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Portland IT overhaul runs into delays, excessive costs

City hires new IT consultant as costs jump from $31M to $49.4M

By Todd R. Weiss
May 15, 2008 12:00 PM ET

Computerworld - Twenty months into an overhaul and integration of its more than 300 key IT systems, applications and data sources, the city of Portland, Ore., has changed IT consultants as the price tag for the project has soared.

Originally targeted to cost about $31 million in late 2006 for consulting fees, hardware, software and other expenses, the project is now estimated at $49.45 million, according to the city. The work, which was supposed to be completed this past December, now won't be finished until sometime next year, raising the costs of the project considerably, said Laurel Butman, a principal management analyst for the city's Office of Management and Finance.

"What happened was we were supposed to go live in December of last year ... and it became increasingly clear that we weren't ready," Butman said.

Now the city is negotiating a termination deal with Ariston Consulting & Technologies Inc.,the San Diego-based IT consultant that was hired to oversee the project. Both the city and the consulting company say that problems with the other led to the cost overruns and delays in getting the work finished.

As the target completion date passed last December, the city brought in consultants from SAP AG for advice, since the city is now moving to SAP's ERP software systems, including financial and human resources capabilities.

Butman said SAP found that the previously set project schedule and budget were too tight, and that more time and money would be needed to complete the work. The city was told "that the approach that Ariston suggested wasn't getting us to [the December 2007 completion] goal. It wasn't the software, but the process of approaching the implementation."

Now that SAP will provide consulting services to complete the project, the timeline and the costs have been expanded. The new schedule calls for the city's financial software to be ready by November, with the human resources software ready by next May, Butman said. "SAP said that that was going to be a better situation for us," she said. "We are off and running."

Robert Stoll, a Portland attorney representing Ariston in the termination negotiations with the city, said the company did the best it could do with the information it was given by the city.

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