Tennessee's ERP Project Mess

After several years of analysis, the State of Tennessee embarked in May of 2005 on developing a $135 million enterprise resource planning (ERP) system called Project Edison. The purpose of Edison, the state says, is to:

"... perform Tennessee government administrative business functions, such as financials and accounting, procurement, payroll, benefits, and personnel administration...  Edison uses a common database that allows the system to share information between business functions within an agency, and across agencies statewide."

Tennessee expected Edison to save the state significant amounts of money currently being spent on administrative processing, as well as:

"... fundamentally change the way that the State of Tennessee does business by adopting the best practices that the new technology makes possible."

After three years of work, on October 1, 2008,  Project Edison's  Human Resources/Payroll modules went live. The project plan then called for the state to deploy the Financials and Procurement / Logistics functionality in three waves. The first and second waves were deployed on January 1, 2009 and April 4, 2009 respectively, with the third wave set for to go live on July 1, 2009.

However, the third wave has not gone live because of troubles with the previous modules that have been rolled out. 

In March of this year, for example, there were news reports of state government employees complaining that they were going unpaid or being struck off the payroll altogether because of software problems with Edison.  State Finance Commission officials, however, said that the problems being reported were exaggerated, and that the complaints obviously were being made by a small number of state workers who had failed to learn how to use the new system correctly.

However, the complaints sparked an inquiry by State Comptroller Justin Wilson.

In May, Comptroller Wilson released his review which reported wide-spread dissatisfaction with Project Edison. For example, some 40% of employees said they disliked the system, while 58% said it was worse that the old system. Comptroller Wilson said in his report that,

"The issues described to us by state employees, HR Directors, and Project Edison staff indicate that the HCM [Human Capital Management - ed.] component is troublesome, time-consuming, flawed, and is not meeting management’s goals. These problems clearly exceed what would be expected in a start-up."

Comptroller Wilson also called for a freeze on Project Edison's final implementation phase until the current problems were fixed.

However, in response, the state's Finance Commissioner Dave Goetz, continued to downplay the complaints and Comptroller Wilson's report. He said the problems were related to training issues and, yes, the "normal" start-up problems of a new, major IT system. He also not too politely implied that the Comptroller didn't know what he was talking about.

Commissioner Goetz also strongly disagreed with an implementation freeze, and Tennessee Governor Phil Bredesen, an ardent supporter of Project Edison, seemed to support Commissioner Goetz's position.

However, by the end of June, it was clear even to Commissioner Goetz that Comptroller Wilson was correct, and that state workers weren't exaggerating their problems with using Edison. 

Commissioner Goetz admitted that there were more problems with Project Edison than he had thought, and that its final roll-out needed to be delayed from July to September/October. The Commissioner also reportedly admitted that Edison was rolled out prematurely last year.

According to Comptroller Wilson, it will now cost at least $1 million to fix the problems. Until then, Comptroller  Wilson says,

"We have a very, very volatile situation here. I don't think it's really an understatement to say that our integrity of the state is at risk here."

Gov.Bredesen also saw the light and reportedly said he would do 50 things differently if he could do Project Edison over again.  The governor still insisted, however, that a major problem was training, which had been "underestimated."

Continuing to blame the problem on training is a rather lame excuse.

You see, according to the Edison Project web site, "skimping on training" was one of three major mistakes the state had uncovered during its "lessons learned" tour of other states' ERP implementations (Not bringing in enough staff to get the job done and envisioning the implementation only as an IT project were the other two big mistakes that the Project Edison management team had discovered).

Blaming the problems being encountered on a lack of training is a rather clear-cut case of risk mismanagement from my perspective.

It makes one wonder, too, what the other 49 mistakes the governor also believes were made and should have been avoided.

Well, at least Tennessee's experience will provide a wealth of lessons learned (at least 50?) for other states contemplating a major ERP implementation.