public sector clients who have implemented Tier 1 ERP systems and the following situations have prevented them from realizing the full benefit of these systems; thus diminishing their return on investment:

The governmental body did not budget the necessary capital to implement the solution and optimize current business processes due to cost factors related to capital budget and resource constraints.

The operating costs to maintain Tier 1 solutions relative to software maintenance and support consumed operating budgets thus creating a situation where hiring the necessary internal resources to maintain and enhance these systems (e.g., data mining, workflow, custom reporting) was not feasible.

Users of Tier 2 solutions often find that these solutions are more prescriptive; i.e., governmental best practices are designed within the application. This is intuitive since Tier 2 solutions were designed for use within the government sector. They may offer less flexibility and configurability than Tier 1 system but, as a result, are typically less cumbersome to implement within their organization, because of their native public sector design and more prescriptive implementation approach. Tier 2 vendors tend to have their origin based in the government sector and have been improving and updating their software products to offer a greater range of modules and functionality. As such, the Tier 2 vendors are touting themselves as viable alternative solutions to Tier 1 providers. However, beyond enhanced functionality, the scalability of the services being offered by Tier 2 solution providers is a strong consideration when determining the best overall solution. Unlike Tier 1 solution providers, nearly all Tier 2 solution providers implement their own software and do not rely on third party implementers.

The software marketplace has seen the emergence of solutions being touted as Tier 1.5s, or “one and a halves.” Originally positioned as Tier 1 or Tier 2 solutions, these vendors have now positioned themselves between the two tiers and often offer enhanced functionality in areas such as human resources and payroll. They are also offering modules that are able to scale up to a larger client’s complexity and transaction volume but at a lower cost and time to implement as compared to a Tier 1 provider.

Many of the solution providers will propose modules in the first two areas noted above as components of their overall solution set that are characterized as “best-of-breed” solutions. For HR/Payroll specifically, there are a number of niche solutions that have frequently been implemented by public sector organizations to complement their existing financial system investment to obtain a “best-of-breed” approach.

As identified by Gartner Research, there are still distinct differences between Tier 1 and Tier 2 software providers in the ability to address all business needs. Tier 1 vendors, such as IBM, Microsoft, Oracle, SAP and UNIT4, garner economies of scale by focusing on a smaller set of back-office capabilities and building add-ons to products they sell in other vertical markets. They attempt to address local government-specific business requirements, such as permitting and licensing, by building templates using


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a combination of ERP, CRM and business intelligence (BI) products. Conversely, the Tier 2 provider’s smaller scale allows for country-specific business and regulatory compliance requirements, and positions them to focus on local government-specific capabilities. In order to meet a greater subset of business needs, they have evolved through a number of acquisitions that have led to solutions that satisfy both back-office and front-office business requirements. The struggle, however, has been to evolve toward an integrated suite package while continuing investments in business development for the separate products.

While overlap occurs, generally Tier 1 vendors are more prevalent in larger communities over 375,000 population while Tier 2 vendors occupy the market space for communities below this threshold. Large global vendors tend to focus on the largest local government jurisdictions. The cost of their solutions and their business models, which usually require a system integration partner for design, configuration and implementation, are usually beyond the means of smaller jurisdictions. Conversely, local independent software vendors tend to be viable for smaller jurisdictions and have pricing and implementation timelines that tend to be more favorable for midsize and small local government organizations.

The following table identifies some of the key differences between Tier 1 and Tier 2 software providers on issues such as support requirements, cost of implementation services, cost for major version upgrades, software support channel, and other factors:

Tier 1 Vendors Tier 2 Vendors

Sample Representative Vendors

Oracle (Oracle e-Business Suite, PeopleSoft)

SAP

Workday

Infor (Lawson) (1.5)

Oracle (JDE 1.5)

CGI (1.5)

UNIT4/ITP (1.5)

Others

Harris (Innoprise)

Microsoft Dynamics AX

New World Systems

Springbrook Systems

SunGard Public Sector (ONE Solution)

Tyler Technologies (Eden, MUNIS)

Others

Design Considerations

Developed product for private sector and later adapted for public sector

Many modules specific to public sector

Larger organizations with greater R&D budgets, offer more robust technology

Robust development tools

Scalable to leverage most robust development and database environments

Primarily designed for public sector

More prescriptive functionality and less conducive to customization without altering source code

Often leverage common municipal technology standards (e.g. MS SQL database); some support Oracle

Environments leverage third party tools (database, report writer, etc.)

Ongoing Technology Support Resource Requirements

Most require multiple technology FTEs to support

Also impacted by level of integration with other organizational systems

Requires fewer technology FTEs to support

Also impacted by level of integration with other organizational systems


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Tier 1 Vendors Tier 2 Vendors

Software Functionality

Core modules have robust functionality

May lack public sector specific features (e.g. encumbrance rollover, GASB 34 reporting)

License costs per user typically more expensive than Tier 2

Incrementally less robust functionality for core components

HR/Payroll solutions are frequently less robust as compared to Tier 1 offerings

Many vendors offer additional public sector modules, such as fleet management, request for service, etc.

License costs per user typically less expensive than Tier 1

Implementation Services for New Installation

Requires multiple full time staff to implement

Requires significantly greater implementation vendor resources than Tier 2 to implement including key staff that are full-time to the project

Software implementers are typically integrators / channel partners

Implementation services cost ratio comparison to license fees often many times software cost (frequently 3:1 or higher)

Vendor “homework” approach has organization responsible for many implementation tasks

Frequently implemented with organization resources not dedicated to the project

Rarely requires full-time vendor staff to implement

Software vendors also implement their own solutions

Implementation services ratio typically closer to 1:1; 2:1 would be more robust services approach

Staff required for Implementation

6 to 12 FTEs 3 to 7 FTEs

Ongoing support staff required

3 to 8 FTEs 1 to 3 FTEs

Cost Model for Major Version Upgrades

Most major upgrades include significant license fee costs

Most major upgrades require significant levels of vendor services to assist

License fees for version upgrades often included with maintenance fees

Most major upgrades require moderate levels of vendor services

Software Support Channel

Mixed; some direct, some through implementer / value added reseller channel

Primarily direct vendor support

Hosting Options Generally hosted internally, some offering ASP; few multi-tenant web-based options

Generally hosted internally, some offering ASP; few multi-tenant web-based options


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SUMMARY COMPARISON: INTEGRATED VS. BEST OF BREED

Integrated ERP Best of Breed A

dva

nta

ges

Meets the needs of the organization as a whole. Rather than provide the best solution for each functional area, ERP solutions tend to be designed for the needs of the broader organization focused around processes versus functions.

Better optimized business processes. Because they tend to be designed around processes, ERP solutions provide a better platform for process optimization (depending on how it’s configured) including cross-functional workflow.

Improved reporting. Many ERP vendors provide a variety of canned reports and specialized reporting tools. A single database typically allows for more robust reporting across functional areas. Database complexity can create reporting challenges though.

Market trends. The market for ERP systems in the public sector continues to evolve. The trend is toward consolidation as companies acquire best of breed solutions to build into their solutions.

Foundation for regional collaboration. The standardization associated with the deployment of an ERP could better position the organization for future collaboration opportunities.

Potential for more robust functionality. Each system is selected and implemented to accommodate the needs of the specific functional area(s).

Vendor independence. A best of breed approach allows greater flexibility and independence versus a single vendor. Over time, the organization is in a better position to replace a single system if its functionality becomes inadequate or obsolete.


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Integrated ERP Best of Breed

Dis

adva

nta

ges

Change management. A new ERP typically

requires more thoughtful consideration and planning for change management. In any organization, the introduction of new processes coupled with new technology is typically met with varying and unpredictable degrees of staff resistance. Some organizational change may result, adding to the complexity.

Significant capital investment. The selection and procurement of an ERP requires a sizable investment with software licensing, vendor consulting resources, internal staffing, and other related project expenditures.

Implementation risk. Given the robust functionality and flexibility of some ERP solutions, there is increased risk given the decisions and interdependencies that exist. A higher degree of ERP experience (and a good contract) can help mitigate risk.

Risk commensurate with integration experience. Risk of system issues increases with integration complexity and the organization’s experience / resources to deal with the complexity.

Added support for multiple systems. The staffing requirements would increase due to the necessity to develop and maintain the interfaces between the best of breed applications. This tends to increase the total cost of ownership (TCO) over time.

Information silos. In best of breed situations, the characteristic “islands of information” are a result – expensive and complex data warehousing and business intelligence can partially remedy. Further, developing interfaces between best of breed applications are not as robust as true integration (i.e., single database).

Distraction from core mission. Developing integration between best of breed modules requires strategic allocation of resources away from other, perhaps transformational/innovative strategic goals (e.g., eBusiness).

Fragmented and inefficient processes. As processes flow across functional areas, so must information. Streamlined work flow becomes more challenging in a non-integrated environment.


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Appendix F: Cost Assumptions This appendix details Plante Moran’s assumptions associated with the cost analyses presented in this ERP Needs Assessment report.

GENERAL

1. An annual rate of inflation of 3% was assumed for all options.

2. A 15% contingency is assumed for all implementation costs.

3. Cost estimates do not include potential vendor discounts.

4. Low and high estimates for each option are calculated at 75% and 125% of average estimated costs.

5. Annual maintenance costs for legacy systems to be retired are not included in cost estimates for Options 3 and 4.

6. Average annual labor costs for both technology and departmental staff is assumed to be $176,974.46, based upon actual, fully loaded salary data.

OPTION 1

Labor

1. A duration of 12 months to upgrade the City’s existing systems was assumed. Implementation is assumed to begin immediately and 100% of associated implementation costs occur in Year 1.

2. A labor cost of 4.0 FTEs throughout the duration of the upgrade was assumed.

3. An annual labor cost of 5.5 FTEs for long-term support of the City’s systems was assumed.

Software

1. Software upgrade costs were provided by the City, and adjusted based upon Plante Moran’s experience.

2. Annual software maintenance and support were calculated at 22.5% of one-time software costs.

Services

1. Ongoing third-party support costs were calculated at 10% of one-time upgrade costs.

OPTION 2

Labor

1. A duration of 12 months to implement a business analytics middleware was assumed. Software upgrades are assumed to begin immediately and 100% of associated upgrade costs occur in Year 1. Integration is assumed to begin in Year 2 and 100% of associated integration costs occur in Year 2.

2. A labor cost of 4.0 FTEs throughout the duration of the upgrade and middleware implementation was assumed.

3. An annual labor cost of 6.5 FTEs for long-term support of the City’s systems including a new middleware was assumed.


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Software

1. Software costs were based on Plante Moran’s experience in the marketplace.

Services

1. Implementation costs include software upgrade costs from Option 1 plus 200% of software costs for implementation of the middleware solution.

2. One-time third-party support of the City’s interfaces were calculated at 20% of the implementation cost of the middleware solution.

3. Ongoing third-party support costs were calculated at 10% of one-time services costs.

OPTION 3

Labor

1. A duration of 24 months for the implementation of an integrated ERP system was assumed. Software upgrades are assumed to begin immediately and 100% of associated upgrade costs occur in Year 1. System replacement is assumed to begin in Year 1, with 50% of associated implementation costs occurring in Year 1 and 50% in Year 2.

2. A labor cost of 11.0 FTEs was assumed throughout the duration of the implementation.

3. A labor cost of 5.5 FTEs was assumed for long-term support of the new system.

Software

1. Software costs were calculated based on similarly situated implementations, based upon Plante Moran’s implementation and consulting experience, and database of vendor price proposals and negotiated contracts.

2. Annual software maintenance was calculated at 22.5% of one-time license fees.

Services

1. Implementation costs were calculated at 250% of software license fees.

2. Recurring annual training was calculated at 15% of implementation training costs.

OPTION 4

Labor

1. A duration of 24 months (beginning midway through Year 1) for the implementation of an integrated ERP system was assumed. Software upgrades are assumed to begin immediately and 100% of associated upgrade costs occur in Year 1. System replacement is assumed to begin in Year 1, with 25% of associated procurement and implementation costs occurring in Year 1, 50% in Year 2, and 25% in Year 3.

2. A duration of 12 months for the selection of an ERP system was assumed.

3. A labor cost of 0.5 FTEs was assumed throughout the duration of the selection.

4. A labor cost of 11.0 FTEs was assumed throughout the duration of the implementation.

5. A labor cost of 5.5 FTEs was assumed for long-term support of the new system.


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Software

1. Software costs were calculated based on similarly situated implementations, based upon Plante Moran’s implementation and consulting experience, and database of vendor price proposals and negotiated contracts.

2. Annual software maintenance was calculated at 22.5% of one-time license fees.

Services

1. Implementation costs were calculated at 250% of software license fees.

2. Recurring annual training was calculated at 15% of implementation training costs.

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