HomeMy WebLinkAboutStaff Report 3396
City of Palo Alto (ID # 3396)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 12/17/2012
City of Palo Alto Page 1
Summary Title: SAP license Contract Amendment
Title: Approval of Appendix 10 Contract Amendment with SAP Public Services
Inc. For Software Maintenance Support Services to the City of Palo Alto
From: City Manager
Lead Department: IT Department
RECOMMENDATION
Staff recommends that the Council approve, and authorize the City Manager or his designee to
execute, the attached Appendix 10, which is an amendment to the contract between the City of
Palo Alto (the City) and SAP Public Services, Inc. (SAP) in the amount of $1,779,911.33, to
support MySAP.com Solution Suite and Industry Solution for Utilities.
EXECUTIVE SUMMARY
Staff recommends the approval of a contract amendment with SAP for essential software
maintenance support in the amount of $1,779,911.33, which includes $333,481.00 for new
licenses. Of the $1,779,911 sum, $1,446,430.33 will be payable over a five-year period at
$289,286.07 per year. The sum covers five systems: Financial system, Industry Solution of
Utilities (IS-U), Electronic Utilities Customer Service (UCES), Customer Relationship
Management (CRM), and Business Intelligence (BI).
BACKGROUND
The City implemented SAP?s Enterprise Resource Planning system in 2003. The Implementation
of Industry Solution of Utilities (IS-U), Electronic Utilities Customer Service (UCES), Customer
Relationship Management (CRM) and Business Intelligence (BI) followed in 2009. These
applications support Finance, Payroll, Budget, Utilities, and Public Works functions and
customers and are now fully integrated into a city-wide platform under one SAP contract. To
ensure business continuity, it will be crucial to secure 24x7 mission-critical supports from SAP.
In addition, City is using SAP-delivered software enhancements to meet on-going legal
regulation and compliance requirement.
City of Palo Alto Page 2
On December 10, 2012, the Council approved a settlement agreement with SAP in the amount
of $333,481.00, for (a) Named User license fees of $120,481 and (b) Cross Industry Software
License fees of $213,000. These new licenses are needed to support increasing software usages
and meet software license agreement compliance requirements.
DISCUSSION
Services covered under the maintenance contract include: 24x7 global support and quality
check for financial system, Industry Solution of Utilities (IS-U), Electronic Utilities Customer
Service (UCES), Customer Relationship Management (CRM), and Business Intelligence (BI),
access to global customer support portal to download software corrections and changes to
meet legal and regulatory requirements, and access to service market for content, best
practice, and software release and technology updates
License purchase covered by Appendix 10 is for (a) Named user license: 143 of Professional
User License and 127 of Employee User License, and (b) Cross Industry License: 110,000 of
Billing (Consumption Based Contracts and 10,000 of e-Invoicing and Contract Accounting (e-ICA)
TIMELINE, RESOURCE IMPACT, POLICY IMPLICATIONS
Funds for the SAP License Maintenance is budgeted as an IT operating budget item under the
Technology Fund - Enterprise Systems Service and Maintenance, Software Application
Maintenance. The new license purchase will be paid from Technology Fee Fund.
ENVIRONMENTAL REVIEW
The award of a contract amendment does not constitute a project for purposes of the California
Environmental Quality Act CEQA Guidelines, thus no environmental assessment is required.
Attachments:
Palo Alto SAP Appendix 10 (12-4-12 SAP executed) (PDF)