1) Overview of Portland's EBS Project
The mission of the EBS project is to implement an Enterprise Resource Planning (ERP) software solution using SAP software, to incorporate citywide, standardized, business processes, and to create a single repository and source for data.  This ERP software solution will provide best business practice functionality to eliminate current stand-alone systems for the implemented functional areas.

EBS Project Scope
The City expects to replace the legacy system functionality in the areas listed below. The project scope will be broken down into two (2) phases, as follows:

Finance/Logistics (Procurement)- (Phase 1)
	Financials (FI)
	Controlling (CO)
	Funds Management (FM)
	Grants Management (GM)
	Accounts Receivable (AR)
	Accounts Payable (AP)
	Asset Accounting (AA)
	Project Systems (PS) - WBS level functionality for CoP Capital Projects
	Treasury (TR) - 
	Sales & Distribution (SD)
	Business Intelligence (BI) - CAFR reports
	Material Management (MM) 
 
Human Resource/Payroll  (Phase 2)
	Organization Management (OM)
	Benefits (BN) 
	Personnel Administration (PA) 
	Time Management (TA)
	Payroll (PY)
	Employee Self-Service (ESS)

2) Goals of the EBS Project
- Completely replace Portland's 20-year-old administrative systems infrastructure
- Significantly improve the effectiveness and efficiency of Portland's administrative business operations.
- Use technology to facilitate business process integration, automation and a reduction of paper.
- Improve the quality and productivity of employees' jobs at the City of Portland
- Increase the effectiveness of Bureaus across the City of Portland by allowing them to more effectively and efficiently serve their constituents

3) How the EBS changes and improves people's lives
- End-Users of the new system now benefit from integrated, streamlined business processes that allow them to more effectively perform their jobs within the City's Bureaus.
- Protects City Bureaus by providing automated internal controls for conducting City business
- Assures citizens within the City of Portland that government operations are more effective, more efficient and more focused on maximizing tax dollars because operations no longer have many inefficiencies that existed prior to the EBS system.

4) Benefits within a specific business or institutional context.  Dramatic business operations improvement has and will continue to be achieved because the following financial operational areas have specifically been targeted and addressed:
a)	Improved Revenue Recognition and enhanced revenue data.  The EBS project facilitated recordng revenue when billed (legacy system didnt record until receipt) so Bureaus now work in accordance with Generally Accepted Accounting Principles (GAAP) and are recognizing revenue faster.  Furthermore, EBS allows more receivable information to be entered so the City has much greater insight in the receipt of funds.
b)	Improved Collections Rate.  Past due amounts are now available in a single system.  This improves the Citys ability to follow-up on past due accounts, review status of customers across bureaus and refer them to collections in a more timely manner.
c)	Automated procurement controls.  City leadership used the EBS project opportunity to institute and implement increased contract compliance.  This heightened focus tightened controls and allowed the City to identify and address approximately 160 contracts that did not meet the SAP purchasing control requirements.
d)	Segregation of Duties.  Appropriate role mapping for generation of transactions and execution of approvals has ensured that duties are segregated to prevent fraud and misuse of public funds.
e)	Automated interest allocations.  EBS features automated interest allocations and electronic bank statements with automated matching of deposits to the statement.
f)	Financial reporting based on monthly reporting periods instead of 13 non-standard reporting periods.  Managers can now integrate their monthly performance measures and financial reports.
g)	Real-Time Funds Management. EBS now provides real-time budget information.  Before EBS, budget decision-making was challenging because of lag times between purchasing decisions and when the funds are shown as encumbered.  Providing access to real-time budget information allows decision-makers to eliminate internal tracking systems and spend more time on direct services.
h)	Fixed Asset Management.  Portlands infrastructure is now easier to manage because the integrated system replaced the separate database.

Portland's EBS project would not have been undertaken without the promise that technology provided in terms of facilitating dramatic operational improvements for Portland's city government.

Portland is not unlike many local governments across the country who have worked very hard to serve the public with administrative systems that were implemented almost 20 years ago.  Underlying technology that supports core business operations is extremely expensive and at some point the systems are too constrained to effectively serve the city.  

Technology advances with the City's SAP system are responsible for almost all of the gains and benefits possible to the City of Portland.  Technology allowed and provided the following:
- "Real-Time" funds management.  Real-time budget information and controls are in place which greatly increases operational decision-making (e.g. no more lag-times for budget checking)
- Automation (end-to-end) of business processes for the first time which removes manual reconciliations and inefficient manaual effort
- Elimination of paper for requisitions and purchase orders.  Transactions no longer a sheet of paper each and every time a transaction is inititated.
- Purchasing documentation is now stored electronically, saving paper, storage space and retrieval time
- Contracts controls have been put in place that identified and have prevented expenditures on 160 contracts that have lapsed (was manual process in legacy system)
- Retirement of 10 "shadow" systems that had emerged to support operations.

It was important that the replacement software provide a fully integrated system and a platform for additional functionality. SAP is a very robust and dynamic software that has the ability to fully meet the City's needs over time. It also has a strong track record with large businesses around the world. Some of the features such as work flow and multi-dimensional reporting structures helped the City achieve its business objectives.

Yes

Yes

Citizens and taxpayers alike benefit from the EBS system because Portland government operations can now place much more focus on direct services to the public because of operations efficiency/effectiveness gains. 

A few important examples of how EBS provides advantage/opportunity to people include:
- Fire - Operations gains in procurement processing (to secure required equipment and materials) allow firefighters to spend more time on direct services protecting the public instead of getting bogged down in manually intensive, redundant adminstrative work as had been the case.
- Parks - Parks can now place more emphasis on directly maintaining the City's parks and hiring adequate staff to support very important recreational areas for the City's citizens.
- PBOT - Portland's Bureau of Transportation historically spent a tremendous amount of administrative effort to track costs in an originating or managing fund and then reallocate the cost to a project tracking structure in their legacy system with the correct funds. Implementation of specific Project Management functionality has enhanced capital project reporting, transparency and controls.
- Police. Police officers have tremendous procurement needs in terms of equipment and supplies for serving the public.  Automating and streamlining procurement allows the Police Bureau to more rapidly receive the goods it needs to more effectively serve the public.
- Grants. Many bureaus receive grant funding, usually with cumbersome tracking and reporting requirements. SAP provides excellent tracking and reporting that relives bureaus from tedious work to focus on delivering the results the grant funded. Also, audit preparation is significantly reduced saving audit costs and staff time.

The EBS project has benefited the City of Portland in many significant ways.  For example, there are multiple financial concepts, standards and techniques that have been advanced through the Citys EBS initiative that demonstrate effeciency/effectiveness gains for the City.  For example, 
a)	Improved Revenue Recognition and enhanced revenue data.  The EBS project facilitated revenues being recorded when billed (legacy system didnt record until receipt) so Bureaus are now working in accordance with Generally Accepted Accounting Principles (GAAP) and are recognizing revenue faster.  Furthermore, EBS allows more receivable information to be entered so the City has much greater insight in the receipt of funds.
b)	Improved Collections Rate.  Past due amounts are now available in a single system.  This improves the Citys ability to follow-up on past due accounts, review status of customers across bureaus and refer them to collections in a more timely manner.
c)	Automated procurement controls.  City leadership used the EBS project opportunity to institute and implement increased contract compliance.  This heightened focus tightened controls and allowed the City to identify and address approximately 160 contracts that did not meet the City and best practice purchasing control requirements.
d)	Segregation of Duties.  Appropriate role mapping for generation of transactions and execution of approvals has ensured that duties are segregated to prevent fraud and misuse of public funds.
e)	Automated interest allocations.  The EBS features automated interest allocations and electronic bank statements with an automated matching of deposits to the statement.
f)	Financial reporting based on monthly reporting periods instead of 13 non-standard reporting periods.  Managers can now integrate their monthly performance measures with their financial reports.
g)	Real-Time Funds Management. EBS now provides access to real-time budget information.  Before EBS, budget decision-making was challenging because of the lag time between purchasing decisions and when the funds are shown as encumbered.  Providing access to real-time budget information allows decision-makers to eliminate internal tracking systems and spend more time on direct services.
h)	Fixed Asset Management.  Portland's infrastructure is now easier to manage because the integrated system replaced the separate database.

Overall, the entire organization and every bureau has benefited from this project.

While there have been a number of governments implement ERP projects, Portland is unique in the following ways:
	Priority and Leadership on Financial Concepts/Improvement.  As listed in section B above, Portland identified and pursued dramatic improvement in significant operational areas.
	Governance Model.  Portland established a model that has already been adopted by another local government because of the model's effectiveness and success.  
	Value Realization focus.  The City of Portland understood that getting the project done per a schedule and budget was important, but most importantly, the City leadership knew that the investment of time, effort and money would only be worth it if the City could qualify and quantify value achieved for the City.
        Change Management priority. Recognizing the City's culture and historic resistance to change led to an extensive change management effort. Many level of communication and end user support smoothed tranistion to the new system and brought quick adoption of the new processes.
        Quality Assurance. Due to apprehension about this large technology project, a very high level of quality assurance oversight was employed. This gave elected officials comfort and gave additional perspective to project management.
        Rescue and Recovery. In spite of excellent due diligence in consultant selection, the implementing partner was not able to execute completion. It became necessary to terminate the consultant's contract and bring in SAP to complete the work plan. This was done successfully while project work continued. It was a relatively seamless process that even included continuation of some of the subcontractors.
  

While ERP implementations are very complex, Portland has realized tremendous success to date in large part because the EBS leadership understood their complexities and established strategies for handling each of these areas.  

Training and technical skills are required for any new solution.  Portland began the project with the end in mind because they used the project implementation as a training ground for their core support personnel and it has proven to be quite effective.  From an end-user perspective, training curriculum was developed to train approximately 700 personnel.  Portland chose to require training as a prerequisite for system access in order to better assure success.

The following were some of the key complexities identified and addressed by the EBS leadership:

a) Rescue and Recovery by City Leadership. When Portland began its EBS Project, it selected a vendor that ultimately could not deliver the project successfully for the City.  The Executive Team had the insight and courage to make a change by making SAP accountable to completing the project with them.  Portland knew a change was needed when they did not see rigorous project management and a disciplined approach.  The end result has been extremely successful to date with the City having realized its first major milestone with the implementation of financials and procurement.

b) Geographic complexity - 145 square miles and over 75 separate locations. Successful business change requires a well-planned, well thought-out approach for supporting employees as they perform critical City business with new business processes and new technology. With only 20 project team members, the EBS Project Finance Team crafted a strategic support approach that allowed them to virtually grow their team through the establishment of deeply trained champions across each of the City bureaus. 

c) Commitment of senior City leaders. Governance was a hallmark achievement for the EBS program. Under the CAO and CFOs guidance, Bureaus actively met to resolve critical business decisions. Additionally, each bureaus business operation managers actively participated on the Project Advisory Committee. Unlike most Advisory Committees, this working group made major investments of time to help guide the project (e.g. bi-weekly meetings for 2 years). 

d) Diversity of department missions.  EBS established a goal at the outset to standardize business processes across City bureaus to better enable the City to become one of the most efficient and responsive local governments in the nation. Collaboration between bureaus with completely different missions presented major challenges for the City. Fragmented, non-integrated legacy systems further compounded the problem.

e) City technology project history. Of concern in planning this project was the Citys previous experience in implementing a failed utility billing project. Also, accounts from other jurisdictions regarding the complexity and challenges of their ERP implementations resulted in hiring quality assurance oversight. This consultant service provided very close monitoring of all aspects of the project work. The consultants attended meetings of the team leads, Project Advisory Committee and Executive Steering Committee on a regular basis. 

Monthly written reports were provided to the CAO and CFO with stoplight ratings on various aspects of the project. When final, this was also shared with project leadership and the City Council. This gave added confidence in achieving success. In addition, special bureau readiness reports were provided before go-live. Again, the extra oversight gave assurance that nothing was overlooked in the press to implement. This heavily involved independent third party participation is extraordinary in the level of oversight and engagement in the project. 

The City faced two major hurdles before reaching project success. In 2001, the City experienced a failed implementation of a utility billing system. The bad memories of the political embarrassment, press scrutiny, public outcry and lost revenue were still very present when the EBS project was first proposed in 2004. The elected officials were loathe to embark and an even bigger technology project.  One of the ways their apprehension was reduced was to engage a high level of quality assurance oversight.

The second barrier was the City's form of government. Portland has a rare commision form of government where the City Council members serve as both legislators and administrators.Each of the four City Commissioners is assigned a porfolio of bureaus to administer. The Mayor retains control of some bureaus as well. The direct involvement and responsibility of an elected official brings a heightened level of politics and silo mentality to operations.

During the nearly two decades of operation under the City's old legacy system, over 300 shadow systems were put in place. These were intended to address shortcomings of the legacy system but also to keep control of information within the bureau. The silo mentality resulted in an entirely separate accounting system (including payroll) for one bureau and two different major work order systems that did not integrate.

Ultimately, the bureaus came together to support the EBS implementation because the legacy system was so lacking in functionality compared to current systems. The tangle of shadow systems became increasingly cumbersome and expensive. Finally, upcoming retirements and the possible loss of knowledgable workers to support the numerous separate systems brought realization of the need to put a solution in place.

Exceeded

Portland has already taken the initiative to network and share key tenets of the EBS program with other local governments that could benefit from Portlands progress to date.  For example, the City of San Diego, California has already adopted major aspects of Portlands governance model as they work to complete their ERP initiative.

In addition to sharing the governance model for managing success, the following are also elements and concepts of the EBS ERP initiative that could be adapted and used by other organizations:
	Value Realization.  Where most ERP initiatives fall short is a primary focus on schedule and budget.  While these are extremely important, Portland also placed focus on identifying and accomplishing objectives that deliver tangible value to the organization.  
	Team Structure and Organization.  Portland established a well-defined, well structured organization for the implementation and for post-production support.  Key team organization is certainly something that can be leveraged by other like organizations proceeding with an ERP initiative.
	Methodology and Approach.  ERP products and vendors have methodologies for implementing software.  However, Portland tailored their approach to carefully consider comprehensive integration testing and infrastructure testing that can be leveraged and shared with other like organizations (e.g. key financial concept testing).  Additionally, Portland understands how to best stagger implementation of an ERP to mitigate risk (e.g. financials and procurement first along with the required interim integration required to make this work well).
	Change Management.  Portlands focus on change management has been a critical success factor.  The Citys enlistment of change captains has helped ensure that Bureaus are truly informed and being brought along effectively for rapid adoption.
	Training and Support.  Portland established a repeatable approach for training Bureau staff and then supporting them through the stabilization effort.  Other like organizations can clearly benefit from the City's experiences in this area.

Many of the staff impacted by the new system were involved in the legacy sytem inplementation 18 years ago. Recognizing the City's culture and employee history, an extensive change management program was put in place from the very beginning. The project provided each bureau a change captain for communication and bureau readiness support. Also, multi-layered training was deployed. The project maintained a robust website and regular e-mail newsletter rich in current information. This many faceted approach eased anxiety and engaged end users to accept forthcoming changes.

Bureaus appointed change captains and assigned super users who became advocates and information sources. Super users led training classes and became "go to" staff at go-live. Numerous levels of end user support were provided including daily call-ins and support centers. While advance preparations smoothed the way, user support at go-live was most essential for acceptance. The project received very high marks from users for change management efforts. 

With Phase One live for three months it has been amazing to watch staff sharing tips and tricks, preparing their own reference manuals and collaborating with each other to learn more or problem solve. Honestly, the change did slow business for several weeks and complaints were loud and frequent. But having pushed through the learning curve with plenty of support, the light at the end of the tunnel is clear. Now there is building pressure for enhanced and new functionality. Staff are suggesting ways to better serve customers and improve operational efficiency.