Title
SAP Infrastructure and Database Upgrade
Description
This report requests City Council approval to authorize the City Manager, or his designee, to issue a Request for Proposals (RFP) for an Infrastructure as a Service contractor to provide a comprehensive service package for SAP. This service package will include licensing, cloud hosting and database upgrade implementation of SAP for the Finance Department. This enhancement alleviates the need for a full system replacement and would not require staff to purchase, maintain and support new hardware and other infrastructure. The aggregate five-year contract value is estimated to not exceed $21.5 million, which is an incremental increase of $1.5 million per year for five years over currently budgeted costs.
Report
Summary
The City currently utilizes the SAP system for critical financial accounting and reporting processes, procurement, accounts payable and receivables, grant management, asset management, work order management, inventory management, plant maintenance, and overall financial reporting and analytics. SAP has more than 3,000 users across all City departments and interfaces with numerous other citywide systems and applications.
The SAP software system is over 20 years old and requires significant upgrades necessary to support evolving work processes, advanced analytics and to interface with citywide functions. Additionally, the hardware for the system was installed in November 2013 and is currently at the end of life with extended support expiring in 2021.
Recently, through a partnership between the Finance, Information Technology Services and Human Resources departments, an Enterprise Resource Planning roadmap study was conducted by Gartner, Inc. This study recommended moving the SAP environment to the cloud using a service provider along with migration to the new SAP HANA database cloud environment. The migration to a cloud-based system mitigates the risk of aging hardware while providing an ongoing secure and stable SAP environment. Upgrading the software for a new database environment will also allow modernization to SAP in the areas of system speed, user experience and data analytics.
The proposal will include the following:
• Continued licensing for the current SAP modules and database upgrade,
• Migration to the cloud,
• Cloud hosting and cloud hosting support,
• Implementation of the new database environment; and
• Full disaster recovery and business continuity support for the entire SAP environment.
Maintenance and hardware on the existing system over a five-year period would amount to an estimated $14.0 million. Alternatively, the proposed upgrade including the cloud solution over a five-year period is estimated to be $21.5 million. The incremental amount of $7.5 million, or $1.5 million annually over a five-year period, would allow staff to extend and enhance the life of the City’s existing city-wide financial and procurement system. This enhancement alleviates the need for a full system replacement and would not require staff to purchase, maintain and support new hardware and other infrastructure.
Procurement Information
If approved, staff will conduct a procurement process consisting of a Request for Proposals (RFP) as set forth in Phoenix City Code, chapter 43. As part of the procurement process, staff requests an exception from Phoenix City Code section 42-19 to the extent necessary to indemnify the contractor. Responsive proposals will be evaluated according to the following evaluation criteria (1,000 possible points):
1. Consultant’s Qualifications and Experience (0-300 points)
2. References (0-150 points)
3. Approach to Scope of Work (0-250 points)
4. Consultant’s Price (0-300 points)
Staff anticipates the RFP will be issued in January 2021, with staff seeking City Council approval for the contract award in the spring of 2021.
Financial Impact
The aggregate budget shall not exceed $21.5 million. Funds are available from existing excise tax bond proceeds and from the Finance Department's operating budget.
Department
Responsible Department
This item is submitted by City Manager Ed Zuercher and the Finance and Information Technology Services departments.