Garbage in, garbage out

At an ibm team-building exercise, executives were instructed to tell three things about themselves, one of them a lie. One participant said:

“I climbed Mt. Kilimanjaro.

“I pitched the first ball at a Padres game.

“I oversaw the smooth implementation of SAP software.”

His colleagues laughed; they knew right away which was untrue. Most big new software programs cause big headaches at first. But software by the German company SAP is known as a particularly balky, if useful, tool for payroll, billing and other financial matters.

The Irish Health Service spent eight years and 12 times more money than budgeted before calling a halt to its attempt to install SAP software customized by Deloitte Consulting. That was in 2005, just as the Los Angeles Unified School District was moving ahead on SAP, also customized by Deloitte.

The contract was just the first of the district’s mistakes.

One year ago this month, the new software began generating thousands of wildly inaccurate paychecks -- 32,000 in June alone -- especially to teachers. Some received a fraction of what they were owed; others were grossly overpaid. Teachers camped out for entire days at district headquarters while a special office tried to solve their problems. Money and many thousands of hours of instructional time were lost.

At least that part is over. Almost all teachers are receiving the right amounts now, although it still takes an army of district employees to backstop the software.

The payroll debacle was a textbook case of the inefficiencies that perennially plague the L.A. school district -- a paucity of talented managers, a lack of responsiveness and a stultifying bureaucracy. Turnover among the top ranks meant the district lacked the expertise to oversee the $95-million contract. Lower-level tech people were undertrained, and many were underqualified but could not be replaced because of union contracts. The district’s pay system is impossibly byzantine, with each of nine unions having its own pay structure. Employees might be paid by the hour, the week, the task or even in six-minute increments. And in the beginning, bureaucrats in the central office were remarkably indifferent to teachers who faced financial calamity, transferring them, disconnecting them, failing to return their calls.

Given the rocky history of the SAP/Deloitte combo in Ireland and elsewhere, it’s unconscionable that Deloitte consultants and L.A. Unified managers turned on the SAP switch overnight without a full-scale test run, even after the school board had expressed doubts. That was nothing short of arrogance.

Supt. David L. Brewer was left to clean up the mess created by his predecessor, Roy Romer. But before Brewer got his arms around the problem, L.A. Unified fumbled through a series of misguided responses. First, it blamed school clerks rather than the software. Then, in a perfect microcosm of district ineptitude, it considered paying Deloitte an extra $9 million to fix the mayhem it had created. Then it spent yet more money to hire a public relations team to burnish its image.

Today, L.A. Unified is stuck with a hugely expensive software system that still needs tweaking. The district will have to streamline its pay system while demanding maximum compensation from Deloitte. Brewer understands this. At long last, he also has wisely hired the top technology official from the Los Angeles Community College District, which experienced similar problems with SAP but took more steps to forestall pay disasters.

Prodding Deloitte toward cooperation is Assemblyman Kevin de Leon (D-Los Angeles), whose AB 730 would prevent a company from getting a state contract for five years if it’s found in court to have failed on a large public technology contract. The bill needs modifications -- it’s too narrowly drawn, and lawsuits commonly take years to resolve, giving a company plenty of time to do more damage -- but its intent is right and it should go forward.

The lessons of this past year are only tangentially about SAP software; it can and does work for some companies. The lasting blame for this debacle lies with Deloitte for bad programming and worse advice, but also with L.A. Unified for the series of foul-ups that followed. If our school district cannot even pay its teachers, how can we trust that it is doing right by our children?