ERP: It's Going Nowhere Without the Buy-In of Your Users

A decade ago, in November 2001, the state of Idaho embarked on a huge Student Information Management System project that was set to improve the collection and maintenance of student data across the state. But instead of bringing needed positive changes, the $35 million project was terminated just three years later after it failed miserably to deliver on its promises.

You'd have thought Idaho would have learned some important IT lessons from that embarrassing failure, wouldn't you?

Alas, the lessons were there but no one seemed to have paid any attention to them.

Instead, history is repeating, this time with an ERP project in the Idaho Department of Health and Welfare, according to a blog post by Brevard Neely, the marketing director for Panorama Consulting Solutions, an ERP consultancy.

Last June, the department began processing Medicaid payments using the new medical claims processing system it had built for $106 million with the help of vendors Unisys and Molina Healthcare (Molina bought the Unisys product line after the project began so Unisys is no longer a prime vendor). But this latest project, which took three years to implement, is now a year old and it's still not working properly, according to a recent report from the Office of Performance Evaluations (OPE), a nonpartisan, independent office in the state that evaluates whether state government programs and agencies are operating efficiently and cost-effectively. The OPE does research for the Idaho Legislature, which asked OPE in February to look at the problems with the latest IT system.

The 71-page report found some glaring problems. "A series of design defects, provider enrollment issues, and a lack of coordination to resolve issues led to months of payment delays and inaccurate processing of claims," the report states. "As problems continued to plague the new system, concerns were raised by providers and legislators about the amount of time taken to resolve defects and whether the system would ever function properly."

That's certainly not the way the project was supposed to progress.

But hold on. It gets worse.

"Problems with the system quickly surfaced and legislators and other state officials began receiving complaints from Medicaid providers. According to our study request, many Medicaid providers have been in crisis-laying off employees, limiting services, and identifying exit plans to no longer provide Medicaid services," the OPE report continues.

Rakesh Mohan, director of OPE, says his agency's reviews of the project and it's problems is now in a follow-up mode that will dig deeper into what has happened and how it can be corrected. The next report is due in November. That first "quick evaluation" done in February and March was just meant to touch the surface, but now investigators will take more time to talk to the actual hands-on users of the problematic systems to find out what's really been happening, Mohan says.

It's all reminiscent of that 2004 Student Information management System debacle, Mohan says. "The state back then was trying to do a project for tracking the progress of students in grades K through 12. They spent $35 million but the system just totally collapsed. It just didn't work. Then people asked us what went wrong and we did an investigation and issued a 'lessons learned' report."

Apparently, it didn't take.

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