After pause, city software boondoggle comes back on line

After a two-month “pause,” Anchorage Mayor Ethan Berkowitz has announced the city will continue working to implement the costly and contentious SAP software program.

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An external audit review of the project presented Friday found no fault with the software system itself, but instead identified a number of missteps putting the program into action.

“It was a train wreck from the beginning, frankly,” said Assembly member Elvi Gray-Jackson, who chairs the committee in charge of reviewing the SAP program, and has been a longtime critic of how it was handled. Members of the Assembly and Administration were told Friday that after so much money and time has been invested, it doesn’t make sense to walk away from the project.

“It was clear that keeping SAP was probably the only choice to make,” Gray-Jackson said. The contractor hired by the Assembly to study what’s worked and what hasn’t determined the software itself is salvageable, but institutional disorganization and mismanagement have been the chief obstacles.
The audit did included a number of recommendations to not repeat past mistakes.

“First off the city–and I’m talking about the past administration–did not understand the full scope of the project and what they were about to undertake,” Gray-Jackson said of the report’s findings. “Leadership wasn’t appropriately engaged and didn’t take ownership of the project or the outcome. The contractor supplied inadequate resources, governance and oversight.”

The original estimate was that the SAP software would be up and running across municipal departments by 2011 at a cost $9.6 million. To date, the city has spent more than $36.2 million dollars with full implementation now optimistically forecast for early 2017.

Gray-Jackson says she’s encouraged to see Berkowitz taking responsibility for the project.

The administration has not released an updated cost estimate yet. Deputy Chief Financial Officer Alden Thern said the administration will spend the next few weeks re-staffing consultants who have previously worked on the project, though about a third of them, including members from leadership, have moved on. Those teams will work on finalizing blueprints for the software by March as the Administration prepares an implementation strategy.

Correction: An earlier version of this story mistakenly mentioned the original cost estimate for the SAP project was $10.6 million.