When Pleasanton, Calif.-based PeopleSoft is the primary software vendor, it might seem to even the not-so-casual observer that huge information-technology projects in large urban school districts are more likely than usual to be plagued by high-profile problems and multi-million-dollar recriminations.

That’s partly because trouble makes news and success usually brings silence, but the explanation lies deeper than that, according the software firm. The fault, says PeopleSoft, lies not in its software, but in the way school systems are often forced to manage a major software implementation.

Be that as it may, two more big districts–the District of Columbia and San Diego–are caught up in this phenomenon right now, and their situation is reminiscent of the multi-million-dollar headaches that befell the San Francisco Unified School District just four years ago.

In the nation’s capital, public school officials are weighing whether to forge ahead with a four-year, $25-million enterprise resource solution, furnished by PeopleSoft. The technology–intended to rectify long-standing flaws in the district’s troubled payroll system and smooth out other basic business functions–still is not working, school officials say, and is a long way from reaching its full potential.

In San Diego, stakeholders in the nation’s 13th largest urban school district are confronted with a similar problem. Officials and stakeholders there wonder whether PeopleSoft technology is to blame for millions of dollars in unpaid bills, neglected as a result of an on-going malfunction with the software. The school system shelled out more than $30 million in two years to integrate the technology, which includes an automated payroll service, supply-chain management tools, and other front-office solutions.

In both Washington, D.C., and San Diego, school officials have come under heavy fire for failing to get the systems up and running effectively. PeopleSoft executives contend it’s not the technology that needs changing, but rather how school administrators often approach large-scale software projects.

Part of the problem, according Bill Sullivan, PeopleSoft’s vice president for state and local business initiatives, can be attributed to the high turnover rate of key district personnel, especially at the executive level.

The D.C. public school system has burned through three superintendents since it began contracting with PeopleSoft in 1999. Similarly, in San Diego, budget cuts and staff reductions have greatly reduced the number of trained technology staff available to work on projects in city schools.

The situation got so bad in San Diego that in March the San Diego Union-Tribune reported the district was as many as eight weeks delinquent on payments to several vendors–a complication that had providers threatening to cutoff vital services.

“The real change occurs not from the implementation, but from a change in the processes,” Sullivan said. Stakeholder buy-in dictates that administrators demonstrate a long-standing commitment to the project. But when visions differ from one top-tier executive to the next, certain components run the risk of getting lost in translation.

“The most critical aspect of a functioning school system is human capital,” Sullivan pointed out. “When you have any kind of change, it’s potentially problematic. When you have multiple changes, it becomes darn near impossible.”

School leaders in San Diego don’t doubt that turnover played a role in the setbacks, but they contend certain hardships are to be expected and should have been taken into account.

“During a major implementation of the magnitude that SDCS is undertaking through [its] implementation of PeopleSoft [software], it is expected that there will be an initial decrease in productivity,” wrote school board President Ron Ottinger in an eMail message to eSchool News. “In our particular implementation, the productivity decrease was magnified due to the budget reductions that school districts throughout California are experiencing and the resulting layoffs and decrease in trained personnel in Human Resource, Finance, and [information technology]. There was no ‘software glitch.'”

School Board Member John de Beck expressed similar views in a separate eMail message to eSchool News: “My experience with software and conversion is that they always required system redundancy. The mistake in San Diego, in my opinion, is that we did not operate a redundant system, and at the same time, we cut staffing. Managing conversions is not the thing to do in times of shortages.”

To be sure, however, turnover isn’t the only source of trouble. PeopleSoft executives say the problems often stem from a disconnect between district leadership and outside technology personnel.

PeopleSoft says it tries to address this shortcoming by providing school districts with consulting services to oversee the software conversion from conception to deployment. But the competitive-bidding process at work in many school systems can militate against top-of-the-line implementation. PeopleSoft cannot force customers to take advantage of its extended services, and districts often hire outside consultants who might opt to do the work for less. Even if the outside consultants are PeopleSoft-certified, this can lead to trouble.

In the event a school system does opt for outside consultants, the company recommends that at least 20 percent of the personnel assigned to the implementation should be PeopleSoft personnel.

In the District of Columbia, administrators opted out of the PeopleSoft service entirely in favor of an outside provider–a move Sullivan says was risky.

“Part of the challenge is to ensure timely, consistent decision making throughout the life-cycle of the project,” he said. “When you don’t maintain that consistency, you’ve got problems. The D.C. public schools would be an unfortunate case study for anyone,” he said.

D.C. school officials did not respond to repeated calls from an eSchool News reporter by press time, but Clifford Cox, the school system’s acting executive director of management services told The Washington Post for a March 30 story that the district was conducting a review of the project to determine what went wrong and decide whether or not to abandon its investment. Results of that review are expected later this month.

Officials also told the Post they had hoped to salvage at least some portion of the technology. Although the district is considering looking elsewhere for services such as procurement, accounts payable, and financial reporting, Cox said, administrators likely will stick with the software to perform functions associated with human resources and payroll, primarily because the city government plans to integrate a similar solution, according to the article.

“A substantial amount of the money will be recoverable,” Cox told the Post. “That’s as far as I can quantify it.”

But San Diego and D.C. are not the only school districts to have run into problems with the technology.

In November of 2000, eSchool News reported officials in the San Francisco Unified School District experienced similar complications while attempting to leverage $5 million in PeopleSoft software to help with administrative and front-office functions.

Although the school district considered dropping the technology, executives eventually decided to work with PeopleSoft consultants to fix the glitches. The district continues to use the PeopleSoft platform.

As has been the case in other districts, the problems in San Francisco were traced not to the technology itself, but to a poorly executed implementation of the software.

Sullivan called the situation analogous to an airport, which hires a group of air traffic controllers, and then doesn’t give them the coordinates to guide the aircraft. “The planes are going to crash,” he said. “It’s as simple as that.”

In terms of scale, Sullivan says, the number of school customers experiencing problems with the software is relatively low when compared with the vast array of customers PeopleSoft serves worldwide. Indeed, statistics and a specific big-district success story tend to support the PeopleSoft view.

More than 700 universities and at least 530 state and local governments, including a number of K-12 school districts, currently use the company’s software to perform basic business functions.

In Georgia, officials for the Gwinnett County Public Schools, a 129,000-student district with more than 20,000 employees in the metro-Atlanta region, recently tapped PeopleSoft to provide more than $40 million in software and services to overhaul its business operations.

Jeff Weiler, the district’s chief financial officer, said officials couldn’t be happier with the new system. “It went exceptionally well,” he said of the integration.

Weiler said the technology already has enabled administrators to rectify problems with the district’s automated payroll system, which before PeopleSoft arrived, was not equipped for incremental changes in tax withholdings and other legal variables that tend to shift from year to year.

Like the D.C. Public Schools, Gwinnett County also opted to use an outside consultant to help guide it through the implementation process. Using services provided by IBM Corp., the school district conducted extensive training and testing of the software before going live with the new system. Officials even ran the PeopleSoft technology over the school district’s original business software for three months to ensure that if problems with the new system arose, a back-up would be in place to correct any errors.

From start to finish, Weiler said the PeopleSoft project took just under two-and-a-half years to complete. He credited its success primarily to an enduring commitment from school district leaders and said Gwinnett County was not subject to the kind of staff turnover that occurred in D.C. and San Diego.

“Change in leadership makes it really hard to sustain something like this,” he said. “The hardest part in implementing the system is not the technology; it’s the change in management. You need consistent leadership at the top.”

Similar success stories have been reported in Milwaukee and Houston.

Sullivan said he believes success is possible anywhere, so long as school districts adhere to four basic principles of responsible systems integration:

First, school districts should do their homework. Before setting out to overhaul an entire enterprise solution, administrators should search for best practices and make note of which solutions worked and why.

Second, he said, top-level administrators need to stay the course and communicate their vision to community and staff, so that all stakeholders are aware of how the changes might effect them personally.

Third, administrators also should try to put their best people on the project. With good leadership, he said, come the best results.

Finally, school districts need to maintain an open, ongoing, and trusting relationship with their technology vendor. This will ensure that problems are dealt with as they arise, he said.

Despite problems in San Diego and D.C., Sullivan said PeopleSoft has no immediate plans to change its business model or how it negotiates contracts with local school districts. In terms of consulting, he said, PeopleSoft remains convinced that giving its customers the option to seek outside help is necessary to maintain its competitive advantage. Though PeopleSoft strongly recommends its own services, the ultimate decision remains with the customer.

“The success of our company is dependent upon the success of our customers,” Sulllivan added. “Our goal is to continue to provide timely, accurate, and transparent HR data [to our customers].”

Sullivan also denied that any of the problems in San Diego or D.C. derive from Oracle Corp.’s attempted $9.4 billion hostile takeover of PeopleSoft. He refuted the possibility that the corporate battle might have caused the company to divert some of its attention away from school customers. On the contrary, he said, the corporate struggle has served to bolster PeopleSoft’s commitment to its customer base.

The attempted takeover “has served to heighten our commitment to the public sector market,” he said. “This is a critical part of the company’s business.”


PeopleSoft Inc.

District of Columbia Public Schools

Gwinnett County Public Schools

Oracle Corp.

San Diego City Schools