City Hall tech systems upgrade at risk ‘of failing’
Assessment leads to a plan to help keep the project on track
Mayor Alan Webber stood at a podium bearing the seal of the city of Santa Fe, members of his newly hired executive team lined up in a row behind him, flames gently flickering in a fireplace that served as the backdrop for a midweek news conference held at the Santa Fe Community Convention Center.
“This work that we’re talking about today is exactly the work that I was elected to do,” said Webber, who was elected the city’s mayor in March. “This is the work of changing the way the city is run.”
The work Webber was talking about was Project Ándale, the implementation of the Enterprise Resource Planning and Land Use Modernization Project, or ERP for short.
The project is a long way from the potholes, weeds, busted sidewalks, zoning fights and the other issues that City Hall routinely deals with. No one seems to be able to describe it without falling into tech or management jargon — ERP is just one of many acronyms that get tossed around in any presentation of what is now supposed to be called a “program,” not a project, thank you very much. But Webber presents the ERP, with an estimated cost of more than $8 million, as absolutely crucial to Santa Fe’s future.
ERP is a massive overhaul and upgrade of the city’s software and information technology systems that began under Webber’s mayoral predecessor, Javier Gonzales. Webber says it’s essential for the efficient, smooth-running, customer service-oriented government that he campaigned on.
“Not completing this work is simply not an option,” Webber declared.
His words seemed to echo down the hallway from where he held a similar news conference five months earlier. Both sessions introduced 10-point “corrective action plans” (CAPs) designed to clean up computerized systems and record-keeping. The one from June was a CAP intended to straighten out the city’s financial accounting and, the mayor added, to restore public trust.
“Very clearly, the message is we want to change the way the city does business,” Webber said
then, promising a series of as many as 10 audits, including “forensic-style” audits he said would assess how well the city was following industry standards and internal controls. “People want the city to change and we’re delivering that change.”
‘High risk of failure’
The second point of that 10-point plan from the summer was the implementation of the ERP, which now has a 10-point corrective action plan of its own. The one the mayor presented last week grew from an “Independent Verification and Validation,” or IV&V, a third-party assessment aimed at determining whether the systems upgrade process is meeting requirements and fulfilling its intended purpose.
Acro Service Corp., an Ann Arbor, Mich.-based management consulting firm with an office in Corrales, performed the IV&V, producing weekly reports during October to keep city officials informed of its findings. The first sentence of the first report on Oct. 6 flatly stated: “Project Ándale is in immediate and high risk of failing.”
Webber credited his new finance director, Mary McCoy, for suggesting an IV&V be conducted. She stood behind Webber alongside City Manager Erik Litzenberg and other new city department heads hired to their positions in the past few months, all brought in to bring change to city government.
“This is what good management looks like,” Webber said proudly before turning the podium over to Litzenberg, whom the mayor described as a “change agent” when he picked the then-Santa Fe fire chief to become city manager in March.
Litzenberg called the rest of the management team “courageous” for taking on the task of implementing the ERP, which he described at the Halloween Day news conference as “a scary thing to do.”
“Part of good management is evaluating how things are designed, how you’re using your resources and what changes you need to make to successfully achieve your desired end result. That’s what we’ve done here,” he said.
Acro’s weekly IV&V reports were harsh. Among the key issues identified as impacting Project Ándale’s implementation in the initial Oct. 6 report were a “culture of mistrust and fear, evidenced by the fact that several key personnel interviewed for this study did not feel ‘safe’ to be quoted directly.”
A heavy turnover among city employees involved in the project and “no single view” from a budget or timeline perspective was also cited in the report.
Relating to budget, the IV&V also flagged the more than 300 percent increase in a contract with a vendor even while the project was placed on “pause.”
That vendor, the BerryDunn accounting firm, was hired to serve as project manager for the ERP installation, but “between November 2016 and December 2017, BerryDunn’s contract was amended five (5) times,” according to the report. “These amendments increased the original contract amount of $444,960 to $1,315,716 (both amounts include travel). There is currently a sixth (6th) amendment pending execution in the amount of $216,829.”
“Futhermore,” it goes on to say, “had BerryDunn been properly scoped, there may not have been a need for six contract amendments.”
That sixth amendment was put on hold as BerryDunn’s role is being considered.
“Any changes to the contract are being reviewed as the executive team reviews BerryDunn’s role, that includes that specific $216,000 amendment,” a city spokesman said in an email.
The IV&V recommended that the city employ an internal project manager to manage the ERP timeline and budget. “This would reduce the duplication of effort and provide internal ownership of Project Ándale,” the report reads.
Webber said last week that the city would hire a program manager.
The report also suggests the city hire at least two systems analysts who can provide business process engineering, as well as a database administrator.
The IV&V also questions the role, or lack of one, of the city’s Information Technology and Telecommunications Department.
Even though ERP is an overhaul of computer software systems, the IT&T Department wasn’t relied upon as a project resource and wasn’t providing a leadership role, the report says. It also noted that IT&T was “limited” by seven vacancies within the department.
The IV&V report concluded that during the project’s implementation, which began in July 2017, city leadership “often lacked the foresight needed to mitigate identified risks or address project needs.”
Webber said the IV&V made clear there were numerous problems plaguing the project, which the mayor re-branded as a “program” made up of many “projects.”
“Perhaps the most serious one was the decision made at the beginning about how to structure the management of the program from the getgo,” he said, adding that it was a management structure he inherited from Mayor Gonzales’s administration.
But Webber wasn’t interested in pointing fingers. Questioned by reporters, Webber said the point of the latest corrective action plan “is really to focus on solving the problem that we have and not look to identify any individual or person who we would attempt to blame.”
However, former City Manager Brian Snyder was asked to step down after authorizing nearly $400,000 in wages to be distributed to 37 city staff members working on the program without informing city councilors or Webber when he came on board at City Hall last March. That same day, Human Resources Director Lynette Trujillo announced her retirement.
Renee Martinez, the former deputy city manager who was in charge of Project Ándale and recommended the payments, stayed on a few more months before resigning to take a position with the city of Albuquerque.
At first, Webber said that using nearly $400,000 from the program’s contingency fund to pay employees for their extra work on the project was the right call, but he later put a stop to them after it was pointed out that awarding the payments administratively was against city policy.
The IV&V also points out problems with the project’s budget, not the least of which was there was no one person — or “single point of budget management,” as described in the report — overseeing the budget.
“Two project budget reports were provided for this study, both in Microsoft Excel, that do not appear to align,” it said. “Furthermore, budget expenditures do not appear to be traceable from project inception to current day.”
Yet another “furthermore” was equally alarming.
“Furthermore, the project budget has not been tracked or reported since May 2018,” it said. “As it currently stands, it is unclear if there’s enough budget remaining to meet the remaining project needs.”
The IV&V report dated Oct. 24 said that about $3.1 million had been spent on Project Ándale so far. “However, this figure is difficult to verify, as there is no single view of the project budget that has been tracked and updated since Project Ándale’s inception,” it said.
A week later at the news conference, the best estimate was that $3.7 million had been spent. Webber said implementation of the ERP was budgeted at $8.2 million over an eight-year period, meaning the program won’t be completed until 2024 or 2025.
A city spokesman said that the timeline takes into account the work the city will do once the core modules are in place and functions are added.
“This is what we mean when we talk about it as an evolution rather than a project with a specific start and end date,” city spokesman Matt Ross said.
While problems with the program appear prevalent based on the IV&V reports, Webber spent much of last week’s news conference putting a positive spin on things. Despite the issues, he noted that Project Ándale was 35 percent complete. He noted that the timekeeping system critical to payroll operations was substantially complete, and other systems within the Land Use and IT&T departments were on track.
“It’s a mistake to say failure or failing when there have been successes,” he said.
And the IV&V reports contained some optimism, too. Listed as strengths were a willingness among staff to improve project performance, institutional and functional knowledge that could be leveraged, and that the software appears to be a “good fit” for the city.
Listed first on the 10-point Corrective Action Plan for the implementation of the ERP is “to establish a clear management structure.”
Webber has already picked Litzenberg to serve as executive sponsor of the program under a new organizational chart. BerryDunn remains in place as program management consultant. An executive steering committee made up of those staff members who stood behind Webber at last week’s news conference will oversee the budget.
The mayor said that the IV&V came in on time and under budget, and accomplished what they hoped it would.
“It told us what we needed to know,” he said. “It said we need to make changes and that we have the capacity to make changes.”