In the late 1990s, Arkansas started a project to revamp how it carries out accounting, human resources and other core business functions. The state boldly installed an ERP software package for all its agencies, becoming one of the first states in the nation to attempt such a comprehensive implementation.

But in the nearly three years since the state began planning the Arkansas Administrative Statewide Information System (AASIS), the project has been wracked with difficulties that have little to do with technology and everything to do with introducing massive change into a large public-sector organization. The ambitious project has endured political infighting, overly optimistic timelines, poor communication, shifting responsibilities and inadequate staff training. When Arkansas officials threw the switch on the system's accounting module in July 2001, more than 5,000 state employees failed to receive their paychecks.

State officials say progress is being made. Parts of the AASIS human resources module have rolled out to some agencies, and Arkansas plans to deploy pieces of the system's performance-based budgeting module in 2003.

But the project's history paints a stark picture of how nontechnical issues play a central role in the success of IT initiatives.

"We failed to recognize, I believe, that we were changing the accounting system in the state," said Kelly Boyd, technology policy adviser to Arkansas Gov. Mike Huckabee. "We weren't just teaching people how to run computers; we were teaching them accounting all over again. You've got people who understood state government, and we were just taking that all away from them."

Aggressive Schedule

AASIS started innocently enough. Deloitte & Touche completed a needs assessment for the state in 1996, recommending Arkansas consider purchasing a new financial-management system that, at a minimum, would provide five core functions -- accounts payable, accounts receivable, general ledger, budget preparation and budget control.

By October 1999, the state decided it really needed an entire ERP software package and released an RFP seeking bids. After the usual winnowing, SAP won the contract in February 2000.

Once it chose the software, Arkansas set an ambitious schedule -- completion of the system's business blueprints by June 30, 2000, and a "go-live" date of July 2001. This left the state with a scant 16 months to implement the first ERP module across all state agencies.

Cracks quickly appeared. Monthly AASIS status reports began setting off alarms, according to the state's legislative auditor.

The June 2000 status report warned that only half the business blueprints would be turned in on time. It also cautioned that additional state staffing was needed for management of the changeover, human resources and training. July 2000's status report said the state lacked approximately 12 to 20 positions; August 2000's status report again warned that the AASIS project team was not adequately staffed to successfully deploy the software to all participating agencies.

By November 2000, the situation was critical, according to the legislative auditor's special report. That month's status report said the "state's ability to successfully implement and roll out the system to all agencies on July 1 is at risk due to insufficient deployment resources. ? If the deployment team is not fully staffed with qualified individuals by January 1, 2001, the scope of the July 1 rollout must be reduced."

In December 2000, SAP itself urged the state to push back the go-live date, according to the auditor, but Arkansas stuck to the July deadline. Extra staff was made available to the deployment team, but end-user training emerged as the next big problem.

In March 2001, a status report offered a bleak assessment of Arkansas' training situation: "Of the 1,569 seats available in the first session of Overview and Basic Navigation, a prerequisite for all other courses, only 744 were occupied -- a 47 [percent] utilization rate. ? If this trend continues, some employees will not be able to get into the classes they need to

Shane Peterson  |  Associate Editor