SAP ERP Software Fails Marin County: "Don't Cry for Me, California"

There is a very interesting article in a number of dimensions up on IDG News Service August 25 (truth in advertising: I am a former IDG employee) about the lawsuit between Marin County, California and Deloitte over a four year old SAP implementation. According to Chris Kanaracus,

"Officials in Marin County, California, decided on Tuesday (August 24 I presume) to replace the county's ailing SAP ERP system, an option that would cost less than trying to fix widespread problems with the software, according to officials."

For those readers from outside the U.S., Marin County is one of the richest in our country and can presumably afford any approach it wants to take. It's one of the most beautiful spots in the U.S. so close to a major city (San Franciso) and claims in court filings to have one employee for every 100 residents (see other articles about the problems in California state and municipal financing).

The first thing that hit me in reading the background material was that the county does not provide educational sevices but does provide such things as public safety, libraries, parks (there are some great ones), and welfare payment processing (which presumably there is not a lot of in Marin County). But that only adds up to 2500 employees so although the employee-resident ratio is pretty lavish, in terms of an ERP system, I don't understand why Marin didn't use Intuit (INTU) Quick Books and ADP payroll processing instead of having to bring in Deloitte.

Marin had been using an AMS legacy ERP package; I am assuming that was CGI's (GIB) product (formerly American Management Systems) and not a product from the local software company that specializes in winery ERP. When the county said in court filings that it had no experience it clearly wasn't lying under oath. Whatever Deloitte is guilty of, Marin County seems to be a serial believer in advertising brochure copy. I hadn't heard about the old 1998ish SAP "blueprinting" concept in more than a decade until it popped up on clause 57 of Marin's complaint against Deloitte.

And before the project was even completed, Marin agreed to be a beta user of SAP ERP 2005. Wow! (Note: Deloitte is the alleged bad guy here, not the usual whipping boy SAP. The May 2010 court filing makes that clear but a July 2010 county IT department apparently done by a bunch of varying consultants does not seem to mention Deloitte.)

Second, how did Marin County decide that

"Maintaining the system at "status quo" would tally up US$34.7 million; fixing it and also "supporting continual improvement" by hiring more workers would cost $49.8 million;... merely fixing problems and running the system would ring up a $34.1 million bill... (but) starting over with a new product would cost just $26.2 million over the same 10-year period."

The latter number is interesting because, according to IDG according to the Marin County IT director, no software package is currently selected to replace SAP. How did he come up with that price then? Well the answer is that Marin and even more consultants (looks like a dozen or so) looked at Sungard, Tyler Technologies (TYL), New World Technologies and Microsoft (MSFT) Dynamics software.  Microsoft, apparently smelling a rat hole but maybe because Tyler and New World are partners, declined to participate in the process. The big savings come as I would expect because all the consultants conclude that a much less elaborate ERP system is all Marin needs (and needed in the first place).  It feels -- I think based on the Sungard system -- that seven IT folks could run the system as compared to 23 now.

And third, I love the quote attributed to one of the county commissioners:

"There is little need to hurry. The technology is changing. I think this is a good opportunity to shake out the sheets and see what's available."

I am guessing that the sheets thing is a reference to hanging out laundry... in the air... to dry...  Actually when it comes to ERP, the technology is not changing that much. 

Like I said, for 2500 cops, librarians and park rangers, go with QuickBooks.

-- Dennis Byron

(no financial interest in companies mentioned)

 

Comments

[manufacturing erp software]

Problem with any erp software is that they need business process and culture change before implementing the system.