Business Investment Board 6 Business Investment Board Packet...payroll cycle hundreds of hours are consumed processing paper, working with employees to make corrections and then manually

Business Investment Board

Date: June 5, 2018 @ 11:00 AM – 12:30 PM

Location: 200 W. Washington St., 12th Floor, Central Conf. Room

1. Tech Plan FY19 – Status Update 10 min

2. Lessons Learned & New Opportunities 10 min

3. Tech Plan FY20 - Preparations & Schedule 10 min

4. Time & Labor – Strategic Discussion 30 min

5. Open Discussion 20 min

AGENDA

Business Investment BoardBusiness Investment Board

June 5, 2018

ITS

AGENDAAGENDA

►Status Update for FY19 Projects 10min

►Lessons Learned & Opportunities 10min

►Preparation & Schedule for FY20 10min

►Time & Labor – Strategic Discussion 30min

Status Update for FY19 ProjectsStatus Update for FY19 Projects

►Recap from Jan 11

Project Disposition

Law Criminal Case

Management System

Approved w/Conditions

City Clerk Ballot Tabulation Approved w/Conditions

Neighborhood Services

Rehabilitation

Withdrawn by Department

Time & Labor Approved w/Conditions

►Law Criminal Case Management


Suggestion and/or Condition ITS Action Plan

Process should enforce that Law does not go down the same path of customizing app(s). This includes an escalation path that brings requester back to the Board. (i.e. budget is exceeded)

Since Law will be leveraging their fulltime Project Manager (PM) and Business Systems Analyst (BSA), ITS will partner with Prosecutor to empower the project team to utilize processes that will:A) measure the level of customization proposed by all vendor RFP

responses B) enable the project team to determine vendor selection based on

quantitative measure of proposed customizationC) follows existing citywide procedures for technology project status

reporting, project management, escalation, sponsorship and governance meetings and

D) consider project/reporting to the Public Safety Technology Governance Committee, as determined by the CIO and the City Attorney.

Approval for project is not an automatic approval of new technology staff that are specified in the proposal. This must be reviewed and assessed at the appropriate time by ITS and Prosecutor.

ITS and Prosecutor shall assess FTE staffing requirements to implement and provide ongoing operational support at the appropriate time (i.e. during RFP vendor evaluation and solution selection), and shall follow technology FTE request procedures to articulate needs, costs, and operational support model that will be needed to implement and operate any specific software solution.

This project has great risk tied to it. ITS shall ensure that PM utilizes prescribed issue and risk practices throughout project management lifecycle, so that appropriate project governing groups may be informed and consulted about risks that may surface.

►City Clerk Ballot Tabulation


Suggestion and/or Condition ITS Action Plan

Security has to be a large part of this request. Cannot take for granted that a vendor will say it is secure

Project charter sponsorship/organization shall include the Chief Information Security Officer (CISO) and/or his designee to be certain that needed security assessments and measures are incorporated into any procurement contract and operation agreement.


QUESTIONSQUESTIONS

►Processes

►Briefings

►Templates

►Scoring

►Other

Lessons Learned & OpportunitiesLessons Learned & Opportunities

Lessons Learned & Opportunities

Processes


Processes

Plan Submissions

May - Jul

Business Concept Review

Aug - Oct

Advisory Review

Nov

Architecture Review

Dec

Investment Decision

Jan

Plan Submissions

Jul - Aug

Business & Architecture Review

Sep - Nov

Advisory & Investment Decision

Dec - Jan

► Less confusing; 5 to 3 phases

► Aligns w/resource availability

► Collapses Concept and

Architecture Review within ITS

► More efficient


Briefings


Briefings

► Continue with scheduled group briefings

► Introduce on-demand audio/video briefings

► Provide follow-up web conferencing workshops in small groups

8

20

19

10

7

5/11/2017

5/25/2017

6/15/2017

6/22/2017

7/27/2017

2017 Briefings: 64 Trained


Templates


Templates

B1.5.2

Annual Technology Planning Program

Procedure

Business Case Template

Financial Analysis Template

B.1.5.6

Business Investment Board Presentation

Procedure

Presentation

Template

► Business Case Template► Upfront delineation of soft vs. hard

dollars

► More detailed staff resource

requirements and $ projections

► Financial Analysis Template► More detailed staffing roles

► Better analytics

► Presentation Template► Create a PowerPoint template for

use by all presenters

► Promote uniform flow of messaging


Scoring


Scoring

Strategic Alignment Score

Mitigation Risk


Other


Other

► Detach or Go Forward ► Project requests with budget availability through

multiple partnerships need signatures to go forward

► Lean IT► Partnership with Mary Jo Caldwell

► Incorporate best practices into

program

Lessons Learned & OpportunitiesLessons Learned & Opportunities

QUESTIONSQUESTIONS

Preparation & Schedule for FY20Preparation & Schedule for FY20

Plan Submissions

Jul - Aug

Business & Architecture Review

Sep - Nov

Advisory & Investment Decision

Dec - Jan

► Action Items for June► Schedule briefing locations and times for Jul-Aug in e-CHRIS

► Memo to dept. heads on June 22

► Revise and/or create templates and written procedures

Proposed Board meetings for Tech Plan FY20 status updates

QUESTIONSQUESTIONS

Preparation & Schedule for FY20Preparation & Schedule for FY20

Time & Labor – Strategic DiscussionTime & Labor – Strategic Discussion

Solution options?

What is the

Value?

Impact to Employees How to roll

out?

What are the risks?

Are there quick wins?

Open DiscussionOpen Discussion

Time & Labor - Strategic Discussion [Type here]

BIBBrainStormSession20180605

Value Impact Risks Quick Wins / Solutions Roll Out Reduce human

errors Automated

validation Reduces manual

processing and human error

Consistent rules application (schedules, hours, overtime, exception pay, specialty pay)

Ability for self-service scheduling requests

Ability to manage time proactively

Visibility at executive level as- well-as details.

Labor union streamlining

Shift in time entry (clerk- employee)

Shift in approval (paper signatures to electronic online)

Electronic approval of schedule changes

Visibility for supervisors (schedule coverage, pay & overtime planning)

Support structure required (training, workflow, configuration, etc.)

Visibility into prior inconsistent application of rules

Payroll under-payment (hourly, special pay, etc.)

Payroll over-payment

Automate timesheets

Automate Pay Exception & Specialty Pay

Ensures consistent application

AdvancePHX (consistent & streamlined processes)

Phased rollout

1

Business Concept Review Information Technology Services

Date:

November 21, 2017

Authors: Ronda Hollander, ITS, Lead Business Systems Analyst Ankita Saxena, ITS, Lead Business Systems Analyst Michael Ravelo, ITS, Enterprise Architect James Albanese, ITS, Application Portfolio Manager Michelle Root, ITS, Lead Business Systems Analyst Cecilia Romo-Thomas, ITS, Lead Business Systems Analyst Rosemary Madrigal, ITS, Lead Business Systems Analyst William Maynard, Budget Supervisor Mark Haskins, ITS Project Manager

Topic:

Time and Labor Modernization for FY2018-19 Tech Plan

1. PURPOSE The following business concept review has been developed by the Information Technology Services (ITS) Department, Enterprise Architecture Team (EA Team) based on ITS’s written business case and follow-up consultation with the Aviation, Human Resources, Finance, Police, Public Works, and Water Services departments and technical staff. This document does not serve as a replacement to the ITS Department’s written business case, which is attached for review, but instead serves as a supplement to the entire packet that is intended to serve as an objective review of the business concept for which the written business case and associated artifacts propose. The Business Concept Review was created by:

Person Department / Role

Ronda Hollander ITS, Lead Business Systems Analyst

Michael Ravelo ITS, Enterprise Architect

The following business service owners and/or subject matter experts were consulted throughout this technology planning process:

Person Department / Role

Cindy Bezaury Water, Assistant Human Resources Director

Tamie Fisher Public Works, Assistant Public Works Director

Jill Celaya Police, Administrator HR

Tiana Robert HR, Management Assistant II

Jenelle Hancock HR, Lead Business Systems Analyst

Dan Stebbins HR, Lead Info Tech Systems Specialist

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Sandra Schilling Finance, Assistant Finance Director

Joyce Griffin Finance, Payroll Supervisor

Aaron Cook Audit, City Auditor

2. PROPOSAL SYNOPSIS The City is requesting funds to hire an industry expert in Time and Labor systems to perform discovery, document requirements, assess the City’s readiness, and guide the City with recommended options and a roadmap for success. The City of Phoenix currently processes overtime, exception pay, specialty pay, and temporary salary adjustments manually for an active workforce of over 14,000 employees. Each payroll cycle hundreds of hours are consumed processing paper, working with employees to make corrections and then manually inputting changes to time and wages in the City’s Human Resource Management System (eCHRIS). In addition, departments interpret rules and process time changes differently, putting the city at risk of payroll processing issues. In addition to this manual process, the Police department has a custom-built Leave and Overtime Tracking System (LOTS) which processes public safety payroll and transfers information to eCHRIS. This system is operating on unsupported database software and an unsupported development language and needs to be replaced. Two previous attempts were started in 2011 and again in 2015-16 to implement a Time and Labor solution. Each project was stopped with a request to look at a citywide solution.

3. STAKEHOLDER REVIEW

Stakeholders for Time and Labor include Aviation, Finance, Human Resources, Information Technology Services, Police, Public Works, and Water Services. The Fire department currently utilizes the Kronos Time Scheduling software and should also be included as a stakeholder.

Budget is being requested for this proposal to hire consultancy. Additional sources of funding currently ear-marked for Time and Labor include approximately $450,000 remaining in Police’s Leave Overtime Tracking Systems (LOTS) replacement budget and $2,455,000 is allocated by Water Services. Preliminary estimates indicate that a citywide solution would cost significantly more than currently allocated. The plan is to have enterprise funds contributed from the major stakeholders for procurement, implementation, and on-going support costs.

4. STRATEGIC ALIGNMENT

In March of 2017 the Chief Information Officer (CIO) and City leadership concurred with adopting six business values to assess strategic alignment of technology plan requests, and to assign weight to each based on the priority and/or importance of each as determined by City leadership. These six business values are:

• Reduce Cost

• Increase Productivity

• Increase Revenue

• Mitigate Risk

• Improve Customer Service

• Resolve Compliance Issue

Thirty-six (36) data points were assessed to calculate overall strategic alignment of this technology plan proposal. See the Strategic Alignment Scoring Matrix which produced the strategic alignment score for this request. In the appendix, this request scored 46 of 100 total points. See Figure 1 below. Figure 1: Time and Labor Modernization Strategic Alignment Score

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Also, the detailed scoring by business value suggests that this proposal, if approved and funded, would improve productivity, mitigate risks, improve customer service, and resolve compliance issues.

5. RISK ASSESSMENT

A risk assessment was also facilitated for the As-Is, in partnership with the Finance department, by further expanding on the Mitigate Risk business value category. This method used a probability-impact approach to assess risk for the following eight dimensions:

Table 1: Risk Assessment Dimensions

Risk Dimension Description

1 Internal Services Risk of not being able to deliver services to internal staff and departments with the current solution(s)

2 Public Facing Services

Risk of not being able to deliver services to the public, partners, and other government agencies with the current solution(s)

3 Vendor Support Risk of not being able to retain vendor or third party support to sustain current solution(s)

4 Budget Risk of budget increasing in the future to sustain current solution(s)

5 Life Safety Risk of injury/death to person(s) in the future with current solution(s)

6 Information Security Risk of security breach or data loss to current solution(s)

7 City Reputation Risk of losing public trust and hurting City’s reputation in the future with the current solution(s)

8 Staff Resources Risk of not being able to sustain the current solution(s) with existing City staff

This risk assessment was facilitated for the purpose of enabling leadership to become informed about potential risks with the current state solution(s). Figure 2 illustrates the outcome of the risk assessment for the City’s Time and Labor current state.

46

54

Strategic

Alignment Score

of 100 Max

Points

Variance

Actual Score

0 15 0

12

6

13

15 0

5

13

9

12

Reduce

Costs

Producivity Increase

Revenue

Mitigate

Risk

Improve

Customer

Service

Resolve

Compliance

Issue

Strategic Alignment Score

by Business Value Category

Actual Score Variance

4

Figure 2: Eight Dimension Risk Assessment Results

The risk assessment for Time and Labor suggests that vendor support is at risk on the basis that Police Leave and Overtime System (LOTS) has no vendor support due to the age of technology it is operating on and the development language used to build the system. Internal services and staff resources are also at risk due to limited knowledge of older technology, lack of resources to convert to supported technology, and ability to resolve any critical outages caused by a LOTS failure. The budget is at risk on the basis that outside consulting services would need to be acquired, at a high cost, to triage and recover major LOTS outages. Thus, not funding this request could result in risk if the LOTS system fails and Police is unable to pay staff for overtime and specialty pay.

6. INVESTMENT ANALYSIS

This section exists to provide a summary of As-Is costs vs. Proposed Future State Costs, so that leadership may visually review and assess budgetary estimates developed by the requesting department, in partnership with ITS. One point to note is that cost estimates presented within this and other documents in this technology plan are based on research facilitated. For detailed figures that were collected to produce the data in this section please see the Financial Analysis in the appendix.

As-Is Cost Analysis

The as-is, five-year Total Cost of Ownership (TCO) is approximately $13,125,500. Figures 3-5 below show the as-is (current state) cost projections that were developed to identify actual and projected, unbudgeted costs that may be incurred over the next five years if a modernization effort is not approved and/or funded.

Actual costs of the As-Is are unknown at-this-time due to the manual processes housed in each of the 30 departments with no enterprise over-sight. Prior initiatives did produce some return on investment estimates but attempts to locate this 2011 research was unsuccessful. Rudimentary estimates indicate it takes approximately 18 minutes to process time exception and pay exception requests. Payroll clerks must validate employee schedules, verify eligibility for overtime, compensation time, holiday, and specialty pay while ensuring leave and compensation time are available. Clerks must ensure appropriate approvals have been acquired, coordinate and process corrections needed, and enter adjustments required in eCHRIS. Currently, no one can provide the total number of transactions processed each payroll, monthly or annually. It is recommended that the industry expert collect this information during discovery and requirements gathering.

5

The following As-Is Annual Cost Projections are based on extrapolation of labor estimates to processing green and yellow sheets. Calculation basis assumes 25% of hourly employees require payroll exception processing at an average processing time of 18 minutes each. Processing includes submission of paper green or yellow sheets, eligibility and rules validation, entry, and adjustments each pay period. This rough estimate is based on research of one of 30 departments. Operating costs do not include Fire and Police automated systems hardware, software, and application staff costs for Police Payroll, Police LOTS, and Fire Kronos. Figure 3: Annual Cost Projections for As-Is State

Figure 4 illustrates both investment and operational costs over a five-year period. Time and labor costs include staff paperwork processing cost projections with no planned financial investment.

Figure 4: Investment vs. Operations Cost Projections for As-Is State

$2,625,100.00 $2,625,100.00 $2,625,100.00 $2,625,100.00 $2,625,100.00

FY-19 FY-20 FY-21 FY-22 FY-23

As-Is Totals

by Year

$-

$500,000.00

$1,000,000.00

$1,500,000.00

$2,000,000.00

$2,500,000.00

$3,000,000.00

FY-19 FY-20 FY-21 FY-22 FY-23

Operations $2,625,100.00 $2,625,100.00 $2,625,100.00 $2,625,100.00 $2,625,100.00

Investment $- $- $- $- $-

As-Is Totals

Investment vs. Operations

6

Figure 5 below also illustrates a breakout of these As-Is five year costs by spend type. As part of the process to assess As-Is cost projections, departments were asked to identify various costs including existing support staff, hardware, software, licensing, and any critical resource needed to sustain the current solution(s). For now, totals are limited to internal staff timesheet processing estimates. Figure 5: As-Is Cost Projections by Cost Category

Proposed Future State Cost Analysis

The Time and Labor technology plan request proposes hiring an industry expert to perform discovery, requirements development, solution option recommendations, scope development, and assist with RFP fit-gap assessment, and selection. Even though RFI research acquired estimates for Time and Labor solutions, the focus of this request is limited to funding for discovery, guidance, and support from an industry expert. Year one costs are estimated at $1.3 million which include $644,000 for the consultant team and $668,000 in internal soft costs. The initial investment of $644,000 includes discovery, requirements gathering, scope of work development, travel and a 20% contingency. The consultant will guide the City’s team through options and selection activities. The finding will be presented to the Business Investment Board (BIB) for review and approval. At that time, it will be recommended that the industry expert be retained during the 2-year implementation to provide oversight, advice, and ensure a successful implementation based on the roadmap provided in discovery. The target is to present findings to the Business Investment Board (BIB) in spring 2019. If approval is received to move forward with procurement activities, it is estimated that a Time and Labor proposed future state four-year TCO would be approximately $22,715,600 with $13,020,000 external costs and $9,695,600 for internal soft costs. A summary of financial estimates is provided in Figures 6-8 below showing the proposed future state cost projections over the next five years. The following graphs represent both external and internal costs for year one discovery, years two and three procurement with implementation, and years four and five on-going maintenance support. Funding for years two through five are only estimates to provide a rough order of magnitude for leadership review and

$-

$500,000.00

$1,000,000.00

$1,500,000.00

$2,000,000.00

$2,500,000.00

$3,000,000.00

FY-19 FY-20 FY-21 FY-22 FY-23

1. Hardware $- $- $- $- $-

2. Software $- $- $- $- $-

3. External Professional Services $- $- $- $- $-

4. Internal City Staff Services $2,625,100.00 $2,625,100.00 $2,625,100.00 $2,625,100.00 $2,625,100.00

5. Internal ITS Staff Services $- $- $- $- $-

6. Other Costs $- $- $- $- $-

7. Contingency $- $- $- $- $-

As-Is Totals

by Cost Category

7

planning. The nine Time and Labor RFI responses receive September, 2016 included 13 options. These responses along with other research where used as the basis for solution and support estimates. No funds are being requested for years two-five. Figure 6: Annual Cost Projections for Proposed State

Year one is $1.3 million for both internal and external resources to identify requirements, review and assess solution options. Year two and three is approximately $10 million each year for hardware, software, and implementation, as-well-as external and internal staff resources. Once implementation is completed, on-going operating costs are estimated to be $1.6 million annually for a cloud-based license, hardware maintenance, and two staff positions to support new technology solution. If a cloud-based solution in not selected, software licensing costs will be higher in FY20. See appendix for complete Financial Analysis details.

Figure 7 illustrates both investment and operational costs over a five-year period. The initial external investment is projected at $644,000 FY19, $5.8 million FY20, and $5.2 million FY21 with an ongoing external cost of $1 million annually thereafter. All other estimates are internal soft costs including two new support positions starting in FY20.

Figure 7: Investment vs. Operations Cost Projections for Proposed State

Figure 8 below also illustrates a breakout of these proposed, year one industry expert discovery and

$1,311,775.00

$10,145,400.00 $9,375,400.00

$1,599,400.00 $1,595,400.00

FY-19 FY-20 FY-21 FY-22 FY-23

Time & Labor Modernization

Totals by Year

$-

$2,000,000.00

$4,000,000.00

$6,000,000.00

$8,000,000.00

$10,000,000.00

$12,000,000.00

FY-19 FY-20 FY-21 FY-22 FY-23

Operations $22,575.00 $2,502,400.00 $3,668,400.00 $1,599,400.00 $1,595,400.00

Investment $1,289,200.00 $7,643,000.00 $5,707,000.00 $- $-


Investment vs. Operational

8

procurement along with future state four year costs by spend type. FY20-FY23 estimates are provided for planning and are not being requested now. This proposal focuses on funding for FY19 discovery only.

Figure 8: Proposed Cost Projections by Spend Type

As-Is vs. Proposed Future State Cost Comparison

This section illustrates cost projections and comparisons between the As-Is and the Proposed Future State that is the basis for this business case and overall technology planning packet. Implementation of a Time and Labor solution which automates time entry is anticipated to increases productivity by facilitating electronic entry of time and labor, improving visibility and scheduling. Additional research is required to estimate productivity improvement impacts, expected savings, and return on investment time-period. Figure 9 below compares current As-Is manual processing costs to Proposed Future discovery, implementation, and on-going support costs. NOTE: As-Is costs do not reflect Police Payroll, Police Leave Overtime Tracking Systems (LOTS), and Fire Kronos system operating costs.

$-

$2,000,000.00

$4,000,000.00

$6,000,000.00

$8,000,000.00

$10,000,000.00

$12,000,000.00

FY-19 FY-20 FY-21 FY-22 FY-23

1. Hardware $- $525,000.00 $120,000.00 $45,000.00 $45,000.00

2. Software $- $1,145,000.00 $965,000.00 $965,000.00 $965,000.00

3. External Professional Services $514,000.00 $3,085,000.00 $2,980,000.00 $- $-

4. Internal City Staff Services $408,600.00 $3,818,000.00 $3,954,000.00 $312,000.00 $312,000.00

5. Internal ITS Staff Services $259,175.00 $482,400.00 $266,400.00 $277,400.00 $273,400.00

6. Other Costs $30,000.00 $90,000.00 $90,000.00 $- $-

7. Contingency $100,000.00 $1,000,000.00 $1,000,000.00 $- $-


by Cost Category

9

Figure 9: Cost Comparison of Current to Proposed Solution (COTS Model)

To summarize this financial analysis, we have added Figure 10 below to illustrate the five-year TCO difference between the two options that were assessed. Figure 10: 5YR TCO Cost Comparison

7. RESOURCES

Staff resources have been identified in the business case. If this investment were to be approved it suggests that additional external resources are required to complete discovery, identify and assess options, finalize estimates, and produce findings for management decisions. It is recommended that a City IT Project Manager and Business Systems Analyst be assigned part-time to drive the timeline, provide oversight, and ensure deliverables meet City needs. Other City staff including executive sponsor, key stakeholders, departmental subject matter experts (SMEs) and ITS resources, are expected to carve out time for discovery efforts for Phases 1 – 3 from their normal duties.

FY-19 FY-20 FY-21 FY-22 FY-23

As-Is $2,625,100.00 $2,625,100.00 $2,625,100.00 $2,625,100.00 $2,625,100.00

Industry Expert $1,311,775.00 $10,145,400.00 $9,375,400.00 $1,599,400.00 $1,595,400.00

$-

$2,000,000.00

$4,000,000.00

$6,000,000.00

$8,000,000.00

$10,000,000.00

$12,000,000.00

Axis Title

Options Comparison

Cost per Year

$13,125,500

$24,027,375

As-Is COTS Model

Options Comparison

5YR TCO

10

Following discovery, if approval is provided to procure and implement, internal support requirements increase significantly. Staff time will be needed to procure, finalize rules and system validation criteria, configure solution, develop interfaces, develop reports, KPIs and metrics, setup workflows, convert existing systems, train, and on-board departments. Backfilling key project team members will be needed for them to concentrate on setup, testing, training, and implementation. Subject matter experts will need to be assigned by each department and allocated adequate time for configuration deep dive sessions, testing, training, conversion and implementation support. An IT Project Manager and Business Systems Analyst is also needed to manage the vendor, drive the timeline, remove roadblocks, track requirements, ensure adequate testing, and ensure City goals and objectives are met. Also, two full time equivalent positions will be needed for on-going support to maintain a robust rules and validation engine, workflow management, monitoring and tracking of activities and processes to ensure timely input and processing. Funding of the new positions needs to occur in FY 20 during Phase 4 to ensure on-going support resources are in place.

Time and Labor Time and Labor Time and Labor Time and Labor Modernization Modernization Modernization Modernization

Business CaseBusiness CaseBusiness CaseBusiness Case

For FY18For FY18For FY18For FY18----19 Technology Planning19 Technology Planning19 Technology Planning19 Technology Planning

FY18-19 Technology Planning Business Case Template

1

Document Control

Document Information

Information

BIRF ID 0904 Time & Labor

Document Owner Ronda Hollander

Creation Date 10/19/17 – 11/21/17

Document Owners

Role Name© Signature Date

Requesting Dept. Document Author Ronda Hollander

Requesting Dept. Financial Reviewer

Michale Ravelo

Requesting Dept. Sponsor Ajay Joshi

Requesting Dept. Head Matthew Arvay


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Table of ContentsTable of ContentsTable of ContentsTable of Contents

FFFFOR OR OR OR FY18FY18FY18FY18----19191919 TTTTECHNOLOGY ECHNOLOGY ECHNOLOGY ECHNOLOGY PPPPLANNINGLANNINGLANNINGLANNING ......................................................................................I

1 PROBLEM OR OPPORTUNITY STATEMENT ................................................................. 3

2 RESEARCH METHODOLOGY ................................................................................... 3

2.1 METHODOLOGY .................................................................................................................................. 4 2.2 ASSESSMENT TEAM & RESOURCES ....................................................................................................... 4 2.3 ASSUMPTIONS .................................................................................................................................... 5

3 NEEDS ASSESSMENT ............................................................................................ 5

3.1 STRATEGY ......................................................................................................................................... 5 3.2 CURRENT STATE ................................................................................................................................ 6 3.3 CURRENT STATE CHALLENGES AND OPPORTUNITIES .............................................................................. 10 3.4 DESIRED FUTURE STATE ................................................................................................................... 11 3.5 GOVERNANCE .................................................................................................................................. 13 3.6 METRICS ......................................................................................................................................... 14

4 SOLUTION OPTIONS ........................................................................................... 15

4.1 HIRE CONSULTANCY ......................................................................................................................... 15 4.2 SCOPE ............................................................................................................................................ 16 4.3 SCHEDULE ....................................................................................................................................... 18 4.4 RESOURCE NEEDS ............................................................................................................................ 19 4.5 DESIRED OUTCOMES & BUSINESS VALUE ............................................................................................. 20 4.6 STAKEHOLDERS ................................................................................................................................ 20 4.7 DEPENDENCIES ................................................................................................................................ 20 4.8 CONSTRAINTS .................................................................................................................................. 20 4.9 ORGANIZATIONAL IMPACT ................................................................................................................... 21 4.10 STRATEGIC ALIGNMENT ..................................................................................................................... 21

4.10.1 Reduce Costs ........................................................................................................................ 22 4.10.2 Improve Productivity .............................................................................................................. 22 4.10.3 Increase Revenue .................................................................................................................. 22 4.10.4 Mitigate Risk .......................................................................................................................... 22 4.10.5 Improve Customer Service ..................................................................................................... 23 4.10.6 Resolve Compliance Issue ..................................................................................................... 23

4.11 FINANCIALS ..................................................................................................................................... 23

5 RECOMMENDED SOLUTION .................................................................................. 24

5.1 DECISION NEEDED ............................................................................................................................ 25 5.2 NEXT STEPS .................................................................................................................................... 25

6 APPENDIX ........................................................................................................ 26

6.1 SUPPORTING DOCUMENTATION ........................................................................................................... 26


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1 Problem or Opportunity Statement The City is striving to do more with less, reduce risk, improve efficiencies and achieve economies of scale. The City currently has over 14,000 active employees with a large support network required to capture and process overtime, exception pay, and specialty pay manually. In FY16/17, over 1.2 million hours of overtime was processed, not including exception and specialty pay transactions. As of 2017, all but two city departments utilized green and yellow paper based forms to capture and process all payroll exceptions and adjustments to pay rates

2 Research Methodology In 2010, a vendor was hired to conduct a citywide survey, assess departmental payroll and leave management processes, and gather requirements for a T&L and Absence Tracking solution (TLAT) as part of the eCHRIS Upgrade project. In 2011, it was decided to remove TLAT from the scope and deliverables of the eCHRIS Upgrade Project. In 2013 a PeopleSoft bolt-on was implemented through the Leave Absence Management Project (LAMP). This project was successful in transforming the City’s paper based leave submission and approval process, but exception pay processes remained on paper. In 2015 a project was initiated to develop a temporary T&L bolt-on to PeopleSoft to replace Police’s Leave & Overtime Tracking System (LOTS), building upon the successful LAMP software capabilities. A cross-functional team was created, comprised of Aviation, Finance, Human Resources, Information Technology Services, Police, and Water Services to understand, document, and develop the new T&L solution for Police. Although progress was made to propose a PeopleSoft bolt-on solution, the Business Investment Board (BIB) redirected Human Resources in June 2016 to focus on a citywide solution, beginning with a Request for Information (RFI). Specifically, members of the BIB requested that Human Resources also explore cloud alternatives. An RFI was issued to facilitate needed market research and to explore options beyond what was initially proposed to the Board. Nine vendors responded to the RFI in September, 2016. Based on the change in direction to focus on a citywide solution, the Police LOTS replacement project, which was intended to exclusively focused on Police’s audit remediation, was suspended in October, 2016. No formal action has been taken on RFI responses due to HR resources being redirected for Proposition 206 changes, the PeopleSoft upgrade activities, and changes in leadership. In August, 2017 the Chief Information Officer partnered with leadership from Human Resources and Finance to resurrect the discovery and research needed to propogate T&L through the technology planning program. Benchmark surveys were conducted in 2011 and recently in 2017 to determine what other major US cities and counties were using for payroll T&L. The chart below shows a stacked comparison between 2011 and 2017 of T&L solutions in use or in migration. Of sixteen major US cities and counties that replied in the 2017 survey1, the majority indicated that their organizations utilize Kronos for employee-managed time tracking. It should be noted that responses received from the two surveys were from different organizations. However, the significant spike in Kronos adoption across surveyed organizations appears to show a market trend. See Appendix item 10 for benchmark details.

1 City of Phoenix, Human Resources, Cindy Bezaury, “2017 Market Study”, 2017


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2.1 Methodology

2.2 Assessment Team & Resources

The City’s assessment team needs to be a representation of all departments with a special emphasis on departments who handle a large volume of overtime, pay exception, specialty pay situations, work with the various labor union groups, and have work shift scheduling needs. The project team will be comprised of executive decision makers, sponsors, key stakeholders, core team members, departmental subject matter experts (SMEs), labor union representatives, internal system support staff, and external vendors.

Name Department

Cindy Bezaury Water

Jill Celaya Police

Aaron Cook Audit

Tamie Fisher Public Works

Joyce Griffin Finance

Jenelle Hancock Human Resources

Mark Haskins ITS

Ronda Hollander ITS

Ron Kogler Finance

Stacey Linch Audit

Lisa Martinez ITS

Janice Pitts Aviation

Michael Ravelo ITS

Tianna Roberts Human Resources

Sandra Schilling Finance

Dan Stebbins Human Resources

Sandra Torres Finance

Most of the cross functional team who worked on the 2015/16 T&L initiative continue to work in their same or similar roles. As such, the recommendation is to utilize many

0

2

4

6

8

10

12

14

16

Time & Labor Solution Comparison

2011 2017


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of the same individuals to oversee the citywide initiative. See Appendix item 11 for both the original 2015/16 and recommended support teams moving foward.

2.3 Assumptions

1. Development of this business case is based on discovery facilitated by ITS over

the past month and involved key players who where part of earlier Time and Labor replacement initiative.

2. Cost projections for hiring an industy expert are based on costs of past and/or similar projects where external consultants were hired to assist the City.

3. Preliminary cost projections for procuring and implementing a T&L solution for

the City are based on a review of RFI responses from nine vendors who presented thirteen options.

4. Insufficient market research has been accomplished to-date and additional market research will be performed to determine best solution.

5. Enterprise departments will assist with funding of T&L solution. Recommended

departments include: Aviation, Public Works, and Water Services.

a. Current funding sources for T&L solution include:

Department Description Funds*

Aviation TBD

Police LOTS replacement budget $600K. Approximately $150K spent during 2015/16 discovery.

$450,000

Public Works TBD

Water Services CIP Project Charter #408 for Citywide Time and Labor Project created June, 2016

$2.4M

* Budget numbers are approximate

6. Previous T&L discovery and deliverables can be leverages in assessment activities including 2010/11 Navigator research and 2015/16 Police research.

7. T&L solution discovery estimates include time to interview all City departments as

it relates to time and labor efforts including payroll time, overtime, exception pay and specialty rules.

3 Needs Assessment Today’s manual environment does not provide appropriate tools and oversight to make major improvements. Capturing, processing, and reporting on time is limited. Exception pay and labor scheduling is inconsistent, needs streamlining, tools, and standardization to better utilize our labor resources across the City. This discovery effort can help the City acquire the appropriate tools to transform time and labor management.

3.1 Strategy

Since 2010, multiple departments, such as Aviation and Water, have requested a T&L solution to automate time tracking, improve visibility into labor management and improve capabilities to schedule and adjust staff as needed. After multiple initiatives,


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City leadership has requested a citywide approach to T&L. The City’s strategy needs to ensure consistent time and labor processes, rules, and data entry validation are applied to reduce risk and ensure compliance. Supervisors, manager, and management need improved capabilities to manage their ever-increasing and complex workforces. Staff need more efficient ways to capture, track, process, and report payroll time and exceptions,and ultimately, staff and management need near real-time visibility to make better workforce management decisions. These objectives are achievable with current technology offerings. By working towards one citywide solution, it is believed that the City can realize major improvements, eliminate manual labor-intense processes, all while greatly improving time and labor management capabilities. During 2011 when the Time and Labor and Absence Tracking (TLAT) project was estimated to cost $20M+, the Navigator Impact Analysis Report states, “The business case created for this project proposes that the payback period will be less than three years.”2 See Appendix item 1 and 2 for complete reports. With solutions becoming more competitively priced over the past several years, the use of existing mobile technology assets, advances in the marketplace, and experience with multiple enterprise wide initiatives successfully delivered by City staff in the past 2-3 years, the City is capable of capitalizing on the momentum, lessons learned, and deliver value from a T&L investment.

3.2 Current State

Paper Based Forms Currently, each City of Phoenix department is responsible for collecting, tracking, approving, and entering all payroll exceptions. All but two departments (Fire and Police) utilize paper forms to capture and process the various pay exceptions, adjustments to pay rates, and specialty pay. Departmental processes are labor-intensive with inconsistent rules application across departments. Any changes in an employee’s schedule that results in a reduction or increase of pay based on the normal 40-hour work week are recorded on the green sheet. Any adjustments to regular pay rates or specialty pay are recorded on the yellow forms. Staff at remote sites transport exception forms to downtown Phoenix for processing. If transactions have been approved, payroll clerks manually enter transactions in the City’s eCHRIS system to reflect accurate payroll processing and compensation. Exceptions to this process are for Fire and Police (See current state for Police and Fire below). Below is a breakdown of active employees as of October, 2017 and exception pay processed3. Almost 2.5 million hours of overtime was processed in FY16-17. During the same period over 9,000 employees received some type of exception pay.

2 Navigator Management Partners, “Time and Labor and Absence Tracking (TLAT) Project – Impact Analysis Report (FINAL)”, Feb, 2011. The team was unable to locate a copy of the 2011 business case referenced to review research to validate the three year payback quoted. 3 Employee counts, overtime, and exception pay processed were provided by Human Resources Department, Oct 2017. See Appendix item 12.


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EXCEPTION PAY* (FY16/17) Total

#Empl

Elig

OT Notes

# Overtime Hours 1,246,247 12,013 Overtime - Avg 104 hours per

eligible employee. Assuming 25%

of active employees earned

overtime, average is 415 hours or 8

hours a week per employee.

# Part-time & Job share Hours 1,136,822 Employee class requires exception

payroll entries

# Employees receiving other

types of exception pay

9,293 Shift differential, out-of-class, etc.

* totals do not include furlough

Paper processing is labor intensive and results in manual data entry errors, rework, delayed payments, and increased risk of penalty due to inaccurate payroll payments. Staff at remote City locations are required to transport forms to downtown Phoenix for central processing, further increasing processing time required and increasing risk for data entry errors. The processes for tracking, managing, and submitting overtime and specialty pay options range widely between work groups and departments. Interpretation of T&L rules in each department, results in inconsistent rule applications between departments. Validations also vary between departments and there is limited visibility and oversight of time management, exception pay, and specialty payment processing due to these manual processes. An assessment of one department was performed to analyze how much time is spent processing green and yellow sheets each pay period. Information Technology Services have hourly staff who must report their time each pay-period, staff that are required to work non-standard shifts, may be paid for holidays, staff who are eligible for shift differential, call-out pay, and specialty pay due to hazardous conditions. Even though the number of employees is small, it is a broad representation. Based on average time to validate, process, follow-up, enter and verify payroll adjustments are correct, it takes on average eighteen minutes for each employee who submits green and/or yellow sheets. This average per transaction was used as the basis for calculating the current state costs and may be higher for departments such as Police and Fire who have many more specialty pay categories.

10,387

1,595

31 2,302

Active Employees October 2017

Full-time hourly Part-time Job share Full-time salaried


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In addition, Police’s automated Leave Overtime Tracking System (LOTS), used to capture overtime and shift differential pay for public safety officers and support staff, needs to be replaced. The 2013 internal audit report for Police HR Information

Systems states,

“The highest risks were that the systems used an unsupported database version and one system uses an unsupported development language. Additionally, processing controls failed to detect some payroll errors regarding holiday pay and shift differential pay.”4

Per the 2015 Human Resource Information System (HRIS)/City Audit5, inadequate manual and automated processes exist for identifying payroll discrepancies. As a result of errors discoverd, an additional $250K in employee payroll was paid by the City. In addition, Police also tracks specialty pay allowances for uniforms, court appearance, linguistic services, and other types of career enhancement pay. This system is also using unsupported technology and needs to be replaced.

Police The Police Department currently processes its own payroll transactions in separate systems and provides an automated payroll interface to eCHRIS each pay period. Police utilizes a custom developed application,Leave and Overtime Tracking System (LOTS) as-well-as Police Payroll system to capture and manage payroll information. Police’s overtime and tracking requirements are one of the most complex due to their varied types of employees, labor unions, and shift schedules. In addition to overtime, Police officers also have various specialty types of pay due to the unique nature of the services that they provide to the public. Police also manages numerous grants with specialty requirements for tracking use of grant funds. Due to these multiple factors, the Police’s LOTS system also interfaces with their budget system and in 2015/16, the Police Payroll As-Is process was documented, business requirements captured, and reporting requirements updated in preparation for a T&L implementation. The 2013 Police HR Information Systems Audit recommended Police payroll migrate its current process to the city's eCHRIS system because several deficiencies existed as it relates to Police’s Leave and Overtime Tracking System (LOTS) including:

“Application controls relied primarily on manually invoked and corrected processing controls (payroll audit reports) which in some instances failed to provide sufficient data validation checks. … Career Enhancement Pay practices did not follow the requirements defined by the City’s labor agreement.”6 See Appendix item 3 for complete audit report.

In addition to Audit findings, the City Manager has directed that all city departments must use core central city services for HR and Payroll. All departments, including Fire and Police, have been migrated to eCHRIS for leave absentee management and Police

4 City of Phoenix Audit, Irene Larkin, Aaron Cook, Stacey Linch, “Police HR Information Systems Audit”, October, 2013

5 City of Phoenix HRIS & Audit Department, Bill Greene, “Overtime and Leave Slip Processing”, April, 2015 6 City of Phoenix Audit, Irene Larkin, Aaron Cook, Stacey Linch, “Police HR Information Systems Audit”, October, 2013


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is the only department that provides an electronic interface file for exception pay. See Appendix item 3 for complete audit report.

To provide some sense of payroll processing, the following quote and payroll totals by pay type have been included from the 2013 Police HR Information Systems Audit which states, “During that time period there were approximately 550,000 transactions for 4,004 employees”. Yellow highlights have been added to designate areas where additional exception pay tracking is needed and manual adjustment processing may be required.

2013 Police HR Information Systems Audit

“We reviewed the payroll transactions for the first half of Fiscal Year 2012/13 (July 1, 2012 through December 31, 2012). During that time period there were approximately 550,000 transactions for 4,004 employees. The following table summarizes payroll transactions for the period:

… Additionally, processing controls failed to detect some payroll errors regarding holiday pay and shift differential pay. Weaknesses in the change management process have slowed staff’s ability to implement needed processing controls that could detect such errors.”

Fire The Fire Department currently utilizes the Kronos TeleStaff solution for scheduling and time tracking capabilities for fire staff. Per Human Resources, Fire generates reports from TeleStaff for payroll clerks to manually enter payroll changes into eCHRIS. Similar to Police, Fire has additional complexities that are specific to Fire. Management of Fire Fighter schedules is critical and complex to ensure life safety support with special time schedules, rules, and tracking. Per the 2011 Navigator Management report, “Fire is the most complicated department from a union pay perspective.”7 See Appendix item 2 for complete report.

Other City Departments Implementation of a T&L system is very complex and will touch nearly all staff, supervisors, and managers. The current eCHRIS system is an honor-based system assuming that all full-time employees work 80-hour in a pay period unless exceptions are entered. Part-time or job-share employees are 100% exception based, meaning complete data entry is required for those employees to be paid. Full-time hourly employees are paid for 80 hours unless entries are processed for exception pay.

7 Navigator Management Partners, “Time and Labor and Absence Tracking (TLAT) Project – Impact Analysis Addendum”, May 2011.


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Currently, most City employees do not “clock in” daily. Many T&L systems require employees to “clock in” and pay calculations are based on hours reported by time-clock devices. The impact and level of changes will depend heavily on what T&L solution is selected and how it is implemented.

Labor Unions The City currently has several Memorandums of Understanding (MOUs) and Memorandums of Agreement (MOAs) that must be considered when planning for changes as they relate to employee time, labor, and scheduling. Each of the City’s labor relation groups will need to be included in discussions to streamline, simplify, and standardize administrative regulations for ongoing management and to implement a T&L solution for the City.

3.3 Current State Challenges and Opportunities

1. The Water Services 2016-17 Program/Project Charter for Citywide T&L summarized the current state challenges and opportunities,

“The City currently processes exception pay (green sheets) and specialty pay (yellow sheets) manually. … Employee exception pay is time-consuming, inconsistent, and costly, particularly the number of MOUs/MOAs in the city and with staff working in different roles across a variety of physical locations. One automated Time and Labor system can streamline the administrative effort, save money, and improve internal customer satisfaction by ensuring timely, accurate pay for all work performed. By removing the need for manual data entry, accuracy improves. One Time and Labor system for all MOU and MOA agreement processing will ensure consistency in pay. Further, remote facilities will no longer have to collect and transport green sheets to a central facility for processing. This will save time and money while mitigating the risk of accidents incurred while traveling between facilities. An automated, citywide Time and Labor system that integrates with our current eCHRIS system is needed to improve accuracy, save time and money, ensure consistency in applying MOU and MOA contract rules, and ensure employees are being paid for time worked is necessary.”8 See Appendix item 6 and 7 for complete details.

2. The city has limited visibility into overtime, exception and specialty pay which limits

staff insights and improvements. Manual paper processes are difficult to audit further reducing visibility into issues, risks, and potential liabilities.

3. Exception pay is not visible by employee by day or even by pay-period. Instead,

the current eCHRIS system only provides summary totals for an employee which makes it impossible for manager to view patterns and make informed management decisions.

4. The City could benefit by capturing and managing time and labor in one system

of record which will allow for visibility, measurement, key performance indicators tracking, and decisions based on facts.

8 City of Phoenix Water Services, Ronda Buker, “Citywide Time and Labor, Program/Project Charter (PC) FY 16-17”, June 2016


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3.4 Desired Future State

The City’s desired future state entails an automated solution for T&L that eliminates antiquated paper based processes and manual data entry to achieve exception payroll processes. The following are additional outcomes desired of a future state solution: 1. Overtime, exception pay, and specialty payment rules

a. Consistent business processes will be implemented

b. Business processes will be streamlined and simplified, where feasible

c. Solution will support the following employee types: i. Part-Time employees ii. Full-Time hourly employees iii. Full-Time salaried employees iv. Job share employees v. Contractors (TBD)

d. Solution will support a variety of employee classes

2. Time and Labor will include the ability to handle the following:

a. Various schedules will include: i. Full-time and part-time ii. 40 hour 5-day schedules iii. Alternative 4-10s iv. Alternative 9-80s v. 56hr employees (Fire) vi. Shifts other than M-F 40 hours

b. Ability to set rules and control validation

i. Various union rules based on employee’s union ii. Rules by various schedules and shifts iii. Rules by industry

1. Limitation on number of hours in specified period (e.g. unable to work more than x hours in 24hrs, 48hrs, 72hrs, workweek, etc.)

iv. Rules for shift differential v. Rules for out-of-class vi. Rules for specialty pay (e.g. linguist, firearm performance, etc.) vii. Rules by eligibility (eligible or not)

1. Overtime 2. Shift differential 3. Holiday Pay 4. Out-of-Class 5. Court appearances 6. Specialty pay 7. Comp-time

viii. Rules for FMLA

c. Work hour entry, adjustment, and approval i. Entry, adjustment, and delete by employees before approval ii. Review and approvals by supervisors/managers iii. Review and approvals by delegate iv. Review and approvals by administrator v. Entry/adjustment by supervisor/manager with tracking


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vi. Automated workflow management, notification, with automatic escalation

d. Scheduling of shifts for hourly and salaried employees

e. Ability to view and manage employee schedules, time worked, and

overtime.

f. Ability to view employee time worked, exception pay, and specialty pay in various

g. Ability to trend and report activity over adjustable time-period

By implementing a centralized Time and labor (T&L) solution that automates employee time tracking, scheduling, and adjustment processing, the City will reduce current risks and establish consistency to employee time management, monitoring and reporting. Automating T&L enables organizations to eliminate the manual paper tracking, streamline processes, implement workflow management for approvals, improve consistent payroll validation, and increase accuracy. Advances, developed in modern (T&L) solutions marketplace, aide orgnizations to facilitate timely and accurate time capture, incorporate standardized rules and validation as-well-as improve time, labor and scheduling management capabilities. A T&L solution also provides reporting of time and labor details, utilizing advances in business and data analytics technology which improves timeliness and accuracy of reporting. Lastly, an automated T&L system would improve visibility for supervisors, managers, payroll staff, departmental leadership, and City leadership to enable City staff to work smarter. Below are additional benefits that could be realized by an automated T&L solution:

� Improved productivity by:

o reducing multiple touchpoints o eliminating need to transport paper forms for processing o automating data collection o improving ability to capture time remotely o streamlining data validation o reducing data entry errors and re-work o minimizing time and labor rule interpretation discrepencies o improving timeliness of exception processing

� Consistency through:

o standardized management of Time and Labor practices o pre-defined rules application for overtime, exception pay, and

specialty pay o implementation of approval workflow and escalation management o automated validation between systems to improve specialty pay

accuracy

� Reduced risks caused by inconsistent exception pay processes

� Improved time scheduling, management, and measurement capabilities including:

o visibility of work schedules and patterns o visibility of overtime, exception and specialty pay for better

management


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o improved scheduling functionality o improved reporting, comparison, and auditing capabilities

3.5 Governance

The City currently has an Executive Steering Committee which oversees potential changes to Human Resources Information Systems (eCHRIS) and associated interfaces with Finance Payroll Processing. In addition to utilizing this Steering Committee, the following are additional recommendations for promoting success:

1. Executive champion be designated from the City Manager’s office to oversee, provide guidance, and executive decisions that will impact the entire City.

2. Group of project sponsors be created to oversee, review and make decisions on T&L findings and next steps. This group would consist of Directors or Assistant Directors assigned to oversee major areas impacted such as HR, Finance Payroll, Aviation, Public Works, Water, and ITS.

3. Working committees be designated to oversee major areas of the project.

Examples may include labor relations, employee scheduling, employee time entry / rules / calculations, etc.

This project sponsor body would work with the Executive Steering Committee to finalize direction and decisions as it relates to a citywide T&L solution.

In addition to the executive oversight bodies, the current and future T&L processes are/will be governed by the following Administrative Regulation (ARs). The following 41 administrative regulations will need to be reviewed, revised, or consolidated, as needed, to reflect any future state regulations and/or personnel rules that will be needed to effectively govern processes that a new T&L solution will introduce. AR Administrative Regulation Function 2.11 Legal Holidays and Holiday Pay HR and Payroll 2.12 Recording of Work Hours in Emergencies HR 2.13 At-Home Administrative Work Assignment Policy HR 2.14 Lunch Periods, Rest Breaks, Regular and Alternative Work

Schedules HR

2.141 Job Share Program HR 2.142 Flexible Workplace Program HR 2.143 Family and Medical Leave HR and Payroll 2.144 Leave Contributions to Fellow Employees HR 2.145 Employee Volunteer Time HR 2.15 Severance Pay Executive Employees HR 2.151 Severance and Retirement Voluntary Separation Incentive

Packages for Employees Involved in a Reduction in Force HR

2.16 Employee Political Activity HR and Payroll 2.17 Time Off to Vote HR and Payroll 2.18 Excessive Accumulation and Carryover of Vacation Credits HR and Payroll 2.19 Productivity Enhancement Pay Program HR 2.20 Working Out-of-Class HR and Payroll 2.201 Working Out-of-Class Fire Department Sworn Employees HR and Payroll 2.21 Overtime, Call Out and Standby Pay and Shift Differential HR and Payroll 2.22 Specialty Skills Premium Pay HR 2.23 Show up Time HR and Payroll


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AR Administrative Regulation Function 2.24 Jury and Witness Service HR and Payroll 2.241 Compensation for Interpreting and Translation by Personnel in

the Municipal Court HR

2.26 Clothing Allowance for Certain Employees of the Police and Fire Departments

HR and Payroll

2.261 Clothing Allowance for Certain Civilian Employees HR and Payroll 2.262 Tool Maintenance Allowance - Field Unit II HR and Payroll 2.27 Employee Suggestion Program HR 2.29 Communications and Transportation Allowances HR 2.30 (A) Interim City Leave Policy HR and Payroll 2.30 (B) Interim Attendance Policy HR and Payroll 2.31 Safety Program HR 2.32 Worker's Compensation Program HR and Payroll 2.321 City of Phoenix Benefit Programs - Plans and Eligibility HR 2.323 City of Phoenix Long Term Disability Program HR 2.39 National Guard, Military Reserve Training, and Active Duty

Call-up HR

2.44 Public Safety Vacation / Sick Leave Payout HR and Payroll 2.441 Sick Leave Payout HR 2.441(A) Timing of COPERS Applications for Retirement HR 2.45 Sick Leave Payout at Time of Death HR 2.54 New Employee Relocation Expenses HR and Payroll 2.71 Uniform Program for Civilian Employees (formerly Uniform

Program for Field and Shop Personnel) HR

2.94 Privately-Owned Motor Vehicle Authorization and Mileage Reimbursement Policy

HR

It is also critical to ensure there is a clear consensus on who is the Business Owner for Time and Labor. Currently, it is not a clear who should be driving this initiative (e.g. Human Resources or Finance Payroll). Prior to work beginning, one responsible party needs to be designated. Finally, partnership with the City’s labor relations groups will also be required to promote a fair and equitable approach to any new or revised rules resulting from the implementation of a T&L solution for the City.

3.6 Metrics

Departmental information only exists with the paper green and yellow sheets, tracking spreadsheets, and some local departmental databases. Metrics and KPIs are limited mostly to pay-period and after-the-fact totals reported from eCHRIS as it relates to overtime, exception pay, specialty pay, and adjustments. These limitations do not allow for work-day analysis and reporting. When Central payroll was asked how many exception forms are processed annually, they indicated those numbers would have to come from the individual departments. Also, Finance Payroll and Audit have limited visibility into departmental timeliness and accuracy without verifying actual entries against manual forms and one or more automated vehicles (e.g. spreadsheets, internal departmental databases, and/or eCHRIS). Due to the sheer volume of transaction and varied capture methods, audits are limited in scope and frequency.


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Audits normally include a limited number of transactions for random verification. The percentage verified is very small and may not uncover issues with inaccurate business processes or calculations. Police was audited in 2015 and staff verified overtime transactions which were “denied” in 2009. It took 100 hours of staff time and the audit report states, “Based on the number of transactions and the hours spent in reviewing the 2009 transactions, we estimate it will take approximately 2,700 hours to review all transactions for years 2002-2014.”9 See Appendix item 4 for complete audit report. This audit reveals the labor-intensive nature of the overtime and exception pay auditing and further bolsters the need for one consolidated system with standard rules, validation, and workflow to help manage and provide workforce visibility. Being unable to monitor, audit, and manage exception pay processing appropriately increases the City’s risk for payroll penalties. If an employee is not paid appropriately for hours worked, the City may have to pay 3 times the amount of payroll deficiency. Implementing a single system for capturing, tracking and reporting T&L activities will greatly increase the ability of HR, Payroll, and individual departments to audit, measure and set key performance indicators. Standardizing processes, implementing consistent rules, ensuring data validation, and utilizing approval workflows and escalation will improve accuracy, efficiency and timeliness of exception processing.

4 Solution Options There are two options that are presented in this business case:

1. Do Nothing: This option entails perpetuating the status quo for continuing to manage exception pay across the City. This option does not establish a singular solution to transform the City’s current state, it does not remediate outstanding audit recommendations, and perpetuates existing risks associated with operating a paper based exception payroll process.

2. Hire Consultancy: This option entails hiring a consultancy to assist the City to

fulfill a three phased approach to 1) conduct a needs assessment 2) Develop an RFP and solicit vendors 3) remain engaged throughout the procurement and implementation phases of a new T&L solution. This option is modeled after a current project that the City is facilitating to replace an antiquated land information and permitting system (KIVA) for the Planning and Development Services Department.

For the purposes of this business case, and based on the premise that City leadership has expressed a business desire to implement a citywide T&L solution, the remainder of this business case will not focus on analysis of Option 1 (Do Nothing), but instead will outline the need for Option 2 (Hire Consultancy).

4.1 Hire Consultancy

In 2017, the City realizes the value and opportunities of engaging with professional consultancies on large, high dollar investment projects to augment internal City staff expertise on discovery, research, requirements elicitation, RFP development, and competitive procurement to acquire and implement high risk technology solutions. For example, the City engaged Gartner Consulting to facilitate research and to assess the Police Department’s Records Management System (RMS) implementation and operations. This engagement delivered outputs that prescribe an approach and specific activities to remediate and even enhance the City’s investment in the RMS

9 City of Phoenix HRIS & Audit Department, Bill Greene, “Overtime and Leave Slip Processing”, April, 2015


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solution used by Police. Also this year, the City engaged and contracted with Gartner Consulting to assist the Planning and Development Services Department with their discovery, research, and development of an RFP to replace their land information and permitting system (KIVA). Although this project is still inflight, the method of approach that the City and Gartner Consulting developed is one that remediates many of the challenges that the City has faced in the past when attempting to exclusively leverage internal City staff and expertise to deliver high dollar and high risk projects. The T&L Project, if the City chooses to pursue this option to transform its payroll exception processes, is a project that will be a high risk/dollar project that the City must be successful with. As a result, hiring a consultancy to hold the City’s hand through all phases will be the recommended approach for T&L and the industry expert hired will bring a team to capture results and assist with creating deliverables and roadmap for a citywide time and labor solution.

NOTE: Gartner Consulting is not being recommended as the consultancy for the City to engage with by default. Instead, it is the method of approach, which is becoming the gold standard for how the City is embarking upon large technology based projects, that is being outlined within this business case.

4.2 Scope

Implementation of T&L has the potential to impact all 14,000+ employees. The complexity of T&L solutions continues to increase to support the varied workforces that exist in large companies and organization. T&L initiatives are transformational, need significant resources to implement, and require both strategic and tactical planning to ensure a successful implementation. Therefore, it is critical to understand the various business units along with their requirements and select the appropriate solution that best fits the City’s requirements. Considering these factors, it is prudent to leverage an expert to facilitate discovery and provide advice, direction, and guidance needed to select, acquire an implement appropriate solutions for the City of Phoenix. In addition to the need to fully understand what the City’s requirements are, it is also important to understand the the culture, how initiatives such as T&L impact staff, and how to successfully navigate transformational type projects. Gartner states,

“This digital workplace is less about a set of commodity services and more about its capacity to provide tools that engage and inspire workers to perform effectively. In many industries, workforce management (WFM) technology can be a key enabler, because it often is the principal means by which workers

interact with the enterprise on a daily basis.” “Front-office enterprise functions that have recently deployed a workforce optimization (WFO) suite (a combination of workforce management (WFM) with other functions such as evaluation, training, scheduling optimization and

performance reporting) have still found it difficult to fully engage workers.”10

This is another reason why engaging an industry expert will assist and guide the team to understand and plan for the human factor of changes to Time and Labor. Also, based on the previous discovery initiatives, both previous attempts to implement a partial-phased approach to T&L have resulted in City management requesting a

10 Gartner, Inc, multiple authors, “Understanding the Fragmented Workforce Management Solution Market”, Nov 2017.


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citywide approach. Industry software and hardware tools have also changed significantly between 2011 and 2017 due to widespread use of electronic devices such as smart phones, tablets, and laptops. Solutions have matured with significant changes in data collection options, wireless location and time tracking, and employee authentication capabilities. With the impact T&L will have on City staff and the criticality of selecting and implementing a long-lasting citywide solution, it is recommended that an industry expert specializing in Human Resources - Employee Time and Labor Tracking be engaged to accomplish the following:

1. Leverage previous research completed to-date including:

a. 2010-11 Navigator engagement for Time and Labor and Absence Tracking (TLAT)

i. Requirements Documentation ii. Supporting Design Documentation iii. TLAT Impact Analysis Report iv. TLAT Impact Analysis Addendum

b. 2016 Police payroll assessment i. Police LOTS and Payroll Automation As-Is Analysis ii. Police Payroll Automation (LOTS) Business Requirements

c. 2016 Request for Information vendor submissions 2. Assess City of Phoenix payroll processing

a. Business drivers, Administrative Regulations (ARs), and and Standard Operating Procedures (SOPs)

b. Current state processes, challenges, issues, and risks c. Assess current City labor union agreements which are impacted by

T&L including Memorandum of Understanding (MOUs) and Memorandum of Agreement (MOAs)

d. Assess department process and interview subject matter experts e. Analyze and summarize findings including current state, current

issues, risks, deficiencies, and recommended changes needed for a successful implementation of a citywide T&L solution

f. Capture City Department T&L business requirements g. Organizational readiness to implement and support automated T&L

3. Identify viable solution options which:

a. Support public safety including Fire and Police b. Support varied needs of multiple business entities c. Provide T&L capabilities that match City requirements d. Include pros and cons of each solution e. Facilitate governing body decisions

4. Develop Scope-of-Work appropriate for Request for Proposal (RFP)

NOTE: Discovery findings will be presented to governing bodies for review, discussion, and directions on issuing a Request for Quote or Request for Proposal (RFP).

Consultant services with T&L expertise would be hired through an RFP competitive procurement process. The Phase 1 process to hire and industry expert would include City staff and subject matter experts from Finance, Human Resources, Water Services, Aviation, Fire, Police, and Information Technology Services. This team would work together to write a scope of work and RFP to solicit consultancies with expertise in T&L implementations to partner with and lead the City through all future phases.


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The industry expert is being requested to assist not only in the discovery but also in the selection and implementation phases to ensure solution(s) implemented meet City requirements and are in alignment with the roadmap identified.

4.3 Schedule


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4.4 Resource Needs

1. Identify executive sponsor, stakeholders, and project team. 2. Assign business systems analyst and project manager (oversight and QA). 3. Hire industry expert knowledgeable in Human Resource T&L solutions for large

government organizations. 4. City Management Executive Support is critical to ensure appropriate

participation and decision oversight. An executive from the City Manager’s office needs to be designated as the champion. Time and Labor initiatives can be complex, impact all staff, and have a transformational effect. As such, a champion is needed to oversee this multi-year project which will:

o Impact all employees and change how they track their time o Require consistency for rules applications o Shift where the responsibility lies with capturing, reviewing and

approving time o Adjust how managers approach time and overtime


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o Provide visibility and tools to improve time management

4.5 Desired Outcomes & Business Value

1. Appropriate stakeholders are identified and consulted 2. City-wide requirements are identified and documented 3. Costs of processing green sheets manually will be quantified 4. Options are identified with pros, cons, risks, issues, and cost/resource

estimates 5. Project team, sponsors, and City Management have actionable options to make

decisions

4.6 Stakeholders

1. Finance Department (payroll T&L and financial interfaces) o Payroll managers for each department o Subject Matter Experts (SMEs) for each department

2. Human Resource Department: PeopleSoft development and dependencies

o HR managers for each department o Labor Relations Representatives o City Employee trainers o City Supervisors o City Employees

3. Aviation, Police, Public Works, and Water Services Departments (funding and

significant users of T&L)

4. Information Technology Services (ITS) Department: technology support

5. Solution vendor

4.7 Dependencies

1. Availability of key stakeholders and sponsors 2. Availability of funding for industry expert 3. Availability of industry expert 4. Availability of internal business analyst and project manager 5. Availability of departmental HR managers, Payroll managers, and subject

matter experts (SMEs) for discovery and requirements gathering

4.8 Constraints

Due to this phase being a discovery phase, the main constraint is people who will perform and participate in the discovery. At this time, the schedule for discovery will be created after initial engagement. As for budget, the anticipation is that enterprise departments will fund the discovery efforts.

1. Availability of subject matter experts (SMEs) from each department: o SMEs must be knowledgeable in their departments payroll processes o SMEs must have adequate time provide and validate:

� Current standard operating procedures (SOPs) � Current payroll processes � Current approval processes � Current issues and known problems

2. Availability of industry expert


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3. Availability of funds and council approval

4. Labor group negotiations will occur in 2019 for the next Memorandum of

Understanding (MOU) and Memorandum of Agreement (MOA) 2019-2013 cycle. Activities should be negotiation windows to facilitate streamlining potential.

Due to budget cuts over the past 10 years, staff resources are stretched thin and competing project priorities are a concern. A dedicated internal team will be required to collect, assess, and determine future solution.

4.9 Organizational Impact

T&L implementation will be transformational and will require all departments to participate. Most the City’s 14,000+ active employees will be impacted as T&L will change how time and labor are tracked. The extent of impact will be dependent upon the solution selected, how processes are changed/streamlined, and how the new solution is configured. Discovery will help identify the type of transformation needed and solution options. A complete impact analysis and fit gap will not occur until discovery and procurement activities are underway. Previous Assistant Human Resources Director recommended that union negotiations will be required before simplifying the current T&L requirements. By standardizing rules and reducing the number of variations based on union groups, the City could reduce on-going costs. Implementation of T&L may also experience resistance from current labor relation groups and/or staff represented by such groups. During Phase I of discovery, it will be important to include labor relations stakeholders in the discovery process and have a clear communications plan for concerned city staff and labor relations groups. Labor Unions will be included as stakeholder to ensure compliance and identify opportunities for streamlining.

a. Negotiations will be conducted with labor unions to standardize payroll exception tracking and management across various labor groups to simplify support and on-going costs of payroll exception processing.

b. New solution need to support labor union rules associated with:

i. Overtime determination ii. Exception and specialty pay iii. Federal and/or industry scheduling guidelines

In addition to labor impacts, implementing T&L could result in additional payroll expenses based on employee time reported. For example, if time clocks are implemented and employee works extra time, payroll costs may increase based on automated rules. Today, employees staying 10-15 minutes late may not be reported. Utilizing electronic capture of time worked may record additional time resulting in additional payroll expenses.

4.10 Strategic Alignment

The goal is to automate T&L data entry rules, validation and activities bringing consistency and structure to all departments as it relates to scheduling, capturing time worked, and processing related information.


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4.10.1 Reduce Costs

� At this time there is no complete research around the current manual process and associated costs to provide accurate projections. Current state costs are based on research in only one of 30 departments to provide an estimate. Further research is needed.

� It is anticipated that automating electronic time entry will shift the burden from payroll clerks to employees and that automating schedules, rules and validations should decrease the entry time and improve accuracy.

� One deliverable of an industry expert will be to calculate current state processing costs as-well-as as anticipated costs with new solution options to provide a projected payback period.

4.10.2 Improve Productivity

� Provide visibility into current payroll processes

� Identify inefficiencies and inconsistent processes

� Documented processes can be used to on-board and train new staff � Documented processes and requirements will help facilitate solution

selection

� Documented processes will be used as basis for future state planning

Future Productivity Improvements expected with automated T&L � Ability for supervisors/managers to schedule, monitor, approve, and

manage staff using an automated system

� Ability to reduce manual data entry errors by staff

� Ability to apply consistent rules to employee time reporting � Increase accuracy of employee time tracking and payments

� Reduce time spent transporting green sheets to downtown for processing

� Reduce re-work by catching inconsistency at time of entry

� Improve supervisor’s and manager’s ability to monitor and manage

overtime

4.10.3 Increase Revenue

� N/A

4.10.4 Mitigate Risk

� Currently departments interpret and calculate time inconsistently which causes improper payroll payments and rework. Inaccurate payroll can result in payroll penalties. Consistent calculations with validation will reduce risk of miscalculations.


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� Employee scheduling issues may result in labor issues. Implementing standard scheduling capabilities will help highlight and stop inappropriate scheduling.

� Discovery may uncover additional inconsistencies where policies are not being followed appropriately. This allows staff to make changes to mitigate risk even prior to implementation of T&L.

4.10.5 Improve Customer Service

� Providing tools for employees, supervisors and management to enter, review, and adjust time, schedules, and pay based on standards will improve customer service by:

o Providing default schedules to simplify time entry

o Implementing automated rules and validation to reduce errors and rework

o Implementing automated workflows to enable approval and routing

o Providing self-service visibility and access into work history

4.10.6 Resolve Compliance Issue

� City departments are required to follow state, federal, and labor agreements to ensure employees are compensated appropriately. Currently, departments interpret time and labor rules differently causing issues with payroll, personnel, and labor union. Implementing standard rules with validation can reduce interpretation issues ensuring compliance.

4.11 Financials

By following a 4-phase approach of Aquiring Industry Consultant, Discovery and Requirement Definition, RFP, and Implementation will allow the business to provide appropriate information during the various stages. This request focuses on phases 1 through 3. Phase I will acquire an Industry Consultant. Phase 2 is for Discovery and Requirements Definition which will be used to create an appropriate scope of work for a RFP. Phase 3 is for RFP Development and Solicitation efforts. Financials included with this business case only include estimates for resources to perform discovery efforts, define requirements, identify options, and develop a scope of work to support solicitation and selection efforts. Phase 2 discovery efforts will provide additional insight into current costs and areas of improvement to be included in a business case for a formal RFP process. Necessary information to assess the manual costs and potential impacts of an automated system would be part of the discovery deliverables. A realistic return on investment will not be available until discovery is completed, options have been identified, a roadmap for acquisition is developed and a rough order of magnitude for software, hardware and implementation costs can be determined. See Financial Analysis Template for details. Phase 3 is to develop the actual scope of work for the RFP process and to assist with fit gap analysis and selection criteria. The recommendation is to engage the industry expert in the acquisition, procurement and implementation to ensure a successful implementation. Estimated costs for Phase 1 through most of 3 are detailed below:


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Year 1: Discovery

Description Amount Total Initial Investment Hardware $ 0 Software $ 0 External Professional Costs $ 514,000 Travel Costs $ 30,000 Contingency $ 100,000 $ 644,000 Soft Internal Costs Internal City Staff $ 408,600 Internal ITS Staff $ 259,175 $ 667,775 TOTAL $1,311,775

The target is to present findings to the Business Investment Board (BIB) in spring 2019. If approval is received to move forward with procurement activities, it is estimated that a Time and Labor proposed future state four-year TCO would be approximately $22,715,600 with $13,020,000 external costs and $9,695,600 for internal soft costs. Estimated costs for procurement activities in Phase 3, Phase 4 implementation and two years of on-going costs are detailed below:

Year 2-5: Implementation

Description Amount Total Initial Investment

Hardware $ 735,000 Software $4,040,000

External Professional Costs $6,065,000 Travel Costs $ 180,000 Contingency $2,000,000 $13,020,000 Soft Internal Costs Internal City Staff $8,396,000

Internal ITS Staff $1,299,600 $ 9,695,600 TOTAL $22,715,600

5 Recommended Solution No solution options have been identified at this time. Funding is being requested to hire consultancy which will:

Phase 2: Perform discovery needed to:

• Gather, document, and assess current state

• Gather, document, and assess business requirements

• Determine appropriate scope of work

Phase 3: Develop options for management review and decisions

• If approved by governance board to proceed, o Develop scope of work for RFP o Provide guidance with vendor demos o Provide oversight and advice through procurement and

implemenation An industry expert’s assessment, insight, and guidance for the City’s T&L initiative is required to ensure the best T&L solution for the City of Phoenix. Acquistion of consultants in Phase 1 and completion Phases 2 and 3 will provide appropriate information for leadership to review


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findings and make further investment decisions. This funding request is limited to consultancy services only and does not include funding for Phase 4 Procurement and Implementation. NOTE: Financial estimates provided in this business case are based on past experience and estimates provided as a result of the Time and Labor RFI responses from September 2016. Financial estimates will be adjusted based on findings completed in Phase 3. See 2.1 Methodology for more details.

5.1 Decision Needed

Approval to spend $644,000 FY18-19 in external resources to facilitate discovery and assessment of the current City of Phoenix overtime, exception, special pay and labor scheduling practices and provide options and guidance for implementing Time and Labor capabilities at the City of Phoenix. Optional approval to spend $720,000 FY19-21 to retain external resources for procurement and implementation services to ensure a successful implementation that meets City requirements and follows the roadmap outlined. It should be noted that it is estimated that an additional $668,000 of internal staff time and resources will be utilized to support these efforts for a total expenditure of $1.3 million in year one. Phase 2 and 3 results will be presented to appropriate governing boards for review and/or approval to move forward, as appropriate.

5.2 Next Steps

� Identify sponsors and stakeholder for discovery � Assign Project Manager and Business Analyst � Hire industry expert � Identify departmental subject matter experts (SMEs) � Elicit and document current processes and requirements � Analyze and summarize findings and options � BIB Decides on next steps � Assuming BIB approval is granted, Industry Expert would develop scope-

of-work needed for RFP process


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6 Appendix

6.1 Supporting Documentation

Item Year References File 1 2011 Navigator Management Partners, “Time and Labor and

Absence Tracking (TLAT) Project – Impact Analysis Report (FINAL)”, Feb, 2011. Impact Analysis

Report Final 20110131.doc

2 2011 Navigator Management Partners, “Time and Labor and Absence Tracking (TLAT) Project – Impact Analysis Addendum”, May, 2011 TLAT Impact

Analysis Addendum.doc

3 2013 City of Phoenix Audit, Irene Larkin, Aaron Cook, Stacey Linch, “Police HR Information Systems Audit”, October, 2013 PD HR information

systems audit report - 10032013 FINAL.pdf

4 2015 City of Phoenix HRIS & Audit Department, Bill Greene, “Overtime and Leave Slip Processing”, April, 2015

2015PD Overtime Audit-1150110f- FINAL-SL.pdf

5 2016 Original 2015/16 Time and Labor Team

OriginalTeam.pdf

6 2016 City of Phoenix Water Services, Ronda Buker, “Citywide

Time and Labor, Program/Project Charter (PC) FY 16-17”, June 2016 CITYWIDE TIME AND

LABOR PROJECT CHARTER FORM 2016-17.pdf

7 2016 City of Phoenix Water Services, Ronda Buker, “Citywide Time and Labor, Budget Sheet”, June 2016

CITYWIDE TIME AND LABOR SYSTEM - ATTACHMENT B - Budget Sheet 2016-17.pdf

8 2016 City of Phoenix, Amanda Brennan, “Police Payroll

Automation (LOTS) Business Requirements”, July, 2016 Business_Requirem

ents_LOTS-Payroll-Automation_Draft_v2.0.docx

9 2016 City of Phoenix, Amanda Brennan, “LOTS and Payroll Automation As-Is Analysis”, July, 2016

As-Is_Analysis_Audit_LOTS-Payroll-Automation_Draft_v2.0.docx

10 2017 City of Phoenix, “Time and Labor Benchmark

Summary Comparison 2011 vs 2017” for other Major US cities and counties, Nov 2017 BenchmarkCompari

son2011-2017.xlsx

11 2017 City of Phoenix, Ronda Hollander, “Time and Labor Team by Department”. Nov, 2017

TeamList.pdf

12 2017 City of Phoenix, Human Resources, Employee Counts

and activity email, Oct, 2017 HR-Totals for a Time and Labor Business Case.pdf

13 2017 City of Phoenix, “Time and Labor RFI Response

Summary”, Nov, 2017 2016 RFI Response

Summary.docx


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Item Year References File 14 2017 Gartner, Inc, multiple authors, “Understanding the

Fragmented Workforce Management Solution Market”, Nov 2017 understanding_the

_fragmented_341542.pdf

15 2017 Financial Analysis for Time and Labor

Financial Analysis Time & Labor v20171121 Ravelo.pdf

16 2017 Strategic Alignment Scoring Matrix for Time and Labor

Strategic Alignment Scoring Matrix Time and Labor v20171113_Final.pdf

Documents

Business Investment Board 6 Business Investment Board Packet...payroll cycle hundreds of hours are consumed processing paper, working with employees to make corrections and then manually