Department of Information and Technology Services (DOITS) IT Strategic Plan 2018 – 2020

1. Department of Information and Technology Services (DOITS) IT Strategic Plan 2018 – 2020 Addressing Information Technology Opportunities, Risks and Threats Washington, D.C.February 2018

2. The importance of information technology systems for GS/OAS daily operations has been recognized by the Board of External Auditors Board of External Auditors Reports

3. The importance of information technology systems for GS/OAS daily operations has been recognized by the Member States PROGRESS TOWARD ACCOUNTABILITY, EFFICIENCY, AND EFFECTIVENESS, AND RESULTS IN THE OAS GENERAL SECRETARIAT AG/RES.2911 (XLVII-O/17) C.7: Information Technology Strategic Plan To instruct the General Secretariat to include in its proposed program-budget for 2018 sufficient resources to upgrade critical information technology systems and processes based on the Strategic Plan for Management Modernization of the Organization of American States and the Information Technology Strategic Plan 2018-2020 presented by the General Secretariat. Despite this recognition, only $200,000 was allocated in Program Budget 2018 to address critical IT requirements, when $5 millions are urgently needed. $25M $50M A ‘piecemeal’ approach does not work

4. GS/OAS core administrative systems (ERP) are in a critical condition DOITS has been working hard to keep the GS/OAS ERP (OASES) alive: • Oracle’s data base engineis no longer supported by Oracle • Oracle’sElectronic Business Suite (EBS) current version, is no longer supported by the vendor. • Not evenexternal software companiesprovide support to GS/OAS current version of EBS • ‘Band-Aid’ approach: significantinvestment in people’s time in findingtemporary fixes withoutaddressing the root causes of ourproblems • Exponentialexposure of a total system failurethatwill impact directly on day to dayoperationswith the inherentpossibility of loss of data. • Shut down procedures to avoidsystems crashes withpotentialloss of data has increased in 2017 near to 3 days of interruptions. • Data integrityproblems have been discoveredmainly in end-of-month and end-of-yearfinancialclosings. • Inherentincapacity of streamliningexistingprocesses or defining new ones.

5. GS/OAS core administrative systems (ERP) are in a critical condition Data Base Engine Electronic Business Suite Supported Unsupported Extended Support Color code: ORACLE ORACLE Timeline OAS Timeline OAS

6. GS/OAS core administrative systems (ERP) are in a critical condition MS SQL MS SQL RBCS TECS Electronic Business Suite Release 11 • DHR DFS LMS TXF Human Resources General Ledger OPDB Payables No payrollNo checksNo financial statements No purchase orders App Receivables CashManagement ORACLE DB Engine PES Grants/Projects App Payroll FixedAssets • DP DGS App App Purchasing Fixed Assets (Inventory) App App Legal CPR PIMS OASES

7. GS/OAS core administrative systems (ERP) are in a critical condition Under these circumstances DOITS cannot guarantee “day to day operations” of GS/OAS • 1. Current ERP annual maintenance costs: • Total annual cost of maintaining the status quo $ 925K • Spending $925,000 everyyearjust to keepsystemsrunnning = $4.6 millions in 5 years • Withouthavingresolvedanyproblem • Without the capability of streamlininganyprocess at all • Exponentiallyincreasing the risk of total collapse of existingERP 1. Maintenance costs of OASES current licenses $ 160K 2. Maintenance costs of existing apps $ 50K 3. Support cost of outsourced apps $ 25K 4. External support costs (consultants) $ 80K 5. Complementary applications development cost t $160K 6. OASES DOITS support costs $ 450K OASES No payrollNo checksNo financial statements No purchase orders • 2. Daily cost of OASES downtime = $ 205,000 x number of days of failure. • Number of day the system failed in 2017= 3 days • Total cost of downtime in 2017= $ 615,000 2017 total annual cost of ownership of GS/OAS current ERP = $ 1,540,000

8. A modern OAS requires a modern ERP • Automate, streamline and strengthen financial, procurement, human resources management and business processes; With a modern ERP, the GS/OAS will be able to: • Increase its accountability, improving the ability of the GS/OAS to report effectively and in a timely manner to donors • Manage information efficiently and securely; • Gradually convert to IPSAS, or any other standard enabling GS/OAS capability to apply for grants from organizations such as EU, WB. • Manage projects in a consistent way in order for donors to gather project information such us progress, results and impact on beneficiaries. • Integrate in a consistent and proactive way GS/OAS National Offices. • Promote a dramatically change in the GS/OAS culture and way of doing business

9. How do we get there ? TCO savings of $$11M OVER 10 YEARS* Oracle ERP On-Premise vs. Oracle ERP Cloud TCO Analysis10 year Cumulative Cost Comparison Note: Estimates based on client data provided and assumptions for operational data not provided.Source: ORACLE

10. Why move to the Cloud ?

11. Why move to the Cloud ?

12. Why move to the Cloud ?

13. The quicker we implement the cloud-based system, the cheaper it will be Start of activities: July 2018 15 month implementation 18 month implementation 24 month implementation

14. Source of funding Board of External Auditors Reports • Resources of this magnitude have not been identified in Program Budget 2018 and it is unlikely that such investment would be allocated in the Program Budget without affecting the implementation of other priorities • The quicker to move forward with the project, the quicker we will avoid a system collapse and the cheaper it will be • SAF estimates that the surplus in the Indirect Costs Recovery Sub-fund (ICRRS) for the 2017 exercise is $5,5 millions; • ICRRS can be used for infrastructure projects (aa. 79 and 80 of the General Standards) “The Board recommends that the OAS consider any surplus of the ICR fund be earmarked for administrative requirements, including the necessary improvements to maintenance and infrastructure.”

15. Recommendation To upgrade the existing system we recommend to: Authorize the GS/OAS to proceed to upgrade existing ERP to a cloud-based modern ERP system Approve, on an exceptional basis, the use of $4.8 millions from the ICR reserve sub-fund in order to finance this project that is essential to guaranteeing OAS “day to day” operations Implement the project within a 15-month period, which is the most cost-efficient option

16. Annexes

17. Upgrade of Existing ERP Implementation Plan

18. Upgrade of Existing ERP Implementation Plan

19. Upgrade of Existing ERP Implementation Plan

20. Upgrade of Existing ERP Implementation Plan

21. Upgrade of Existing ERP Implementation Plan

22. Upgrade of Existing ERP Implementation Plan

23. Upgrade of Existing ERP Implementation Costs ORACLE licensing costs = $ 450,000 / year Change Management Implementation Plan is a must

24. Department of Information and Technology Services (DOITS) IT Strategic Plan 2018 – 2020 Addressing Information Technology Opportunities, Risks and Threats Washington, D.C.February 2018

25. Information Technology Risks and Threats Matrix     