Template revised April 12, 2018.
COMMISSION
AGENDA MEMORANDUM
Item No.
6c
ACTION ITEM
Date of Meeting
February 26, 2019
DATE: February 15, 2019
TO: Stephen P. Metruck, Executive Director
FROM: Dan Thomas, Chief Financial Officer
SUBJECT: Port Budget Software System Replacement (CIP #C801015)
Amount of this request:
$600,000
Total estimated project cost:
$600,000
ACTION REQUESTED
Request Commission authorization for the Executive Director to (1) proceed with the Port
Budget Software System Replacement project; (2) procure hardware, software and vendor
implementation services; and (3) use Port staff for implementation, for a total project cost not
to exceed $600,000. A 10-year contract for the service fee is estimated at $2,200,000.
EXECUTIVE SUMMARY
This purpose of this authorization request is to procure and implement a new, Portwide
Budgeting, Forecasting, and Planning system.
The Port procured our current budget software over ten years ago to support the annual
budgeting process. Over this time, the product has been sold twice to other vendors. While the
current vendor continues to provide technical conformance for current users through system
upgrades, they are no longer enhancing their system with features to meet modern
requirements. Market leaders, however, provide easier to use and maintain offerings
architected for more efficient and faster processing. They will supplement the budgeting
process with forecasting, modeling, collaboration analytics and performance-reporting
capabilities. A new comprehensive system will enable Port financial staff to be more effective
and efficient in their work.
This project is scheduled to be completed in 2020 in time for the 2021 budget process.
Information & Communications Technology (ICT), Finance & Budget (F&B), Central Procurement
Office (CPO), Accounting & Financial Reporting (AFR), Human Resources (HR) and budget
system users from across the Port organization will be involved in this project. Total capital
costs for this project are estimated at $600,000. Software-as-a-service subscription fees are
estimated at $220,000 annually. These recurring license costs will be budgeted within the
Central Services operating budget.
COMMISSION AGENDA – Action Item No. 6c Page 2 of 4
Meeting Date: February 26, 2019
Template revised September 22, 2016; format updates October 19, 2016.
JUSTIFICATION
This project includes several important benefits.
(1) One integrated and comprehensive Budgeting, Forecasting and Planning System will
provide staff a single system with modeling and analysis tools and features such as the
ability to review previous scenarios and use common assumptions.
(2) Rather than use multiple separate disconnected Excel models, F&B staff will use one
integrated technology tool. Financial models developed within the controlled
environment will be interconnected and will automatically update when key inputs
change. The expected result is more reliable forecasting.
(3) The enhanced functionality provided in the new comprehensive solution will allow
Finance staff to respond more quickly to evolving business needs.
(4) Current technology will ensure availability of a critical Portwide system.
DETAILS
Scope of Work
(1) Procure, configure and implement a comprehensive Budgeting, Forecasting and
Planning System. A 10-year contract will be pursued but the Port will have the ability
to exit early if warranted.
(2) Integrate budgeting system with PeopleSoft Financials and PeopleSoft Human Capital
Management.
Schedule
Commission Authorization
2019 Quarter 1
Procurement Completion
2019 Quarter 3
Implementation
2020 Quarter 2
This Request
Total Project
Vendor Services
$286,000
$286,000
Port of Seattle Labor
$314,000
$314,000
Total
$600,000
$600,000
ALTERNATIVES AND IMPLICATIONS CONSIDERED
Alternative 1 – Delay the new Budgeting, Forecasting and Planning System.
Cost Implications: $0
Pros:
(1) Capital funds are available for other projects.
COMMISSION AGENDA – Action Item No. 6c Page 3 of 4
Meeting Date: February 26, 2019
Template revised September 22, 2016; format updates October 19, 2016.
Cons:
(1) The current system is at risk of failure due to incompatibility with technology
advancements (i.e., web browsers, Microsoft tools).
(2) Requires more employees to perform manual budget analysis;
(3) Provides no required improvements in forecasting and analytical modeling tools.
This is not the recommended alternative.
Alternative 2 – Upgrade current system for Technical Conformance.
Cost Implications: $300,000
Pros:
(1) System will continue to be compatible with current technology (i.e., web browsers,
Microsoft tools) for a few more years.
Cons:
(1) Continue to require more employees to perform manual budget analysis;
(2) Provides no required improvements in forecasting and analytical modeling tools.
This is not the recommended alternative.
Alternative 3 – Purchase and implement a Budgeting, Forecasting and Planning solution.
Cost Implications: $600,000
Pros:
(1) Meets Finance & Budget (F&B) team’s business requirements for a comprehensive
budgeting, forecasting and planning solution.
(2) Enables staff to be more effective and efficient, eliminating much of the manual Excel-
based analyses currently done outside the budgeting system.
(3) Provides system tools to advance the Port’s F&B department to a higher performing
one.
Cons:
(1) F&B staff will need to dedicate significant time to learning and configuring new system
over several months to take full advantage of powerful new functionality.
(2) Requires process changes that will impact many Port staff as forecasting and budget
analyses are performed in new system.
This is the recommended alternative.
FINANCIAL IMPLICATIONS
Cost Estimate/Authorization Summary
Capital
Expense
Total
COST ESTIMATE
Original estimate
$600,000
$0
$600,000
COMMISSION AGENDA – Action Item No. 6c Page 4 of 4
Meeting Date: February 26, 2019
Template revised September 22, 2016; format updates October 19, 2016.
AUTHORIZATION
Previous authorizations
$0
$0
$0
Current request for authorization
$600,000
$0
$600,000
Total authorizations, including this request
$600,000
$0
$600,000
Remaining amount to be authorized
$0
$0
$0
Annual Budget Status and Source of Funds
This project was included in the 2019-2023 capital budget and plan of finance under committed
CIP #C801015 in the amount of $600,000.
Financial Analysis and Summary
Project cost for analysis
$600,000
Business Unit (BU)
Corporate
Effect on business performance
(NOI after depreciation)
NA
IRR/NPV (if relevant)
NA
CPE Impact
$0.01
Future Revenues and Expenses (Total cost of ownership)
10-year software-as-a-service subscription costs estimated at $2,200,000 will be budgeted in
the Central Services Division operating budget beginning in 2020.
ATTACHMENTS TO THIS REQUEST
None
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
None