Arkansas set to pull the plug on ERP-driven budgeting approach

Computerworld - Editor's note: This is an updated version of a story originally posted on Feb. 4 with inaccurate information.
The state of Arkansas is on the verge of stopping its use of software functionality that supports an advanced budgeting technique, a move that comes as the state continues to pursue litigation against SAP AG over an earlier implementation of budgeting software.
The lawsuit, filed in the Circuit Court of Pulaski County, Ark., four years ago, alleges that an initial budgeting application delivered by SAP failed to work as promised and that the state's core IT system based on SAP's R/3 software didn't meet specifications for accessibility by handicapped users.
A spokesman for Arkansas Gov. Mike Huckabee confirmed that the state's so-called performance-based budgeting methodology will be dropped at an as yet undetermined time. The Arkansas legislature first needs to pass a bill that would scrap a law requiring state agencies to use the performance-based approach, which now is supported by software written by a third-party vendor.
Performance-based budgeting tools were supposed to be a key part of the state's ERP backbone, known as the Arkansas Administrative Statewide Information System. AASIS went live in July 2001 and is built primarily around R/3. Two state officials agreed that other than the issues outlined in the lawsuit against SAP, the AASIS implementation has been successful, despite significant cost overruns.
The state currently puts the cost of AASIS at $60 million, twice the estimated budget at the project's start. It contracted with SAP for the system, including the company's budgeting applications, in February 2000.
Arkansas officials said that after the initial installation of SAP's budgeting applications failed, the state spent $2 million on software from Protech Solutions Inc. in Little Rock, Ark. They added that the government will continue to use Protech's budgeting application, which was designed to accommodate both conventional line-item budgeting and the performance-based approach.
Keith Leathers, AASIS director for the state, said that the Protech software has performed well and that the state's move to stop the use of performance-based processes has nothing to do with the quality of the applications. "We've been very happy with Protech," Leathers said. "The Protech application is the backbone of our budgeting system."
He added that if the proposed legislation passes, the functionality supporting the presentation of budgets in a performance-based format will remain in place in case the state makes future changes in the way that budgeting is done.
Arkansas Attorney General Mike Beebe, who is representing the state in its lawsuit against SAP, said