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SAP Customer Success Story

"The implementation could not have been done without the empathy and good working relationships established between the SAP consultants and the employees of the Municipality of Caguas."

Carlos Crespo, Director of Finance, Municipality of Caguas, Puerto Rico



Company Name Municipality of Caguas, Puerto Rico Industry Public sector Key Challenges Replace legacy system with an open Web-based system for financial and human resources (HR) information, and persuade users to buy into the new system Implementation Partner SAP® Consulting, part of SAP Customer Services Network Solution and Services SAP R/3® Enterprise, available today as part of the mySAPTM ERP solution mySAP Business Suite SAP Public Sector Collection and Disbursement SAP software for public sector budgeting and payroll Implementation Highlights First implementation of SAP Public Sector Collection and Disbursement High-functioning international implementation team Implementation in six months; go-live and support in another three months Project on time and on budget


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Key Benefits Completely integrated financial and HR operations Better decision making through improved reporting and better access to more accurate information Improved productivity through access to more accurate, comprehensive information and timely reports Operating costs reduced and revenue collections more timely System template available to other Puerto Rican municipalities Hardware IBM Operating System Microsoft Windows NT

The Municipality of Caguas is Puerto Rico's fifth largest city. With 59 square miles and 150,000 people, it has 2,300 employees and manages $130 million in annual funds. "The only things we don't have," says Carlos Crespo, director of finance, Municipality of Caguas, Puerto Rico, "are an airport and a beach. But we have all the other elements required of a city." Prior to 1999, the Municipality of Caguas was using a 10-year-old, closed legacy system. In 1999, Crespo decided that along with preparations for Y2K, the city's accounting system had to change. To determine the specific needs of the city and drive the implementation, he formed a committee from the budgeting, human resources (HR), procurement, and finance departments, along with external auditors and an information systems consultant. The committee compiled a list of 457 criteria it would use to evaluate competing systems and put out a request for information. Of the 23 companies invited to participate, only 3 fulfilled the minimum requirements, and one was subsequently eliminated. SAP and a competitor remained in the running. The competitor gained a nominal advantage by offering a less expensive system.

Existing Environment Legacy system; Kronnos biometric time and attendance system

"What was more important than the results of the proposal was the quality of the vendors' systems that were in use in Puerto Rico," says Crespo. "The clients who had implemented an SAP solution reported total satisfaction with the products and support, unlike the competitive vendor's users." The city chose SAP® software for the solution and SAP Customer Services Network for services. SAP Customer Services Network provides easy access to the most comprehensive SAP solution services, including consulting, education, support, custom development, and hosting. SAP Education, a part of SAP Customer Services Network, immediately initiated a two-week training program in Basis and ABAPTM to bring the municipality's employees up to speed. Once the employees were trained, SAP Consulting, another part of SAP Customer Services Network, assisted with implementation.

"We were concerned about the change in the culture for our employees, because the change in the system would affect them directly," says Crespo. "But the people who were going to use the software were also the codevelopers and they were able to customize it to their own particular flavor. Now their attitude is: `This is our baby.'" In other words, the city was challenged not only to upgrade its IT systems, but also to conduct change management and process reengineering while gaining the acceptance of users. This is exactly the kind of challenge that SAP Consulting was created for. "We set aside a room here and packed it with computers designated to do nothing but code software in the different modules," says Crespo. The room was filled with SAP Consulting project managers from the United States, Venezuela, Peru, Brazil, Argentina, and elsewhere, working side-by-side with Municipality of Caguas employees. Their mission was to create custom modules and templates, geared to the specific requirements outlined by the committee.


"Whenever someone had a problem, the SAP consultants would often have the answer within the same day or the next."

Carlos Crespo, Director of Finance, Municipality of Caguas, Puerto Rico


"Our understanding is, this was a unique project, not only for us, but for SAP as well," says Crespo. That was true in a variety of ways. First, this was to be the world's first implementation of SAP Public Sector Collection and Disbursement (SAP PSCD). And second, the requirements of municipal government in Puerto Rico, combined with the reporting requirements of Governmental Accounting Standards Board (GASB) Statement 34, were unique and had never been addressed before. So the software-implementation challenges were significant.

The system was introduced within the given time frame, thanks to the proven ASAP implementation methodology. "The implementation could not have been done without the empathy and good working relationships established between the SAP consultants and the employees of the Municipality of Caguas," says Crespo. "We were also impressed by the support provided by SAP offices when we needed more information. Whenever someone had a problem, the SAP consultants would often have the answer within the same day or the next."


The city's goals were well met. Implementation was completed in six months, and another three months were devoted to going live with support. The project came in on budget. The legacy Kronnos biometric time and attendance system was seamlessly integrated with the SAP software.

The Municipality of Caguas now has a fully integrated, Web-enabled system. And SAP Consulting project leaders successfully conveyed to the development team best practices that were implemented as part of the city's workflow or system transactions. Caguas is the first customer in the world to go live with SAP PSCD. And it is the first SAP customer worldwide to use SAP PSCD in conjunction with SAP software for public sector budgeting and payroll ­ all loaded on the same hardware. The scope of the implementation covers finance, controlling, treasury, funds management, fund accounting, collection and disbursement, materials management, HR, and payroll.



The Municipality of Caguas continues to achieve impressive benefits from its SAP software. It has already reduced costs, ensured timely revenue collection and streamlined operations; improved customer-facing services; and increased employee efficiency and effectiveness. The software facilitates collaboration, efficiently manages mission-critical operations, and ensures that the appropriate data is shared in a secure environment. Furthermore, the municipality has increased revenue-collection efficiency and is in the process of minimizing tax evasion. It has improved its data quality, making it less prone to error; made that data more accessible; and facilitated the timely issuance of reports. "If I were to give SAP a grade, I'd give it an A," says Crespo.

The most immediate benefits the city realized from this system are better decision making, greater integration, and significantly improved productivity. "Let's talk about a transaction," says Crespo. "Prior to implementing the SAP software, we depended on all the physical internal documents to prepare a disbursement." With the old process, requisitions, purchase orders, and vouchers were sent from one department to another for signatures and approvals and were then remitted physically to the finance department for payment planning, so that final payments could be delivered. "This process required a couple of days at least. Now, with our SAP solution, these documents are generated electronically, so we don't need them in physical form," says Crespo. The system has all the signatures in electronic files, and once a transaction is approved on the screen, the entire process of issuing checks is electronic. "What required a couple of days or longer is done now in 10 to 15 minutes. So we save a lot of time, effort, and paper," he says.

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50 071 297 (04/11)


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