Implementation of the city of Anchorage’s problematic new software spanned two administrations and multiple vendors as it tried to tailor the programs to its needs. As the city played whack-a-mole with ever-surfacing issues, costs increased.
The city purchased SAP software programs in 2011 under former Mayor Dan Sullivan to assist in nearly every function of city government, leaving behind the PeopleSoft program it had been using for about 30 years.
The worst came in 2017 when the city launched the payroll system, which resulted in frequent errors on municipal workers’ paychecks. Their unions, backed by collective bargaining agreements, filed grievances. Over the next two years, the city offered additional paid leave to workers to avoid costly cash penalties.
The police union received the largest settlement, estimated to be worth more than $11 million. Overall, the city estimated it had a liability of $2.7 million due to payroll errors, and settled with unions by giving employees paid leave worth a collective $16 million.
Now, city officials say there’s little legal recourse they can take, despite large cost and time overruns associated with the adoption of SAP.
Here is a timeline of the SAP software implementation:
2011
The SAP project launches with a $10.6 million budget and a 2012 “go-live” date
In April, signs of trouble: Software to automate city government behind schedule; costs are rising
August: City pushes back software project launch date
October: City plans $7.5 million in additional spending on software project
2014
August: Municipality of Anchorage again delays launch of software system
September: Task of fixing troubled software project falls to new Anchorage CFO Kate Giard
October: Assembly members press for external audit of SAP
Anchorage Assembly approves an external audit of the SAP project
2015
February: Reviews conclude Anchorage’s troubled software upgrade should move ahead
March: Anchorage IT director and mayoral candidate critical of city data system revamp
May: City’s troubled SAP project plans move to Sunshine Plaza building downtown
July: Mayor Ethan Berkowitz takes office, replacing Sullivan
August: With tens of millions spent so far, Berkowitz to press ‘pause’ on troubled software project
October: Anchorage’s troubled SAP project to continue under Berkowitz
2016
March: Anchorage hires former IBM executive as SAP project manager
2017
March: $40 million spent so far on city software project has had ‘no measurable benefit,’ mayor says
July: Anchorage Assembly reluctantly gives more money to $81 million software project
October: A milestone for Anchorage’s troubled SAP system: First paychecks go out
December: Anchorage settles two grievances with Local 302
2018
February: Anchorage settles additional grievances with Local 302 and grievance with Anchorage Municipal Employees Association
March: Anchorage settles grievance with Public Employees Local 71
June: Nine months into new software system, Anchorage city government’s payroll problems persist
July: Anchorage settles grievance with Anchorage Police Department Employees Association
September: Anchorage settles another grievance with Anchorage Municipal Employees Association
December: Anchorage settles grievances with International Brotherhood of Electrical Workers Local 1547 and International Association of Firefighters Local 1264
2019
February: Anchorage settles additional grievance with Anchorage Police Department Employees Association
April: Anchorage settles additional grievance with Anchorage Police Department Employees Association
September: Anchorage settles grievance with Intern & Pipefitters Local 367
October: Anchorage settles additional grievance with the International Brotherhood of Electrical Workers Local 1547
December: Payroll software settlement with Anchorage firefighters union costs city an estimated $2 million
Anchorage payroll error settlements cost the city an estimated $16 million