Ritter seeks to bring order to computer chaos

Denver tech exec to steer systems' design, purchase

Ann Imse And Alan Gathright, Rocky Mountain News

Monday, July 23, 2007

Gov. Bill Ritter has ordered sweeping changes in an effort to halt Colorado's dismal record of buying expensive computer systems that don't work.

He issued an executive order seven weeks ago that begins to centralize control over the state's scattered computer systems and gives unprecedented authority to a single technology executive, State Chief Information Officer Mike Locatis.

Under the previous Owens administration, the state contracted to spend $325 million on five new computer systems that were unable to: pay welfare benefits on time, pay road crews overtime, track voters or unemployment benefits, or issue license plates.

Two of the systems have been scrapped and a third is on hold.

Ritter has authorized Locatis, for the first time in state history, to set priorities for purchasing new computer systems.

Locatis also will have a say in hiring the state's top tech executives and deciding if they will be shared across departments.

Among Locatis' plans:

• Consolidate 60 telephone systems, saving on maintenance and operating costs.

• Combine 10 financial systems into one or two.

• Study whether the state's 1,680 computer servers could be reduced by up to 40 percent.

• Buy equipment and software at bulk prices, rather than one department at a time.

Ritter means business

Ritter put teeth in his order, telling departments to cooperate with Locatis, or explain why not in writing.

In giving Locatis authority over new projects with budgets over $10,000, the order warns: "Projects shall not be artfully divided to avoid this."

In June, Ritter promoted Locatis from a governor's aide with a staff of five to a position in the Cabinet with management control over the state's 214-person information technology division and its $36 million budget.

The division remains technically under the Department of Personnel and Administration, but now is managed by Locatis.

That change still leaves most of the state's 1,500 computer staff scattered around dozens of departments and divisions.

Locatis is studying whether more of them should be brought under his control.

"We are looking at options for the governor to consider," he said.

Locatis is a self-described "turnaround expert" who previously centralized uncoordinated computer systems for the city of Denver and for Time Warner's cable division.

Time Warner had been saddled with numerous incompatible computer systems after acquiring dozens of smaller cable companies.

"Locatis brings a level of skill that we've not seen before," said state Rep. Bernie Buescher, D-Grand Junction, vice chairman of the Joint Budget Committee.

Buescher has been repeatedly frustrated by state officials seeking money for computer projects who can't say if the investment will save the state even a dime.

When Buescher invited Locatis to a get-to-know-you dinner, Locatis "showed up with a 40-page power point presentation that he put together specifically for me. The man is extremely knowledgable, and very intense," Buescher said.

"Had we had someone like Michael involved" with the five problem computer systems, "some of those pitfalls would have been avoided," Buescher said.

The planned changes also met with the approval of University of Denver professors Don McCubbrey and Cindi Fukami, who have used state computer fiascoes as examples of how not to manage.

"It sounds like Ritter has stepped up to the plate on this thing and wants to clean it up," said McCubbrey, an information technology professor. "Now, it's a matter of execution."

Locatis' projects praised

Fukami praised Locatis' plan to have monthly reviews of major computer projects sent to his office. Until now, they have been sent only to the department spending the money - which has an incentive to keep mistakes quiet, she noted.

Locatis said he is considering creating a statewide "enterprise" computer system to replace hundreds of systems that don't talk to each other, but said no decision has been made yet.

He said it is not unusual for employees of large organizations to create little databases that then become "mission-critical."

In Denver, Locatis won praise from Mayor John Hickenlooper and tech staff alike for forging them into a united team.

He drove the long-delayed dream of a new police records system, switching from a conglomeration of 1,000 databases to one where officers in the field can use laptops to search records for a telltale scar, for example, that could trap a criminal.

Locatis also oversaw the creation of Denver's 311 telephone and online system that gives citizens a one-stop place to ask questions and file complaints.

For the state, Locatis expects to consolidate a number of functions across departments, including data centers and GIS (global information systems) mapping.

Locatis also has begun reviewing existing projects, including the five that ran into problems. On a number of these, state officials did not sort out what the system needed to do before spending money writing computer code.

"If you don't have those business requirements right, you almost always buy the wrong system," Locatis said.

Locatis put on hold a $36.5 million contract for a new taxation computer system to replace a web of systems up to 40 years old. The Owens administration had awarded the contract to Fast Enterprises just days before leaving office last January.

"We wanted to make sure the vendor was right," Locatis said. He's now accepted Fast Enterprises' proposal to modify a computer system it has already installed in nine states.

Locatis' deputy, John Conley, is hammering out a tough contract that will penalize Fast Enterprises if the system fails and the state can't collect its taxes properly.

Sorting out mistakes

Two departments have been told to start over on identifying what they need their computers to do.

The Department of Labor and Employment has been sent back to the drawing board on a new computer system to track unemployment benefits. It was dumped last year after the state spent $27 million on it.

The department must sort out what the system needs to do before the state spends more money writing computer code, Locatis said.

The Department of Revenue is doing that same thing with CSTARS, a new computer system for issuing vehicle registrations and license plates that was yanked out of partial use in April. A review found that the department made such a list nine years ago, and then did not require the contractor to use it.

The Revenue Department also had too little oversight for the project, the review found. Locatis plans to hire an outside manager when the CSTARS project is restarted.

The Department of Transportation modified an off-the-shelf computer system to consolidate dozens of systems, but forgot to program in a way to pay overtime for those who work more than eight hours a day. As a result, a thousand employees' paychecks came out wrong.

Seven months later, CDOT still has some payroll problems.

"Usually, you would catch that in testing," Locatis said.

Five that failed

•

None of these systems performed to specifications:

CBMS

Colorado Benefits Management System, developed by EDS at a cost of $223 million. It fouled up welfare benefits and left poor people without critical cash and other benefits.

Genesis

Developed by Accenture under a $40.8 million contract with the state Department of Labor to track unemployment insurance. The state said the system had a 20 percent error rate. The two sides agreed to cancel the contract. Colorado paid Accenture $27 million.

SCORE

Statewide Colorado Registration and Election system, developed by Accenture under a $10.5 million contract. When Accenture missed a federal deadline for completion of the new statewide voter registration database, the secretary of state canceled the contract and hired a different company to do the job.

ERP

Enterprise Resource Planning system was developed by SAP at a cost of $38 million to track Colorado Department of Transportation finances, personnel and project management. About 1,000 employees found errors in their payroll checks last winter. Some checks are still showing errors.

CSTARS

The state spent $10 million on the Colorado State Titling and Registration System, built by Accenture, before pulling the plug on it in April.

imsea@RockyMountainNews.com or 303-954-5438