HomeMy WebLinkAbout2003-04-21 City Council (15)of PMo A to
TO:
ATTENTION:
HONORABLE CITY COUNCIL
CITY MANAGER DEPARTMENT: ADMINISTRATIVE
SERVICES
DATE:
SUBJECT:
APRIL 21, 2003 CMR: 233:03
APPROVAL OF APPENDIX 6 OF THE SAP INC.,
SOFTWARE LICENCE AGREEMENT IN THE AMOUNT OF
$35,000 FOR FISCAL YEAR 2002-03 AND $95,000 IN 2003-04
FOR TRAINING SERVICES RELATED TO THE
IMPLEMENTATION OF THE ENTERPRISE RESOURCE
PLANNING (ERP) SOFTWARE OR RESOURCE AND
FINANCIAL TRACKING SYSTEM (RAFTS)
RECOMMENDATION
Staff recommends that Council approve and authorize the Mayor to execute a
professional services ageement in the amount of $130,000 with SAP Inc. (SAP), for
Enterprise Resource Planning (ERP) software training services with a fiscal year
breakdown of $35,000 in 2002-03 and $95,000 in 2003-04 with the latter subject to
Council approval of the 2003-04 budget.
DISCUSSION
In July 2002, Council approved the purchase of SAP’s ERP so~¥are. A key component
of the so~¥are implementation is training in various aspects of the system. Staff prepared
a training plan that addressed Phase I training needs. On October 15, 2002, staff received
Council approval for a $150,000 ageelnent with a $15,000 contingency for SAP training,
which has been instrumental in the development of employees’ system knowledge and an
enhancement to the ea consulting partnership in configuring the SAP system.
Utilities staff identified a wider goup of users due to the vast capabilities of the work
orders module and has requested to expand the nulnber of trainees to better suit the
department business needs. The Utilities Department is requesting $12,000 to train
additional employees.
CMR:233:03 Page 1 of 3
As a result of experiences during Phase I, staff intends to accelerate the preparation and
some of the SAP system training for Phase II from next fiscal year to this fiscal year.
The lesson learned during Phase I is that the more familiarity staff has with SAP
functionalities, the better the transfer of-knowledge becomes and the easier it is to
establish the blueprint and configuration requirements. Staff proposes to move up
$23,000 in training from the next fiscal year to this fiscal year to train Payroll, Human
Resources, and Information Technology personnel. The funding for both requests will
come from existing budgets within the Enterprise and General Funds. The earlier
training allows staff more time to prepare for and implement Phase II.
The training is focused on software use and maintenance as well as associated systems.
A total of 117 employees were trained on the Finance, Procurement, Inventory
Management Work Orders, and Project Management modules. Staff recommends that
Council approve purchasing a Preferred Card with $130,000 worth of training, since the
need for this level of training is anticipated. As a result, the City would receive an
additional $3,900 worth of training due to the upfront commitment. The Preferred Card
can be used for any SAP offered courses such as: SAP Classroom Training; SAP Live
Virtual Classrooms; SAP On-Site Training, and SAP Solution Academy. Since staff will
need ongoing SAP training, if there are any 6alances left, they can be used at later times.
The breakdown of the $130,000 will be $35,000 for the current fiscal year and $95,000
for fiscal year 2003-04. Staff recommends that Council approve the $95,000 in fiscal
year 2003-04, subject to Council approval of the budget in June 2003. Approving the
contract now allows staff to plan for training to begin in early July and eliminates the
need to present a separate CMR for approval.
Selection Process
No Request For Proposals were issued for this purchase. The City selected SAP software
for the ERP system because SAP is the only authorized provider of SAP software
courses.
RESOURCE IMPACT
The training expense will come from existing current and adopted-in-concept budgets of
the following funds: General Fund (mainly Administrative Services and Human
Resources Departments), and the Utility Funds. These transactions will have no impact
on any reserves.
POLICY IMPLICATIONS
This ageement does not represent any change to existing City policies.
ENVIRONMENTAL ASSESSMENT
Approval of this ageement does not constitute a project under the California
Environmental Quality Act (CEQA); therefore, no environmental assessment is required.
CMR:233:03 Page 2 of 3
ATTACHMENTS
Attachment A- Appendix 6 of the Sap Inc. Software License Agreement
PREPARED BY:
LAL(
Assistant Director, Administrative Services
DEPARTMENTAL HEAD APPROVAL:
- ~TS
Directo~,/Administrativ e Services
CITY MANAGER APPROVAL:__
EMILY HARRISON
Assistant City Manager
CMR:233:03 Pa~e o of 3
ATTACHMENT A SAP Preferred Ca
Appendix 6
effective March 20, 2003 ("Appendix")
to
SAP PUBLIC SERVICES, INC. ("SAP")
SOFTWARE END-USER LICENSE AGREEMENT effective July 22, 2002 ("Agreement")
with
CITY OF PALO ALTO ("Licensee")
This Appendix 6 provides for the purchase by the Licensee of an SAP Preferred Card for SAP Training and materials in addition to that
purchase by Licensee pursuant to Appendix 5 to the Agreement.
This Appendix is hereby annexed to and made a part of the Agreement specified above. In each instance in which provisions of this
Appendix contradict or are inconsistent with the provisions of the Agreement, the provisions of this Appendix shall prevail and govern,
and the contradicted or inconsistent provisions of the Agreement shall be deemed amended accordingly.
1.Scope of Services. As consideration for the payment of the fee set forth herein, SAP shall provide Licensee access to SAP’s
regularly scheduled SAP Classroom Training; SAP Live Virtual Classrooms; SAP On-Site Training and SAP Solution Academy
classes provided by SAP in the United States only. A detailed list of courses, content, and schedules are available to Licensee
on the SAP Education worldwide web site, http:llwww.sap.comlusaleducation. Licensee may enroll in all SAP Classroom
Training, SAP Live Virtual Classroom and SAP Solution Academy classes by calling SAP’s Central Registration at 1-888-777-
1727. On-Site classes can be scheduledby contacting the SAP Education Help Desk at 1-877-876-7271.
2.Fees/Payment Terms. For a fee of USD $130,000, Licensee shall receive a SAP Preferred Card training fee credit totaling
USD $133,900. Such fee shall be invoiced in two increments; the first $50,000.00 shall be upon Licensee’s Council approval in
April 2003 and is payable upon Licensee’s receipt of SAP’s invoice. The remaining $80,000.00 shall be invoiced upon
Licensee’s Council approval of the 2003-2004 budget and appropriation of funds for this appendix in June 2003 and is payable
upon Licensee’s receipt of SAP’s invoice. Any training provided in excess of such training fee credit shall be invoiced at SAP’s
then current rates upon scheduling, without premium, and is payable by Licensee upon receipt of SAP’s invoice. SAP is not
obligated to provide and Licensee shall not attempt to obtain any Training hereunder that is above the incremental paid amount
by Licensee. If Licensee’s Council does not approve the remaining $80,000 payment by June 30, 2003 from Licensee to SAP,
then the SAP Preferred Card training fee credit hereunder is revised to $51,500.
At r~o time will any portion of the training fee credit be refundable, including at the conclusion of the Term set forth below.
3.Activation Date. The activation date for the SAP Preferred Card is the date that SAP receives full payment of the SAP
Preferred Card fees specified above from Licensee. Classes taken prior to such date cannot be applied to the SAP Preferred
Card.
4.Term. The training fee credit set forth above shall be applied to the then current SAP training course fees until such time as the
traini-"---ng fee credit is fully utilized or twenty-four (24) months after the Activation Date of Licensee’s SAP Preferred Card,
whichever is earlier.
5.Traininq Materials. SAP Training Materials provided (if any) are intended solely for the use of the individual student attending
training and may not be copied, distributed or used for any other purpose. Licensee agrees that such Training Materials are the
Proprietary Information of SAP. Licensee agrees not to disclose, transfer, or otherwise make available the Training Materials to
any third parties except as required under the Public Records Act or other similar law.
Course Administration.
a) Enrollment in re.qularly scheduled SAP Classroom Traininch SAP Live Virtual Classrooms and SAP Solution Academy. AllSAP Classroom Training, SAP Live Virtual Classroom, and SAP Solution Academy course registration must be processed
through SAP’s Central Registration. If no space is available on the date requested, an alternative date will be suggested where
possible.
b) Cancellation of enrollment in re.qularly scheduled SAP Classroom Trainin.q, SAP Live Virtual Classrooms and SAPSolution Academy. Licensee may submit cancellations by e-mail or fax or by calling SAP’s Central Registration. If the
cancellation is not confirmed in writing by SAP, Licensee remains liable for the full course fee associated with the class or
classes. All cancellation fees will be applied to Licensee’s SAP Preferred Card without premium benefit. In the event of a
cancellation or the rescheduling of a course by Licensee, SAP will assess the following fees:
Notification Period !i Cancellation Charge
!i 10 business days or more before the scheduled class ~! No cancellation charge
~i4 to9 business days before the scheduled class ]i, 50% of total projected training costs
!i 3 business days or less before the scheduled class ....I!~ 100% of total proje.cted training costs
c) SAP On-Site Trainin,q Processin.q. All requests for SAP On-Site Training must be processed through SAP’s Educational
Support Services Group (ESSG). Once confirmation of such a request is provided to Licensee by SAP’s On-Site Training
Department, any changes in class dates or cancellations shall be subject to the terms of item 6(d) herein. The fees applied to
Licensee’s SAP Preferred Card for On-Site Training classes with premium are applicable for the on-site rate only. All other costs
such as travel and living expenses, equipment charges, freight, remote server connection fees, and books will be applied to
Licensee’s SAP Preferred Card without premium benefit.
SAP CONFIDENTIAL
d) Cancellation of On-Site Trainino Class~. Licensee may submit changes in class dates or cancellations in writing or by
callin~ the SAP On-Site Training Coordinator or the ESSG representative. The fees charged to Licensee for On-Site Training
classes upon cancellation are based on projected instructor time; actual travel and living expenses and any other charges. All
cancellation fees will be applied to Licensee’s SAP Preferred Card without premium benefit. In the event of a change in class
dates or a cancellation of a class by Licensee, SAP will assess the following fees:
il 6 to 14 business days before the scheduled class .....]! 50% of total proiected train,ng costs
~I "’~! 75% of total ro’ected trainin_g_costs~ 5 business daYS or less before the scheduled class o,p
~. The validity of the offer set forth in this Appendix will expire June 30, 2003, unless sooner executed by Licensee, or
extended in writing by SAP.
Accepted by:
ATTEST :
City Clerk
¯ APPROVED AS TO FO-~!{:
Accepted by:
CITY OF P~i~0 /aLTO
17_.ayor
!NC.
City Attorney
APPROVED:
Assistant city Manager
Director of Administrative
Se~ices
insurance Review
N~me:Steve Peck
Name: ~2[a!-y Beth Hanss
Title: Vice ....mdenu & Secreta--q¢_
Ta~_-payer identification No.
54-1865804.
(Com_Dliance with Corp. Code § 313 is
required if the entity on wlnose behalf
nhis contract is signed is a corporation.
In the alternative, a certified co_-p_orate
resolution attesting to the signatory
authority of the individuals signing in
their respective capacities is
accep=ab!e)
SAP CONFIDENTIAL 2