Enormous cost overruns associated with botched enterprise resource planning implementations are the stuff of legend in IT circles.
Now theres a new debacle to add to the list. Nine months after the Los Angeles Unified School District launched the SAP HR and Payroll modules—as part of a larger ERP rollout dubbed Business Tools for Schools, or BTS—tens of thousands of LAUSD employees at 700 schools have either gone unpaid or been overpaid or underpaid.
The situation for teachers—the vast majority of employees hit by the payroll snafu—is only getting worse as the district struggles to get the system errors corrected in time for tax season and other regulatory deadlines.
In the meantime, teachers are tired of waiting. The UTLA (United Teachers of Los Angeles) union has called for rolling boycotts of after-school administrative meetings on four separate dates in October. Two strikes are scheduled next week, on Oct. 8 and 9.
LAUSD teachers are paid once a month. In June, the worst month for system errors, about 30,000 paychecks were issued with errors. In September, an additional 3,800 teachers reported errors, according to media reports.
But amid mounting frustration that could result in massive teacher defections to other districts, the boycotts by teachers and a pending legal claim have brought little relief.
"I am standing in the payroll center right now and there are quite a few teachers here still having payroll problems. They are having to spend four, six, eight hours at the district to get payroll issues resolved and some of them have been here multiple times since February, when this all started," Marla Eby, UTLA Director of Communications, said in an Oct. 5 interview with eWEEK. "They all have to get substitutes to cover their classrooms. Every month [school district officials] say its going to get better, and every month it doesnt."
Eby said LAUSD officials are also saying that most teachers are being overpaid rather than underpaid. "Were seeing no evidence of that," she said. "Were seeing teachers overpaid, or not paid at all. This whole room is full of teachers, and they are leaving their classrooms" in hopes of getting paid, she said.
LAUSD Superintendent David Brewer outlined the steps the district is taking to make sure that teachers get paid this month.
"Tomorrow is payday for certified employees," Brewer said in an Oct. 4 statement. "We will have payroll errors tomorrow and the majority of those problems will be overpayments. I urge anyone who thinks they may have been overpaid to not spend the money, as overpayment errors will need to be corrected by the end of the year."
Click here to read about IT problems at retirement fund manager TIAA-CREF.
Brewer said the district has "retooled" its approach to solving problems and said that overall, people are spending less time at payment centers trying to resolve issues.
"Please be assured the Board of Education, the payroll team and I are committed to making our employees whole and correcting the remaining system issues," Brewer said.
The payroll situation has been brewing for months. On June 11, the Los Angeles Times reported that the total cost of the districts BTS project is expected to reach somewhere in the neighborhood of $132 million—over 35 percent, or an additional $46.3 million higher, than originally expected.
About $95 million was allocated for the BTS ERP implementation project, with $55 million earmarked for Deloitte Consulting, the system integration partner on the project. Now the LAUSD School Board, led by Board President Monica Garcia, has voted to hire an outside monitor to follow the situation.
The BTS program formally kicked off on June 27, 2005, and was projected to be a 27-month implementation that would go live over three distinct phases: Finance, launched in July 2006; HR & Payroll, launched in January 2007; and ESS (employee self-service) and Supply Chain, scheduled for a Jan. 1 rollout.
The second phase, in production now, is the system thats seeing so many issues—though its not clear exactly what those issues are. The final leg of the project, ESS and supply chain, was delayed to give the school time to deal with Phase 2 issues.
In media interviews, LAUSD officials have stopped short of pointing fingers at Deloitte as the culprit. SAP itself has a laundry list of successful school implementations and so far no one seems to be pointing the finger at faulty software. But a quick Google search of Deloitte ERP implementations shows that this is not the first botched deployment the company has been involved in.
In 1995 Irish Health Services paid Deloitte $10.7 million to install an ERP system in three years. A full decade and $180 million later the project was incomplete and finally abandoned. The City of San Antonio, L.A. Community College, and the San Bernardino and Minneapolis School districts reported similar ERP implementation nightmares in association with Deloitte.
Deloitte officials did not return calls from eWEEK.
In April the UTLA filed a lawsuit against the Los Angeles Unified School District seeking emergency relief for teachers. The judge hearing the case ruled against UTLA, according to Eby. The case is now in appeals.
"The question is, How long do they [LAUSD] expect teachers to tolerate this?" Eby said. "Its been 10 months already. How long can they put up with this? Teachers will leave. Its very difficult to recruit good teachers—[LAUSD] doesnt pay as well as some other outlying districts do. And its always a challenge to recruit good teachers."
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