STAFF REPORT - TorontoEstablishing a SAP Competency Centre will improve the overall management of the SAP information system while maximizing the City’s investment in SAP. Existing

STAFF REPORT

January 29, 2004

To: Administration Committee

From: Commissioner, Corporate Services

Subject: Moving Forward with SAP

Purpose:

To address the Auditor General's recommendation to develop a long term City-wide strategicplan relating to the future direction of the SAP information system to: maximize the City'sinvestment in SAP; address the critical lack of internal capacity and staff resources to sustainbasic SAP functionality; establish a governance structure for corporate management informationsystems with clearly defined roles, responsibilities and accountabilities; and implement acontinuous improvement framework for corporate and administrative processes.

Financial Implications and Impact Statement :

For 2004, a budget of $700,000 for the start-up and phased implementation of the SAPCompetency Centre and $91,000 for one staff person dedicated to corporate process review andredesign is being requested through the budget process. Approximately $200,000 savingsrealized through the successful negotiation of lower SAP maintenance fees can be reallocated forthe Competency Centre. The Executive Management Team (EMT) has recommended awithdrawal of services in other areas of Corporate Services, Information and TechnologyDivision in order to prioritise the allocation of $500,000 to provide the remaining 2004requirement so that there is no net pressure on the 2004 operating budget for the CompetencyCentre. The SAP Competency Centre will be fully operational by 2005 and the annualizedbudget pressure in 2005 will be assumed corporately.

The Chief Financial Officer and Treasurer has reviewed and concurs with the financialimplications and impact statement.

Recommendations :

It is recommended that:

1) Council endorse the strategic direction, governance structure and continuous serviceimprovement framework and process for the future of the SAP information system asdescribed in “Moving Forward with SAP at the City of Toronto”;

2) Council authorize establishing a SAP Competency Centre, subject to 2004 budget approval;3) Annual reports be prepared by the Commissioner of Corporate Services to provide an update

on SAP development and a summary of the activities of the SAP Competency Centre; and4) The appropriate city officials be authorized and directed to take the necessary action to give

effect thereto.

Background:

At its meeting of April 14, 15 and 16, 2003 City Council approved the Auditor General’s April 4,2003 report on the SAP Financial and Human Resources/Payroll Information Systems – PostImplementation Review. This report included the recommendation that the Commissioner,Corporate Services and the Chief Financial Officer and Treasurer, be required to develop a long-term City-wide strategic plan relating to the future development of the SAP information systemand also that the City establish an SAP Competency Centre.

In the status report on the City response to the Auditor General recommendations at the January21, 2004 Audit Committee, the Commissioner of Corporate Services and the CFO and Treasurerreported that a team of senior managers had prepared a strategic plan for the City’s managementinformation systems, focusing on maximizing the City’s investment in the SAP informationsystem.

This strategic plan has been endorsed by EMT. To implement this plan, resources are required toestablish a SAP Competency Centre and support corporate process review and redesign. Theserequests are included in the 2004 budget submission. This report outlines the strategic plan, andthrough this report, EMT seeks Council support for this strategy and the implementation plan.

Comments:

The Auditor General’s post implementation review provides a thorough examination of theimplementation of SAP at the City of Toronto. A recurring theme in the Auditor General’sreport is that the City should maximize its investment in SAP. Maximizing this investmentrequires moving beyond the implementation phase and establishing a solid foundation forsustaining SAP over the long term. SAP sustainment includes establishing a corporate widedirection for SAP, establishing a governance structure to prioritize and allocate limited resourcesand expertise; providing sufficient internal capacity to support day to day operationalrequirements, coordinate and implement major initiatives and provide long term planning; andreducing dependency on external consultants.

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The proposal entitled “Moving Forward with SAP at the City of Toronto” (Appendix 1) providesa strategic direction for the future of the SAP information system. It recommends a governancestructure and decision making framework for corporate management information systems withclearly defined roles and responsibilities. It includes a framework for improving corporateprocesses and administrative operations using best practices and a process review approachdesigned specifically to meet the unique challenges facing the City. It proposes establishing aSAP Competency Centre as a best practice for building internal capacity and effectivelymanaging the SAP information system over the long term.

The key elements of the strategic direction include:

• SAP will provide the foundation for the corporate business and management informationsystem;

• business systems supporting department specific functions will complement SAPsupported processes not duplicate them;

• integration between existing transactional processing will be improved;• new functionality will be implemented in SAP to support other corporate processes and

administrative operations;• providing the capacity to implement the “SAP first” approach to management systems

development in the City’s agencies, boards and commissions;• operational considerations will be balanced and coordinated with opportunities for

increased functionality in a planned manner;• a shift in emphasis from the “systems” to the “processes” that the system supports; and• development of the SAP information system will serve as a catalyst for service

improvement and process redesign.

Specific Elements of the Plan

A critical component of the new governance structure is establishing a cross-departmental teamof senior financial and administrative staff, including representatives from each business processsupported by SAP. In addition to providing a City wide forum for coordinating investments ininformation and technology, this team, to be known as eFACT, will be responsible foridentifying priorities for corporate management information systems development. This willinclude an assessment based on:

Risk – associated with uncertainty;Organizational Impact – impact on staff in the organization;Mission Effectiveness – impact on internal and external customers;Strategic Alignment – measures how projects support strategic organizational objectives; andCost/Benefit Impact – measures value of system.

The continuous improvement framework for corporate and administrative processes is built uponthe development of a business process review approach that satisfies the unique requirements ofthe City of Toronto. The “Toronto Approach,” developed by City staff, will establish a common

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language and understanding of business process review tailored to the diverse activities of theToronto Public Service. The improvement framework will examine both effectiveness (based onresults or outcomes) and efficiency (based on how work is done or workflow). Process reviewteams will conduct comprehensive reviews, identify best practices and redesign their ownprocesses with the assistance of experienced facilitators. This was a key component that wasmissing when the City first implemented SAP.

Consolidating technical support, production planning and systems development in a “centre ofexcellence” is an emerging industry standard best practice among organizations that haveimplemented integrated corporate wide information systems such as SAP. Organizations asdiverse as Dow Corning, Procter & Gamble, the City of Edmonton and Canada Post have allestablished SAP competency centres. The City of Calgary uses a similar centre of excellencemodel to support its PeopleSoft system. The Auditor General’s 2003 report on SAPimplementation recommended that “the appropriate staffing of a centrally administeredCompetency Centre” be included in the development of a long-term City-wide strategic planrelating to the future direction of the SAP information system at the City of Toronto.

The proposed SAP Competency Centre will provide consolidated planning, management andoperation of the City’s SAP information system. The staffing requirement for the City ofToronto SAP Competency Centre is 24. This includes ten existing positions in CorporateServices, Information and Technology and one position in Finance, Accounting Services thatprovide technical SAP support and 13 new positions including: one manager, two planninganalysts, one security specialist, three project managers, two ABAP analyst/developers, threeABAP developers and one BASIS administrator. The total cost of the SAP Competency Centrewill be phased in over 2004 and 2005. The 2004 start-up and phased implementation cost of$700,000 is being requested through the 2004 budget process. Reallocation of $200,000 savingsrealized by the successful negotiation of lower SAP maintenance fees, and a further reallocationof $500,000 from other services within the Information and Technology Division of CorporateServices are proposed so that there is no net pressure on the 2004 operating budget for theCompetency Centre. The level of service provided to departments can be expected to beimpacted by the reprioritization of resources towards the SAP Competency Centre.

What is the Benefit?

The requirement for this new approach is critical. The current SAP installation supports basiccorporate functionality related to budget preparation and monitoring of actual capital andoperating revenues and expenditures; financial reporting, ordering of goods and services andvendor payments, inventory control, tracking of employee hires, transfers, promotions andterminations, payroll and employee benefits management and general revenue billing andcollection. While significant in its breadth, the initial SAP implementation in 1999 was limitedto only the basic functionality deemed critical to quickly implement a single financial, HR andpayroll system for the newly amalgamated city.

The benefits of the new approach include coordinated strategic information systems planning;increased internal capacity to implement SAP enabled service improvements; reduced reliance

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on external consultants with associated cost reductions and improved risk management.Establishing a SAP Competency Centre will improve the overall management of the SAPinformation system while maximizing the City’s investment in SAP.

Existing resources are barely sufficient to provide day to day maintenance and support forcurrent functionality and business processes. There is no internal capacity to think long termabout the City’s corporate management information systems requirements or to implement manyservice improvement initiatives. Establishing the SAP Competency Centre will provide astrategic information systems planning function to ensure that enhancements, upgrades and newfunctionality are consistent with corporate priorities and that implementation is coordinated andsequenced to deliver the maximum benefit to the City.

Increasing internal capacity will permit planned service improvements such as the AccountsPayable Improvement Project, the Toronto Maintenance Management System Work OrderIntegration, Facilities and Real Estate Business Improvement Project and the Financial Planningand Budgeting System to proceed while reducing reliance on external consultants. The lack ofinternal resources to work on these initiatives and to provide post implementation support hasdelayed completion of a number of service improvement projects and contributed to an underutilization of the City’s investment in SAP. Increasing internal capacity will help move many ofthese initiatives forward and increase the use of the City’s SAP licenses.

Reducing reliance on external consultants is a financially responsible approach that improvesrisk management. Experience with SAP implementation at the City has demonstrated thatretaining SAP consultants and contract staff is expensive. It has been determined that increasinginternal capacity and using permanent staff to support the City’s corporate managementinformation systems would be less expensive over the long term. In addition to avoiding costlyconsultant fees in the future, building internal capability, enhancing internal knowledge andretaining technical expertise increases continuity and manages the risk to the City moreeffectively than continuing to rely on external consultants.

Conclusions :

The City of Toronto has made a significant investment in SAP. Maximizing that investment,increasing SAP information system functionality, balancing operational needs with futureenhancements, identifying corporate priorities and linking service and process improvementswith enabling technology are critical components of the proposal to move forward with SAP.The proposal provides the foundation for SAP sustainment at the City of Toronto.

Establishing a SAP Competency Centre to more effectively manage the SAP information systemis part of a broader commitment to think strategically about corporate management informationsystems and improve internal services and processes. Sustaining SAP is recognized as a criticalcorporate requirement by senior staff and Corporate Services, Information and TechnologyDivision has been instructed to reduce services in other areas to provide a reallocation toestablish the SAP Competency Centre in 2004. EMT has endorsed the strategic plan and hasproposed phasing implementation over 2004 and 2005.

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Contacts:

Ana Bassios, Acting Executive Director, I&T Steve Woodward, Project ManagerTel.: (416)392-8421 Tel: (416) 392-9901Fax: (416) 696-3688 Fax: (416) 397-4007E-mail: [email protected] E-Mail: [email protected]

____________________________M. Joan AndertonCommissioner, Corporate Services

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MOVING FORWARD WITH SAPAT THE CITY OF TORONTO

A Proposal

SAP Work GroupOctober 2003

Moving Forward with SAP at the City of Toronto – A Proposal 2

Table of Contents

1. Moving Forward page 3

2. Proposed Corporate Information Systems Governance page 7

3. Roles and Responsibilities page 8

4. Corporate Process and Policy Review page 15

5. SAP Competency Centre page 17

6. The “Toronto Approach” page 20


Moving Forward with SAP at the City of Toronto

Highlights

• SAP will provide the foundation for a corporate wide business and management informationsystem

• Integration between existing transactional processing in SAP (core financials, payrollprocessing, organization, training and events management) will be improved to increase theavailability and reliability of “management information” necessary to support corporatedecision-making

• New functionality will be implemented to support additional corporate wide processes(business planning, financial planning, executive retrieval systems, time and attendance,physical asset planning and asset management)

• Analytical capability will be enhanced as necessary using a combination of available SAPproducts and fully integrated third party solutions

• Business systems supporting department specific functions and activities will complementSAP supported processes not duplicate these processes

• Shift in emphasis from the “system” to the “processes” accompanied by a reconsideration ofthe way work is completed

• “Building-out” SAP (enhancement and implementation) will be a catalyst for serviceimprovement and process redesign

• Balance operational considerations with opportunities for increased functionality

Moving Forward

Currently, SAP is used to support a number of the City of Toronto’s core financial, payrollprocessing, and human resource processes. However, limited integration between SAP and otherapplications used to support corporate processes requires additional resources to compile,consolidate, reconcile and analyze information to support decision-making, including planningfuture expenditures. Further, the lack of integration between processes limits the availability ofanalytical functionality typically available in integrated management information systems orenterprise resource planning (ERP) systems.

The selection of SAP as an integrated financial information system and human resources/payrollsystem was based, in part, on an assumption that this solution would allow for the futuredevelopment of an enterprise resource planning system. While there is an expectation to deliverthe benefits of an ERP system this expectation cannot currently be met with the existing systemconfiguration, processes, utilization and governance at the City of Toronto. Realizing thebenefits of an ERP solution and providing timely access to reliable, accurate and usefulinformation requires setting a new direction for SAP at the City of Toronto.

The existing SAP system(s) at the City of Toronto will provide the foundation for a corporatewide business and management information system. This system will continue to be developedby reviewing existing SAP supported processes to ensure best practices, increasing the level of


integration between the functional areas and adding new or enhanced functionality that supportscorporate wide processes and provides the analytical tools that support the decision-makingprocess.

Building on the City’s existing SAP environment will deliver a number of benefits to the Cityincluding:

• Leveraging the existing investment in software• Streamline administrative processes• Provide a common, integrated system for corporate wide processes• Reduce data redundancy and eliminate duplicate data entry• Improve data accuracy and reliability• Provide more timely access to corporate information• Make better use of staff skills and core competencies:

• Performing higher value added functions (analyzing and interpreting information ratherthan collecting and reconciling data)

• Separating business process knowledge from information technology responsibilities• Increase internal SAP capacity - increase staff expertise, knowledge and skills and reduce

reliance on external consultants• Provide for more sophisticated analytical capabilities (modeling, forecasting, scenario

testing)

The evolution of SAP at the City of Toronto from a group of transactional systems to anintegrated business and management information system will require executive leadership and awillingness at the functional level to revisit, redesign and where appropriate realign servicedelivery responsibilities irrespective of departmental boundaries. Securing this commitment andcontinued attention will also require the establishment of a new governance structure for SAP inthe City of Toronto. This is the focus of this document.

Governance

The proposed governance structure is designed to address current and anticipated challengesconcerning SAP at the City of Toronto. It recognizes that the City has matured as anorganization and suggests redefining roles and responsibilities to maximize opportunities forimproving service delivery.

Key Points

• Improve linkages with the rest of City administration• Balance between existing and new requirements• Improve communication throughout the organization• Functions on three levels:

- strategic- planning and priority setting- operational


• Realigning and enhancing the level of production support• Centralize SAP technical knowledge in a “competency centre”• Ensure the separation of business process knowledge and information technology

responsibilities (business process knowledge remains in the business unit and systemsresponsibility is centralized in a competency centre)

It is recommended that the SAP Steering Committee and the SAP Advisory Committee bedisbanded. Responsibility for providing strategic direction concerning corporate wide systems(including, but not limited to SAP) will be assumed by an extended Finance and AdministrativeCoordinating Team. The extended FACT (eFACT) group will identify corporate wide processes,prioritize corporate process reviews, make recommendations to Executive Management Team(EMT) concerning corporate business and management information systems matters and helpcoordinate implementation. It is suggested that every third regularly scheduled FACT meetinghave an eFACT agenda and that attendance at these meetings be extended to include appropriaterepresentation from operating departments, process owners and Corporate Services, Informationand Technology.

Under the direction of eFACT, Process Review Teams will be responsible for conductingcomprehensive business process reviews, identifying best practices and developing specificationsfor changes to corporate wide processes, support systems, policies, procedures and practices. Anapproach to business process review (the Toronto Approach) will be selected/developed toaddress the unique challenges facing the City. The Toronto Approach will establish a commonunderstanding and language and introduce a consistent practice for corporate process redesignefforts in the City. Experienced facilitators will coach the Process Review Teams and assist inthe redesign process. The results of each process review will be forwarded to EMT for theirapproval of the new process as well as any financial implications. It is suggested that a“purchasing and accounts payable” Process Review Team be established immediately and thatthe Toronto Approach be developed and applied to this review.

Implementation and ongoing maintenance of processes will be the responsibility of the processowner. Each Process Owner will have software rule and process configuration expertise and willmanage configuration changes in adherence to corporate standards. Project ImplementationTeams will be established for any major redesign, enhancement or addition of new functionalityto the existing SAP environment. The key responsibility of the Project Implementation Teamwill be to ensure that the design specifications provided by the Process Review Team arerealized. eFACT will provide a steering/consulting role during project implementation.

Following implementation, a Process Reference Group will be established for each SAPsupported business process. The Process Reference Group will provide an opportunity to identifyongoing operational issues or concerns and potential system and process improvements. Thereference groups will replace the SAP User Groups and provide an opportunity to shift the focusfrom a consideration of SAP improvements to a more comprehensive consideration of processimprovements. Coordinating change management issues for

Technical operational (“care and feeding”) considerations will become the responsibility of theSAP Competency Centre. The SAP Competency Centre will assume responsibility for systems


administration, systems development and support functions relating to SAP. Working closelywith process owners, change management issues will be coordinated through groups such asSAP Team Leads. The SAP Competency Centre will also be responsible for leveraging theexisting investment in SAP and ensuring that the cross module integration necessary to deliver“management information” is established and maintained. The SAP Competency Centre willreport administratively and for budget purposes to Corporate Services, Information andTechnology. The relationship between the Process Owner and the SAP Competency Centre willbe negotiated on a case by case basis to ensure that business process expertise is retained in thebusiness unit while highly specialized technical knowledge is resident in the Competency Centre.Competency Centre staff will work closely with business unit staff most familiar with thebusiness processes supported using SAP to ensure that appropriate control over system access ismaintained.


Proposed Corporate Information Systems Governance

The design phase is represented in the shaded boxes.The implementation and operational phases are represented in the white boxes.

EMT

eFACTProcessOwner

Process Review Team

“Toronto Approach”

Which processesand order of review

Specificationsfor change

Approves

Plan for ChangeImplementation

Internal orOperationalPolicy Change

Internal orOperationalProcessChange

Internal orOperationalStructureChange

TechnologyChange

SAPCompetencyCentre

OtherCorp ITDept. IT

CS FacilitatorProcess ownersBSUsOperationsI & T

RecommendsAdvises

Project Implementation

Team

Steers/Consults

Process Reference

Group

Identify Operational Improvements


eFACT(Corporate Information Systems Coordinating Team)

RoleTo provide strategic direction, executive leadership and identify priorities for corporatewide business and management information systems matters.

FocusAll corporate wide business and management information systems matters.

MembershipFACT membership be extended to include the Executive Director, Information andTechnology and a senior representative from each business process supported by SAP(existing and planned).

FrequencyEvery third regularly scheduled FACT meeting or at the call of the chair.

Key Responsibilities• Provide executive leadership• Champion business transformation and improved service delivery through the

integration of new technology or the innovative management of information• Provide for the coordination of investments in information and technology in a

sustainable manner• Identify priorities based upon pre-established guidelines that balance operational

considerations, enhancements and the development of new functionality for corporatewide management information systems

• Provide a forum for resolving information and technology issues and identifyingemerging technologies and solutions


Process Review Team

RoleTo conduct comprehensive business process review, identify best practices and developrecommendations for changes to corporate processes, support systems, policies,procedures and practices.

FocusFocus on single process (end-to-end) to be supported by SAP with awareness ofintegration issues (“purchasing to pay”, “time and attendance”, “recruitment andstaffing”).

MembershipProject based Process Review Teams to include process owner and process usersensuring that each department is represented. Teams will require dedicated resources forproject management, administrative support and business process review expertise.

Experienced facilitators will coach the Process Review Teams and will use a common“Toronto Approach” to process review to ensure that there is a consistent framework andlanguage to work from.

Key Responsibilities• Conduct comprehensive corporate business process reviews• Provide complete documentation of business process• Examine opportunities for increased integration between corporate processes• Document process improvements and identify resource requirements• Develop business process design specifications• Make recommendations concerning policy change or development• Make recommendations concerning timing and sequencing of process improvements


Process Owner

RoleTo be accountable for and to serve as the lead and key contact for a corporate businessprocess and oversee the ongoing maintenance of the process to ensure successfuloutcomes.

FocusFocus on a single corporate process (end-to-end).

Key Responsibilities• Authorize user access• Ongoing maintenance of the process• Provide comprehensive user support and training• Monitoring, evaluating and improving process performance• Lead Process Review Teams and Project Implementation Teams• Participate in Process Reference Groups• Participate and review results of user acceptance testing for software changes• Authorize changes to process (the responsibility for the final sign-off prior to go-live)

Corporate Processes and Process Owners

Corporate Process Process OwnerPurchasing/Payable/Payment Finance – Accounting Services/PMMD–Complement Management Corporate Services – Human Resources –

Employment Services - Human ResourcesInformation Systems

Payroll Finance – Pension, Payroll and EmployeeBenefits

Asset Management and Work Order Corporate Services – Facilities and Real EstateFinancial Planning/Financial Reporting Finance – Financial Planning/Accounting Serv.


Project Implementation Team

RoleTo implement changes to processes recommended by the Process Review Team asapproved by EMT. To oversee the implementation of major , enhancements, or newfunctionality in SAP and other related systems. To oversee the implementation ofrequired policy and procedures changes within the process.

FocusNew and or modified SAP supported processes.

MembershipAppropriate departmental (process owners), user and competency centre representatives.

FrequencyDetermined on project by project basis

Key Responsibilities• Translate Process Review Team design specifications into detailed work plans for

SAP configuration specialists, other systems specialists, policy and procedure writersand trainers

• Review quality control testing• Coordinate user acceptance testing and training material• Identify sustainment requirements


Process Reference Group

RoleTo identify operational issues, potential process and system improvements.

FocusFocus on a single process (end-to-end).

MembershipThe process owner, process performers or users and a key contact from the SAPCompetency Centre.

FrequencyMonthly for first six months following the implementation of new functionality or anyinitiative involving major changes to existing processes. After six months the referencegroups should meet quarterly.

Key Responsibilities

• Identify system and process issues from an operational perspective• Identify potential process improvements• Provide user feedback for process evaluation• Participate in user acceptance testing for software upgrades and application

modification


SAP Competency Centre

RoleTo provide centralized technical support and coordination for maintenance, enhancementand future development of the SAP system in the City of Toronto. To demonstrate howSAP may be used to improve the way we work and to promote the use of SAP to supportcorporate wide processes throughout the organization.

FocusProvide a one-window approach for all SAP related technical requirements from existingand potential SAP users.

Key Responsibilities• Provide systems administration, production planning and dedicated application

support• Provide system design and development services and manage implementation of

enhancements and new functionality• Research SAP products and services and make recommendations for sustaining SAP• Prepare annual SAP work plan• Coordinate initial training for new SAP functionality

Functional AreasSystem Administration

- system management – installation; upgrades, network; “LCP’s”; “transports”;“OSS notes”;

- managing user accounts – profiles; licences; password resets; security; auditsin co-ordination with the business process owners; i.e. finance, hr, payroll, etc.

- monitoring system performance – daily, weekly, monthly and annual checks;monitoring database growth; optimizing system performance “tuning ortweaking”; troubleshooting

- backup procedures – execute backups; restore and recovery; disaster planningSystem Development

- SAP configuration and interface systems design- prototyping- coordinating test environment (stress test; user acceptance)- quality assurance


Corporate Process Review

Improving corporate processes effectively will in large part rely on the establishment of aconsistent corporate process and policy review process. The proposed process is depicted, at ahigh level, on the following diagram and is described in more detail including references to thePurchasing Payable Payment Process on the following table.

Note: This diagram depicts the process for a comprehensive business process review. It doesnot preclude the process owner from coming forward with policy changes that may be requiredthat are beyond mere “maintenance” but are not significant enough to trigger a full blowncomprehensive review of the business process.

Need Design Implement Maintain

Evaluate

eFACTProcess Owner

Process Owner

ProcessReviewTeam

ProjectImplementation

Team

SAPCompetency

Centre

ProcessReference

Group

EMT eFACT EMT eFACT


Corporate Process and Policy Review Case Study:Purchasing Payable Payment Process

Description Accountablity

NeedNeed for process review identified AG report; Finance Dept identified improvements;

otherDevelop Project Charter Accounting Services & Purchasing and Materials

Management develop Project Charter (include identification of sponsor; scope; PRTcomposition; resources)

Sponsor: CFO; Lead: AS & PMM Directors;coach: CS Facilitator;

Review Project Charter eFACTRevisions if necessary to address departmentalconcerns

AS & PMM

Affirm Project Charter eFACTRecommend Corporate Process Review andPriority

eFACT

Review Recommendation EMTApprove Project Charter EMTAuthorize Process Review EMT

DesignEstablish Process Review Team (PRT) eFACTConduct Process Review PRT -Preliminary Policy and Process Design AS & PMM/CFOEndorse Process Design eFACTApprove Process Design EMTAuthorize Implementation EMT (includes budget/resource commitment)

ImplementProject Implementation Team (PIT) is established AS & PMMDevelop Implementation and Staging Plan PITReview Implementation and Staging Plan eFACT (ensure that specs are met and requirementssatisfied)Execute Implementation and Staging Plan PITAssess Business and Technical Readiness PIT"Go Live" AS & PMM/Competency Centre


MaintainEstablish Process Reference Group (PRG) AS & PMMIdentify Process Improvements PRGMake Minor Configuration Changes "ProcessTweaking"

Process Owner

Coordinate Configuration Changes Competency CentreProvide Business Process Support Process OwnerProvide Technical/Systems Support Competency Centre

EvaluateIdentify Operational Issues PRGIdentify Need for Comprehensive ReviewPrepare Annual Report AS & PMM


Proposed SAP Competency Centre

The existing resources dedicated to SAP are barely sufficient to provide day to day maintenanceand support for existing functionality and business processes. They include nine CorporateServices, Information and Technology (CS, I&T) staff dedicated to supporting SAP and one CS,I&T project manager. These resources are in addition to Finance staff in Accounting Servicesand Pension, Payroll and Employee Benefits and Corporate Services staff in Human Resources,Employment Services who provide a mix of administration, user support and business processconfiguration.

Other large organizations have established ERP Competency centres in which certain corporatefunctions related to their ERP are consolidated. Canada Post has a large SAP Centre. Calgary hasa Peoplesoft Centre and Edmonton has a central SAP team in their Corporate ServicesDepartment. There are parallel existing centre of expertise models in the City of Toronto. LandInformation Toronto provides a centre of expertise of 28 staff for Geospatial informationtechnology and planing. Similarly the City has an internet team in CS I&T of about 30 staff thatprovides a core area of expertise and corporate support on internet and web issues.

There is currently little capacity to implement new functionality, undertake planning, managenew or additional projects, or undertake major modifications to the existing systems. Whenadditional capacity is needed it is typically consultants or contract staff.

The proposed Competency Centre includes a minimum level of additional staffing in order tomove from a wholly reactive management of SAP to a point where the current investment ofover $35 million is maximized.

Benefits

The benefits generally fall into the following areas:

New Functionality/ Maximizing Investment

A number of service improvement initiatives have yet to be implemented because of insufficientcapacity. In many cases the City owns the relevant SAP module and supporting user licences butdoes not had the capacity to fully use the capability it owns. The projects now on hold include:

• Enterprise interfaces linking SAP with other business systems (in some cases reducing theneed for double entry of data);

• Implementation of the Real-Estate Module for Facilities;• TES Replacement; and• Financial Planning, Analysis and Reporting Project.


Support to Business Process Review

The additional capacity would allow for sufficient technical staff to participate in and support thebusiness process reviews of activities currently undertaken in SAP including accounts payableand purchasing. There is general corporate consensus that reviews of these functions arenecessary. Competency centre technical staff and/or project managers should be attached tothese reviews from the outset in order to assist with the transition from process design tosoftware implementation. These resources do not currently exist.

Replacement of Consultants and Contracts Staff

Although it could still be necessary to use contract staff from time to support major SAP changeinitiatives, the Competency Centre would mitigate this need. Contract staff for SAP are typically$120,000 to $140,000 a year. A contract SAP Project manager is typically $180,000 to $200,000a year. Permanent staff would be substantially less expensive. The staffing levels proposed arethe minimum needed to provide ongoing reactive and proactive internal expertise, and would bethe recipients of knowledge transfer when external experts are used.

Central Management of Common Functions and Administration

The Auditor General has recommended in his review of the SAP implementation that staffconsider the creation of a competency centre. His recommendation arises primarily from theneed to ensure that there is central management of licences, change planning, and those keycorporate functions such as security, that are common to all business uses of the software. Theproposed competency centre includes a capacity to do planning, manage licences and centrallyset administrative and security policies.


SAP Competency CentreMain Functions

Policies & Standards

License Management

System Lifecycle &Development Planning

Capacity Planning

Budget & FinancialManagement

Planning

Security Planning/ Management

User Profiles Creation/ Management

Configuration Management/ Coordination

Security

Project Planning

Project Delivery

ProjectManagement

Analysis & Blueprinting

ABAP Programming

Scripting

Programming QA

Development /Sustainment

BASIS Support / Transports

Technical EnvironmentManagement

OperationsManagement

Manager

StaffingExisting

1 2 1 4 3

Proposed3 3 4 9 4

Total staffing for SAP Competency Centre including Manager is 24.

Preliminary DRAFT Cost Estimate

13 New Staff, Salariesand Benefits

$1,400,000 Includes:1 Manager2 Analysts for planning1 Security Analyst3 Project Managers5 ABAP Developers1 BASIS Administrator

Supplies and Services $ 125,000 Office supplies, development software, testtools, research services

External ContractSupport

$ 150,000 External SAP specialist for expert consultationand professional services as required forsustainment work.

Training $ 280,000 Technical training for staff to maintaincurrency of skills and knowledge

Total New Cost $1,955,000


The “Toronto Approach”

Corporate Services, Service Improvement and Innovation will be responsible for developingjointly with the Departments an approach to business process review that satisfies the uniquerequirements of the City of Toronto. The “Toronto Approach” will establish a commonlanguage and understanding of business process review that will be tailored to the diverseactivities of the Toronto Public Service. Process Review Teams will receive “TorontoApproach” training and will be coached by experienced Corporate Services facilitators to ensurethat process reviews are undertaken consistently.

Several steps will be taken in developing the “Toronto Approach”. These include:

Seminar - BPR Tools and Techniques PrimerEstablishing Public Sector BPR RoundtablePrivate Sector BPR Consultations (depending on resources)Workshop SeriesPreliminary BPR ApproachPeer RevieweFACT Review of the Toronto ApproachEMT Review of the Toronto ApproachTrainingUse by Process Review Teams

Documents

STAFF REPORT - TorontoEstablishing a SAP Competency Centre will improve the overall management of the SAP information system while maximizing the City’s investment in SAP. Existing