Anne Arundel County spent $9 million on failed human resources software upgrades

By Dana Munro

Capital Gazette

May 18, 2023

Anne Arundel County spent about $9 million to install a new human resources software program before halting the project after officials found it wasn’t suited to the county’s needs.

Last fall, after spending the money on licensing fees, programming work and consultant support over the past two fiscal years, the county’s Office of Information Technology concluded that Workday, the new program it was trying to implement, was not suitable for the complex needs of the county’s workforce, including paying pensions and contractual employees, and accommodating various union contracts. The office scrapped the changeover, opting to make improvements to the county’s current patchwork of systems instead.

“The Workday product we thought would be flexible enough to meet all of those needs, as we got into it, we realized it wasn’t going to work the way we needed it to,” Jack Martin, acting chief information officer, said.

The department decided to upgrade its human resources and financial systems about five or six years ago, Martin said, as they were examining outdated county programs.

Officials knew it was risky to try to migrate from their existing EnterpriseOne software to the new ERP [Enterprise Resource Planning] system, but it seemed worthwhile for the benefits of streamlining operations, Martin told the County Council at a budget meeting earlier this month.

“Workday was chosen as a candidate. We did due diligence on it, working with departments to talk about some of their needs and eventually it was deemed to be the right product and it was selected and purchased,” Martin said at the budget meeting.

Last fall, as the installation neared completion, the office decided to not proceed with the project to avoid investing even more money in it. It would have likely taken the county at least another year to get Workday up and running, Martin said. He told the council the county had spent about $9 million on the project.

Martin is temporarily serving as chief information officer as the county searches for a permanent replacement following the departure of Rick Napolitano who held the position for more than eight years before resigning in March. When asked if his decision to retire when he did was related to the Workday changeover, Napolitano declined to comment.

When the IT office decided to reexamine its systems, officials learned some hadn’t been updated in around 20 years. While the county uses EnterpriseOne currently for its finances, the program doesn’t have an integrated human resources component like Workday’s. Meanwhile, what the county was using for human resources operations was fractured across multiple programs including ADP, Martin and Napolitano said.

“They didn’t have a system that covered all of HR and so we determined that it would be a good thing to do to find one,” Napolitano said. “HR manages people — time recording, vacation hours, history of getting in and getting out, hiring, firing … each of those today, not all of them, but a lot of them, are handled with either homegrown systems or one-off systems that do a specific function, but they don’t necessarily integrate.”

Software created in recent years can do multiple functions at once and integrate with each other, Napolitano said. They also coordinate well with finance systems.

Of those newer programs, there were only a few that could handle the county’s needs, including Workday and Oracle. The office chose Workday, a system that was believed to be suitable for the county’s more than 6,000 employees.

A cost-benefit analysis completed by the county showed Workday was the most economical choice and over time would be cheaper than the programs the county uses now. It was also cloud-based which was important as the county tries to make all their programs cloud-compatible.

“It’s not expensive relative to what you’re doing,” Napolitano said. “You would actually save money in the long run.”

Employing the services of Enterprise Resource Planning systems like Workday is reported to have a 75% failure rate, Martin said, however the benefits could cut down on the costs of lost time in separating out the financial and human resources services that Workday combines.

“It’s a very high risk and reward,” he said.

That’s a piece of information County Council member Nathan Volke, a Pasadena Republican, said he wished he’d known before he voted on the budgets that included the funding for Workday.

“I think this is an area of the county that we have to invest in,” Volke said. “I’ll be candid, I would never have known to ask the question, ‘Hey you’re doing this new ERP system — 75% failure rate?’”

As the project evolved, the county discovered its needs were too complex for a system like Workday, said Christine Anderson, County Executive Steuart Pittman’s chief administrative officer.

The county has 13 employee unions it negotiates with individually, she said. It also has about 20 different pay plans and packages, which include things like allowances to cover uniforms and equipment for employees like police officers. It also needs to pay retired employees pensions as well as its current employees’ salaries.

Martin and Anderson said in addition to bolstering its existing systems, the office will refocus on ensuring the systems it decides to use work well together and are user-friendly rather than trying to fit everything into one software program.

“If you can have multiple systems that talk well to each other, then it doesn’t really matter how many systems as long as they interface well and there’s a good user interface for the employees that actually are doing the work,” Anderson said. “That’s more where our focus is now.”

The program didn’t have the internal communication efficiency the office expected and required, Martin said, and ended up needing lots of time to troubleshoot. Those involved said the county has learned a lot from the process.

“Change is hard for the county. It wouldn’t matter what tool you went to, they would have a hard time with it,” Napolitano said. “It would have brought good things to the county. There were just some decisions to not go in that direction.”