Two years ago, Denver's new accounting and personnel system was conceived as a technology update that would bring all the departments under one central system and save money.

But the All Systems Performance Enhanced Network, dubbed ASPEN, is nearly $10 million over budget, and many programs, and at least one department, have yet to come on line.

"Maybe we should have been better informed and made better decisions," said Councilman Ted Hackworth, chairman of the City Council's Finance Committee, which has had to approve dozens of contracts and amendments to keep the system running.

ASPEN project director Mel Thompson concedes the system has had problems. But he points out that it allows information to be put in the system once and shared with all departments. The city can also better analyze projects and expenditures, he said.

"It's a huge leap in technology," Thompson added.

Two years after the project started, it has yet to cross the finish line, and no one is sure when the end will come or how much it will cost. Officials say the cost overruns stem from hooking up new city departments, underestimating technical support needs, and training too few people, some of whom left for better jobs.

The city has borrowed the money to install the system and created an information technology contingency fund to handle the additional debt payments.

The city has installed the financial, purchasing, accounts payable, benefits administration and payroll systems for slightly less than $24 million. ASPEN officials, who in the beginning said the whole project would cost $14 million, still have asset management, billing, receiving and inventory functions to install.

Even the sections that have been installed haven't lived up to their promise of creating one computer system for the whole city. General Services finalized a $57,000 contract last month for an outside consultant to do the theaters and arenas payroll that ASPEN couldn't do, according to the contract.

Thompson said he hopes to get that payroll into the city's system next year, but it's currently too complex for the system to handle.

The whole project has been complex from the start.

In 1997, Denver realized it had to implement a new computer system to deal with Y2K complications.

Peoplesoft was selected from three major bidders to head the project. But mistakes, additions and poor planning by city officials have increased the costs, said Hackworth.

"I only wish we could have had a crystal ball," Thompson conceded.

Denver is not alone in failing to see into the future, but city computer systems elsewhere have come in under budget with proper planning. The Seattle area has seen the best and worst of what a new computer system can bring.

King County, where Seattle is located, budgeted $38 million for a new computer system. This year, after spending that much and bringing only one-third of it on line, King County officials suspended the project. They are paying a consultant $300,000 to determine what they should do next.

"One of the things we learned is that we're not alone," said Steve Call, King County's assistant county executive. "These are huge undertakings and are fraught with unknowns."

A few miles away at Seattle City Hall, Mike Herrin was planning a trip this week to a New York City conference where he will speak on how to install a new system the right way. Seattle's accounting system came in $1.5 million under its $25 million budget, and Herrin said planning is the key.

"You have to make thousands of decisions and be tough enough to say no to certain requests from departments." Herrin said. "Then you've got to hire people with experience. You wouldn't hire your dentist to build a bridge." Denver relied on Peoplesoft for its experience and used a lot of its existing employees to staff the project when it started in 1997.

City officials also say the Peoplesoft bid, which was slightly higher than another company's but chosen because city officials decided it better fit the city's needs, didn't have several things the city needed.

Peoplesoft only included 30 days of support once the system went live, and the city had to buy more support credits, Thompson said. "Peoplesoft should have recommended more," he added.

Laura King, vice president for marketing at Peoplesoft, said the company tries to fit its bid to the needs of a city and would never compromise quality to get a contract.

"Our core value is integrity," she added. "We would lead a customer to believe what is a fair and accurate assessment of what is needed." The city is also culpable for the project exceeding its budget.

The first cost overrun emerged when the Department of Public Safety abandoned its Y2K remediation efforts and joined ASPEN.

The biggest costs came from converting databases and programs to fit the city's needs and training employees, who sometimes used the knowledge to get better jobs in other departments or in the private sector.

Denver initially trained one person in each department to run the system and train colleagues, but found that he or she was consumed with operating the system. ASPEN officials are now training more city employees.

Thompson said the final parts of the system could be installed by the end of next year, and at that point the city will wean itself of consultants. But he said the installation might take longer if officials decide to upgrade to Peoplesoft's new version.

Neither Thompson nor Peoplesoft's King could provide an estimate of how much it will cost to complete the system or update it to Peoplesoft's new version, which is Internet-based. Peoplesoft spokeswoman Lisa Sion provided testimonials from other cities that said the system improved efficiency and customer service, but Denver officials say the computer system won't pay for itself.

"The savings are not going to recover all of our investments," said city Budget Director Margaret Browne. "There's a cost to running the city, and these systems are necessary."

Denver Post

-- Anonymous, December 17, 2000

Answers

-- Anonymous, December 17, 2000

Tax software taxes city budget

The nuclear arms race between India and Pakistan and other unforeseen problems have forced the city of Denver's spending on a computer system to go more than 30 percent over budget.

The Integrated Tax System computer hardware and software were purchased in 1997 to replace an aging system and prepare for Y2K problems. It was suppose to cost $3.5 million.

Since then, the system, which is designed to calculate sales taxes and other taxes due to the city, has required an additional $1.2 million in software and support that the city had not expected to spend. The money will come out of the city's reserves.

"It was much more complicated than we realized," city Treasurer Steve Hutt said. "In hindsight, we wouldn't have designed it to do so many things." Hutt attributes cost overruns to the fact that the contractor, Unisys, used Indian programmers who had problems getting visas after their country and Pakistan started testing nuclear weapons and having border skirmishes in 1998 and 1999.

Unisys was expecting Congress to increase the number of visas the State Department was issuing, but that action was delayed because of the increased tensions, Unisys spokeswoman Susan Beck said. The limits were eventually lifted, but the delay in getting programmers who knew the system cost the city more.

There were also other programming glitches with the system.

The Treasury Department's computer problems are reminiscent of those of the city's finance and human resources system, the All Systems Performance Enhanced Network, although on a smaller scale.

ASPEN was to cost $14 million, but the city has already spent $24 million on the system without using all of its functions.

The initial ASPEN bid included only a month of technical support, and the city underestimated the amount of training needed.

Other parts of the system have yet to go online, and the city doesn't know how much more the system will cost.

Computer systems that were put in to deal with Y2K problems often have glitches that add millions to the costs. King County officials in Seattle budgeted $38 million on a Peoplesoft computer system, but ran out of money with only a third of it up and running.

Denver Councilwoman Kathleen MacKenzie, chairwoman of the city council's E-Government Committee, said the city is trying to revamp the way it does computer projects to avoid such overruns.

"I think the (information technology) area is new enough and large enough and changing enough that many organizations take a few missteps," MacKenzie said. The city is interviewing for a new technology czar to oversee these types of systems in the future and help prevent the cost overruns. MacKenzie did not know how long it would take to fill the position.

In the meantime, the Integrated Tax System may cost the city still more.

Hutt said the city is trying to set up a system that allows people to pay taxes online, but programmers will have to modify the system to take electronic inputs.

The city is also trying to synchronize the system with the state computer to help flag people who aren't paying city taxes and accounts that require auditing.

He did not know how much the additional functions will cost.

Denver Post

-- Anonymous, March 05, 2001