California State Payroll System (CSPS) Project
The California State Payroll System Project (CSPS) is progressing through the California Department of Technology (CDT) Project Approval Lifecycle (PAL) in accordance with the Statewide Information Management Manual (SIMM) Section 19. The PAL is divided into four stages: Stage 1 Business Analysis, Stage 2 Alternatives Analysis, Stage 3 Solution Development, and Stage 4 Project Readiness and Approval, each separated by gates of approval. Rather than picking up where the 21st Century Project left off, the State Controller’s Office (SCO) examined lessons from the past and started the project from scratch. The project team worked with the business owners to identify problems and opportunities with current business practices and establish a solid business case aligned with SCO’s strategic direction. The project team set clear, measurable objectives for the payroll system replacement project through the completion of the PAL Stage 1 Business Analysis (S1BA) in October 2017.
The project team and its procurement support vendor, Crowe LLP, then worked with subject matter experts from SCO and other state departments to create end-to-end documentation of the 41 distinct business processes required to process payroll. This process reaffirmed the opportunities documented in S1BA and guided the team in defining future standardized and streamlined state business processes.
A project of this size and complexity calls for a high level of market research. Working with CDT and Crowe LLP, the project team created a market research plan that included interviewing other states and large local government entities who recently replaced their human capital management (HCM) and payroll systems to learn from their experiences. Further research gained insight into the shortcomings of failed projects. The project team held meetings with the project leadership team that completed the rollout of the University of California UCPath system. The insights gained from the UCPath team will prove quite relevant given they too converted from a decades-old mainframe system.
In keeping with SCO’s commitment to communication and transparency, the project team conducted extensive engagement with the vendor community. Beginning with an open vendor forum, the team presented the project’s key objectives and challenges to an audience representing the HCM software industry, custom developers, and systems integrators. Next, the project team released the first of two requests for information (RFI). High-level issues were presented to vendors, asking how they would recommend addressing them. Fifteen responses were received and analyzed by the project team who then followed up with in-person meetings to discuss the concerns raised. The second RFI released delved deeper into the project’s known set of detailed requirements. Eight responses were received and analyzed, and the project team then scheduled another open briefing with the vendors. One-on-one discussions followed, including product demonstrations to key subject matter and technical experts.
Having completed this research, the team weighed alternatives to identify the path forward. Options considered by the team included incrementally improving the current system, full custom development, and integrating multiple best-of-breed platforms, which were neither recommended nor even suggested by the vendor community. While the project team estimates the cost of the current proposed solution to be approximately $760 million, it conservatively estimates the cost of the best-of-breed option to be close to $1.26 billion.
Due to its lower cost, reduced risk, and shorter project schedule, the option to acquire a single-platform solution with functionality that supports position control, personnel administration, benefits administration, time and attendance, and the issuance of payroll stood above the rest.