Replacing Idaho's Aging Tech an Expensive Proposition

The state's 30-year-old computer system deals with a number of issues, including an inability to support basic business functions such as invoicing and accounts receivable, according to a study.

by William L. Spence, Lewiston Tribune / January 19, 2015
A new report has shown a large part of Texas' state IT infrastructure to be obsolete. Shutterstock

(TNS) -- The Idaho Legislature's joint budget committee got a severe case of sticker shock this week when it learned the cost of replacing the state's aging computer system could exceed $100 million.

However, State Controller Brandon Woolf assured lawmakers that he isn't asking for any money this session. Instead, he'll take a year to evaluate a recent study and decide if and how to move forward.

The $250,000 study identified a number of problems with the state's 30-year-old computer system, including an inability to support basic business functions such as invoicing and accounts receivable. It also relies on old computer languages that are no longer being taught and can't be upgraded.

"Our financial system is becoming obsolete and unsupportable," Woolf said. "Either we begin preparing to replace it, or state agencies will buy systems of their own."

The report recommends replacing the central legacy system with a new "enterprise resources planning" system, which could handle everything from bank reconciliations and payroll to purchasing and inventory management.

Nathan Frey - a partner with Information Services Group, the consulting firm that conducted the study - said the new system could be phased in over a five- to seven-year period for an estimated cost of about $103 million.

Sen. Jim Guthrie, R-McCammon, said he almost reached for a heart defibrillator when he saw that figure.

"That's more than $60 for every man, woman and child in Idaho," he said after the presentation. "We have kids in classrooms with 25- and 30-year-old textbooks. My comfort level (with replacing the state system) isn't there, yet. They'll have to do a lot better job of selling the idea."

In addition to $103 million in upfront cost, an enterprise resources planning system would require another $98 million in ongoing costs over its first decade of operation, or almost $10 million per year.

However, the report indicated that would be offset by $99 million in avoided system costs - the cost of maintaining and upgrading the existing system - as well as $113 million in process improvements and efficiencies.

"Due to the significant upfront costs, we estimate you'd achieve a positive return on investment in the 13th year," Frey told the committee.

Given the limited functionality of the state's central computer system, he said, many agencies have purchased or developed additional systems to handle key business needs. That's led to problems with duplicate data entry, incompatibility between systems, lack of control and data conflicts as agencies record and report the same information in different ways.

Acquiring a new central system could eliminate as many as 75 agency-specific systems, Frey said, as well as replace the central finance and human resources system with a modern system has capabilities far beyond what is presently possible.

Sen. Steve Bair, R-Blackfoot, complimented Woolf for bringing the issue to the budget committee's attention before he asked for any money.

"If you want to earn our support, the best way is to be up front," he said.

Nevertheless, the potential cost was a major concern - particularly the fact that half the estimated price tag was for consulting services.

"I don't know who that consultant is, but that's a lot of money," Bair said. "I do think we have to have a new computer system, but there's a lot of information we still need."

Rep. Maxine Bell, R-Jerome, the budget committee co-chairwoman, said she's convinced the Legislature will have to invest in a new system.

"We can't put it off," she said. "During the (economic) downturn, that was the first thing that went, our investment in infrastructure. But part of what we do here is keep things running smoothly for the citizens of Idaho. If agencies don't have the tools to do that, what's the point?"

©2015 the Lewiston Tribune (Lewiston, Idaho)