Reviews conclude Anchorage's troubled software upgrade should move ahead

Anchorage officials said Friday the city is moving ahead with a troubled technology project after two recent reviews concluded the project was salvageable.

The SAP software system, which is designed to automate payroll and other city government functions, has cost $34.6 million and is running more than two years behind schedule. The project has been stalled for the last two months as the city brought in experts to analyze what has been called a botched rollout.

The results of those reviews, one of which was conducted by a team of SAP consultants, confirm what was already known about the problems surrounding the project: poor management, missing documentation, staffing problems and the lack of a well-defined project plan.

But the reviews also suggest that the project should not be abandoned. On Friday, Mayor Dan Sullivan said his administration is coming up with a new timeline and budget for the project.

The Sullivan administration said in its response to the "quality assurance" report by SAP that it had not lost confidence in the SAP system or the contractors and staff associated with the project.

Sullivan said his administration wanted to ensure the project was on track. He said a new schedule and budget will be unveiled in two weeks.

Zig Berzins, a Denver-based consultant who performed a separate external review, on Friday called SAP "a perfectly fine software product."


"It's hard to implement because it's complex," Berzins told Assembly members. He also said that because of the pause for the reviews, the project is currently "stagnant" and needs to be revitalized.

The SAP project began in September 2011. It was supposed to replace the PeopleSoft system, which has not been fully upgraded in more than a decade. The project had a $9.6 million budget and a launch scheduled for the following July, and officials have since acknowledged they underestimated the time and money required to complete it.

In January, an independent section within SAP dispatched consultants to conduct a "quality assurance" audit on the project's technical design. The city paid $750,000 for the work. The review produced a detailed 417-page analysis of the technical design of the project, along with recommendations for making fixes.

Separately, Berzins was brought in to look at project management after Assembly members Amy Demboski and Elvi Gray-Jackson spearheaded an effort to spend $200,000 on an external review.

Berzins told Assembly members that the municipality should apply SAP's technical recommendations. With significant changes in management and project flow, SAP could be successful, Berzins said.

But, he noted, there will be a cost. About $2 million is left in the project's budget, Berzins said. He said that amount would "not come close" to covering what needs to be done.

Gray-Jackson, who has been a longtime critic of the project, said after the meetings that she was pleased with the reviews, though she noted that putting the recommendations in place will be costly. She said the city doesn't have much choice at this point.

"We've accepted the fact we can't go back," Gray-Jackson said. "We have to move forward."

Devin Kelly

Devin Kelly was an ADN staff reporter.