Marin County to rip and replace ailing SAP system

Officials in Marin County, Calif., decided Tuesday to replace the county's ailing SAP ERP (enterprise resource planning) system, an option that would cost less than trying to fix widespread problems with the software, according to officials.

The system is the subject of a lawsuit Marin County filed against system integrator Deloitte Consulting earlier this year. Deloitte used the project as "a trial-and-error training ground" for inexperienced employees, and the result was a "costly computer system far worse than the legacy systems it was intended to replace," according to the county's complaint.

Deloitte has filed motions against Marin County's "completely unfounded allegations," as well as a complaint seeking unpaid fees, a spokesman said via e-mail. The system "was working properly and could perform all the tasks consistently with the standards set forth in the written contract," according to a Deloitte court filing.

Marin County tells a different story. The SAP implementation dates to 2006, but today only 50% of the functionality is in place and working properly, according to a county report.

"In order to make it happen with SAP, we would need to re-architect it, redesign it, and that would be quite expensive," said David Hill, director of the county's information services and technology department, during a meeting of the Marin County Board of Supervisors, which was webcast.

Most county department heads "agree there's a compelling reason to move off SAP or improve it, but not to stay where we were," he added.

A chart in the Marin County report details what various solutions to the problem would cost over a 10-year period.

Maintaining the system at "status quo" would tally up $34.7 million; fixing it and also "supporting continual improvement" by hiring more workers would cost $49.8 million; and merely fixing problems and running the system would ring up a $34.1 million bill.

In contrast, starting over with a new product would cost just $26.2 million over the same 10-year period, according to the report.

No particular software package is currently in mind for the replacement, according to Hill.

There is little need to hurry, suggested board member Susan Adams. "The technology is changing," she said. "I think this is a good opportunity to shake out the sheets and see what's available."

SAP "strongly believes in the value and performance of its software in use in Marin County," said spokesman Andy Kendzie. "Our software works exactly as it should, and any issues in this implementation in no way reflect on SAP. Our software is installed and functioning perfectly in tens of thousands of public sector agencies, including dozens in California."

"We regret their decision but will work with them going forward as they deem appropriate," Kendzie added.

Whatever product Marin County chooses as a replacement, "the key thing is for them to understand their future state business processes," said Altimeter Group analyst Ray Wang. "They need to compare what they want to do with what the software vendors say they can do."

In turn, "the next software vendor that picks up this gig needs to be clear on what works out of the box, what is customizable and what's coming in the future," he said. Any system integrators involved would do well to give the county concrete expectations of what can be accomplished in a given time frame, he added.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris's e-mail address is

Copyright © 2010 IDG Communications, Inc.

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