The University of California’s new payroll system for its campuses, hospitals and other institutions will cost more than double what was conceived when the project was proposed in 2011, the university’s IT officials told UC Regents during a board meeting on Wednesday.
Four years ago, the university anticipated the UCPath system would cost $156 million and be done in 36 months. Oracle was eventually removed as the project implementation lead and the project was brought in-house. UCPath will still use Oracle’s cloud system.
The project is now estimated to cost $375 million and will be deployed to all 10 campuses by the end of 2017, UC system deputy CIO Mark Cianca said yesterday.
If there are additional cost overruns, the campuses will pay for it themselves via their IT budgets, he said. The cost could go up if there are delays when each campus adopts the new payroll system.
"We all agree, those of us working in the project, that the effort itself was vastly underestimated — which is to say, the complexity, and as a result the timeline, were not fully appreciated. And so the initial budget I look at as a very understated amount," Cianca said.
Besides underestimating the project’s complexity and cost, Cianca said it took much more time than anticipated for the campuses to work on about 100 uniform business processes that will support the new technology.
Campuses worked together for almost a year together to standardize about 100 processes in payroll, accounting and human resources.
"The great lesson early in the lifespan of UCPath was really focusing on set of business practices to then drive a software deployment as the finishing step," Cianca said.
UCPath is scheduled to be deployed first at the Office of the President this fall. Then the system will be deployed in a pilot at three campuses: UCLA, Merced and Santa Cruz. The other campuses will come aboard later in two waves. There are approximately 190,000 faculty and staff across the entire UC System.
UCPath will replace a 35-year-old legacy system called PPS. The new payroll system will be centrally managed from a service center in Riverside that eventually will have about 400 employees.
During Wednesday’s meeting, the Regents and Lt. Gov. Gavin Newsom expressed their concern about UCPath and said the university must remain vigilant as the project moves forward.
Newsom said the total project cost will approach $750 million when the annual operating expenses over the next two decades for UCPath and the Riverside service center are added to the ledger.
"I hope there are some lessons learned here. A project was going to be done in 2014 for $156 million. At least now, as advertised, we’ll hope it gets done for $375 [million], and we’ll hope it gets done by 2018."
Newsom continued: "At the end of the day, it comes back to one thing, and that’s procurement: We got off the wrong track the minute we wrote the RFQ, RFI and RFP."
