Seeking to replace scores of aging IT systems, state officials are proceeding with a $138.7 million overhaul of the state's financial, payroll and purchasing systems.
Gov. Scott Walker's administration says the ambitious update to decades-old systems is desperately needed — it's been nearly 10 years since the project began to replace a patchwork of some 120 different computer systems. The effort seeks to integrate a hopeless patchwork of isolated spreadsheets, paper files, and obsolete programs into a single modern system.
But six years ago the project was halted after an alarming collapse of savings estimates, a legislative audit and public criticism of the project from its own leader at the time.
The complex effort now known as State Transforming Agency Resources, or STAR, is on better footing than when former Gov. Jim Doyle's appointees suspended it in April 2008, according to the officials Walker appointed in their place.
Three years from completion, the project has spent $33 million so far. But lawmakers aren't deeply engaged — the legislative committee charged with overseeing costly IT projects hasn't bothered to meet in years, although a 2007 audit singled out the panel for the same poor oversight. In response to questions from the Milwaukee Journal Sentinel, the committee's co-chairwoman said she would seek to hold oversight hearings on the project.
The current stakes are high. If successful, STAR would give taxpayers and elected officials a reliable system that could deliver an estimated $100 million in net savings over a decade from lower maintenance and higher efficiency across all of state government.
But as in past state computer debacles, a failed or further delayed project would leave taxpayers with hefty bills, an IT system lagging far behind those of private-sector companies and no good alternatives.
"Doing nothing's not an option anymore. Everybody recognizes we've got to do something because these systems are not going to hold up," said deputy administration secretary Chris Schoenherr.
The state has to be able to pay employees on time and track its spending and assets, Schoenherr said. "If that system were to fail, we'd be in a world of hurt."
Yet despite the stakes, lawmakers aren't keeping a close watch on STAR, which is scheduled to finish in 2017.
The Joint Committee on Information Policy and Technology doesn't appear to have even met in the past three legislative sessions going back to 2009, a period that includes both GOP and Democratic majorities. Assembly leaders in 2009 and 2010, a period of Democratic control, didn't even appoint lawmakers to the committee, which is supposed to mind the store on matters of state technology.
The current GOP co-chairs of the information policy committee, Sen. Sheila Harsdorf (R-River Falls) and Rep. Kevin Petersen (R-Waupaca), haven't scheduled a meeting in this two-year legislative session or made use of their power to direct the state Department of Administration to report on expensive projects such as STAR.
In a 2007 report, the nonpartisan Legislative Audit Bureau noted that the Joint Committee on Information Policy had been inactive for years and recommended the Legislature reactivate it to "enhance oversight of large, high-risk executive branch projects."
After being contacted about the inactive committee by the Journal Sentinel, Harsdorf said she is working to set up hearings on the STAR project. She said she hadn't talked to Petersen yet but has a "plan in the works."
Lawmakers have exercised some oversight of IT projects, particularly troubled ones at the University of Wisconsin System, through the Joint Audit Committee. A March 12 audit hearing on UW projects included some discussion of the STAR project, and DOA officials have also briefed legislative leaders and the co-chairs of the audit and information policy committees.
On Thursday, after the Journal Sentinel had asked lawmakers and DOA about whether the Legislature is tracking STAR, DOA sent the audit committee a letter following up on questions raised at the March hearing. That letter had already been in the works, administration spokeswoman Stephanie Marquis said.
Assembly Speaker Robin Vos (R-Rochester) said he believes STAR makes sense. Vos noted that the state's current patchwork of computer files and even paper records can't give leaders like him the information they need.
"I ask how many rolls of toilet paper did they purchase for the prison system and they couldn't tell me," Vos recounts. "How do you negotiate for a better price when the only person who has the data (on state purchasing) is the vendor?"
The STAR project, originally known by the more obscure acronym of IBIS, goes back to 2004 when the administration of Doyle, a Democrat, hired an outside consultant to size up the project. The project was begun in earnest in 2005 and put on hold in April 2008, one day after lawmakers voted to include it in a larger state audit.
In the meantime, the state had spent about $15 million on costs such as Oracle's PeopleSoft, the software being used for the project.
The project was dusted off in late 2011 by the Walker administration, which first updated the estimates on how much the project could cost and how much it could save.
As noted by the audit bureau in 2007, past estimates for the STAR project have varied from wildly optimistic figures such as $514 million in net savings from the project over a decade to much more modest savings, such as $35 million.
The new estimates for STAR costs and savings were done by Information Services Group, which has done similar projections for nine other states, according to Marquis.
The consultant found that over 10 years STAR would result in $100 million in net saving for taxpayers. That estimate calculated the costs of doing the project and then paying the lower maintenance costs that should result and then compared those to the higher expected costs to the state of simply maintaining its increasingly outdated systems.
The project was restarted in earnest in June 2013.
The $138.7 million cost estimate for STAR includes within that total an extra 20%, or nearly $20 million, that can serve as a cushion against unexpected costs and delays.Neither the costs nor the $100 million in savings, however, includes the $15 million spent on the previous aborted IBIS project.
"For a project of the scope and timeline of the planned (STAR) initiative, unexpected events will occur that will have a direct or indirect cost impact to the project," according to the Information Services Group report to the state.
The project to integrate 120 fragmented computer systems into one coherent whole won't be easy. But state officials said that's the same reason that the project is needed so badly:
¦ The state's payroll system is almost 30 years old and is written in an antiquated programming language, COBOL, that today's college graduates don't know, making it hard to find new programmers to maintain it.
¦ Some functions such as reimbursing state employees for their mileage aren't even done on computers — they're largely done on paper.
¦ The state's budgeting system goes back to the 1960s and its system for budgeting for jobs dates to the late 1970s.
STAR has two phases. Financial and purchasing systems for state agencies will be put in place over about two years, going live in late 2015 or early 2016. Personnel and payroll systems will be put in place over 18 months, going live in 2017.
In one reason for optimism, the Department of Employee Trust Funds has just finished implementing the PeopleSoft product at a cost of $2 million, on budget and basically on time. Agency spokesman Mark Lamkins said the project had been a success.
WHY IT MATTERS
¦ If successful, an upgraded, integrated system could improve reliability and save $100 million over a decade from lower maintenance and higher efficiency.
¦ A failed or further delayed project would leave taxpayers with hefty bills, an inefficient IT system and no good alternatives.
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