Houston counts down to SAP enterprise software liftoff

The city of Houston wants to replace its antiquated business systems with enterprise resource planning software capable of improving efficiency and customer service.

For this purpose, the city has tapped SAP Public Services Inc. to implement its mySAP solution through a 10-year, $15 million contract, said Earl Lambert, Houston's chief technology officer. The contract includes software, training and maintenance, he said.

The ERP solution will lay the foundation for HoustonOne, a $23 million system of streamlined business processes the city is implementing. The city will spend an additional $8 million on hardware, interfaces, conversion services and software, project management support and additional staffing, Lambert said.

The city's contract with SAP calls for a three-year implementation program with SAP Consulting Inc. serving as integrator, then seven years of additional maintenance, said city spokesman Frank Michel. The contract has options for the city to implement SAP's E-procurement and business warehouse reporting applications, he said.

SAP will work with a steering committee of city leaders, selected from each department involved in the project, to guide implementation and assist in training city employees. The new system, which will give 23,000 city employees access to real-time information, is designed to improve the city's financial management, human resources, payroll, procurement and materials management processes.

The project also will standardize the city's administrative functions across all departments and increase collaboration and information sharing.

"We're trying to make ourselves more efficient on the one hand, so that we can more easily interface with the rest of the world on the other," Michel said. "Those are the two main goals."

The project will fundamentally change how the city handles key business and administrative functions, said Rich Beggs, strategic consulting engagement manager for SAP Public Services.

"There will be integrated business areas, in many cases for the first time, so this is a significant change for the city," Beggs said.

But no cost savings estimate is complete yet, so officials are not sure how much Houston will save because of efficiencies.

The city is plotting where it can make operational improvements and plans to monitor and quantify the degree and value of the improvements, said Tim McCormick, vice president of state and local government for SAP Public Services.

SAP, which often partners with systems integrators for large-scale statewide ERP implementations, also has served as its own integrator on other projects, Beggs said. In May, SAP implemented its own ERP system for the Clark County School District in Clark County, Nev., home of Las Vegas. It also did a similar project at the University of Kentucky, Beggs said.

McCormick said the market for ERP systems in state governments has taken a back seat to ERP opportunities in local governments over the past few years, but that trend figures to reverse.

"We see a lot of activity in all major states in the administrative systems and ERP, looking forward, though not in the recent past," McCormick said. "We're seeing a trend where the state governments are now stabilizing their budgets and moving forward with ERP and administrative projects."