Mayor Pulls The Plug on A Slow and Spendy Software Project

Photo: Zach Hughes/KSKA.
Photo: Zach Hughes/KSKA.

A massive software project that’s run millions of dollars and years over budget was halted today by Anchorage’s new mayor. The move is meant to reexamine the city’s path forward, but won’t totally shut off money for the project.

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Implementing the SAP software across the municipality’s offices is–to put it mildly–a pretty giant mess. There are a lot of unflattering numbers associated with the program’s over-runs. When former mayor Dan Sullivan’s administration announced the project in 2011 it was forecast to cost around $11 million ($10.6 million, to be exact), and take just a year-and-a-half to come online. But Assembly Member Elvi Gray-Jackson ran through a much different timeline at a the start of a committee meeting.

“September 2014: project now two years behind schedule. Budget is $31.4 million, tripling the projected cost.”

Currently, it costs the city $50,000 a day to pay for employees, consultants, and office space–all without a clear end date. So, Mayor Ethan Berkowitz announced his administration has decided to take what he’s calling “a pause.”

“At this juncture the responsible course of action for us to follow is to take a pause, assess where we are, make a determination what options we’re going to have moving ahead.”

The length of that pause has yet to be determined. It will cost the city several hundred thousand dollars just shutting down current operations–that is, paying consultants as their jobs wind down, keeping up with rent payments, and other obligations. No city employees are losing work, they’ll all be reassigned internally.

This is the third time the SAP project has been put on hold. And Assembly member Amy Demoboski–who was critical of the last administration’s spending on the project–reminded the new administration that the longer the pause, the more costly it is to resume operations down the line. Asked whether full termination was a possibility, Berkowtiz replied:

“We’re gonna be reviewing all options.”

The administration has recruited a team of seven Alaskans mostly from the private sector to review the project.