Marin Information Services and Technology Director Dave Hill took over the effort to untangle the county s fiscal software system in early 2009.
Marin Information Services and Technology Director Dave Hill took over the effort to untangle the county s fiscal software system in early 2009. (IJ archive)
After spending more than $30 million on a fancy computer system that never worked well, top Civic Center officials have concluded the program should be scrapped as soon as a more efficient system can be phased in.

County Administrator Matthew Hymel said pulling the plug on the county's computer debacle will cut losses because the county can buy a better and more efficient system for about as much as it would cost to fix and maintain the problematic SAP fiscal software program.

Although officials including county supervisors contended in recent months that many problems plaguing the system were ironed out as the program "stabilized," an executive summary of a departmental team review headed by Chief Assistant County Administrator Mona Miyasato indicates the situation remains grim.

"Although SAP is getting the basics done, we are still doing work-arounds and using up significant staff time because of the poor initial implementation," the document says. "Almost one-third of the functionality that was promised has never been met."

After reviewing the investment required to fix and maintain SAP, the county plans to look at other system options and propose to phase-in a new system over the next two to four years.

"For about the same amount of investment needed to fix SAP, we could move to a new system and have significantly lower ongoing operating costs," the summary says.

More efficient systems designed specifically for local government "were not as widely available when we first looked at SAP six years ago.


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... The reduced operating costs of a new system would save at least $8 million over the next 10 years. We would still use SAP for the next three years."

Hymel said the team study "provides us with a future direction, but it does not mean we will be getting off SAP in the near term."

The recommendation to junk SAP and buy a new system will be reviewed by county supervisors Aug. 24.

David Hill, head of the county's Department of Information Services and Technology, said the question officials on the team pondered was, "Is it better for us to do that we're doing now, or is it better to invest in another approach?" The answer, he added, was "We basically concluded it would cost more to stay with SAP."

Hill said that while it would cost $5 million or more to "fix and enhance" the current system, a new program tailored to county needs could cost about half that while requiring about half the staff to maintain.

County supervisors chose the sophisticated SAP program in 2005 after courting vendors including Oracle and PeopleSoft, as officials sought to bring efficiencies to a bureaucracy that relied on an aging accounting system incapable of in-depth financial oversight. A grand jury probe concluded the botched program cost taxpayers $28.6 million as of April 2009, although Hymel noted some of the expense would have accrued no matter what system the county installed.

Hill said county experts believed they were making a good business decision when they chose SAP, but the management issue now is "how to recover" and learn from mistakes of the past. Although "it seems like a high risk to swap systems, it will be a better system, with a much better price," he added.

To avoid problems that riddled the "big bang" installation of the SAP program, Hill said the county intends to ease into a new program incrementally, provide training, making use of its technical staff rather than consultants and closely monitoring all aspects of the effort while making progress reports.

Marin County is locked in a civil court battle with computer consultant Deloitte Consulting LLP, as officials are suing the firm for $30 million, accusing it of fraud, misconduct and misrepresentation. The lawsuit asserts the firm used Marin as a "guinea pig" and employed rookies to work on an untested system, failed to provide proper training and rushed to meet installation deadlines despite problems in order to obtain fee payments. The result was a "defectively designed, deficiently installed and poorly-functioning SAP system," the suit says.

Deloitte has denied the accusations, saying it fulfilled all its obligations and noted that the county signed off on the project. Deloitte, which was paid about $12 million for its work, now seeks another $555,000 it says it is owed in light of an unpaid change order.

The system designed and installed by Deloitte triggered a cascade of problems from the start, ranging from bobbling the county payroll to an inability to reconcile cash accounts. Some problems have persisted.

The staff decision to call it quits on SAP followed a $30,000 study by Porter Roth & Associates, a Mill Valley consultant called in this spring for an independent analysis of the computer fiasco that focused on what to do next.

Contact Nels Johnson via e-mail at ij.civiccenter@gmail.com.