City may spend $10M on software to save big money down the road
Examiner Files - Barrie City Hall
The city could spend millions to both save money and improve its core information systems.
Barrie councillors gave initial approval Monday to the business case for enterprise resource planning (ERP) software and its systems.
The estimate to buy the software, design it and install it is approximately $10 million, and it will take three years to fully implement. Plus it will cost $320,000 annually to operate, starting in 2015.
Benefits are estimated at $15.5 million for the city during the next decade, including expected cost reductions worth $12.5 million for goods and services purchases.
ERP is software to replace many stand-alone systems and manual work processes, and integrates these functions into an automated system based on a centralized data base accessible across the corporation.
"The city's core information systems no longer meet its needs, and to properly manage an organization with more than $3 billion in assets under its control, annual spending in the $300 million range, and significant growth costs on the horizon, an ERP is necessary," said Ed Archer, Barrie's general manager of corporate services.
"We're in the dark ages. We are still operating like a small town," said Mayor Jeff Lehman. "This one's a no-brainer for me."
City CAO Carla Ladd said it was like comparing a bank with lineups and deposit slips to one with debit cards and ATMs.
"It isn't if we do this system, it's when we do this system," she said of the ERP. "There are so many benefits."
Ladd mentioned ERP would virtually eliminated paper work and could cut service delivery times by two-thirds.
Only Coun. Bonnie Ainsworth spoke and voted against ERP, saying she didn't want to approve the spending until she sees the 2013 capital budget, which is debated in January.
She said the city might have other priorities.
"We have a crumbling infrastructure in this city," Ainsworth said. "There are 33 kilometres of roads that need to be constructed.
"I don't feel the decision should be made in isolation of the impact on the business plan and long-range plans."
Coun. Peter Silveira also spoke against the expense of ERP.
“This time is probably not the right time to spend $10 million,” he said.
But when it came time, Silveira voted for ERP
"I don't see any downside," said Coun. Barry Ward. "Just because there is something you can't touch or you can't see or drive on, that doesn't mean it isn't a valuable investment."
"The timing dictates that we move forward, especially with the annexed (former Innisfil) lands," said Coun. John Brassard, of the south-Barrie property that will be developed during the next decades.
Currently, Barrie's financial system consists of separate, non-integrated systems requiring expensive and inefficient manual steps to complete transactions. City staff says it does not meet the business needs of Barrie residents, customers or employees.
These information systems are fragmented, incomplete and don't provide timely information. This means service levels are lower and less efficient than they could be, because work processes and information systems are incapable of meeting demands placed upon them.
These inefficiencies are not readily apparent now because city staff make the extra effort to address information needs, but that can't last.
Archer says ERP will eventually fix these inefficiencies.
"This will increase the assurance that decisions about residents' tax dollars are based on the best available information in a timely way," he said. "And staff will have better information for program management and oversight. The risk of cost overruns on projects or inadequate service levels because plans did not accurately predict how things would actually work will be much lower."
The city budgeted $450,000 for a business case study about how ERP would support specific corporate information needs, processes and service capacity. Archer said less than half that amount was spent on the report presented Monday by Deloitte & Touche LLP, a London firm.
ERP funding is included in the city's capital budget.
Council will consider final approval of a motion to move ahead of this plan at its Dec. 17 meeting.