Template revised September 22, 2016.
COMMISSION
AGENDA MEMORANDUM
Item No.
4e
ACTION ITEM
Date of Meeting
December 12, 2017
DATE: December 4, 2017
TO: Dave Soike, Interim Executive Director
FROM: Peter Garlock, Chief Information Officer
SUBJECT: PeopleSoft Financials Upgrade (CIP #C800909)
Amount of this request:
$3,600,000
Total estimated project cost:
$3,600,000
ACTION REQUESTED
Request Commission authorization for the Executive Director to (1) proceed with the
PeopleSoft Financials Upgrade project; (2) procure hardware, software, and consulting services;
and (3) use Port staff for implementation, for a total project cost not to exceed $3,600,000.
EXECUTIVE SUMMARY
The Port currently uses Oracle’s PeopleSoft Financial system, version 9.1 to support the
following business functions: General Ledger, Purchasing, Accounts Payable, Project Costing,
Accounts Receivable, Billing, and Asset Management. Oracle’s annual support plan, provides
frequent, critical software patches to address constantly evolving cyber-crime threats. Regular
updates of our PeopleSoft Financial System are critical to secure our financial data and preserve
the value of our investment.
Extended support for PeopleSoft Financials version 9.1 ends in January 2018, after which we
will no longer receive security and application software patches. This project will upgrade the
Port’s PeopleSoft Financial System to version 9.2, and continue vendor support that is vital to
on-going Port operations. Information & Communication Technology (ICT), Accounting &
Financial Reporting (AFR), Central Procurement Office (CPO), and PeopleSoft users from most
other Port organizations will be involved in this project.
A procurement for an Indefinite Delivery, Indefinite Quantity (IDIQ) Contract for PeopleSoft
Consulting services is currently in progress. When the contract is in place, it will be used to
provide the vendor support needed to complete the project.
JUSTIFICATION
This project includes several important benefits.
COMMISSION AGENDA – Action Item No. 4e Page 2 of 5
Meeting Date: December 12, 2017
Template revised September 22, 2016; format updates October 19, 2016.
(1) The upgrade will ensure continued support of our PeopleSoft Financials system, used
Port-wide to conduct operations. In 2017 alone, Oracle released 40 critical updates to
fix security issues. The availability of security and application patches are critical for
reducing the Port’s vulnerability to cyber-crime and system issues that could disrupt
Port business.
(2) Oracle’s support model will change with the new version, providing smaller, more
frequent updates with the flexibility for customers to choose only the features they
want to install based upon functionality and cost. After this upgrade, there will be no
more large projects required to ensure continued support.
(3) With the new version, there are several feature improvements including the
introduction of work centers designed to improve user productivity, a more efficient,
search-driven navigation, and pre-built dashboards.
DETAILS
The original Capital Improvement Program (CIP) Definition was to complete the upgrade as well
as reconfigure the system to better meet the financial reporting needs of Port business entities
and operating divisions. Current cost estimates to improve financial reporting are significant so
the recommendation is to move forward with the upgrade only in this project authorization.
During the project, we will leverage consulting expertise to assess the viability and implications
of activating certain system features to enhance the Port’s financial reporting and a future
project authorization may be requested when more information is known.
Scope of Work
(1) Upgrade of the Port’s PeopleSoft Financial System to version 9.2. Approximately 100
resources across the Port are expected to contribute to the upgrade and testing of the
new version.
(2) Elimination of customizations, where possible, by using built-in functionality in the
new version.
Schedule
Planning and Design Complete
2018 Quarter 1
Upgrade and Testing Complete
2018 Quarter 4
Deployment
2018 Quarter 4
Project Close
2019 Quarter 1
Cost Breakdown
This Request
Total Project
Port Labor
$1,450,500
$1,450,500
Vendor Services
$2,150,000
$2,150,000
Total
$3,600,000
$3,600,000
COMMISSION AGENDA – Action Item No. 4e Page 3 of 5
Meeting Date: December 12, 2017
Template revised September 22, 2016; format updates October 19, 2016.
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Select a new Financials application through a competitive procurement.
Cost Implications: $6,750,000
Pros:
(1) The benefits of selecting and implementing a new replacement financial system for
the Port will not be known until after an initial procurement process to compare
between systems.
Cons:
(1) The way the Port conducts its business will need to change to work within the context
of a new financial system. Many business processes such as billing customers, paying
bills, capturing/recording capital project costs, and accounting for the Port’s many
different financial transactions, will all need to be reviewed for impacts and changes.
(2) The procurement process will take at least 12 months, delaying project go-live until
2020. Lack of vendor support during the interim on the current system would likely
affect system availability and security.
(3) Staff resources will have limited availability to work on other initiatives through 2020.
This is not the recommended alternative.
Alternative 2 – Complete the upgrade to the PeopleSoft Financials 9.2 and reconfigure system
for better financial tracking.
Cost Implications: $6,900,000
Pros:
(1) The upgraded system will provide improvements to critical business functions and will
be fully supported with security and application patches.
(2) With an upgrade to version 9.2, future new feature implementations will no longer
require major upgrades.
(3) A system reconfiguration to improve financial reporting will eliminate manual efforts
to segregate transactions and reporting by entity and division.
Cons:
(1) Cost estimates for the reconfiguration effort are significant, and the benefits do not
currently justify the financial and resource costs. Additional analysis will be completed
in 2018 to determine if there is a less costly approach.
(2) Staff resources will have limited availability to work on other initiatives through 2019.
This is not the recommended alternative.
COMMISSION AGENDA – Action Item No. 4e Page 4 of 5
Meeting Date: December 12, 2017
Template revised September 22, 2016; format updates October 19, 2016.
Alternative 3 – Upgrade the PeopleSoft Financials system to version 9.2
Cost Implications: $3,600,000
Pros:
(1) The upgraded system will provide improvements to critical business functions and will
be fully supported with security and application patches.
(2) With an upgrade to version 9.2, future new feature implementations will no longer
require major upgrades.
Cons:
(1) Staff resources will have limited availability to work on other initiatives through 2018.
This is the recommended alternative.
FINANCIAL IMPLICATIONS
Cost Estimate/Authorization Summary
Capital
Expense
Total
COST ESTIMATE
Original estimate
$5,500,000
$0
$5,500,000
Current change
-$1,900,000
$0
-$1,900,000
Revised estimate
$3,600,000
$0
$3,600,000
AUTHORIZATION
Previous authorizations
$0
$0
$0
Current request for authorization
$3,600,000
$0
$3,600,000
Total authorizations, including this request
$3,600,000
$0
$3,600,000
Remaining amount to be authorized
$0
$0
$0
Annual Budget Status and Source of Funds
This project was included in the 2018-2022 capital budget and plan of finance under committed
CIP #C800909 in the amount of $5,500,000. After additional analysis, it was determined that
the current project scope and objectives can be accomplished with a smaller budget of $3.6
million.
Financial Analysis and Summary
Project cost for analysis
$3,600,000
Business Unit (BU)
Corporate
Effect on business performance
(NOI after depreciation)
NA
IRR/NPV (if relevant)
NA
CPE Impact
$.01
COMMISSION AGENDA – Action Item No. 4e Page 5 of 5
Meeting Date: December 12, 2017
Template revised September 22, 2016; format updates October 19, 2016.
Future Revenues and Expenses (Total cost of ownership)
Annual maintenance costs, budgeted in the ICT Operating Budget, are not estimated to change
with this project.
ATTACHMENTS TO THIS REQUEST
None
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
None
