Misplaced Priorities 101

Amid a drastic budget crisis, why is the California State University system spending $400 million on computers? And where is the money coming from?

To help the system cope with growth, the chancellor's office has traditionally given campuses money for each student added to enrollment. The money is still passed out; but now, much of it is going toward each campus's PeopleSoft project. The chancellor's office said that the enrollment funds are discretionary, and therefore appropriate for the Common Management System.

Faculty hiring is slow. Student populations are growing. Budgets are shrinking. And many CSU teachers and staff are skeptical, if not outright angry, about the Common Management System. George Diehr, a business professor at the San Marcos campus, says the project makes a lot more sense for the Chancellor's Office than it does for the schools.

"The chancellor would like to see Cal State as a single university with branch campuses," says Diehr. "This project involves a tremendous centralization of management, and maybe it makes sense for the chancellor's office. But students don't bounce from campus to campus."

San Jose State professor Patricia Hill says faculty at Bay Area campuses, where meager salaries pale in comparison to some of the nation's highest living costs, are especially frustrated by the CMS project. Instead of raises or more professors, she says, CSU is spending money on computer centralization, raising a host of questions administrators have been reluctant to answer.

"The problem for us is the contrast," Hill says. "They're spending $400 million, plus God knows what, at the same time that spending on instruction keeps dropping. Where's the $400 million coming from?"

And with the loud complaints about cost come persistent reports that the $400 million software system isn't working as well as it should.


Although it has cost more than $150 million to date, the Common Management System is still only in its "first wave" of installation. Eleven of the system's 23 campuses have installed all or parts of the programs that will manage personnel records and track finances, but none has the occasionally combustible student administration module up and running yet.

It is far too early to evaluate the installation as a whole, but not too early to be unsettled by some of its glitches. Exhibit A: a wildly expensive but apparently malfunctioning data center that is supposed to be the foundation of the entire enterprise.

Because systems like the one being built for CSU run only as well as the hubs that store their data and run their software, and because this project is particularly massive, CSU had no choice but to find an off-site data center to run its PeopleSoft system.

Cal State courted bids from the two largest data outsourcing companies, IBM and Unisys Corp., and chose IBM, which submitted the low bid. (Staff evaluations called Unisys' center "quite functional," but a little "too boilerplate" compared to IBM's.) IBM eventually opted out of the contract, leaving CSU with Unisys, essentially by default. In March, Cal State agreed to pay Unisys $60 million over five years for use of its Salt Lake City data center, meaning that the most crucial piece of the PeopleSoft puzzle would also be the most expensive.

So far, however, there is evidence that CSU hasn't gotten what it paid for. On Nov. 12, 2001, Cal State's contract department sent a letter to Unisys complaining, "CSU considers the performance problem on the part of the Salt Lake City operations to be at a "critical' level.

"The CSU continues to experience daily and repeated errors ... negligent monitoring of CSU daily operations; erroneous scheduling and change control procedures which have a negative impact on CSU administrative operations; and, finally, the CSU is not receiving adequate or timely communications from the Center."

Ernst says the concerns raised in that letter have been addressed, and Cal State has Unisys on an "improvement plan" to address other shortcomings. And the project clearly has had other shortcomings.

For instance, when CSU implemented software at its Northridge campus last year, according to the California State Employees Association, employees assigned to the project no longer had time to do their actual, non-PeopleSoft jobs. In fact, the employees complained, their jobs had been made significantly more difficult by inaccurate personnel data the system was producing.

The association, which represents tech workers and other non-teaching Cal State staff, also described workers in Humboldt having to flip through 13 monitor screens of data to accomplish tasks that required three screens in the old system.

Meanwhile, workers at the Humboldt campus reported, the new system wasn't able to keep track of the campus' 1,300 student employees if they missed even a single pay cycle.

Not long after the human resources and payroll systems were installed at San Jose State, staff members there reported an unusually high number of late paychecks. Employees complained of near-constant system crashes, malfunctioning hardware, and insufficient training. "All of us just went crazy," a department secretary said of the switch to PeopleSoft. "It was definitely frustrating."

Reports filed by Cal State's project manager say that February tests of the student administration component of the software at the Sonoma and Fresno campuses revealed "poor" system performance. (A team of technicians was able to bring the software up to an "acceptable" level, but, according to a CSU report, "both PeopleSoft and CSU acknowledge that some of these items will continue to appear sporadically.") The same report says CSU was concerned about system performance once the bulk of data from the system's larger campuses was online.

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