After King County blew $39 million on a botched attempt to modernize its accounting, payroll and human-resources computer systems, County...

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After King County blew $39 million on a botched attempt to modernize its accounting, payroll and human-resources computer systems, County Executive Ron Sims is ready to try again.

But getting the job done this time will require even more money — $70 million, according to a consultant’s preliminary estimate.

And that doesn’t include an estimated $34.5 million more needed to run the new systems over the next 10 years.

The goal is to give the county unified accounting and payroll systems — something it hasn’t had since 1994, when the former transit and sewage agency, Metro, merged with King County government.

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Of the four finance systems now in use, two are using mainframes from the 1970s.

After studying the debacle, which came to a head in 2000, and then figuring out how to do the job right this time, Sims says, his staff is prepared to put together a detailed plan. But until that plan is completed next year, the full cost won’t be known.

However, it will cost far more to finish the job than officials thought the project would cost the first time. The main reason: Sims is proposing more labor-intensive work to change the county’s bookkeeping practices before bringing the new computer systems online.

No one disputes the need to replace the old systems. If nothing is done, Councilman Dow Constantine said, “eventually the payroll and accounting systems, which are now outmoded, will fail and we’ll have a catastrophe on our hands.”

Sims has asked the council to approve his new approach and release $2.4 million for planning and a pilot project. The Metropolitan King County Council earlier budgeted the planning money on the condition it couldn’t be spent until the council approved the overall plan.

Before releasing the money, council members want to know who will be in charge of the project and how Sims will ensure it won’t again fail.

“There’s a lot of anxiety and antsiness about getting into this too far” because of the previous fiasco, said County Councilman Larry Gossett, whose budget committee is considering the funding request.

Some council members became even more jittery when the county auditor earlier this year questioned the financial benefits touted by a consultant to Sims. The consultant reported that benefits from the project would exceed costs by $176 million. But a consultant to the auditor calculated a net benefit of only $17 million over 10 years.

The auditor also said the $70 million estimated cost of the project, which includes capital and financing, is based on 4-year-old numbers and should be recalculated. Executive staffers plan to do that.

County Councilman David Irons, who is running against Sims for county executive, challenged Sims’ numbers on the projected savings. “Why should I have any assurance that your costs for acquiring and training are good? You failed once, you come back again and you start 90 percent off.”

Constantine and Irons have resisted pouring any more money into the project before a manager is hired. Candidates for that job are being interviewed.

Sims and his staff say they’ve learned from the 2000 debacle, and have a plan — renamed Accountable Business Transformation — that will succeed.

Installing the new systems — PeopleSoft for payroll, Oracle for accounting — is expected to take up to five years. If the job is completed in 2010, that would be a decade later than the original target date.

The first attempt to modernize the county’s finance systems was in 1997, when the County Council appropriated $39 million for a project that was to be completed in 2000. Instead, the project was shut down in 2000 after inexperienced project managers spent the entire budget on just one part of the job.

When Sims suspended the project, the new payroll system had been installed for departments employing only one-third of county employees. The accounting system wasn’t installed at all.

The council gave Sims $4 million more to “stabilize” the payroll system and figure out how to restart the project.

A post-mortem study said the aborted project suffered from a lack of teamwork, failure of the steering committee to verify optimistic reports from program managers, and customizing the newly purchased software rather than changing procedures.

Most astonishingly, consultants Dye Management Group and IBM found, “virtually no one within the county had any significant experience in implementing large, complex software application systems.” And the Finance Department, which was in charge, didn’t hire outside experts to manage the payroll part of the job.

Sims said he’s confident the restarted project will be successful because “there’s never been a project more thoroughly vetted.”

This time around, he said, departments won’t be allowed to customize software: “You have to change the way you do business to fit the software, not change the software to fit the way you do business.”

But Caroline Whalen, Sims’ deputy administrative officer, said recruitment of a project manager could be hampered if the County Council does not appropriate the $2.4 million to fund the next steps.

If she were an applicant for the job, Whalen said, “I would ask, ‘How solid is the funding for this? I’m considering leaving where I am now, moving my family, committing to this large-scale project — and you don’t have 2005 funding yet?’ “

Mike Herrin, who successfully installed payroll and finance systems for the city of Seattle, is managing the county project until a permanent manager is hired.

Irons has other concerns about the project: that the county is acquiring software from two vendors rather than one, and that a raft of new “checks and balances” will drive up the project’s cost.

Sims’ staff has defended the choice of two separate vendors, noting that one of the vendors, Oracle, has acquired PeopleSoft, and that both software products are already in use in some county offices.

Herrin is optimistic about the project, which he says Sims, the County Council and other elected officials are “very serious about doing right. … I’m convinced they will be successful, but it will be a lot of work and it will be difficult. Implementation of these systems is one of the hardest things an organization does.”

Keith Ervin: 206-464-2105 or

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