Implementing an enterprise solution takes cash - often lots of it - that government budgets can't always afford. And even when they can, it's common for hefty price tags to stretch budgets thin.
Imagine officials' frustration when they decide to deploy enterprise resource planning (ERP) solutions - those nifty programs that integrate department functions across a company or municipality into one system that addresses all the departments' needs. If a system can tackle finance, human resources, work orders and other tasks by itself, it probably doesn't come cheap.
What are Texas leaders in small to mid-sized municipalities to do if they have cost savings and technology renovation on the brain?
They might want to give the North Central Texas Council of Governments (NCTCOG) a call. NCTCOG is an association of local governments that work together to secure opportunities that would typically be harder and costlier to acquire individually. The group has a history of making affordable software possible for governments through shared services delivery.
In April 2008, NCTCOG made Software Plus Services (S+S), a subscription-based solution, available to public entities thanks to a partnership with Tectura Corp. The solution provides ERP functionality - human resources, payroll, financial, procurement, work order management, permitting and utility billing - using a software-as-a-service (SaaS) approach. But users still have the option to purchase software licenses.
"We wanted to give the option because a lot of times the initial cost of getting into an ERP-type system is just too much, especially for smaller entities," said Tim Barbee, director of research and information services for NCTCOG. "We decided to offer an option, and it really is an option. You can do it either way."
SaaS is a method of application delivery where the software is hosted on the Web by a vendor or third party and provided to users. These users pay subscription rates to use the software, but they don't own it.
The council issued an RFP on Oct. 20, 2006, to find a vendor that could provide an integrated suite of governmental software applications. NCTCOG wanted a company that could deliver a shared services solution, including implementation services and ongoing support. The council chose Tectura, a vendor specializing in ERP delivery and customer relationship management (CRM) offerings from other providers, including technology powerhouse Microsoft.
"It's a combination of multiple systems. It's not a single system that we're talking about here," said Mick Maguire, research and information services program manager of NCTCOG. "It's really a new model, for all intents and purposes. It follows a best-of-breed concept where we go and get the best tool we can find to perform the task that still allows us to break it up. We really are trying something out here that is kind of a new concept as far as how the software packages are available and how they'll be implemented."
The Tectura package combines programs from Microsoft, StarGarden and Cogsdale. The Microsoft Dynamics line is a collection of integrated software modules that communicate easily with standard Microsoft applications found on most PCs. They cover a range of areas, including financial, CRM and supply chain functionality. StarGarden provides human resources, payroll and scheduling functions, and Cogsdale provides billing, permitting, work order and other utility arena solutions.
"This contract allows constituent cities and municipalities the opportunity to procure software and services off the NCTCOG contract with Tectura, thereby saving the expensive and time-consuming RFP process," said John McKeague, Microsoft Dynamics CRM practice lead at Tectura. "Second, the contract allows constituent cities and municipalities the opportunity to procure software and services under a monthly subscription model - or the traditional perpetual model as well - thereby alleviating many of the upfront budgeting challenges we have seen in the past."
Users will pay monthly or yearly software subscriptions fees, according to Barbee, and implementation costs will be spread out over a period of years instead of paid upfront. The contract for S+S is between NCTCOG and Tectura; public entities must sign an interlocal agreement with the council to use S+S. However, these entities can issue their own RFP with Tectura to establish their own partnership. And they don't have to be in Texas, either.
"Obviously we're concentrating on the north central Texas area, but we're not limited to that," said Barbee. "If someone from another area wanted to talk to us about it, we certainly would talk to them about it."
Just how much will it cost? That depends.
For one thing, a town with a population of 5,000 that chooses just a work order solution won't pay the same price as a city with a population of 50,000 that chooses the full suite. And although S+S is ready to go, NCTCOG is looking for a few brave entities to become early adopters so a price model can be developed.
The S+S system allows public-sector entities - cities, counties, school districts and special districts - to pay subscription costs only for what they need.
"It depends on the entity. There may be an entity that wants to do the entire suite," said Barbee. "There may be another entity that is happy with their financials right now, but they've got a problem with [work orders], and they need work orders, so they could just implement the work order piece."
Although S+S offers an array of solutions, Barbee said some functionality, such as public safety records management and municipal court software, has been left out. What remains represents a rather broad brush stroke of the software governments need to do business, Barbee said.
NCTCOG already implemented another shared services ERP system in 2006 through Lawson Software for the cities of Arlington, Carrollton and Grand Prairie, and Barbee recalled they had been contacted by an East Coast city to use the system.
"As long as their laws allow them to do it, our Texas statutes allow us to provide the service outside the state," he said.
Today the Lawson system provides financial, human resources and payroll suites to the participating municipalities, and the cities paid less for the package than if they had bought three individual solutions. According to Maguire, the system has passed several financial audits.
When the project was being worked out, Barbee was employed as Arlington's CIO and he worked with city representatives and NCTCOG to develop ERP system requirements. After the implementation, he applied for the director of research position with the council. Then he and his new co-workers noticed how successful the Lawson implementation was and decided to continue in that direction for other municipalities.
"We were talking about it, and we were going, 'You know, that's a great project, but Arlington's 370,000 people, Grand Prairie's 200,000, Carrollton's more than 100,000,'" Barbee said. In contrast, most cities in NCTCOG's region are smaller. "A city of 25,000 wouldn't be able to afford the Lawson solution," he said. "It's too complex for them. They don't have the staff to support it."
Consequently NCTCOG decided to make a subscription-based solution available for smaller entities and began the project that resulted in the S+S. According to Maguire, more shared services offerings are certain to follow.
"We have several things we're working on; we're in the process of evaluating, taking a step back and really trying to see 'Is there a common need? Is this something that we can generate enough interest in that people will participate?' he said. We're always looking for new opportunities, new directions we can go in with shared services."