Neverending Story pattern: School District ERP system late, over-budget

A story a few days ago caught my eye, not because it was unusual, but because it follows so familiar a pattern. Here are a few excerpts from the article:

MANATEE — Late nights, hefty contracts and humming computers are a norm in the district’s School Support Center, where employees are working to fix a troubled software project.

The project started with an estimated cost of $9.8 million in 2016. A recent estimate places the cost at more than $27 million, and the true price tag is becoming more evident each week. …

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Meanwhile, a team is still dealing with approximately 11,000 errors found in Ciber’s state reporting module. Fixing the software is a top priority, because accurate reports are key to receiving tens of millions of dollars in state funding. …

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In 2016, the board contracted with Agitech Solutions for a price not to exceed $200,000 per year. Agitech maintains the ERP software, installs needed upgrades and monitors performance.

The board increased its maximum spending from $200,000 to $395,000 last April, bringing system testing, development and customization into Agitech’s scope.

The two-year agreement came to an end, and the school board renewed its contract with Agitech on Aug. 28. On Tuesday, the board will decide whether to increase authorized spending from $395,000 per year to $850,000 per year. …

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It seems the rising costs are a symptom of poor management, misconduct and bad luck over the last several years. A bankruptcy impacted Ciber in 2017, adding to rampant turnover among the project team.

The program grew far beyond its original scope, and the district failed to back its project with enough resources, according to past reports from the internal auditor. …

Now, this is a newspaper article based on what the reporter (Giuseppe Sabella) was able to glean through hearings and interviews. Having reviewed dozens of such projects, I know there are a lot more details buried in emails, memos, and status reports. Still, here are some things that leap out at me:

• The estimated cost tripled in less than two years. And we’re not talking about going from $100K to $300K; we’re talking about going from $10M to $30M. There was some serious, serious lack of sufficient analysis at the start of this project. (“In creating a new software program, all the important mistakes are made the first day.” – Spinrad)
• It’s unclear from the report how the project schedule has changed over time, but I’m willing to bet there’s a rough correspondence between the cost increase and the schedule increase.
• The article makes it sound as though the problems are being solved by adding some (10) people and working some late nights. No, that’s not going to have a noticeable impact on the overall schedule of a project that has added $20M to its estimated cost.

As the title notes, this sounds like a situation trending towards the “Neverending Story” pattern in failed IT projects, from my 2000 PwC white paper:

The client contracts with the manufacturer to develop and install a system. The project starts. The completion date slips. It keeps slipping. Each time the adjusted delivery date approaches, the project slips yet again. At some point, one of three things happens: the manufacturer/vendor abandons the project; the client cancels the project; or the manufacturer delivers a system that the client terms wholly inadequate and unacceptable. In some cases, the effort has gone on for years, with millions of dollars spent and little to show for it.

Hopefully, the Manatee School Board can pull this out of the fire.

About the Author: bfwebster

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 303.502.4141 or at bwebster@bfwa.com.