Pricey computers off to rocky start

Tacoma: Payroll glitches, extra time and costs to train employees plague new system

December 12, 2003 

White elephant or white knight?

Two months into its infancy, the City of Tacoma's new $50 million computer system is a source of payroll glitches, late vendor payments, slow customer service and employee frustration.

"Be patient," system managers say. Over time, they promise taxpayers and Tacoma Public Utilities ratepayers will reap big rewards in the form of cheaper, faster and better city services.

The new system replaces 102 separate computer systems - some more than 25 years old - across the city. And because it's integrated, it handles everything from payroll to purchasing, customer service to citizen complaints.

The state-of-the-art software, called SAP, was bought for about $3.5 million from a German-based company of the same name. TUI Consulting is helping the city install the works under a $29 million contract.

Hardware, labor and facilities costs will bring the project in just under the projected $50 million price tag, Karen Larkin, Business Systems Improvement Project director, told the City Council on Tuesday.

But those costs don't include employees' time spent in training, an item for which there is no cost estimate.

And some City Council members are steamed that the Business Information Systems department formed to oversee the new system and its roughly 1,800 users will cost more than $13 million next year. That's about $6 million more than budgeted for the previous information services department - and it has more than twice as many employees as its predecessor.

Director David Otto notes his new department will consolidate existing employees and services from across the city. Still, council members ordered him to work on slimming the department down as SAP ramps up.

The promises of technological wonder might be small comfort to customers who've waited up to a half-hour on hold for a live body in the utilities department; vendors owed thousands of dollars because computer-generated payments are behind; or employees whose pay or vacation balances are askew.

Internal memos obtained by The News Tribune under open records laws point up cases of software that still needs tweaking and humans who lack adequate training.

"Even my most dedicated and knowledgeable people are struggling," Click! Network manager Dana Toulson wrote to Tacoma Power Superintendent Steve Klein on Nov. 21, seven weeks into the first system start-up.

"We are up to eight weeks behind making vendor payments - but not for lack of trying," she added.

Records blame the computer system for six late payments to public works contractors, costing the city $8,000 in interest.

In a Dec. 2 memo about problems with dunning statements, TPU customer services manager William Schatz observed, "This sure looks like we're testing in a live environment. Wasn't this tested before??? Pretty risky!!"

Assistant police chief Paul Mielbrecht wrote to Business Information Systems director David Otto on Nov. 5 about problems with vacation accrual.

"This ... will become a major labor issue for the entire city, created by a computer system which is supposed to make our jobs easier and more efficient."

Finance director Steve Marcotte warned department directors on Nov. 19 that since the SAP system went live, workers issued several purchase orders in excess of the standard $5,000 limit without the authority to do so. "Many are for hundreds of thousands of dollars, some over $1 million," he wrote. Though officials said no money was stolen, Marcotte pointed out the unauthorized orders posed "significant risks" to the city.

Tacoma Public Utilities director Mark Crisson, whose customers will pay for the bulk of the new system, steadfastly maintains things are - on the whole - going well. Both he and Larkin urge patience, telling workers and customers alike it will take several months to shake out all the bugs and give employees time to truly learn a multifaceted system that's light years ahead of its antiquated, patched-together predecessors.

"Anytime you do a new computer system - much less one of this scope and breadth - you're going to experience transition issues," Crisson said at a Nov. 17 News Tribune editorial board meeting.

"We're on target for schedule and budget," he said, declaring the most successful startup he's seen after studying several across the nation.

Two days later, in response to news that two customers complained they were told their work couldn't be done because of the new system, Crisson sent a memo to his management team, thanking them for their "can do" attitudes but making it clear all employees must adapt to the change.

"If I learn that an employee used the new system as an excuse for poor service and/or was critical of the new system, then he (or she) and I, together with everyone in the chain of command, will have a meeting to discuss how we can do better," Crisson wrote. "That's not a threat, it's a promise."

A recording on the utilities' telephone system does have a recording warning customers that their waits on the line might be longer than usual due to the new computer system. But that's a different issue than not doing work you promised and blaming it on the system, Crisson said.

As workers get more comfortable over the next six months or so, they'll learn even more nifty things the system can do, said project manager Larkin.

Already, a city employee can take a complaint about a pothole, schedule a work crew to fix it and reorder supplies for the city warehouse - all in one call, said computer project spokeswoman Karen Jones.

And if just 5 percent, or 7,500, of the city's 250,000 utility customers pay their bills online each month, TPU will save the $4-per-bill cost of mailing them out and processing the checks, Larkin said. That's $360,000 a year.

Swifter transactions in nearly all departments eventually will result in faster service for residents - or could give City Council members the option of cutting staff through saved labor, Larkin said.

Early next year, when the first phase of the project is complete, City Manager Jim Walton and Crisson must decide whether TUI has delivered what it promised.

If so, TUI will receive the remaining $1.9 million on its contract - held back by the city to ensure everything's working as it should. The city has an additional $1.7 million contract for work to be performed next year, said Jones.

Larkin stands to get an $8,000 performance bonus for an "on-time, under-budget" delivery.

After about an 18-month settling-in period, computer functions will be faster and cheaper, creating either improved customer service or allowing the city to trim jobs, the system's champions say.

"Functionally, it's one of the broadest systems ever implemented," TUI Chairman and CEO Ballu Khan told The News Tribune editorial board last month. "We're very pleased with the outcome. ... As time goes on, employees will get more comfortable with the system and they'll realize we can do things even smarter."

There were start-up glitches and growing pains at the 450,000 customer Sacramento Municipal Utility District when they entered the SAP world a few years ago, said Del Pruett, manager for the enterprise systems support group.

But today, Pruett is complimentary of the system: "We've found it's really reliable, and we've been able to extend the use of the system. It's pretty flexible for us."

Warts and all, Larkin gives the Tacoma project an A.

"Given the complexity of the system that we turned on, the amount of data migrated, and the number of end users, the rest of the tech community is just in awe of what we've done," she said.

Kris Sherman: 253-597-8659
kris.sherman@mail.tribnet.com

City's new computer system: What's gone wrong ...

Here's a list of some problems or inconveniences encountered by Tacoma's customers and employees shortly after installation of the city's new $50 million computer system, according to reports and city officials.

* Customers who call Tacoma Public Utilities often face telephone waits of more than 10 minutes - double the previous five-minute time - before they get a live person. The longest recorded wait is about 29 minutes.

* The "abandon rate," or number of customers who quit waiting and simply hang up while in the telephone queue, doubled from 15 percent to 34 percent after the customer service system went live.

* Many city residents can't access the city's Customer Care Web site, from which you can pay utility bills and take care of other city business online. That's because some older Web browsers won't let them in.

* Six payments to public works contractors were late, costing the city $8,000 in interest.

* The city fell up to $500,000 behind on its bill to PetroCard of Kent, which provides fuel for police cars, garbage trucks and other city-owned vehicles.

* The computer system allowed some city employees to write purchase orders for hundreds of thousands of dollars, some over $1 million, without authorization, finance director Steve Marcotte warned in a Nov. 19 memo.

* An occasionally balky payroll system paid some workers twice and 34 employees not at all on one occasion.

* One police lieutenant was overpaid, then had the money electronically yanked out of her account a week later. Her continuing payroll problems forced her to keep two running account balances and make a savings-to-checking transfer so she wouldn't bounce checks.

* Loan payment deductions were mishandled for 340 employees.

* Late pension-fund payments prompted a grievance from the International Brotherhood of Electrical Workers. The grievance has since been solved.

... and what's gone right

The installation of Tacoma's integrated computer system, which replaced 102 antiquated systems, is going well and will eventually pay for itself by providing more efficient services, system officials say. Here are some triumphs they cite between Oct. 6 and Dec. 5:

* 10,285 vendors paid $121 million.

* 1,326 permits processed.

* 0.573 seconds average weekday computer response time

* 100 crews dispatched via wireless devices - 700 orders per day.

* 34,235 work orders created and 13,654 completed at a cost of $17.9 million.

* 22,500 payroll checks issued.

* 131,000 utility bills mailed, with errors in only 5,000.

* 2,648 residents enrolled in www.tacomaservices.org.

* 938 utility customers paid bills totaling more than $133,000 online.

* 247 online resident requests made, 156 completed and 91 in process.

* 1,532 users logged on.

* Database growth of 7.5 GB per week

SOURCE: City of Tacoma, Business Systems Improvement Project

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