Accenture IT System Under Fire in Ontario

Upgrade needed to calculate welfare benefit changes; inquiry sought into deal with vendor

Questions about the cost, stability and usability of a controversial $213.8 million welfare payments system being used in Ontario continue to plague IT services firm Accenture Ltd., which developed the system for the province's Ministry of Community and Social Services.

In the most recent development, an Ontario legislator is calling on the province's attorney general to open a formal inquiry into the contract with Accenture, including an investigation of whether the province did sufficient due diligence before awarding it and whether there were any improprieties during the bidding process.

Accenture is currently billing the province nearly $1 million (U.S.) to tweak the mainframe-based system so it can calculate a 3% across-the-board increase for welfare recipients. The upgrade is expected to eventually cost the province a total of $7.5 million, which includes the coding work and the creation of a specialized testing system, according to a spokeswoman for the social services ministry.

Legislator Peter Kormos last week said the disclosure that the system couldn't handle the increase in payments prompted him to seek an inquiry into the Accenture contract. Not being able to increase welfare payments without modifying the system "is like buying a car without a steering wheel and General Motors is talking about it as an optional accessory," said Kormos, who leads a small opposition party in Ontario's legislative assembly.

The custom-developed system was originally slated to cost $135.5 million. The province's goal was to create a real-time, Web-enabled application that embedded some 800 rules governing eligibility for social services payments and that could help the province prevent fraud, reduce caseloads and improve service.

The new system, which is based on a mainframe running OS/390, replaced eight incompatible applications. End users access data via Internet Explorer, using Microsoft Corp.'s Active Server Pages technology. The system also includes Business Objects SA's reporting tools and is supported by a network built around equipment from Cisco Systems Inc.

Users Complaints

Development work started in 1997, and the system went live provincewide in January 2002. But critics have charged that the technology is difficult to use and requires time-consuming work-arounds.

"It's too cumbersome," said Heather MacVicar, general manager of social services for the city of Toronto. Her 2,000-member staff uses the Accenture-written software to process payments for 67,000 welfare recipients. Although MacVicar acknowledged that the new system has a more user-friendly interface than the previous one used in Toronto, she added that it's "hugely more complex."

For instance, the system's design doesn't let end users skip steps built into business processes, sometimes doubling the time required to do simple tasks, according to MacVicar. "We would like the flexibility to bypass certain things," she said, adding that trying to get Accenture to make such changes has been "an ongoing process."

According to a report issued by the Ministry of Community and Social Services itself, downtime on the system cost Ontario $1.6 million in lost worker productivity last year. But the downtime was partly caused by hardware and batch processing issues, not just by the software, the report noted.

In his July 7 letter requesting an inquiry, Kormos described the deal with Accenture as "an obviously bad contract" and charged that Ontario officials had been "thoroughly bilked by Accenture."

A spokesman for Attorney General Michael Bryant declined to comment about Kormos' request. The spokeswoman for the social services ministry also wouldn't comment about the request or the use of the new system.

In a case study posted on its Canadian Web site, Accenture said the system has helped the province save $521 million so far. A spokeswoman for the consulting firm said that it has been paid $181 million based on the system's performance. The company "would not have received a dime had it not generated savings," she said.

Regarding the concerns about the system's rigidity, the Accenture spokeswoman pointed to Ontario's desire to have a centralized set of welfare policies. She described the $1 million price tag for the application update needed to support the increase in welfare payments as a "reasonable amount" given the scope of the system.

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At A Glance

Ontario's Business Transformation Project

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The new system went live across Ontario at the start of 2002, replacing eight older applications that were unable to share welfare case data.

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It includes a central database, can exchange data with an interactive voice response system and lets workers use third-party sources to verify applicant information.

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According to Ontario officials, the system has cost $213.8 million thus far—58% more than the amount that was originally budgeted.
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