Item - 2022.GL32.12

The General Government and Licensing Committee recommends that:

1. City Council authorize the Chief Technology Officer to negotiate and enter into non-competitive contracts with SAP Canada Incorporated, on the terms and conditions satisfactory to the Chief Technology Officer, and in a form satisfactory to the City Solicitor:

a. to procure SAP software licenses and subscriptions, and professional services required for the upgrade to the S4/HANA RISE and Analytics Cloud solutions, for a five (5)-year period commencing from the date of award for the total amount of up to $19,125,000 net of all taxes and charges ($19,461,600 net of Harmonized Sales Tax recoveries);
 

b. to secure additional SuccessFactors software subscriptions for a five (5)-year period from 2022 to 2027 with additional spend authority of $4,930,016 net of all taxes and charges ($5,016,784 net of Harmonized Sales Tax recoveries);
 

c. to procure Ariba software subscriptions and services and increase the value of the Purchase Order Number 6053111 by $225,000 net of all taxes and charges ($228,960 net of Harmonized Sales Tax recoveries) from $1,406,483 net of all taxes and charges ($1,431,238 net of Harmonized Sales Tax recoveries) to $1,631,483 net of all taxes and charges ($1,660,198 net of Harmonized Sales Tax recoveries); and
 

d. to procure ECC (SAP Enterprise Resource Planning Central Component), software licenses, and increase the value of the Purchase Order Number 6052129 by $422,500 net of all taxes and charges ($429,936 net of Harmonized Sales Tax recoveries) from $7,707,034 net of all taxes and charges ($7,842,678 net of Harmonized Sales Tax recoveries) to $8,129,534 net of all taxes and charges ($8,272,614 net of Harmonized Sales Tax recoveries).

The City has been using SAP since 1998 for the City’s financial and human resources business system needs and as an enterprise-wide system to meet other business requirements. SAP is a software system used to create a centralized system that allows Divisions to share data and manage business processes.

In 2004, Council adopted a report called “Moving Forward with SAP”. This report reinforced SAP as the City’s platform of choice by following the “SAP first” approach to Enterprise Resource Planning management systems as supported by the Auditor General in 2003. It provided the strategic direction for the City to establish an SAP governance model and an SAP Competency Centre to manage and support the City's investment and expansion on SAP solutions and technologies.

SAP Solutions provide foundational system support for critical Corporate Financial Management, Human Capital Management and Business Intelligence solutions across the City. Current corporate initiatives that require additional SAP services and solutions include the Financial Systems Transformation Program, extension of Employee Self Service functionality to support the retirement of mailed pay notices, Payroll and Benefits and People and Equity Transformation programs, Enterprise Business Intelligence and Workforce Business Intelligence initiatives and growth in license demand for existing solutions including ECC (SAP Enterprise Resource Planning Central Component), SuccessFactors, Ariba and SAP Analytics Cloud.

The City currently has a Master Services agreement with SAP Canada Incorporated which provides authority for the use and procurement of various SAP solutions and services in the City.

The purpose of this report is to seek authority to negotiate for and procure next generation SAP solutions and licenses, as well as authority to renew and increase existing contracts due to growth, and where beneficial to the City, with SAP Canada Incorporated, by:

1.  Executing an agreement to procure proprietary SAP software licenses and subscriptions, and professional services required for the upgrade to the S4/HANA RISE and Analytics Cloud solutions, for a five (5)-year period commencing from the date of award for the total amount of up to $19,125,000 net of all taxes and charges ($19,461,600 net of Harmonized Sales Tax recoveries);

2.  Executing an agreement to procure proprietary SuccessFactors software subscriptions. The City currently has authority under GL16.5 (Renewal of Proprietary Technology Maintenance Contracts Supporting the City Services from 2021-2025) for current SuccessFactors software subscriptions up till 2025. Through this report, City is requesting an additional spend authority of $4,930,016 net of all taxes and charges ($5,016,784 net of Harmonized Sales Tax recoveries) to procure SuccessFactors software subscriptions for an additional period of two (2) years up till 2027;

3.  Amending the existing Purchase Order Number 6053111 to procure proprietary Ariba software subscriptions and services and increase the value of the Purchase Order by $225,000 net of all taxes and charges ($228,960 net of Harmonized Sales Tax recoveries) from $1,406,483 net of all taxes and charges ($1,431,238 net of Harmonized Sales Tax recoveries) to $1,631,483 net of all taxes and charges ($1,660,198 net of Harmonized Sales Tax recoveries);

4.  Amending the existing Purchase Order Number 6052129 to procure proprietary ECC (SAP Enterprise Resource Planning Central Component), software licenses, and increase the value of the Purchase Order by $422,500 net of all taxes and charges ($429,936 net of Harmonized Sales Tax recoveries) from $7,707,034 net of all taxes and charges ($7,842,678 net of Harmonized Sales Tax recoveries) to $8,129,534 net of all taxes and charges ($8,272,614 net of Harmonized Sales Tax recoveries).

City Council approval is required in accordance with Municipal Code Chapter 195-Purchasing, where the current request exceeds the Chief Procurement Officer's authority of the cumulative five year commitment limit for each supplier under Article 7, Section 195-7.3D of the Purchasing By-Law or exceeds the threshold of $500,000 net of Harmonized Sales Tax allowed under staff authority as per the Toronto Municipal Code, Chapter 71-Financial Control, Section 71-11A.