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Another $1 billion troubled system project

January 11, 2017

A few years ago, I posted about the Air Force’s abandoned $1 billion effort to consolidate all its many accounting systems. Now it appears the State of California is going through similar difficulties:

State officials have failed to remedy problems that have contributed to a two-year delay for a new computer system and cost increases that are pushing its cost toward $1 billion, State Auditor Elaine Howle warned Thursday.

The system is being built to improve the state’s handling of its finances. The completion date has been pushed back from July 2017 to July 2019 and the total estimated cost has increased $237 million to $910 million, Howle said in a letter to Gov. Jerry Brown.

Howle wrote that the project team “has not remedied the project’s significant scheduling slippage,” and the project is “failing to promptly respond to its oversight entities’ concerns and recommendations, many of which have been outstanding for more than a year.”

The Financial Information System for California (Fi$Cal) project is supposed to centralize all state budgeting, accounting, procurement and cash management functions in one computer system.

The schedule slip does not appear to be that bad — the original projection (in 2012) was for a 5-year project — but the nearly-fourfold increase in cost vastly outweighs the 40% increase in time. I suspect that is symptomatic of the state hiring vast numbers of high-paid outside tech workers. A similar system consolidation project I reviewed several years ago (private sector, not public) was for a period paying out $750,000 per day in consulting IT workers and managers.

About the Author:

Webster is Principal and Founder at at Bruce F. Webster & Associates, as well as an Adjunct Professor for the BYU Computer Science Department. He works with organizations to help them with troubled or failed information technology (IT) projects. He has also worked in several dozen legal cases as a consultant and as a testifying expert, both in the United States and Japan. He can be reached at 720.895.1405 or at bwebster@bfwa.com.

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