Monday saw the restart of a stalled upgrade to the aging workers’ compensation system which handles insurance for workers injured on the job.
The $292 million, 10-year-old effort to replace decades-old technology at the Department of Labor & Industries, or L&I, was suspended in August after repeated delays, cost overruns and little progress.
And just last month, the state Office of Financial Management, or OFM, unveiled a major restructuring of its struggling $776 million upgrade to the state’s antiquated financial systems.
Among other things, the OFM project, known as OneWashington, will have a later but more realistic launch date for its first phase – 2027 at the earliest – and would receive an additional $120 million, under Gov. Bob Ferguson’s proposed supplemental budget for 2027.
Both restarts represent major votes of confidence by the governor as he and state lawmakers scramble for programs to cut as they deal with a $16 billion revenue gap.
These two projects alone represent a major share of the money the state expects to spend upgrading its antiquated IT infrastructure over the next decade.
Some of that new confidence likely reflects changes in the agencies’ project management teams, which have long been criticized as ineffective.
Notably, both IT projects now have more involvement by the state’s IT watchdog, WaTech, which some lawmakers regard as better suited for complicated IT projects.
“The more WaTech can get involved, the better the outcome is likely to be,” said state Sen. Derek Stanford, D-Bothell, vice chair on the Senate Ways and Means Committee.
Critics, however, question WaTech’s own capabilities, and some lawmakers are still waiting to see whether these latest resets can actually deliver results.
Although both projects are showing progress, more missed deadlines will be a line in the sand" for many lawmakers, warned Sen. Matt Boehnke, R-Kennewick, a cybersecurity expert and ranking member on the Environment, Energy, and Technology Committee who has long been critical of the state's IT strategy.
A high-tech 'blackhole'
The upgrades at L&I and at OFM are the most visible parts of a crucial but struggling effort to modernize systems that handle everything from state finances and unemployment checks to driver’s license renewals and state university operations.
While some big upgrades, such as a $137 million child welfare information system at the Department of Children, Youth & Families, are going relatively smoothly, others have had a rougher time.
Currently, of the state’s 10 biggest ongoing IT upgrades, the three largest – OFM’s $776 million One Washington project, L&I's $291 million Workers Compensation project, and a $262 million enterprise system at the state Health Care Authority – are considered at high risk of missing "approved scope, schedule, budget or overall progress," and are in need of “immediate attention," according to WaTech.
Three other IT projects in the top 10, representing $222 million in planned spending, have been assessed at moderate risk.
Even for the most troubled programs, however, outright cancellation isn't an option, state officials say. The state’s vast fleet of aging computer systems, some more than 40 years old, are expensive to maintain and vulnerable to disruptive, costly failures.
Last year, L&I reported several IT outages resulting in service delays and extra costs. The agency has estimated that every hour of “IT system downtime” costs the agency $1.77 million, according to agency internal communications.
But replacing those legacy systems has been monumentally difficult.
For the OFM upgrade, for example, the agency is not only replacing the state’s main accounting system with a new cloud-based software called Workday, it must also get scores of state agencies using the old system to ensure their other antiquated internal systems can work with Workday.
In late 2024, OFM postponed the already delayed Workday launch after realizing that more than a third of 113 affected state agencies, responsible for $43 billion in state transactions a year, hadn’t made the necessary adjustments.
An IT labor shortage that intensified during the pandemic only added to the upgrade challenges at OFM and other agencies.
But OFM and L&I have also come under fire for the way they’ve managed the upgrades.
In 2024, an outside consulting firm found that OFM wasn’t accurately tracking or testing Workday preparations at state agencies, among other shortcomings.
At L&I, a series of outside assessments concluded that the agency lacked the capacity to handle such a large upgrade and that its leadership was disengaged and plagued by high turnover, especially for project managers.
Lawmakers have also become increasingly frustrated over the costly role of outside consultants, notably Deloitte, the state’s second-highest paid IT contractor, which has been a major player in the stalled OFM upgrade and has also contracted with L&I.
By 2024, after continued overruns and delays on both projects, state lawmakers were pushing for a major change in the way the state handles IT.
As state Rep. Travis Couture, R-Allyn, ranking minority member on the budget-writing appropriations committee, said the time, “We’ve just been pouring money into this black hole."
Fits and (Re)starts
On both projects, that pressure has led to a tempering of expectations.
OFM, with hearty agreement from WaTech, has significantly delayed the launch. Instead of a "go live" date sometime between this June and January 2027, the new launch window runs from October 2027 to October 2028
OFM is also opting for a staggered rollout.
Rather than launch the entire multi-agency Workday upgrade in one fell swoop, OFM plans to launch Workday during the new 2027-2028 window, while giving less-prepared agencies more time to fully update their older systems.
That reset, along with a shakeup in OFM's project leadership, helped persuade the Governor's Office to propose $283 million in new spending for the next three years, according to Sen. Stanford.
The reset is even deeper at L&I.
Day-to-day management of the upgrade was essentially pulled from L&I and moved to WaTech, and overall executive authority will be shared between L&I Director Joel Sacks and WaTech Director Bill Kehoe.
There's no additional funding in the governor's supplemental budget, but WaTech can tap existing L&I project funds that were appropriated last year, according to an L&I.
Some lawmakers want to see WaTech take an even larger role in the state's IT projects, which typically have been managed by individual agencies, and not always successfully.
Stanford says the popularity of massive "enterprise" software packages like Workday, which centralize functions such as payroll and human resources, argue for a more centralized IT strategy.
"I think it's inevitable that we have to move toward that (centralized software model), and have WaTech playing more of a central role in that," Stanford said.
That's hardly a universal sentiment.
WaTech itself has also been criticized for pushing one-size-fits-all IT solutions that don’t always reflect the nuance or complexity of individual agency programs.
At L&I, for example, some employees complained that agency staff who have expertise in the workers’ compensation system weren’t part of discussions about WaTech’s new oversight role.
More broadly, it won't matter who's running these resets if they can't produce the results— more reliable, secure and efficient information systems — that have been promised since these initiatives were launched more than decade ago.
As Boehnke, the Republican senator, puts it, if WaTech officials now come back, again, and say you need to move that (deadline) back… we’re going to have a lot of questions.”
© 2026 The Seattle Times. Distributed by Tribune Content Agency, LLC.
