Title
Resolution Authorizing INFOR Lawson SAAS Contract Renewal
Body
Department: Information Technology
Council District: n/a
Public Hearing: n/a
Advertising Date/By: n/a
Contact 1 and Phone: Jane Nickles, IT, 2314
Contact 2 and Phone: Chryste Hofer, IT, 4650
BACKGROUND:
On March 11, 2014 we moved our Enterprise Wide Infor ERP system to the Cloud. We were one of the first clients to deploy our unique ERP configuration and suite of software in this cloud subscription model. As more and more Infor ERP clients have moved to the cloud, the ability to support and maintain various custom client configurations has proven cumbersome. It has also been a challenge for the City of Greensboro IT team when testing upgrades and patches in our unique environment. In an effort to move toward a more standardized architecture, we have negotiated with Infor to move our ERP system to the new CloudSuite. This will provide a more stable and standardized architecture for our ERP system. It will also allow for automated update and patching processes which will save City staff time when system maintenance is required.
Infor will bear the cost to move us to the new CloudSuite, and the City will pay only the difference in the discounted cost of the additional licensed software modules. Infor is also providing us with the enhanced Disaster Recovery option at no additional fee. This new license order would also reduce the future subscription fee escalation percentage from 5% to 2% with no increase for the first three years.
This is a 4 and ½ year contract for the updated subscription. We have purposely structured the contract this way to allow the City to reduce the payment in the current fiscal year so as to offset the increase in future years.
If the order is signed on January 31, the amount of the refund/offset to the City will be approximately $83,574 (($802,754.6/365)* 38 days: 28 Days in Feb, 10 Days in March). If The order form is not executed until March 1, then the amount of the refund/offset drops to about $19,794, since the refund period would only be 9 days. The City can save approximately $60K in the FY17 budget by getting approval on January 17th . The first payment for the initial 6-month period would be reduced by a credit from $448 767.12 to approximately $366,426. The first full annual payment of $900,000 would be due in July 2017 (FY18).
This is a proprietary system.
BUDGET IMPACT:
|
Fiscal Year |
Current Contract Obligation |
Proposed Contract Obligation |
Budgetary Impact |
Account |
|
FY17 |
802,754.40 |
448 767.12 |
(353,987.28) |
686100101.5415 |
|
FY18 |
841,492.85 |
900,000 |
58,507 |
686100101.5415 |
|
FY19 |
*883,568 |
900,000 |
16,432 |
686100101.5415 |
|
FY20 |
*927,746 |
900,000 |
(27,746) |
686100101.5415 |
|
FY21 |
*974,134 |
918,000 |
(56,134) |
686100101.5415 |
|
Contract Change |
$4,429,695.20 |
$4,066,767.12 |
$(362,928) |
|
|
|
Vendor Credit if executed by 1/31: |
(83,574) |
(446,502) |
|
* Years FY19- FY21 would be up for negotiation and are currently scheduled at a 5% escalation rate. Budgeted escalation rates are shown above.
RECOMMENDATION / ACTION REQUESTED:
It is the recommendation of the IT department that this new order form be executed.