The PeopleSoftTouch

PeopleSoft software has forced a Delaware manufacturer to cut paychecks to Mickey Mouse and let failing Wisconsin college students evade expulsion. Guess what software the San Francisco school district owns?

"Maybe Coleman and Rojas thought we had the expertise in-house to install it, but that would have been pretty ridiculous, considering the level of technology we had."

Actually, consultants weren't used "all along." Coleman and Rojas let district staff spend 1996 trying to install the PeopleSoft package. By the beginning of 1997, however, the district was in the market for a consulting firm to help it with the implementation.

The firm chosen, the Sacramento-based Carrera Consulting Group Inc., is a PeopleSoft "certified Alliance Partner," which means it is on a roster of consulting firms that PeopleSoft endorses to install and modify its software. But these "partnerships" -- the subject of a major lawsuit PeopleSoft settled last month -- have not always ensured that the consultants who show up to install the software are experienced and qualified to do so.

Board member Frank Chong: "This is like a never-ending story."
Anthony Pidgeon
Board member Frank Chong: "This is like a never-ending story."
City Hall tech consultant Sandy Rosen is trying to determine if the software can 
be salvaged.
Anthony Pidgeon
City Hall tech consultant Sandy Rosen is trying to determine if the software can be salvaged.

In June, PeopleSoft sent a team of six of its own consultants to assess the state of the San Francisco school district's PeopleSoft systems, free of charge. What the team found, according to a sharply worded report, was a system in shambles.

"Currently the district is barely able to use the data, despite spending over five million dollars in software and implementation costs," the PeopleSoft consultants wrote. "In 1998-99, the district was unable to close its books in a timely and accurate manner [because of software problems], and the 1999-2000 financial records are in a state of chaos. ... Few modules [of the system] are working as intended, and a significant portion of the district's financial records are being compiled and managed on other databases."

Not only did the report acknowledge the software's failings, it also referred to the people allegedly responsible for those failings: the consultants who implemented it, and the district administrators who worked with them.

As it turns out, the consulting group PeopleSoft criticized, but did not name --Carrera Consulting -- was recommended to the SFUSD by PeopleSoft through a marketing arrangement based in part on payments that Carrera was to pass on to PeopleSoft. Carrera, which specializes in public-sector software installations, remains a "certified PeopleSoft Alliance Partner," according to the software maker's Web site. That distinction was a prominent aspect of Carrera's bid to the school district, which, at $1.3 million, was the second-cheapest of three submitted to install the personnel and payroll applications. But in a Sept. 17, 1997, memo, Glenston Thompson, an official in the school district's business office who headed up the disastrous financial software section of the PeopleSoft project, recommended Carrera's bid as best, referring to Carrera's "alliance" with PeopleSoft in the very first paragraph. The board approved Thompson's recommendation with (as was often the case in an administration that once spent $35 million on consultants in a single fiscal year) very little discussion.

And so a brutal relationship began: During the 18-month duration of its three contracts to install PeopleSoft applications at the school district, Carrera collected about $2 million and walked away from the installation at a juncture when district officials -- their computers badly malfunctioning -- insisted it was unfinished.

And then, in what can reasonably be called an unusual turn of the screw, the consulting firm sued the school district for more than $610,000.

In its lawsuit, Carrera complains that the district unjustly ended two of its contracts in January 1999, almost three months after the firm stopped working on district projects. "SFUSD did not give Carrera an opportunity to cure the alleged failure to complete its work," the lawsuit reads.

Now, more than two months after the suit was filed, the district still has not countersued Carrera. David Campos, a city attorney who works in the SFUSD's superintendent's office, says the district is exploring its legal options but refuses to elaborate.

In correspondence with school officials, Carrera executives have complained about the district's lack of staffing and poor working conditions, charges supported by district employees. But those same employees also took issue with Carrera's performance.

"The consensus was that they were a bunch of amateurs," says one former district employee who worked on the PeopleSoft project. "They were all rookies, except for one or two experts. ... The district didn't really have the resources, but Carrera definitely didn't have the talent."

E-mail correspondence between district employees during the implementation seems to confirm that judgment. In one message, a budget office employee, Jim Villaluna, describes a consultant to some of his superiors: "She has not produced anything of consequence for Position Management [one of the implementation projects]. You are paying her a substantial amount, and yet she's using the district's time to learn more about being a consultant. ... In the interest of the district, you guys should do something about this."

"This," it seems, had happened elsewhere.

It's not clear exactly when W.L. Gore & Associates got fed up with PeopleSoft, but it's probably safe to bet that it happened around the time that consultants endorsed by the company were unable to stop the new Gore payroll system from cutting valid paychecks to Mickey Mouse and Donald Duck.

Several business publications found the cartoon-character paychecks funny enough to write about (Mickey and Donald were entered into the system as a demonstration, and then couldn't be deleted for more than a month), but Gore -- the billion-dollar Delaware company that manufactures the high-tech fabric Gore-Tex -- was not amused. It sued PeopleSoft and its implementation partner, the consulting arm of Deloitte & Touche LLP, alleging fraud, breach of contract, and violation of the federal Racketeer Influenced and Corrupt Organizations act.

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