New payroll system is costing U-46 big bucks By Terri Tabor Daily Herald Staff Writer Posted on September 28, 2000 Elgin Area School District U-46 payroll mistakes are proving to be costly, and in more ways than one.

The cost of a new $2 million payroll system package - which includes bookkeeping software, installation costs and training - continues to swell daily as more and more people work around the clock to fix the paycheck errors that prompted today's picket by the teachers union.

On Friday U-46 brought in a team of six technicians and computer software experts at $4,800 a day to zero in on the problems. The team will first determine why the new computer system did not read the new teacher salary schedules and print the accurate dollar figures on paychecks nearly two weeks ago.

U-46 officials do not know how long the experts from Chicago would be in town.

The district also in the next few days will shell out another $50,000 to $70,000 to hire two more payroll staff members to help handle the payroll office workload that continues to mount as more paycheck mistakes surface.

And there is even another cost that hasn't been added into the mix: The amount of overtime logged by payroll and human resource employees who have worked after business hours and on weekends for the last nine months to correct employee paychecks.

The mistakes are costing U-46 some big bucks, but Superintendent Marvin Edwards says the district has no choice.

"In this case it is an absolute necessity," he said.

Since January employee paychecks have contained a number of errors: They have been late and inaccurate, and in many cases, deductions for retirement, insurance and taxes have been wrong.

Jim Freeman, assistant superintendent of management services for U-46, said the problems are a combination of computer and human error.

The computer for some reason is not reading the salary schedules that have been entered into the system. As a result, staff members have had to key information in themselves and correct mistakes by hand. And that itself leads to mistakes, Freeman said.

The problems started a year after the board of education approved a $2 million computer bookkeeping package to replace its 20-year-old system. Officials then said their system was antiquated and not capable of handling the personal and financial information for the district's increasing number of employees.

After months of study and visits to school districts in Denver and Madison, Wis., the district chose the California-based PeopleSoft, a major world provider of administrative software to large corporations, school districts and universities.

PeopleSoft serves more than 42 million employees worldwide in more than 2,800 organizations that include top 10 Fortune 500 companies, universities and school districts.

"Everyone involved said this is the one we want, this is the best one we can find. This new system was state-of-the-art in terms of being able to retain, analyze and manipulate large amounts of information," Ascough said.

U-46's problems are a rarity for PeopleSoft, which boasts a 99 percent customer satisfaction rate, said Laura King, director of marketing strategies for the PeopleSoft division of education and government.

"Over 2,800 organizations are doing this successfully and U-46 will be a part of that - I'm confident," King said.

Among those organizations is ComEd in Chicago. A spokeswoman there said there have been no major problems with the software.

"It wasn't totally flawless, but overall it works great," said payroll supervisor Laura Ficarra.

U-46 officials do not blame the software, but rather themselves.

In hindsight, officials say they should have taken more time to install the software, which has taken some school districts, universities and corporations several years to install and test.

PeopleSoft implementation guidelines also stress the importance of allowing ample time for installation. While successful programs have been installed in less than a year, it does take some organizations longer, King said.

"Each situation is different," she said.

The guidelines also note that purchasing the software from one vendor but then hiring another can complicate the installation process.

U-46 did not hire PeopleSoft consultants to install its new software. The district went with another company - Chicago-based Inforte - which is no longer a certified partner of PeopleSoft. At the time, Inforte was a PeopleSoft partner, said Bob Kaup, director of information services for U-46.

Also at the time, PeopleSoft did not have a "full-service" team that could install and implement the software and the company recommended Inforte, Kaup said.

Since the problems have surfaced, U-46 has consulted with PeopleSoft.

PeopleSoft guidelines also suggest users install the software as is and not customize it. But U-46 officials say they had to tailor the program to meet the district's needs. For example, U-46 needed to adapt the software to account for raises and other benefits because of seniority, employee transfers within the district and teacher certification, Kaup said.

King could not say if that is contributing to the problems in U-46. But tailoring the software can make "troubleshooting a little more difficult," she said.

Kaup agreed that it had.

Although the payroll problems have persisted for nine months, U-46 thought the mistakes were leveling off until Sept. 15 when teachers complained about their paychecks being wrong.

The last error prompted the union to speak out publicly at a recent board meeting and to stage Wednesday's picket in front of district headquarters.

Now it appears the payroll computer problems not only are costing U-46 dollars but is adding tension between the district and its teachers union - who were at odds for months until this summer's contract settlement that included 21 percent raises for teachers.

"At a point when the settlement should have been a real positive force ... the morale has been hit in the stomach with all this business," union president Dave Alexander said.

"I am hopeful we can put this behind us as quickly as possible and move on," he said.

http://www.dailyherald.com/cook/main_story.asp?intID=3679753

-- Doris (groomlk@bellsouth.net), September 28, 2000

Answers

U-46's problems are a rarity for
PeopleSoft, which boasts a 99 percent
customer satisfaction rate, said Laura
King, director of marketing strategies
for the PeopleSoft division of education
and government.

Oh? Then what about this?

PeopleSoft shares closed at $18.38 on
Friday, a drop of more than 30 percent
since January.

. . .

Berquist said the industry peaked in 1997
with about $35 billion in revenue. Since
then, the industry has languished at between
$25 and $30 billion in revenue, and he and
other analysts say that one main reason
for the drop-off was the Y2K glitch.

The theory goes that many companies last year
simply stopped buying enterprise software --
which can cost hundreds of thousands to
hundreds of millions of dollars -- when
they realized they could not have it in
place and tested in time for any possible
millennium trouble.

GICC

-- spider (spider0@usa.net), September 28, 2000.