Staff is bringing forward a contract for consideration related to upgrading and re-establish support for the City's Superion software.  The last time the financial software was upgraded was in 2011.  The City continues to use the 2011 financial software for payroll, human resources, fleet management, work orders and capital assets.  The financial software and hardware have been less reliable during the last seven years and we have had system failures on multiple occasions. The upgrades to be provided by Superion are necessary to provide a more reliable financial system for critical functions of the City.  The contract with Superion was not available for the deadline for the draft agenda, the contract will be attached to the final agenda.
 

The contract to upgrade and reinstate the City's financial software is not expected to exceed $200,000.00. This is a one time cost to upgrade all applications and to move the data to a cloud-based system.  Funding sources have been identified in the fiscal year 2018 budget under in the Non-Departmental programs in Account Nos. 001-09-402-1310 and 001-09-402-1314, and have been approved by the budget team. 
 
There will be an ongoing annual access fee is estimated not to exceed $75,000.00 for this cloud-based system and is in the fiscal year 2019 proposed budget.  The contract allows for annual 5% increase each year thereafter, beginning the second year of the contract.

None

Strategic plan:

• Provide exceptional service - Provide employees tools, training, and support.
• Invest in our people - Ensure effective resources for employees.

No

Option 1: Approve contract as submitted.  Recommended by IT and Management Services divisions due to the exposure of risk of a failure of payroll or other business-critical support; or
Option 2: Provide direction on amending the contract; or
Option 3: Not approve the contract. This would continue 18 to 24 months of exposure, and is highly discouraged.

The City has been using components of Superion for more than 30 years, but in 2011, stopped contracting for everything but the payroll software.   The Superion software is currently being run on an AS400 hardware system. In 2011 the City decided to pursue a new Enterprise Resource Planning (ERP) software.  Staff began working with Harris ERP which provides a software called Innoprise to be the comprehensive ERP software of the City.  The City chose them for several reasons including costs and the fact that many of their employees worked with Superion in the past and are knowledgeable of the system the City was using.  A one year due diligence was performed by City staff and collectively the City made the decision to switch to the Innoprise software.  In 2012, the City signed a contract with Harris ERP and began converting applications. 
 
At the same time as agreeing to convert to the new software, the decision was made to discontinue software support for the City's Superion applications, except payroll, as well as discontinuing upgrades to our AS400 hardware and IBM operating system.  During the last 8 years, the City has not upgraded any of these components and it is becoming a less stable software and operating system.  Due to a complex set of circumstances, the AS400, operating system and software is no longer supported. The City is in a very vulnerable situation when it comes to meeting each payroll cycle.
 
The City is eight years into a migration off the Superion software and AS400 hardware to the Innoprise software. There has been many successes with this migration. The following software has been implemented.
 
2012 - AZ Sales Tax
2013 - Financials: General ledger, purchasing and inventory
2015 - Centralized cash receipts and miscellaneous billings
2015 - Community Development
2016 - Utility billing
 
The final phase includes conversion of payroll, human resources, work orders, fleet management and capital assets.  The City chose to convert these applications last because the appeared to be less developed software of Innoprise.  The City wanted to allow Innoprise to develop these software applications further so they are closer to meeting the needs of the City. 
 
The City has been working on conversion of the payroll, human resources, fleet, work orders and capital assets applications for the last 36 months. The City has found that the Innoprise software is not as mature in functionality for these remaining applications and the City is working in partnership with Harris ERP to develop the software to fit the needs of the City and future customers.  The City’s payroll and human resource applications are very complex compared to other Harris ERP customers.  The City has identified dozens of system development needs as well as over one hundred reports that need to be developed.  With this gap identified, it is expected to take approximately an additional 24 months to convert our payroll and human resources applications. 
 
During this time of converting or final applications, the hardware and software continue to become outdated and the City has lost maintenance support.  Without support from now both the Hardware and Software the City is extremely exposed. Over the past years there have been many AS400 hardware failures, one in May 2016 had our system down for eight days.  If this down time would have been the next or prior week the City would have missed a payroll.  Many of the risks are outlined in the Key Considerations section of this staff summary.
 
Below is a timeline showing system failures in the past two years on the AS400.  Per vendor communications, both IBM and Superion, these crashed would not be under support if they were to happen today.

• In 2016, the City attempted upgrade of Superion software. This failed and left the City's server in a quasi-broken state where there were two incompatible versions and version seven would not start automatically anymore.
• In May 2016, the City experienced a major AS400 crash.  The City's applications, including payroll, were offline for eight days.  Fortunately, the system failed on a non-payroll week and staff was able to get the system running in time to issue checks.
• During the summer and fall of 2017, there were failure every month. In November alone, the City had three drive failures.
• In the fall 2017 we replaced the AS400.  The City's 10 year old plus hardware was replaced with a refurbished AS400 hardware lease of a 2013 machine.
• In Winter 2017, the City had a major operating system failure. The City was down for three days while repairs were made.  Once completed, IBM would not support the City's operating system due to the age of the equipment.

Each year there is great concern as to how to accomplish W2 processing and also ACA compliance when there are modifications to the Superion software which has not been upgraded.  The City has put in place alternative processes to stay in compliance.
 
Over the last eight years of implementing new financial software, the City has continued to lose more and more vital support of our AS400 hardware and financial software.  Staff is looking to reduce the real exposure by upgrading financial software and reinstating support for software on a cloud based system which eliminates the need for the City to own hardware.
 
Once this upgrade is complete IT and Management Services will reexamine the path forward for a payroll software here at the City.  Staff expects to remain with Superion for the next few years while the City makes decisions on the path forward.  This could include continue working with Harris ERP upgrade their software or considering other software companies. 
 
With this contract approval, the City will moved to a cloud based AS400 system.  This is advantageous to the City because it will not be required to upgrade our AS400 system as well as to pay to reinstate maintenance contracts for this hardware.  It put the responsibility on the vendor such as backups, refreshes, disaster recovery, system upgrades and more, thus allowing more resources to be applied to other IT Operation team responsibilities.  Without approval of this contract, the City will continue to have exposure to risk related to our payroll, human resources, fleet management, work orders and capital asset applications.  The highest risk would be related to processing payroll checks timely.

The ability to pay staff timely is important to the community.  Having a reliable software helps assure we can meet the City's financial commitments.

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