IT Fiddles, California Burns
By Ericka Chickowski
As California teeters on the brink of financial collapse and the California legislature continues its months-long streetfight over the state budget, Governor Arnold Schwarzenegger has been scrambling to keep the state running.
But IT is an impediment to the process.
Schwarzenegger has long eyed the payroll as a way to stave off financial shortfalls until a budget reaches his desk for signing. Last July, the governor attempted to cut back payroll by temporarily dropping workers down to minimum wage until a budget deal was hammered out by lawmakers.
This plan was obstructed not by political wrangling or labor lobbyists -- it was held up by absolutely ancient IT infrastructure and a beleaguered project to upgrade to SAP.
The California State Controller's Office (SCO) is currently running on an old COBOL-based payroll system that dates back to the 1970s. The SCO began an initiative in 2006 to update this system, with initial estimates targeting full implementation by 2009. State Controller John Chiang said that the systems needed to carry out Schwarzenegger's minimum wage plan would not be available for six months. That was last summer.
Just this January, the SCO announced that it was canceling its contract with the consulting company in charge of the project and had not estimated when it would hire another firm to carry on. That was $25 million into an estimated $69 million project.
Even with this litany of failure, the payroll systems fiasco has largely been glossed over by the media. But CIOs should really take note. Whether or not better technology could have saved the state from layoffs may be debatable, but one thing is for sure: If your CEO approached you to set temporary paycuts into motion and you told her 'No, infrastructure won't support it,' you'd be out on your butt in a heartbeat.
The fact is that IT failures have very real business consequences. When system upgrades don't go as planned, lines of business must change course. When IT fails to live up to promises it can bring down the business in the process. That's part of the problem today in California.