State to seek review of stalled payroll upgrade

Last month, state officials fired SAP Public Services, the contractor working on a troubled, $373-million upgrade of the payroll system for public employees. Now they will look for a new contractor to review what went wrong and determine if any of the work can be saved.

It’s a process that could take more than a year, further delaying an already overdue project. A spokesman for the state controller, which is overseeing the upgrade, said an independent assessment is necessary.

“The results will not only identify design flaws and what is salvageable, but also tell us if the SAP platform will work and what are the most viable, cost-efficient options for delivering a payroll system that can meet the state’s business needs,” said the spokesman, Jacob Roper.

State lawmakers also plan to hold a hearing to review problems with the project.

The Legislative Analyst’s Office released a report Wednesday saying that the plan to unify and upgrade the state’s divergent and outdated payroll systems may not be feasible.

State officials say the project ran aground last summer when testing revealed deep problems and SAP did not respond with an adequate plan to fix them. The company has defended its work.

Roper also noted that Controller John Chiang and Gov. Jerry Brown have formed a task force to examine why so many of California’s costly computer projects have become mired in “all-too-frequent delays and cost overruns.”

The task force could recommend changes to the state’s procedures for hiring technology contractors and managing projects.

The payroll upgrade isn’t the only project to stall this year. A half-finished, $208-million computer overhaul at the DMV was canceled Jan. 31.

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Twitter: @chrismegerian