The cause of this fiasco is one that's often repeated in government projects. Does anyone remember the FAA's ATC overhaul project, the infamous AAS?

Two different examples that share the same root cause. Governments are not managed like private enterprise. Until they are, senior managers will not be held accountable for failures or lack of progress.

Failing IT is part of the problem in California??? Since when? IT within government may be an issue since incompetance never messures sallary, or job stability when federally employeed. But I will say that I, as an IT professional, would lose my job in an instant if I didn't perform day in and day out.

Why would California State Controller's Office (SCO) not source Payroll from a supplier of same and why are the suppliers of Payroll Services not offering a solution that the SCO and Schwarzenegger can not refuse.

Well only one thing to do take SCO into court for non compliance and get that money back and hire a better company and demand a start and finish date and update every 30 days... Also look at tieing COBOL with Linux.... and cut moneies for software that way.

part of the issue is going with a dog like SAP. The otyher part is trying to eat the pie in a single bite. Massive outmoded systems with no viable db they are running on, (70's cobol system is running on an IBM platform and using VSAM as its db I would bet).Migrate the data to a new platform and environment. and go with a payrole outsourcer. Stay away from the accentures PWC, Bearingpoints as they do not provide the necessary solutions only ever i ncrasing costs. Cobol with Linux is very viable but will still need to upgrade the app or go to a payrole outsourcer.

"You'd be out on your butt?" You obviously don't work in IT. If you think it's so easy, why don't you fly to California and fix their problems over the weekend? These systems are not simple and change take time and effort. That's reality.

Four years ago, I was lead on a project to rebuild a COTS product that would revolutionize my industry. At the same time, the IT department at my company was totally re-engineering the internal accounting and contract systems. My project had dependencies on the IT project; the IT project failed, and as a result we had to scale back the COTS project to just incremental upgrades, losing an opportunity to capture a lucrative market. That company is still feeling the pain of throwing millions of dollars down a deep pit of IT politics and hubris.

This is another story of management failure.
Instead of patching the payroll system to pay minimum wage IT managers sought to replace the entire system.
Replacing any system is not cost effective. Especially if it is a COBOL system. It is estimated the over 70% of the worlds code is in COBOL. COBOL is not going away ever as it is just too expensive to replace and can result in major failures like this. Several yeas ago the FBI pulled the plug on a project after they had spent 100 million on it. IT&T wireless went bankrupt as a result of installing a new customer service package that had more down time that up time. Hershey’s purchased a system from Kelloggs that failed and they missed selling candy for one thanksgiving. The old motto if it works don't fool with it. Giving everyone a minimum wage payment could have been done really easy.
Add a data element of minimum wage. A parm switch in the JCL to pay minimum wage, change the statement to move salary and move in minimum wage if the parm switch was turned on and we are done for a cost of around $2000.00. Now how stupid do we get?
I solved this crisis in five minutes or less all by my self with out a committee meeting. Maybe the problem really is that the IT folks did not want to give up their high salaries and work for minimum wage.
And oh by the way I am a Department of State Federal Govt IT worker.

Ask for minimum of three bids for Payroll from payroll companies like; ADP or Paychex, till the budget problem for the state blows over. Meanwhile have the government payroll employees’ work for ADP in house?

The problem is likely that IT couldn't obtain authorizing approval to upgrade their systems - short-sightedness that eventually collapes the infrastructure.

The State of California has a LONG history of playing politics in the IT area. Several vendors have suggested rehosting and upgrading applications on open (Linux/Windows)servers and been ignored.

While IT may be partially to blame, the larger responsibility falls on the legislature to spend within their limits and NOT create so many dizzying and conflicting laws and regulations that no one can track.

Each pass of their pens causes more businesses to leave the state and more people to pack up and go.

They are eroding their own tax base.

The IT issues could have been addresses prior to enacting laws that have caused many firearms-related businesses to go under, and the latest, the major hit on the trucking industry.

Has California been outsourcing to foreign companies that uses fraudulent H1-B visa hires to displace US citizens? If so, then this can be a major root cause of the problem!

As an IT professional who actually works for the State of CA, I have to ask how many IT posters here would work for state min. wage? Of course, since I have multiple graduate degrees from ivy and non ivy grad schools, IT is not my only professional option which is good since IT pros are sooo socially retarded (OK under socialized excuse me). IT salaries, despite lazily unchecked mythology, are less than social worker and teacher salaries (refer to the state personnel board site and look at clinical social worker and teacher in the depts of corrections and mental health-- assuming you can read and so simple arithmetic which may be a stretch here). The state IT system is antiquated, and, yes, the state contracts out much of its IT work to contractors who contract out to India for IT workers who make 16 to 20K per year (good money in India) and work 16 hour days-- they sleep and eat in the crowded rooms by their shared machines. Bit of Calcutta in the USA. One system alone cost 40 mil. for the best tech. 1980 could implement directly from India. If you dare to mention open source solutions which can save millions, you get slammed despite it being a California Performance Review recommendation. The problems of California's IT dept. are hefty, but as anybody who was awake in econ 101 would tell you that you can't under capitalize a solution (i.e., you get what you pay for). Oh by the way, I must say how impressed I am with private companies like Goldman Sachs-- oops they went bankrupt, Merrill Lyn-- oops no love there, GM --oops going down the tubes fast, Washingto Mu --- oops gone, Ford Mo -- nope not looking good there. Well you Einsteins in private firms have such a solid rep these days! Nice going!

Government doesn't allow enough time to properly design a system. When a system starts without full understanding of the final implementation a disastrous outcome is a 50-50 possibility. Add to that to using untrained personnel who are being rushed to a conclusion and spending outrageous overtime to finish. The result is a tired disillusiioned crew trying to patch the final product together to meet the deadline.

Interesting that MY comment about the incompetance and potential plaguarism of this writer was refused to be allowed to be printed here!

check out the site and article:

http://www.theregister.co.uk/2008/08/14/cobol_california/

I am in complete agreement with David B. who posted on 2/20 at 2:06 pm. The problem is systemic and is NOT unique to government (state or federal). What is interesting is that many companies facing financial troubles are laying off the very IT workers they need to fix their problems. I was laid off by such a conglomerate late last year. One major problem was that they did not have a centralized financial system to consolidate financial results. Their financial problems seem to grow each week as they were negotiating for a federal "bailout". After the bailout, one of the first projects that was killed was a new centralized SAP system. Go figure!

Government at all levels is incompetent. When government money goes into a project, you can be sure that it wil be 1.slow, 2.expensive, 3.done incorrectly. As these governments grow larger and people expect more from them, they become more incompetent. Whether it's be The Federal Reserve's funny money, the Congress' unintended consequences, or the State government's reliance on Federal welfare, it's all a digusting farce and a disgrace to the founders of this once great country.

Oh, was it also built by the lowest bidder?

Public Sector has it's own processes (as does any industry) but I feel that's only part of the point of this article. California paid an outside consultant - one that does implementations in the private sector as well - to implement their new ERP system. That system, which was to replace an aging, COBOL-base system (not just to cut worker wages) is behind schedule and underperforming - in spite of already sinking $25M into the project. The question is why. When you buy an ERP system you have to rely on the vendor and implementor to guide you through the process. And you should expect them to be expert enough to help avoid pitfalls, to manage the program effectively and within budget, etc. These consulting firms have practices dedicated to government and and should be well versed in dealing with the idiosyncracies. So while government has its challenges, dealing with those challenges is what you are paying for when you hire the implemenation firm. And they are supposed to be partners with the IT vendor, so they should be in the best position to avoid the problems. Blaming the government agency here is a little like blaming you when your mechanic can't fix your car: it must be your fault because you never pre-diagnose the problem correctly.