Report...... BRAMPTON 10 City Council

The Corporation of the City of Bramptonbromptonca HOWef City

BRAMPTON CITY COUNCIL Date: April 12,2012 oath, m2*m File: A47 - 463948

Subject: Request To Begin Procurement- Purchasing By-law Section 4.0 Oracle/ PeopleSoft Upgrade and Support

Ward: N/A

Contact: Rob Meikle

Chief Information Officer, Financial and Information Services Telephone (905) 874-2018

Overview:

• The Oracle / PeopleSoft environment is the critical enterprise business system that manages the City's Finance and Human Resource operations.

• To ensure business continuity within the Finance and Human Resource operations with a stable Oracle / PeopleSoft environment, there is a requirement to upgrade the environment and the required funding has been allocated as part of the 2012 budget.

• To ensure there are no disruptions to critical business operations, Original Equipment Manufacturer (OEM) vendor services are required and staff is seeking approval to enter into Direct Negotiations with Oracle Corporation as the manufacturer / supplier of the software product to perform all aspects of the upgrade in a timely manner.

• Critical business timelines dictate that the upgrade needs to be substantially completed by year end 2012. Past upgrades smaller in magnitude have taken 16 months to complete when contracted to non-OEM vendor. The City cannot risk delays in time or product quality, therefore staff feel contracting directly with Oracle to provide this service is the best option for the City.

Recommendations:

1. That the report from the Commissioner of Financial and Information Services titled "Request To Begin Procurement - Purchasing By-law Section 4.0 Oracle / PeopleSoft Upgrade and Support" dated April 12, 2012 to the City Council meeting of April 25, 2012, be received, and

2. The Purchasing Agent is authorized to commence the procurement of services for the upgrade and support of the Oracle / PeopleSoft business systems, and

3. The Purchasing Agent is authorized to engage in Direct Negotiations with Oracle Corporation for upgrade and support services for the Oracle / PeopleSoft business systems.

Background:

The Oracle / PeopleSoft environment is the critical enterprise business system that supports the City's Finance and Human Resource business operations. This environment is critical to the City's operations as it is the primary system used to track all Financial data and all Human Resource related information. The systems hold all information and transactions against the City's budget, tracks our purchase orders and invoices paid, and manages all of our payroll requirements, to list but a few examples.

The 2012 Capital Budget included a project initiative to upgrade the Oracle / PeopleSoft enterprise business systems with an overall budget of $1.54 million. This Direct Negotiations portion of the project will not exceed $1.18 million.

Current Situation:

The Financial and Information Services Department is ready to begin the procurement process for upgrade and support services for the Oracle / PeopleSoft business system environment.

In accordance with Schedule "C" to the Purchasing By-law, it is recommended that Council instruct the Purchasing Agent to proceed with Direct Negotiation with Oracle Corporation. Schedule "C" provides "Exceptions from Competitive Procurement Circumstances for Sole Supplier Procurement (Sole Source)". This identifies the following exception from a competitive RFP process.

'To ensure compatibility with existing products, services and construction, to recognize exclusive rights, such as exclusive licenses, copyright and patent rights or to maintain specialized products that must be maintained by the manufacturer or its representative."

1L+* This upgrade project is required for a variety of business reasons. From a business perspective the outcomes of the upgrade will aid staff across the City to improve business processes and create efficiencies through the automation of manual processes; improve regulatory and legislative compliance; and aid in improving the decision making process by enhancing key information sets available to Cityof Brampton executives.

This upgrade project is also required for a variety of technical reasons. From a technology perspective this upgrade ensures continued vendor support based on software currency; lower cost of ownership and maintenance; enhanced system performance and scalability; and adoption and enhancement of best practices for managing the environment.

The end results are business systems that will allow for staff to further automate best business practices, create operational efficiencies and more easily put valuable business information into the hands of the executive of the corporation.

Oracle Corporation is the Original Equipment Manufacturer (OEM) provider of the City's Oracle / PeopleSoft business system. As the OEM provider, they provide a number of upgrade services to clients who use their software. Through these services the City can upgrade the business systems in a shorter time period, at less cost and with less risk to our critical business processes.

Engaging Oracle Corporation for the upgrade and support services will have a number of benefits. As they understand our business systems, we will decrease the time period required for the upgrade, thereby reducing our cost and the risk to interrupting critical business processes. This engagement will maintain the integrity of our Oracle / PeopleSoft business system, protect our private &critical information, ensure compatibility with existing systems and ensure best practices are continued or introduced.

The last upgrade to the PeopleSoft Financials system was performed by a vendor other than the OEM. This was for only the Financials module, one of the two critical business systems requiring the upgrade. The overall time required for that past upgrade was approximately 16 months in duration, cost the City in excess of $790,000 and did not include any post upgrade support services. Staff feel that due to the importance of this system, another prolonged upgrade is not acceptable.

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Scope of the Proiect/lnitiative

The project involves upgrading the Oracle / PeopleSoft enterprise business systems to the most recently released versions along with all the toolsets that aid in managing and enhancing the system. We will be upgrading to Peoplesoft Financials 9.1 - this system runs all aspects of the City's financials, from tracking budgeting, purchasing, and paying invoices to vendors, to list but a few examples. Peoplesoft HCM 9.1 - this system runs all aspects of our Human Resource operations, including tracking employees throughout their career at the City as well as processing payroll.

Upon successful upgrade services being performed and accepted by the City, Oracle will continue to provide 12 months full support services for all aspects of both Financial and Human Resource enterprise business systems.

The overall budget for this project is $1,540,000. This Direct Negotiations portion of the project will not exceed $1.18 million as follows:

Budget Amount

Oracle Upgrade Services $ 930,000 Oracle Support Services $ 250,000 (12 months) Total $1,180,000

Tentative Project Schedule

Item Target Dates Negotiate With Vendor April/May 2012 Issue Purchase Order May 2012 Upgrade Complete December 2012

Transition New Environment to Production January 2013 Total Completion (Project Complete) March 2013

Departmental Comments:

Purchasing Comments

The procurement method chosen is the following:

1. Direct Negotiation

Oracle Corporation will be issued an invitation to bid and will provide a submission in accordance with the Bid Document. The Bid Submission shall start a negotiation process. Upon a successful conclusion, purchase approval shall be obtained in accordance with the Purchasing By-law.

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Vendor Evaluation:

The Vendor's performance will be evaluated in accordance with the City's Vendor Performance Evaluation Process as set out in the Vendor Performance Standard

Operating Procedure. The performance evaluation will be used to provide feedback to the Vendor; to provide the Vendor with the opportunity to implement performance improvements during the duration of the contract; and to justify an award or non-award of future contracts by the City in accordance with the terms of the Vendor Disqualification Purchasing Protocol.

Communication during Procurement: All communications with Bidders involved in the procurement must occur formally, through the contact person identified in the Bid Document. This shall commence when the bid call is solicited and ends when the Purchase order is issued.

Financial Comments

Funding to begin procurement - Purchasing By-law Section 4.0 - Oracle/PeopleSoft Upgrade and Support is available in Capital Project #121443 - Financial/Human Capital Upgrade/Enhancement.

The table below indicates the original budget, expenditures and balance available for this initiative.

Expenditures and/or Project # Prog# Original Budget Commitments to Date Balance Available

121443 001 $1,540,000 $1,540,000

Conclusion:

This report summarizes the scope of the project, identifies available funding, provides a tentative schedule and methods of procurement for the engagement of Oracle Corporation for the upgrade and support services of our Oracle / PeopleSoft business systems.

To ensure delivery of the project in a timely manner, it is extremely important that staff is authorized to begin procurement, as described in this report.

Rob Meikle Mo Lewi^ Chief Information Officer Com/nissioner of Financial &Information

Services

Report authored by: Bill Latchford Information Technology

Original Signed By Original Signed By