Memorandum

City of Lawrence

City Manager’s Office

TO:	David L. Corliss, City Manager
FROM:	James Wisdom, Director of Information Systems
CC:	Ed Mullins, Director of Finance Alan Landis, Purchasing Specialist Cynthia Boecker, Assistant City Manager Diane Stoddard, Assistant City Manager
Date:	September 15, 2009
RE:	Enterprise Resource Planning (ERP) Software Support Agreement Change

H.T.E. and Innoprise Software Company’s Backgrounds

This memo is to recommend and explain the purpose for changing the City’s ERP software support from H.T.E. Software to Innoprise Software.  The City of Lawrence has been using H.T.E.’s Public Sector ERP Software since 1987 for all accounting, budget, purchasing, payroll, utility billing, business licensing, human resources, building inspections, field inspections, asset management, land management, cash receipts, and several other ERP modules.  Today, the software runs on a iSeries IBM AS/400 and provides many of the core business functions for the City of Lawrence staff and the citizens of Lawrence.

Dennis Harward, one of the original founder of H.T.E. in 1981, originally sold the City of Lawrence our current ERP software system.  Mr. Harward has approached the City of Lawrence with a very unique proposal that can potentially solve many looming issues for the City and save the City of Lawrence well over $1,000,000 or more in the next five years.  Mr. Harward left H.T.E. in 1999 and in 2003 formed the Innoprise Software Company that targeted the same customer audience as H.T.E., but with a much different approach.  Instead of the more costly client-server based system that required a mid-range file server, Mr. Harward chose to develop a web-based ERP system that could run on virtually any operating system with the intent of empowering the end-user of the software to have much more flexibility and increased productivity without special programming to extract necessary data.  Also, since the new software is browser-based, it does not require any software to be installed on each PC, and special licensing per workstation is also not required.

Since forming Innoprise Software, Mr. Harward has installed his new software in more than 65 cities and counties throughout the country.  Also, Mr. Harward hired Gary Beresheim, Bill Barnett, John Hagerty and Dave Marland away from H.T.E. to come to work for Innoprise.  In addition to the RPG programmers that developed H.T.E., Mr. Harward has hired a group of experienced JAVA programmers focusing on developing their new software system.  Mr. Harward’s offer is intended to provide the City of Lawrence with their full-line of ERP software and for the City of Lawrence to become a showcase city in the region for his new software products.  The City would be able to change H.T.E.’s software support to Innoprise and they would immediately assume responsibility from this point on for supporting the H.T.E. software (originally developed by his personnel) and would provide the City of Lawrence with a new full-line of ERP software and a wide range of services.

Innoprise Software Offer

Innoprise’s offer will provide the following:

• Support for the current H.T.E. Software ® applications.
• Innoprise’s full suite of ERP software designed for government institutions.
• Unlimited software licensing usage for all City of Lawrence employees, no need to limit the number of employees that can access the system.
• Conversion of the current H.T.E. data into the Innoprise software system.
• Add any necessary functionality to their software that would match the programming modifications we have made.
• Ability to convert at the speed of our choice, within the next five years.
• 472 implementation days (valued at $900 per day) usable in the next 5 years.
• Travel costs would not be the responsibility of the City of Lawrence
• Replacement of interfaces to ESRI GIS Software, Selectron IVR phone interface used by Utility Billing and Planning and Development Services, FireHouse software used by Fire, ExecuTime Time and Attendance software under consideration, and any other interfaces that are identified in the scope of work to be defined.
• Help Desk support for both H.T.E. and Innoprise Software
• Ongoing software enhancements licensed with Innoprise.
• Training on any software applications licensed with Innoprise.
• Technical services assistance for hardware, operating system and network issues.
• Technology consulting for planning, analysis, and software utilization.
• Financial Software:  Accounting, budgeting, accounts receivable, general ledger, purchasing, inventory, payroll, personnel, and human resources,
• CIS: (Utility Billing for water utility),
• Community Development Suite:  Code enforcement, occupational licensing, and building permits.
• Work Order Software System
• Centralized Cash Receipts
• Citizen Access:  Several software products and interfaces that provide eGov services to the citizens from the Innoprise software.

Moving Away from the AS/400 Server

Continuing the use of the AS/400 and the H.T.E. software presents some major challenges in the next few years.  Below is just a few of the many reasons why the City has been considering moving away from the IBM-based RPG system:

• The AS/400 is beginning to lose market share and many government institutions in Kansas, and elsewhere, have either already replaced them, or are in the process of fazing them out—just as Douglas County has.
• The current AS/400 should be replaced by 2011, with an estimated cost exceeding $100,000.
• Ron Hall, former Director of Information Systems, retired in 2008 with 28-years of IBM experience, and 22-years of H.T.E. experience.
• The City’s Senior Programmer will reach retirement eligibility in about four years, which could leave us with only one employee that has the AS/400 and RPG programming experience.
• The City’s Senior Programmer has developed hundreds of program modifications to the existing H.T.E. software to meet the shortcomings of the software, but also make supporting and upgrading the AS/400 more complicated.
• The majority of personnel in the job pool with AS/400 and RPG skills are also reaching retirement age.

Desired Features of H.T.E.’s Software Replacement

In an effort to make any new ERP software system to help our employees be more productive Information Systems has been looking at many systems with some key-features being the most important.  The software would need to:

• Be fully integrated with the ability to share data and services among all departments.
• Easily interface with third-party software systems, including the many we are already integrated with.
• Integrate with ESRI’s GIS software applications which are already used by so many City employees.
• Be capable of running with Microsoft Windows ® servers
• Be capable of operating on VMWare ® systems
• Able to run using Microsoft SQL ® database engines
• Have graphical interfaces, not the current ‘green screens.’
• Easily query and extract information by the users, not just programmers.
• Allow easy transfers of data or reports to Microsoft Excel or .PDF files.
• Easily import our current historical data into the new system.
• Be affordable, since most ERP systems normally cost $1,000,000 to $2,000,000 for cities the size of Lawrence, by the time you purchase the software, develop a conversion strategy, convert the data, and train the end-users.

Innoprise Research

Mr Harward, of Innoprise Software, originally approached the City in June with the offer that has been described.  On Wednesday, July 15^th, Innoprise was onsite with several of their key personnel and spent a full-day demonstrating many of the software categories that were being proposed to the City of Lawrence in the City Commission Room and each department had representatives that attended at least one, if not several of the demos.  The responses from City employees that viewed the demos were extremely positive, and have created a lot of excitement about the possibility of improving our software systems.

On the surface, this offer seemed too good to be true and our staff was very skeptical about the offer—looking for the loop holes.  But, after several weeks of contacting other cities and counties that have made the same choice we are recommending, we are now much more comfortable with Innoprise Software, their personnel, and the great opportunity they have afforded the City of Lawrence.  The majority of the cities contacted waived their normal bid process due to the value they were receiving.  But some cities, such as Billings, Montana, chose to spend nine months developing a bid and hosting many on-site software demonstrations from several vendors, only to still choose the Innoprise software.  Lawrence personnel are scheduling a visit to Innoprise’s corporate offices in Broomfield, Colorado, and some on-sites with some of the customers in the coming weeks.

SunGard’s H.T.E. Course Change

The H.T.E. software currently used by the City of Lawrence has changed very little since Mr. Harward left H.T.E.  Until just recently, SunGard has been comfortable with making minimal improvements, collecting our annual support fees of more than $89,000, and coasting along.  But due to severe competition from Innoprise and many other ERP software vendors, H.T.E. has been losing customers to these competitors that had already moved toward Microsoft.NET and JAVA based systems.  SunGard has begun developing a “replacement” for the H.T.E. software.  The problem is that their projected timeline starts with a couple of modules being released this year, but most of the modules are to be released supposedly in 2011 and 2012—and the City of Lawrence would basically be a beta tester at that point.  But, the City would have to purchase the new software from H.T.E., as it is a separate product family for SunGard.  The software being offered from Innoprise is several years ahead of SunGard’s projected timeline and it will cost the City of Lawrence to continue to wait to improve.

Recommendation

Authorize the City Manager to sign an agreement with Innoprise Software to assume the support for our current H.T.E. ERP software system.  The City of Lawrence will pay Innoprise Software $22,295 upon execution of the agreement for support for the remaining of 2009, and will begin paying the $89,180 annual support costs beginning January 15^th, 2010 to Innoprise.  In turn, Innoprise will not only continue to support the H.T.E. software, but will begin the implementation of the Innoprise software, data conversion, and training for a much more modern ERP software system.