By Peggy Lowe
Denver Rocky Mountain News Staff Writer

Denver has spent $23.4 million on the city's new financial services computer system — 67 percent over budget.

Most of that — more than $18 million — went to consultants who trained city employees how to work the system. Just $2 million was spent on software and $1.3 million on computers.

And it's not over.

City officials said they may need to spend another $9 million on the system, called the ASPEN Project, next year.

"Let's just say everybody underestimated the magnitude of this process and all of us have learned from it," said Margaret Browne, Denver's finance director.

ASPEN, or All Systems Performance Enhancement Network, is an integrated system that ties together the city's payroll, human resources, ledger, purchasing and employee benefits programs. The system also made the city's centralized computers Y2K compliant.

City officials say the huge overruns can be blamed on a complete overhaul of an aging system and unforeseen problems within a complex government organization.

The last change in the city's payroll system was made in 1979, said Mel Thompson, ASPEN's director."We didn't spend money for 20 years. We had to make a 20-year leap at once."

Councilwoman Kathleen MacKenzie, chairwoman of the council's E-Government Committee, said she was amazed when she first saw ASPEN's "staggering" costs. But she's learned that the city is a large and complicated operation that requires a high-tech financial system.

"We run an airport. We have a relationship with a hospital (Denver Health Medical Center). We pave streets," MacKenzie said. "The city is a diverse enterprise."

The highest dollar amounts have been paid for people and programming skills.

Of the more than $18 million paid to consultants, the highest figure went to AG Consulting. The San Francisco company, which specializes in the city's new software, PeopleSoft, was paid $14.5 million.

Interlink Group Inc., a Denver consulting firm that trains businesses on Internet services, earned $3.1 million. Two other consulting groups — Aurora's Comm Tech and Denver's The Implementation Partners — split about $500,000. Julie Rozencranz, a free-lance programmer, was paid $90,000.

What surprised project staffers were the problems that arose after the first phases of PeopleSoft were implemented in May 1998, Thompson said.

Suddenly, the many complications that can arise over the city's departmental quirks and different pay and benefits for 13,000 employees were overwhelming, he said.

"Clearly, we were not ready to run it," Thompson said.

But the most complicated work is finished and the city is "weaning" itself off its consultants, MacKenzie said.

"Our reliance on consultants is diminishing all the time and at the same time we're seeing the rewards of the ASPEN system," she said.

One of the rewards will be better monitoring of all city projects, MacKenzie said, which could save the city money by keeping budgets tighter.

While PeopleSoft cost $2 million, it could cost the city another $2 million next year. The city will be forced to upgrade to a new version from the earlier one it bought in 1998, Thompson said.

That $2 million will be in addition to the $7 million budgeted for next year, Browne said.

But while admitting the ASPEN Project's problems, city officials are also quick to say Denver's experience hasn't been as bad as that of some county governments.

That's due to the many hours city workers have put in on the project, efforts that were rewarded by a City Council resolution this year commending and thanking them.

"We really did a good job compared to lots of big implementations," Thompson said.

MacKenzie agreed.

"It's a huge undertaking," she said.

http://insidedenver.com/news/1210aspe1.shtml

-- Black Adder (dark@places.com), December 10, 2000