New Mexico State Land Office

Royalty Administration and Revenue Processing System

Project Charter For Certification

Executive Sponsor – George Rosenbaum, Executive Director,
Royalty Management and Information Technology
Business Owner – Danny Martinez, Director,Royalty Management
TechnologyOwner – Tony Hoffman, Chief Information Officer
Project Manager – Cathy Plummer
Original Plan Date: 4/25/2018
Revision Date:
Version: 1

table of contents

table of contents

1. project background

1.1 Executive Summary - rationale for the project

1.2 Summary of the foundation planning and documentation for the project

1.3 Project Certification Requirements

2.0 Justification, Objectives and impacts

2.1 Agency Justification

2.2 Business Objectives

2.3 Technical Objectives

2.4 Impact on Organization

2.5 Transition to Operations

3.0 Project/Product Scope of Work

3.1 Deliverables

3.1.1 Project Deliverables

3.1.2 Product Deliverables

3.2 SUCCESS and QUALITY METRICS

4.0 Schedule Estimate

5.0 Budget Estimate

5.1 Funding Source(s)

5.2. Budget By Major Deliverable or Type of expense

5.3 Budget by Project Phase or Certification Phase

6.0 Project Authority and Organizational Structure

6.1 STAKEHOLDERS

6.2 PROJECT GOVERNANCE PLAN

6.3 PROJECT MANAGER

6.3.1 PROJECT MANAGER CONTACT INFORMATION

6.3.2 PROJECT MANAGER BACKGROUND

6.4 PROJECT TEAM ROLES AND RESPONSIBILITIES

6.5 Project Management Methodology

7.0 Constraints

8.0 Dependencies

9.0 key Assumptions

10.0 Significant Risks and Mitigation Strategy

11.0 COMMUNICATION PLAN FOR EXECUTIVE REPORTING

12.0 INDEPENDENT VERIFICATION AND VALIDATION - IV&V

13.0 Project Charter Agency Approval Signatures

14.0 Project Charter Certification Approval Signature

Revision History

Version Number / Date / Comment
0.2 / April 4, 2018 / Draft submitted for DoIT EPMO review
0.3 / April 18, 2018 / Second Draft submitted for PCC

1

1. project background

1.1 Executive Summary -rationale for the project

The New Mexico State Land Office (SLO) oil and gas royalty collection and distribution functions are critical to New Mexico’s economy. SLO uses the 27-year-old Oil and Natural Gas Administration and Revenue Database (ONGARD) System to supportthese functions. ONGARD is a hybrid mainframe, usingCommon Business Oriented Language (COBOL), Customer Information Control System (CICS), DB2 and server functions (Microsoft Visual Studio, C#, SQL). At this point, ONGARD only serves SLO; support for Taxation and Revenue Department (TRD) severance tax collection moved to a new system in March 2018.

SLO faces several issues with ONGARD. ONGARD processes were originally developed to support vertical drilling practices; however, horizontal drilling is now the standard. Interfacing with Geographical Information System (GIS) data is critical to SLO leasing, rights-of-way, permits, fees, and oil, gas, and mineral royalty collection, but ONGARD cannot interface with this technology. SLO also needs to integrate royalty functionality with its Land Information Management System (LIMS). Furthermore, COBOL programmers needed to maintain and operate ONGARD are difficult to retain and increasingly expensive to hire as contractors.

SLO plans to replace ONGARD with a new Royalty Administration and Revenue Processing System (RAPS) that uses current technologies and includes additional needed functionality. SLO will replace ONGARD using a two-phase approach.

  • During RAPSPhase 1, SLO will convert the mainframe COBOL into a modern language, e.g., C# or Java. This will result in a fully tested application that replaces ONGARD functionality and that is hosted on a server architecture instead of the mainframe.
  • RAPS Phase 2 will begin in parallel with Phase 1 code and software migration. During Phase 2 SLO will concurrently address business process improvement, application modernization, and software modernization as budget and schedule allow. Application modernization will include optimizing the royalty accounting functions to include contemporary features like interest computation, advance payment computation, royalty payment changes and payment matching. Leasing accounting may be migrated to the LIMS application. The modernized system’s ability to interface to GIS will support a more accurate distribution of royalty payments by validating agreements to geophysical areas.

1.2 Summary of the foundation planning and documentation for the project

In 2016-17, SLO escalated efforts to find a Commercial-Off-The-Shelf (COTS) solution for royalty functions, issuing a Request for Proposal (RFP). The two proposals that were deemed responsive exceeded the available budget by 360% to 640%. SLO cancelled its RFP in April 2017.

During 2017, SLO expanded its research into technology options, and evaluated several informal proposals to modernize the ONGARD mainframe platform. SLO concluded that a phased approach would provide the best result and submitted a C2 funding request to support platform modernization and concurrent application development. In addition to $5 million previously appropriated for RAPS, the 2018 Legislature appropriated an additional $5 million for the RAPS project.

1.3 Project Certification Requirements

CRITERIA / YES/NO / EXPLANATION
Project is mission critical to the agency / Yes / ONGARD royalty functions are responsible for 92% of SLO revenue, directly fundingits mission to support public schools, universities, NM Military Institute, NM School for the Deaf, NM School for the Blind and Visually Impaired, three hospitals, correctional facilities, water conservation projects, and public building construction and repair.
Project cost is equal to or in excess of $100,000.00 / Yes / Estimated project cost is $10,000,000 plus support from SLO IT staff.
Project impacts customer on-line access / Yes / The server functions of ONGARD’s hybrid architecture support this access today. Customers have online access to submit returns and pull reports. Following platform modernization, SLO will be able to deploy improved user interfaces, including GIS capability to support registration, owner changes, filing, ad-hoc reporting, and assisting revenue projections and analytics.
Project is one deemed appropriate by the Secretary of the DoIT / Yes
Will an IT Architecture Review be required? / Yes

2.0 Justification, Objectives and impacts

2.1 Agency Justification

Number / Description
Agency Mission / Optimize revenues generated from Trust lands to support the beneficiaries, while ensuring proper land management, conservation and preservation.
Agency strategic goal / Administer State Trust Lands to generate the highest possible level of revenue for beneficiaries.
Agency strategic goal / Conduct the operations of the State Land Office in a manner consistent with strong fiscal accountability, efficiency, and customer service.

2.2 Business Objectives

Number / Description
Business Objective 1 / Deploy a modern royalty application to support SLO customers with improved user interfaces, registration, return filing, auditing and collection, royalty distribution, notices and reporting.
business objective 2 / Convert the ONGARD mainframe code base to a modern language to support software migration and modern accounting and distribution technologies.
business objective 3 / Support data quality and integrity, by deploying a royalty application on a common platform with LIMS and GIS, that can integrate leasing and royalty data.
business objective 5 / Enhance industry users’ reporting and filing experience with improved user interfaces and reporting workflow.
business objective 6 / Employ data analytics and reporting tools to support royalty audit activity, increase collection and maximize state revenue.

2.3 Technical Objectives

Number / Description
Technical Objective 1 / Shift the legacy code off the mainframe and end the need for SLO to manage multiple platforms.
Technical Objective 2 / Convert the mainframe code base to a modern language to support software migration and application development on a modern server-based architecture.
Technical Objective 3 / Reduce the cost of royalty administration through the application of cost effective and sustainable technologies. Research on mainframe conversion projects notes an average 50% or greater IT cost reduction by moving applications off the mainframe.
Technical Objective 4 / Develop and deploy a royalty solution on a common platform with SLO’s other applications, as well as disaster recovery,that can be maintained and operated by IT staff.
Technical Objective 5 / Improve SLO IT ability to respond to required business rule changes and processing methodology for the collection of Royalty.

2.4 Impact on Organization

Area / Description
End user / SLO will maintain user web access and web reporting during code conversion and application reengineeringto reduce the impact on industry customers and SLO business users. SLO will review user requirements and identify gaps and enhancements desired by its SMEs and end users. As the project team deploys new functionality, it will develop education and outreach strategies to support the user base.
Business Processes / SLO will define the business logic for TO BE royalty distribution and assessment; define new business processes to gather production data for each lateral well bore; and allocate new processes to assignProduction Unit Numbers(PUNs) from well completion, owner changes and other well compliance events.
It Operations and staffing / The ONGARD Service Center IT positions will transfer from TRD to SLO in FY19, creating a consolidated IT team. The CIO is working on a new staffing model to support the new functionality hosted on a server architecture instead of the mainframe. SLO will be responsible for professional development to develop the skill sets needed to support the new application(s) on-premises.

2.5 Transition to Operations

Area / Description
Preliminary Operations location and staffing plans / The new system will be hosted on-premises, SLO, during the transition from the mainframe to the new royalty application. The CIO and infrastructure team will be meeting with the DoIT Data Center team to evaluate moving all of SLO’s systems to DoIT support. OSC IT positions are in the process of transitioning to SLO IT, and the CIO will create cross-functional team(s) to provide operational support.
Data Security, Business Continuity / SLO and OSC have each developed separate business continuity plans (BCPs), which will be consolidated to produce a single BCP for SLO operations. SLO collects data classified as public information under state statutes and policies, no sensitive information.
Maintenance Strategy / SLO IT staff will maintain the new RAPS solution.
Interoperability / RAPS requires data from the EMNRD Oil Conservation Division (OCD) to correctly process returns; this data contains the Pool, Property, Well, and Volume data used to manage PUNs and report royalties.
Record retention / SLO will retain and archiveoil and gas, royalty and related information in accordance with all state record retention requirements.

3.0 Project/Product Scope of Work

3.1 Deliverables

3.1.1 Project Deliverables

  • Project Certification Requests and Presentations
  • Project Charter
  • Monthly DoIT Reports
  • Project Management Plan
  • IT Service Contracts for platform modernization (code conversion), royalty application development, and IV&V.
  • Project Work Plan
  • IV&V Reports
  • Project Risk Register
  • Project Dashboard for Executive Reporting

3.1.2 Product Deliverables

Requirements Documents / SLO has previously engaged in a comprehensive Business Process Analysis (BPA) effort, however, did not complete the TO BE analysis. The internal team will review the AS IS BPA for royalty functions and develop a TO BE BPA. SLO’s Business Analyst will work with the Royalty SMEs to document gaps, gather and document requirements, and identify desired enhancements.
The project team and platform modernization vendor will review the system blueprint created in 2016, and augment the documentation to confirm the AS-IS and TO BE environments, sizing requirements, and other needs.
The platform modernization vendor, with assistance from SLO’s project team,will document the current state, evaluate data quality, identify business rules, and catalog system inputs and outputs.They will also document requirements for optimized identity management and security, automated procedures, reports, notices, document management, messaging, file transfer and archival, printing and disaster recovery.
Design Documents / The platform modernization vendor will submit a future-state architecture diagram that details the end state for the refactored approach along with a sizing recommendation. The vendor will also produce Third Party Product (TPP) and interface design for production environment.
Systems Specifications / SLO will develop RAPS software during Phase 2, and systems specifications will be created as the platform modernization process ensues. The RAPS application will have the ability to interface with LIMS and SLO’s GIS applications.
Systems Architecture / SLO will deploy RAPS on its standard operating platform, preferably the latest Windows Server release, .NETframework, Visual Studio and SQL Server. The architecture will be scalable to allow for growth, provide interoperability with other systems, have a secure web front end, be security rules based and provide multiple security layers for user authentication.
System and Acceptance Testing / The vendor will perform quality assurance (base level, unit, and acceptance testing), produce test cases and Test Plan; execute all test scripts and resolve any defects; produce a Production Readiness Report and Implementation Plan; cutover to Production and perform health checks for a period to be determined by the project team. SLO’s end users will test system functionality, performance, and reporting accuracy. SLO’s IT staff will test system operational performance.
Operations Requirements / The platform modernization vendor will provide operational sustainability via knowledge transfer, site and system documentation, user training, and developer training.

3.2 SUCCESS and QUALITY METRICS

Number / Description
Quality Metric 1 / SLO business users are able to log into the modernized system and perform work through an improved user interface.
Quality Metric 2 / Industry users are able to log into the modernized system, file Royalty returns and run reports through an improved user interface.
Quality Metric 3 / There is no increase in royalty suspended lines.
Quality Metric 4 / There is no delay in royalty distributions to SLO beneficiaries.
Quality Metric5 / The NM Consensus Revenue Estimating Group (CREG) is able to acquire metrics on royalty production and revenue to support state revenue estimates.
Quality Metric 6 / SLO Royalty Management increases collections by 5%.

4.0 Schedule Estimate

Project Phase / Start Date / Completion Date / Goals
Initiating / July 18, 2016 / June 30, 2018 / RAPS procurement support and contract PM services
Initiating / April 25, 2018 / June 30, 2018 /
  • Business Process Analysis (BPA): review AS IS BPA and develop TO BE BPA; identify gaps and risks. Identify operations opportunities to optimize royalty transaction processing. Identify desired RAPS enhancements.
  • Expand SharePoint RAPS environment: augment current artifact repository, folder hierarchy and stakeholder outreach and communication pages.
  • Procure ONGARD system modernization services: Define deliverables for ONGARD system modernization; Draft and execute contract with State Price Agreement vendor.
  • Systems and Data Analysis: Identify data integrity issues and develop plan for data cleansing in preparation for data conversion and mapping to a new RAPS application.

Planning / July 1, 2018 / August 30, 2018 /
  • Finalize governance
  • Project Kick-off
  • Document current state, requirements, business rules, and provision environments
  • Identify Roles and Responsibilities
  • Allocate resources and assign project team
  • Communication Plan
  • Draft Project Management Plan (PMP)
  • Procure ONGARD IV&V services: define deliverables; request quotes; select IV&V Service Provider and execute contract.

Planning / September 1, 2018 / October 30, 2018 /
  • Finalize business and technical requirements
  • Requirements Traceability Matrix (RTM)
  • Architecture and Design Initiation
  • Finalize schedule and budget
  • Risk Plan
  • Change Management Plan
  • Future State Architecture with sizing estimate
  • Final PMP

Implementing / November 1, 2018 / October 30, 2019 /
  • Final Sizing Documentation
  • Architecture Diagram
  • Iterative code analysis
  • Refactor code by module
  • Quality Assurance: Test Plan, Use Cases, Unit, Performance, and System testing
  • User Acceptance Testing Support and Test Plan
  • Training Requirements and Training Plan
  • Operational Support Plan
  • Security Policy and Plan
  • End User documentation
  • System Administrator Documentation
  • Business Administrator Documentation
  • Education and Outreach Plan to support Industry User transition

Closing / November 1, 2019 / June 22, 2020 / Final Documentation
Transition to Operations
Final IV&V Report
Lessons Learned

See Timeline, below

5.0 Budget Estimate

5.1 Funding Source(s)

Source / Amount / Associated restrictions / Fiscal year
General Appropriations Act of 2016, 7, Subsection 5 of Section 7 of Chapter 11 of Laws 2016; and re-appropriated to the Commissioner of public lands in General Appropriation Act of 2017 Subsection 7 of Section 7 of Chapter 135 of Laws 2017; General Appropriations Act of 2018, Subsection 18 of Section 7 of Chapter 73 extended through fiscal year 2019. / $ 5,000,000 / ONGARD Replacement Funding / FY16-19
General Appropriation Act of 2018, subsection 19 of Section 7 of Chapter 73 of Laws 2018. / $ 5,000,000 / Extends ONGARD Replacement Funding and increases appropriation with additional $5,000,000 / FY18 -20
TOTAL / $10,000,000 / FY18 - 20

5.2. Budget By Major Deliverable or Type of expense

Item / Cost Estimate
Royalty RFP and PM support contracts / $ 273,861
Requirements Documents: Business analysis, system and data analysis, requirements and business rules documentation / $ 1,665,126
Systems Specifications / $ 540,625
Systems Architecture / $ 324,375
System development and Acceptance Testing / $ 2,157,934
Operations Requirements / $ 808,282
Vendor Project Administration / $ 2,203,658
IV&V (Estimated) / $ 250,000
Phase 2 Business Analysis, Integration, Security development / $ 1,600,000
Equipment / $ 90,000
Software / $ 86,139
TOTAL / $ 10,000,000

5.3 Budget by Project Phase or Certification Phase

Item / Cost Estimate / Project phase
Contractual Services to support Royalty RFP and project management, incurred and encumbered FY17 and FY18. / $ 273,862 / Pre-RAPS Phase 1
Prime contractor for ONGARD platform Modernization (RAPS Phase 1) / $ 7,700,000 / Phase 1 Initiation @ no charge
Phase 1 Planning through Implementation
IV&V Contractual Services(estimated) / $ 250,000 / Phase 1 and 2 Planning through Implementation
Professional services to support Phase 2 RAPS app development business analysis, integration, security development(estimated) / $ 1,600,000 / Phase 2 Planning through Implementation
Equipment to support new operational environment (estimated) / $ 90,000 / Phase 1 and 2 Implementation
Software to support new operational environment (estimated) / $ 86,138 / Phase 1 and 2 Implementation
TOTAL / $ 10,000,000

6.0 Project Authority and Organizational Structure

6.1 STAKEHOLDERS