Contracting and Disbursement for New ERP Initiative

ICANN has grown in size and complexity over the past five years in many ways including, but not limited to the following: (i) staff multiplied by three; (ii) global presence expanded to three hubs and several engagement centers; and (iii) processes became more global and complex. Meanwhile, the infrastructure of separate back office Finance, HR and Procurement systems supporting the current organization was designed and implemented at least five years ago. Securing and implementing an integrated enterprise resource planning ERP solution under a single system of record will improve systems capacity, global reporting and analysis capability, and productivity and cross-functional efficiencies, and enhance internal controls, thus accelerating ICANN's progress towards operational excellence.

The staff performed a thorough analysis of the two options available: (i) retrofitting the existing sets of systems to marginally improve their capabilities and develop interfaces where possible; and (ii) implementing an integrated ERP solution. Though the cost of the retrofit option would be lower in the first year, the five-year total costs would exceed significantly the integrated ERP option, as the retrofit would still require a significant upgrade during the five years. In addition, the retrofit would only marginally improve the back office capabilities and efficiencies, and require developing costly, complex and high maintenance interfaces with a resulting set of capabilities much below the integrated solution.

As a result, the integrated ERP solution is considered a viable, more cost-effective solution.

The integrated ERP solution project has been designed as follows:

Internal resources: The project was considered early but delayed until senior resources with extensive experience were available within the staff and each business unit involved had reached the adequate level of maturity (IT, Finance, HR, Procurement). With the hiring of a Senior Director of IT in 2014 and a VP Finance in March 2015, both having extensive experience of large systems implementation projects, the conditions were met. The internal resources include:

Three subject matter expert teams: each including two levels of experts (one lead, and experts for each function)
Four backfilling resources covering the period of design and implementation to ensure daily operations are carried out while adequate expert focus is provided to the ERP project
One dedicated project manager (contracted) with extensive ERP implementation experience.
Three IT resources: one Senior Director of IT (oversight and management), one IT business analyst and one IT manager (one for HR, one for Finance/Procurement)
A steering committee including: CIIO, COO, CFO and the Senior Director of IT
One HR change management resource (to be hired)
Embedded ERM reviews since inception of the project.
External Resources:

Larger ERP providers have a vast network of certified business partners as well as internal consulting resources that ICANN will draw from.
ICANN will select the most qualified technical consultants through a process of individual interviews.
Technical solution: A Software-as-a-Service (SaaS) model:

One ready-to-configure web-based platform, used by all the customers of the solution provider
Each customer configures a wide range of capabilities, to its business unit's needs (no software development, no customization)
For each function, the range of standard and optional processes is designed on the basis of process and controls best practices, ready for configuration.
Platform is regularly updated and has a rich roadmap of new capabilities made available to all customers in the platform at no additional cost
System's performance is monitored and managed by SaaS supplier to Service Level Agreements (SLAs)
System security:

Data transfer: designed a multi-step data conversion strategy including testing, reconciliation and validation process.
ICANN will be converting historical transactional data and all master file data.
All conversion programs will be thoroughly tested for accuracy and completeness.
ICANN will conduct unit testing, two Conference Room Pilots (CRP), which tests our business processes to system configuration and conversion of data files.
ICANN will perform a Business Pilot, which will simulate actual business process from beginning to end (for example, Order to Cash and Procure to Pay) plus complete conversion testing for historical and master file data.
Data security: RFP process includes demos on disaster recovery, data center operations management, data encryption, data logs, ERP environment exclusive to ICANN:
ICANN will configure to world-class standards for data security, which include data encryption, management of access controls, access and review of system logs, and configuration of access security based on good internal controls.
Further, the Board reviewed the staff's and the Board Finance Committee's recommendations for contracting and disbursement authority for a new ERP solution.

There will be a financial impact on ICANN to implement a new ERP solution. This impact is currently included in the FY16 Operating Plan and Budget approved by the Board on 25 June 2015. This action will not have a direct impact on the security, stability and resiliency of the domain name system.

This is an Organizational Administrative function that does not require public comment.