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issue_20030801


Citys Software Solution Empowers E-Business

Citys Software Solution Empowers E-Business

In Tacoma, WA, "America's No. 1 Wired City," officials are charging ahead with a $50 million project to enhance financial functions, procurement processes,
  • Written by Null Null
  • 28th August 2003

In Tacoma, WA, “America’s No. 1 Wired City,” officials are charging ahead with a $50 million project to enhance financial functions, procurement processes, and citizen services

Karen J. Larkin, BSIP Director, City of Tacoma

Laurel Campbell, C.P.M., Financial Supervisor, Purchasing, City of Tacoma


At first glance, the city of Tacoma, WA, flaunts a pristine setting, amid a scenic backdrop of majestic Mount Rainier and the saltwater shores of Puget Sound.

Beneath a sprawling, picturesque exterior, the city’s grounds are connected by a high-tech infrastructure of cables and modems. Coined as “America’s No. 1 Wired City” by Tacoma’s Economic Development Office, the town has invested heavily in Internet technology to stimulate new business growth. Starting in 1997, the city spent $100 million to install fiber-optic cable in every street, alley, and block of the town.

Thanks to the integrated fiber optics, any Tacoma resident or business can hook up to a nationally renowned cable modem network that enables light-ning-fast Internet connections. Besides providing Internet access, the network provides a conduit for cable TV, as well as computerized power meters installed by the city’s electric utility.

The city has continued to make strides in e-government advances that can i mprove workflow and services. Currently, city leaders are in the midst of a $50 million, 19-month software initiative called Bus iness Systems I mprovement Project (BSIP) to replace various aging systems with state-of-theart technology.

Tacoma’s BSIP will integrate the city’s business functions with an enterprise resource planning (ERP) solution. The solution revolves around software provided by SAP, a German firm whose worldwide installations integrate hardware from a host of major vendors.

Through software, servers, and comprehensive implementation, the BSIP will modernize and merge three major areas—a customer-care system (which includes utility bills), financial management, and human resources—into a holistic system. Everything from workflow processes to procurement procedures will receive a complete overhaul.

Implementation will revamp electronic and manual systems used by various government departments, including the city’s five publicly owned utilities—electricity, water, sewer, solid-waste, and storm-drain operations.

Treasury of Tools
Among the improvements BSIP will achieve include the following:

  • Electronic government features, such as Internet access for utility customers to pay their bills, request or cancel service, and change kinds of services (such as requesting a recycling container). In addition, businesses and residents can obtain various permits and licenses via online requests.
  • Public works and utility workflow, whereby engineers and field crews will be able to manage projects with real-time access to scheduling, time reporting, and billing information.
  • Procurement enh ancements, which will allow city pur –chasers to track the entir e procurement cycle—from purchase requisitions to invoice payments.
  • Citizen respons iveness, by which a centralized tracking system will expedite routing and response to citizen inquiries, complaints, and compliments. SAP software will allow Internet access by citizens, plus links with Interactive Voice Response systems that allow customers to phone in comments and problems to the city.

Overall, the BSIP carries a price tag of $50 million, which includes purchases of about $5 million for SAP software, $3 million for various servers to run a single database of information, and $28 million for a consultant to implement the software and train city workers.

The project was funded entirely by the City of Tacoma, with each department paying a percentage correlating to its use of the system. Therefore, major users of the system, the city’s five utilities, contribute about 80 percent of the total cost. The remaining 20 percent is contributed by the city’s general fund.

Supplier Selection and Strategies
In searching for the best service provider and software, city leaders issued a detailed blueprint document, almost 800 pages long, which outlined the project’s scope. This blueprint became the basis to launch Request for Proposals (RFPs) from private-sector firms.

“We received 27 proposals in response to the blueprint,” says Karen J. Larkin, BSIP Director. “Out of the 27, we narrowed it down to two primary proposals.”

Larkin explains that the RFP process was handled as a package deal: the consultant/implementer proposed an entire solution using specific software and servers. When analyzing RFPs, criteria included lowest cost, fast implementation time, server capacity, fail-safe mechanisms for equipment and data, and versatility for future expansion.

After analyzing the top two RFPs submitted, the city awarded the project to TUI (Total Utilities Integrators) Consulting, a global consulting and technology firm based in Tacoma, WA. The firm proposed using and integrating SAP software to revamp city systems.

Larkin explains that during the blueprinting process, workers outlined about 600 business processes, such as how city departments schedule work crews, pay vendors, hire employees, or issue utility bills. These processes were then consolidated into about 350 processes, to be configured into the new SAP software system.

Besides the blueprinting process, the project includes other major areas:

  • Coding/configuration functions, whereby computer programmers design and code the software according to agreed parameters. In addition, programmers integrate various systems that city workers access from desktop PCs or field-based computers, as well as online programs which citizens access from any computer offering Inter-net capabilities.
  • “Go live” preparation, which involves testing the system through mock data migrations of previously processed information, followed by correcting any inconsistencies. This phase also involves training about 1,700 city employees over a four-month period, based on individual applications required by specific job functions.

Currently, about 80 TUI consultants are working side-by-side with approximately the same number of city workers to configure the system and train city workers.

To date, time frame for project implementation is right on target: on October 6, 2003, city employees will have online access to BSIP core modules (finance, workflow, and human-resource systems).

Then, on November 3, 2003, the customer-care/utilitybilling module is slated to “go live” for online access by citizens. Prior to this launch date, a comprehensive public-relations program will inform citizens about the program via television ads, direct mail, and other media.

Once the system goes online, the dual team of consultants and city employees will remove any computer “bugs” from the system until December 31, 2003. Then, the consultant will cease direct input on the project, and city employees will manage the entire system.

Purchasing Perspective
Procurement officials are particularly looking forward to BSIP’s streamlined workflow. Currently, the Tacoma purchasing department is a mix of centralized and decentralized operations. A central purchasing department handles large purchases (over $5,000) and sets up citywide contracts. Individual departments within the city, however, can spearhead purchases under $5,000 and follow through with the entire process of issuing a purchase order, selecting a vendor, gaining approval, and initiating vendor payments for ordered goods.

Before implementing the BSIP (which is scheduled to go online this fall), purchase requisitions involved a tedious, manual process of inputting the same data in various ways, for use by incompatible systems.

“We [city purchasers] would write a purchase order in one system, using one vendor number, and we’d have to print it out and mail it to accounts payable, whose system had different vendor numbers,” says Laurel Campbell, C.P.M., Financial Supervisor, Purchasing, for the City of Tacoma. “Systems in different departments had different vendor numbers and didn’t communicate electronically, so employees would have to match up purchase orders manually to make vendor payments.”

Campbell adds that with the BSIP/SAP integration, procurement processes will be synchronized among city departments for faster response.

“The SAP software is so much more user friendly, quicker, and provides much more visibility and accountability,” Campbell states. “We’ll be able to see exactly what we’re buying and from whom, to identify contracting opportunities. Then, we’ll be able to leverage our volume pricing opportunities with vendors.”

Campbell, who is part of the inter-departmental BSIP implementation team, explains that purchasing agents were consulted early on in the process to develop guidelines for streamlining procurement workflow. She believes that after attending a training session on how to use the software, city employees can see that the system is very intuitive and logical.

Tacoma’s centralized purchasing department (currently consisting of 12 employees) focuses more on creating value-added contracts, rather than managing small, one-time purchases that each department can initiate. Regardless of which department handles purchases, however, the same naming conventions should be used for products and vendors to assure optimum processing by the BSIP’s central database.

“Because BSIP is a large, integrated system, we want to have a materials master and a vendors master [list] maintained by a central department,” Larkin states. “You don’t want the same vendor called two or more different names—like ABC Co., or ABC Inc. Co.”

Campbell notes that SAP software will add “many checks and balances that we don’t have right now.” These r ange from compiling the correct authorizations for purchases to integrating contract information for assurance that city departments don’t overspend budget limits.

The new software will help city purchasers generate RFPs, RFQs (Request for Quotations), purchase orders, approvals, and vendor payments (hard-copy checks or electronic transfers of funds). To streamline procedures, information from the same source document can be automatically pulled into any application, without the need to rekey data.

“Depending on your authorization level,” Larkin explains, “you can initiate and actually complete a purchase within the whole system in minutes of the time you initiate it.”

In addition, users can program the system to issue vendor payments on a specific day. “You can set the system to issue the payment on whatever date keeps the money in the city the longest, yet takes advantage of any early discounts,” Larkin states.

The software also keeps tabs on product inventories in warehouses, automatically ordering additional stock that runs low.

Many future procurement enhancements are planned for the software, ranging from electronic data interfaces to digital signatures.

“The SAP system is so flexible,” Campbell adds. “We have set it up so it makes the financial people happy, the inventory-control people happy, and the end-users happy so they can search for exactly what they need to buy.”

Campbell can’t wait for the SAP system to be fully up and running. “We’re really excited about it,” she states. “It’s going to make a world of difference for purchasing in the City of Tacoma.”

Array of Advantages
According to Karen Larkin, one of BSIP’s major benefits is the system’s ability to modernize and update every business process in the city for integrated operation.

“It [BSIP] has also really brought the city together,” Larkin adds. “It’s the first time that we’ve had every department of the city represented on one team and all working together toward the same, common goal.”

For added assurance, SAP regularly fixes software problems and sends “patches” of revised programming codes to all clients using the process, worldwide.

A particularly innovative project, which complements the BSIP, will be a pilot program involving the city’s “smart” meters for utility bills. During the trial run, about 10,000 customers will be able to buy electricity in advance, similar to purchasing a pre-paid phone card. They then swipe their power meter with the utility card. If the amount of purchased electricity runs out, the meter and power automatically shut off. The SAP software will also let residents track power usage over the Internet and make cost decisions (such as running appliances at night) to obtain reduced rates.

Overall, the BSIP will allow city employees to perform their jobs more efficiently to enhance customer service.

“Tacoma is in the forefront of providing the highest level of service to its citizens and customers,” Larkin concludes.

For more information about Tacoma’s Business Systems Improvement Project, contact Karen Larkin at 253- 382-2605, or via e-mail: [email protected]

SAP Software and Services
Founded in 1972, SAP is the world’s largest inter-enterprise software company, as well as the world’s third-largest, overall software provider. Software selections include mySAP Business Suite, an integrated platform that supports databases, applications, operating systems, and hardware from almost every major vendor.

Headquartered in Walldorf, Germany, SAP employs more than 28,000 people in over 50 countries. U.S. branches span from coast to coast—from Boston, MA, to Palo Alto, CA. The firm’s client roster includes more than 12 million users and 60,000 installations.

For more information about SAP, visit www.sap.comon the Internet.

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