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Municipality of Anchorage again delays launch of software system

Devin Kelly
Aerial of downtown Anchorage on July 19, 2012. Loren Holmes photo

Anchorage leaders are again delaying the launch of a new software system meant to automate many functions of city government. The project is now running more than two years behind schedule and has cost the city more than $25 million to date.

The Municipality of Anchorage had planned to go live Oct. 1 with the new system, called SAP and named for the German company that created it. The system is designed to manage city financial data, including accounting, purchasing and benefits administration. It replaces the aging Peoplesoft system.

But at a monthly update with Anchorage Assembly members Aug. 15, officials said the city now plans to launch the software in two stages, with the first go-live date set for Jan. 1. The second stage is scheduled to launch April 1.

Anne Reed, a city employee leading the internal project management team, said during a presentation that the city already needed to delay the completion date for a section of the project, leading to a Nov. 1 launch. But with major national holidays in November and December, officials decided it would be “cleaner, simpler” to push the start date back to Jan. 1, she said.

The delay is only the most recent for the SAP project, an effort that began in September 2011 with a $9.6 million budget and a launch scheduled for the following July. Since then, the project has been plagued by cost overruns, staffing problems and missed deadlines.

Last October, the Sullivan administration announced it was dropping consultant Black and Veatch and hiring a new one, The Peloton Group.

During the Aug. 15 presentation, Wade Hunter, Peloton’s representative, was optimistic about the project’s progress.

“This is a significantly different project from November when we started,” Hunter told them. “There’s a clear path to completion.”

But Hunter and Lance Ahern, the city’s director of information technology, wavered on the finality of the new deadlines, saying during the presentation that the timeline is directly tied to staffing.

“The shortage of timely, adequate, dedicated MOA staffing continues to negatively impact the project schedule,” a slide in the presentation read.

Ahern said the city is actively recruiting for five positions in the employee relations and payroll departments to help meet the new deadlines. In a later email, Ahern said the Peloton contract requires 1,700 hours of city staffing time. 

The project budget is now $31.6 million, more than three times the planned amount. A packet distributed at the meeting showed that $25.5 million had already been spent.

In October, a presentation by city officials stated that, in today’s dollars, the installation of the 15-year-old PeopleSoft system cost $28 million.

Ahern would only address questions about the SAP project via email. He wrote that the project has made “excellent progress” through Peloton, and he expects the consultant to be hired for maintenance support after what he called the “split go-live” date.

During the meeting, Assembly members directed pointed remarks at Ahern, Hunter and Reed. 

“I want you to know right now, my patience is running very thin,” Amy Demboski, of Chugiak-Eagle River, told them. “If there’s a staffing issue, don’t wait a month to give us a heads up.”

Assemblymember Elvi Gray-Jackson, a critic of the SAP project, said that while the city does need an update to the city's financial and human resources system, it’s “unfortunate” the timeline for the process has been pushed back again.

“It’s disappointing, although I remain hopeful,” she said.