The URL can be used to link to this page

Home My WebLink AboutORD-2023-005-Microsoft Office 365 Contract and Approval of Budget Amendment #5-B 1 ORD-2023-005 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: January 17, 2023 Action Agenda Item No. 8-i SUBJECT: Microsoft Office 365 Contract and Approval of Budget Amendment #5-B DEPARTMENT: Information Technologies (IT) ATTACHMENT(S): INFORMATION CONTACT: Jim Northrup, Chief Information Officer, 1. Year-to-Date Budget Summary 919.245.2276 Kirk Vaughn, Budget Director, 919.245.2153 PURPOSE: To: • Approve the purchase of Microsoft Office 365 subscription licenses from Software House International Corp., for $403,195.97 paid annually (NC State Contract #208C) using the County Attorney's contract template; • Approve the associated Microsoft Volume Licensing Enrollment Agreement which was originated by the vendor and is in line with industry standards while meeting policy requirements and legal sufficiency; and • approve Budget Amendment#5-B. BACKGROUND: Orange County computer users utilize Microsoft Office products to aid them with productivity. The current version of Office installed on the majority of computers is over seven years old and will necessitate an upgrade in FY 2023-24. Since spring 2022, Orange County IT has been conferring with Microsoft and its partners to undertake a license audit to ensure that the County was meeting compliance standards, i.e., the County was not utilizing any software not appropriately purchased. Upon completion of the audit, it was determined the current license compliance model falls outside of Microsoft standards for Exchange Email and Office. Through an oversight, new Office versions were installed on replacement computers rather than transferring the existing older licenses to the new computers. A similar process took place when upgrading Exchange to a different version. The server license was paid for, but the licenses that allow employees to connect were overlooked. After meeting with Microsoft regularly, all parties informally agreed to try to coincide bringing County software into compliance with the FY 2023-24 Budget cycle as a satisfactory remedy. Recently, however, Microsoft determined that the County needed to meet compliance standards immediately, resulting in the need for the current Board consideration. 2 The current version of Office installed on the majority of computers is over seven years old and will necessitate an upgrade in FY 2023-24 regardless of compliance status. The County traditionally has purchased individual perpetual Office licenses, i.e., employees can use the version purchased in perpetuity and where the support model degrades over time. The proposed Microsoft Office 365 model keeps all licensing and software versions in use up to date and in compliance with an annual subscription. Microsoft Office 365 is an evergreen cloud- based productivity suite. This subscription model includes version upgrades as they become available, as well as a host of other features not offered in the perpetual model. The proposed cost for the proposed model is $403,195.97. The past three years have seen a dramatic change in the way employees try to leverage use of the older software model. Remote meetings and cloud-based document sharing have moved into the necessary category once occupied solely by webmail. This represents a dramatic shift in the way Orange County employees collaborate and interact with data. The use model in place today seems to be growing in an upward trajectory and current licensing model cannot keep up. Microsoft tools for business intelligence have been bolted on to the existing system in order create a robust collaborative space for leaders and staff to look at complex datasets to model and illustrate business outcomes. The Microsoft Office 365 proposal natively integrates many of these somewhat disparate systems. Employees continue to ask for new ways to do business and Microsoft Office 365 meets many of those needs and scales well into the future, more so than the perpetual model that has been in place since 2006. The associated Microsoft Volume Licensing Enrollment Agreement was originated by the vendor in line with industry standards while also meeting policy requirements and legal sufficiency. The implementation costs for Office 365 are recommended to be funded with approval of Budget Amendment #5-B, which will utilize $403,195.97 of the County Capital Reserve Fund authorized in Budget Amendment #5-A (a separate item on this January 17, 2023 meeting agenda), and would transfer those funds to the County Capital Fund. This will amend the following Capital Ordinance: IT Capital Fund($403,196) - Project# 30007 Revenues for this project: Current FY 2022-23 FY 2022-23 FY 2022-23 Amendment Revised Grant Funding $37,343 $37,343 Financing Proceeds $14,195,923 $14,195,923 Appropriated Fund Balance $200,000 $200,000 Transfer from General Fund $2,822,135 $403,196 $3,225,331 Total Project Funding $17,255,401 $403,196 $17,658,597 Appropriated for this project: Current FY 2022-23 FY 2022-23 FY 2022-23 Amendment Revised IT Capital Project Expenditures $17,255,401 $403,196 $17,658,597 Total Costs $17,255,401 $403,196 $17,658,597 3 FINANCIAL IMPACT: The subscription amount is $403,195.97, paid annually each year for three years. As an annual subscription, this agreement may have incremental increases and will be funded in the General Fund in future fiscal years. The approval of Budget Amendment #5-B increases the County Capital Fund by $403,196. SOCIAL JUSTICE IMPACT: There are no Orange County Social Justice Goals specifically applicable to this item: However, while a simple software purchase agreement may not seem to impact Social Justice, this software is essential to the smooth running of government and like many infrastructure items is a foundational element to ensure all Board Goals and Priorities are pursued. ENVIRONMENTAL IMPACT: There are no Orange County Environmental Responsibility Goal impacts associated with this item. The new software does create a more efficient workplace. RECOMMENDATION(S): The Manager recommends that the Board approve this purchase, authorize the Manager to execute all necessary contracts/agreements as well as any future amendments, and approve Budget Amendment #5-B. 4 Year-To-Date Budget Summary Fiscal Year 2022-23 Fund Budget Summary County Capital Original Budget Revenue $10,612,009 Interfund Transfer Revenue Fund Balance Appropiation Total Original Budget $10,612,009 Additional Revenue Received Through Budget Amendment#5-B (January 17, 2023) Grant Funds $336,177 Non Grant Funds $296,098 Additional Interfund Transfer Revenue $518,676 Additional Fund Balance Appropriation Total Amended Budget $11,762,960 Dollar Change in 2022-23 Approved Budget $1,150,951 % Change in 2022-23 Approved Budget 10.85% Authorized Full Time Equivalent Positions Original Approved Full Time Equivalent Positions (includes Permanent and Time Limited) 0.000 Changes to Full Time Equivalent Positions Amended Approved General Fund Full Time Equivalent Positions 0.000 Total Approved Full-Time-Equivalent Positions for Fiscal Year 2022-23 0.000