The village of Oak Park plans to terminate its under-performing PeopleSoft implementation amid accusations of consultant billing irregularities.
According to local newspaper OakLeaves:
The village spent $1.65 million in 2004 to purchase PeopleSoft - a computer system which helps large businesses and organizations manage payroll and finances.
But the complex program never took hold in Oak Park, and some employees were still using adding machine tape to calculate things like tax increment financing districts' fund balances, according to one village document.
The cancellation follows allegations that the village made excessive payments to a consultant brought in to help improve the troubled implementation. The Chicago Tribune reports:
An outside examination of a software consultant's pay that went more than $200,000 above the original contract without the Oak Park Village Board's approval will be conducted to determine if any laws or policies may have been broken.
Jennifer Grochowski of Chicago was originally hired in July 2007 to do an analysis of problems with implementing the PeopleSoft software package bought by the village in 2003.
In the terms of the original contract, Grochowski was to be paid $125 an hour up to $75,000. The work was to be completed in six months. But after the original report was completed, Grochowski continued to do consulting work well into 2008 to more fully implement the complex finance and accounting software, even though a new contract was not approved by the Village Board.
She was paid an additional $204,000, mostly in increments of $25,000, the maximum amount Village Manager Tom Barwin is allowed to approve without the board's authority.
THE PROJECT FAILURES ANALYSIS
Two independent issues figure prominently in this situation:
- Most significantly, PeopleSoft did not deliver expected benefits to the village
- Less importantly from an IT failures perspective, whether there was impropriety in the financial relationship between Oak Park and Grochowski
The Oak Park implementation formally began on January 6, 2003, when the town's Board of Trustees passed a resolution authorizing a software license agreement with PeopleSoft. Human Resources director, Frank Spataro, said at the time:
There is an "extremely aggressive implementation schedule." Mr. Peters said the entire program should be completed by the middle of the third quarter this year.
In July 2007, years after the planned completion date, Oak Park requisitioned consultant Grochowski to:
perform a gap analysis identifying the level that PeopleSoft is currently performing and generate a plan to increase the Village's utilization of the system.
The requisition document describes these system problems:
Ever since the go-live date, while PeopleSoft is a robust tool, the system has proven cumbersome and has made data reporting incredibly difficult. These difficulties tie in to personnel turnover, a lack of continuing training of staff, a lack of process documentation, and a piecemeal implementation.
Local newspaper, Wednesday Journal, added:
At the center of the concern is how to get hand-holding for a $1.6 million package of accounting and human resources software that the village bought in 2003, well before Barwin became village manager.
Barwin said that when he started work here in August 2006, he found "very serious issues" with Oak Park's accounting and finance processes. In some cases, he said, third parties were being paid twice; other times the village was not invoicing for work it had done.
Wednesday Journal columnist, Catherine Smith, also said:
At a Jan. 12  meeting, Village Chief Financial Officer Craig Lesner admitted there are finance employees who do not even know how to auto sum or auto filter in Microsoft Excel , and that lots of data never ended up in PeopleSoft! You can't get out of a program what isn't put in.
My take. The PeopleSoft implementation is a mess and only detailed analysis can determine whether the project is worth salvaging. I suspect the village took on more than it could absorb in purchasing a major ERP package.
I asked fellow ZDNet blogger and enterprise software expert, Brian Sommer, for comment:
This case reminds us that one must examine the software purchase price and the organization's ability to completely and correctly implement and maintain the software. Big software projects are economic, technical, political, emotional, and structural beasts. Even when buyers determine they can afford the initial purchase price, they may forget to budget for all of the change management, training, corrective maintenance, patch management, upgrades of related technology, etc.
ERP projects can sometimes leave buyers with that look you see on kids who gorge on too many sweets; their eyes were bigger than their stomach. I bet the taxpayers are going to press the village board for answers regarding the initial software procurement and all of the follow-on costs.
More than anything else, I believe the Grochowski payments reflect poor judgment on the part of CFO Lesner. Although the work was probably justified and the payments warranted, the CFO should not have sidestepped proper financial protocols. However, it's important to recognize this element is independent of the underlying PeopleSoft implementation issues.
Although even the appearance of financial impropriety is unacceptable, this failed implementation has extended years beyond the planned go-live date and is a more serious matter to examine.
CFO Lesner did not return my message seeking comment.