Denver's overhaul of its antiquated computer system ran a few million dollars over estimates and took a few months longer than planned.

That's really, really good.

Let me assure you I am not being sarcastic. Big software projects almost always cost more and take longer than planned, and that's if they ever work at all. According to one industry survey, a third never do.

Examples? The California Department of Motor Vehicles canceled its drivers'-license project in 1993, having spent $45 million over six years.

In 1992, American Airlines spiked a flight-booking system that had run through $165 million.

And closer to home, you remember the sophisticated baggage-handling system planned for Denver International Airport. A General Accounting Office report listed $27 million in cost overruns, $55 million spent by United, $51 million spent by Denver to move the old baggage system, $35 million in expansion costs for other airlines, some other small-change stuff — and $360 million in costs incurred because of the delay.

In contrast, the city's experience with its new PeopleSoft system, which it calls ASPEN (for All Systems Performance Enhancement Network) has been relatively trouble-free.

The impetus for Denver's computer upgrade was concern about the approach of the year 2000. Its existing system dated from 1979.

Denver chose PeopleSoft in early 1998, said ASPEN director Mel Thompson. The plan at that time was to spend $2 million on the software, $1.3 million on new hardware, and approximately $6 million for implementing it, which includes customizing the software and training staff to operate and maintain it.

The $6 million is now more like $14 million. How does that happen?

One way is that things get added to the project. For instance, after the original contract was signed, the Safety Department decided to join it, bringing payroll and benefit calculations for police and firefighters into the system. That contract alteration added $1.9 million.

Second, customization was more extensive than foreseen. PeopleSoft delivers a generic product, and consultants who specialize in it then fit the software to a customer's specific requirements.

For instance, Thompson said, the original software is designed to work smoothly with bimonthly payrolls. But Denver's payroll is semimonthly.

That may not seem like much of a difference, but varying the number of days in a pay period adds a whole layer of complexity. In my brief time as a programmer, designing membership systems for antique-car clubs, I nearly came to grief over the inconvenient fact that some club members had a lot more cars than others. The software I was adapting hadn't allowed for that.

Third, the looming approach of Y2K altered the schedule. "We had to decide, what did we absolutely have to have by Y2K?" Thompson said. Various modules "went live" through 1999; purchasing, accounts payable and general ledger in August; benefits administration and payroll in October.

Other modules were delayed, which incurred additional costs. In fact, the city's asset management system was brought into ASPEN starting Jan. 2, just last week.

Finally, training has been a big expense — and because city staff now have highly marketable skills it will continue to be. "We just lost a general ledger person we'd been training for a year," Thompson told me.

Thompson's department isn't large — 26 people — and if someone crucial leaves, the city can't very well postpone paying employees for a few weeks while they bring someone new on board. Consultants bridge thosse gaps.

The initial purchase was financed over five years, so part of what is being spent know is to service that debt. And the city will need to buy software upgrades from time to time, as the company stops supporting earlier version.

It wasn't business as usual. But it was a good job.

Rocky Mountain News

-- Anonymous, January 12, 2001