Editorial: Costly delays in implementing UCPath reflect poorly on UC

By Editorial Board

What was supposed to be one of the University of California’s biggest cost-saving initiatives is draining hundreds of millions of dollars and lagged in development for more than four years.

Now, because of yet another logistical delay, it will take even longer and likely cost more money for the University to see any benefits of the project.

The University began the UCPath initiative in 2011 to create a uniform payroll system to replace its outdated, unsustainable 35-year-old one. At its launch, officials boasted that the initiative serves as proof of the University’s financial efficiency amid lower state funding. In May 2012, officials said they expect to save up to $100 million annually by the eighth year of its implementation.

But a disturbing number of delays with the project – and the extra expenses that come with them – mean that campuses have to wait much longer for the savings they were promised, while the University’s pockets continue to be drained.

In January 2012, the UC Board of Regents was told to expect the new payroll system to go live in January 2013. In March 2013, that launch date was pushed back to July 2014. Then again to December 2014. Finally, UC officials revealed to The Bruin this week that the system is now expected to launch no earlier than September 2015.

It’s true that the project is a daunting one and cannot reasonably be completed in just a couple of years. UCPath is attempting to sort out and replace the 11 different versions of the UC’s archaic payroll system that exist for tens of thousands of staff, a system built on obsolete code and various campus modifications. The systems have become difficult to maintain and update, and streamlining them into one new system is expected to save millions in technology efficiency gains and process standardization.

Even so, the number of delays has been mounting to a worrisome level and raises doubts about when the UC will actually see the savings.

At their last presentation to the regents, UCPath officials asked the board for $220.5 million in external loans after they found their previous source of funds – internal, shorter-term loans within the UC – wasn’t enough to sustain the project’s extensions.

As of UCPath’s most recent report to the regents, the repayment period for the project’s loans had jumped from 12 years to 15 to 20 years. Officials said they don’t even know yet how much more the project’s most recent delay will cost the University.

The delays are costing not just UC headquarters, but money from our own campus. Associated Students UCLA, which has been working with UCPath to test the new system, has said the most recent delay will cost its own departments an unknown sum of money.

UC officials clearly didn’t have a firm grasp of what they were getting themselves into when they jumped into this behemoth project. The project is worthwhile and indeed should save the UC millions in the future, but the UC should have been more realistic from the beginning about when the project would be completed and how much it would cost them. The UC is now losing out on millions less in savings than what it promised its campuses back at UCPath’s launch.

It reflects poorly on the UC to ask the state for funding when it can’t seem to get a hold on one of its own cost-saving projects. The UC cannot afford to delay this project any longer, for both its sake and the sake of students.

[Source]: Daily Bruin