Project Management Lessons from California’s Big IT projects

Major projects in state government can easily snowball in scope, schedule and budget.

by / August 14, 2013
California Department of Technology Secretary Carlos Ramos Jessica Mulholland

Since its launch two years ago, the State of California’s Franchise Tax Board (FTB) Enterprise Data to Revenue (EDR) project has collected more than $128 million for the state budget, with total revenue increases of $2.8 billion projected by 2017. Created to modernize California’s tax collection system and decrease the state’s sizable tax gap, the EDR project is well on its way to generating $4.7 billion in additional revenue and is both “on schedule and on budget,” according to Cathy Cleek, chief information officer for the FTB.

That’s a far cry from California’s MyCalPAYS project which was intended to overhaul the state’s payroll system but instead ended up prompting the State Controller’s Office to terminate a $90 million contract with selected vendor SAP Public Services. With $254 million already invested in the $371 million software system, the project, which was riddled with delays, is now on hold while state officials carry out an assessment of what went wrong and stave off legal proceedings.

Welcome to project management in state government where engagements typically span multiple agencies and involve disparate legacy systems – factors that can easily cause a project to snowball in scope, schedule and budget.

Some government agencies are learning to embrace best practices, though, that can make the difference between a gory post-mortem and sweeping project success. “Project managers don’t spend enough time planning,” says Cleek. “The more planning you can do upfront and really think through how a project will get rolled out, the better off you’ll be.”

The EDR project, for example, was divided into four major phases. These components include deploying a new return processing system, the creation of an enterprise data warehouse, the introduction of a secure online taxpayer folder and the updating of legacy systems. It’s a “crawl, walk, run”-approach to project management that Cleek credits for the project’s cautious yet on-course rollout.

Shell Culp is also familiar with the unique challenges government agencies face when it comes to project management. Chief deputy director at the Office of Systems Integration, California Health and Human Services Agency, Culp says, “In a private organization, when you’re integrating systems, you’re integrating them across one entity. But in government, agencies are sovereign, so there’s considerably more activity that has to take place to bring everybody up to speed. And that takes time and effort.”

To ease the process, Culp emphasizes the need for proper organizational change management. Overhauling systems is one thing. However, Culp says project managers need to teach employees “how the face of the organization will change with the new system and to map those changes to a point where people feel comfortable. If that comfort level isn’t there, there’s a possibility for malicious compliance.”

Garnering buy-in from senior-level officials, designing new systems in a collaborative manner, offering extensive training and raising awareness are all ways that Culp says agencies can ensure that workers are on board and rally behind a new project.

While forward-thinking best practices are key to project success, Carlos Ramos says it’s essential that project leaders also get back to basics. “We fundamentally have to change the way that folks look at the way we roll out projects,” says Ramos, Secretary of California Technology, California Technology Agency. “When people decry a failure of a project, they always point to being months beyond schedule or way over budget. But they never go back to where those budgetary and time baselines were set.”

For this reason, Ramos says it’s critical that government agencies painstakingly establish and document realistic baselines for project success – metrics that gauge everything from meeting deadlines and staying on budget to utilizing staff resources and building a strong business case for change.

“We need to redefine our measures of success and change our processes so that by the time decision makers are actually looking at a project and measuring its success, they’re measuring it against an accurate baseline,” says Ramos.

Major Projects of Note

CalFresh. Launched to improve the nutrition of people in low-income households by increasing their ability to buy household needs. Benefits are issued via an Electronic Benefit Transfer card.

California State Board of Equalization’s Centralized Revenue Opportunity System (CROS). Currently in a pre-implementation phase,  CROS aims to generate an annual net increase of $200 million in previously unidentified revenue by expanding online services, improving transaction accuracy and replacing the BOE’s old legacy systems.

The Enterprise Data to Revenue Project. By modernizing tax systems and leveraging data to more effectively administer tax systems, the EDR project plans to improve service, reduce taxpayer burden, reduce the tax gap and generate about $4.7 billion in additional revenue.

This article was originally published in Techwire Magazine.

Cindy Waxer Contributing Writer

Cindy Waxer is a journalist whose articles have appeared in publications including The Economist, Fortune Small Business,, CIO and Computerworld.