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586 Part Four Building and Managing Systems

NYCAPS and CityTime: A Tale of Two New York City IS Projects

CASE STUDY

N ew York City Mayor Michael Bloomberg therefore missed many opportunities to lower devel-

made his fortune in information
opment costs. Early on, in 2002, NYCAPS’s lone
functionality was as a Web site where people could
technology, as the owner of Bloomberg
L.P., a giant financial news and informa- apply to take civil service exams. But less than two
tion services media company. Bloomberg thought he weeks after the launch of the site, a user found that
could translate his success in modernizing informa- he could obtain other users’ personal information
tion technology on Wall Street to modernizing New by exploiting a security flaw, and the site was imme-
York City’s government, and he launched a series of diately shut down. Officials in charge of the project
projects to do just that. Two of those projects proved then vowed to fix the flaw and get the project right.
him dead wrong. However, instead of taking charge of more fac-
Both the New York City Automated Personnel ets of the project, the Bloomberg administration
System (NYCAPS) and the CityTime system for pay- delegated more of the project to Accenture, a promi-
roll-related employee timekeeping have been fraught nent consulting firm. Bloomberg has tended to favor
with cost overruns, mismanagement, and an overall outside expertise for improving the workings of
failure to deliver an information system that has the government, especially for information technol-
capabilities sought by New York City government. ogy projects. The city tasked Accenture with both
How could this happen? defining the specifications of the system as well
Soon after becoming mayor, Bloomberg as putting it together themselves. Companies and
announced the development of NYCAPS. The government agencies building a new system rarely
NYCAPS project had a budget of $66 million at its do this, since splitting those roles keeps the costs
outset. The goal of the project was to create a mod- from any one contractor from exploding unchecked.
ern, automated system for managing and updating This is just what happened with Accenture.
personnel information for New York City’s workforce, Accenture consultants charged the city up to $400 an
including employee benefit information. Personnel hour, and the company earned $8 million from the
management was a prime target for a sweeping tech- city in 2004, then $26 million in 2005, $29 million
nological overhaul, since the city was using eight in 2006, and a whopping $53 million in 2007. Raj
individual citywide systems, 200 systems within indi- Agarwal, the city’s appointed project manager, was
vidual agencies, and a maze of paperwork for han- outspoken in his criticisms of Accenture’s billing
dling employee benefits and job changes. A timely techniques, claiming that they were billing at rates
and successful implementation of the NYCAPS proj- that reflected many more consultants than were
ect stood to save the city millions of dollars per year actually on the job, and that the company was using
in labor and IT costs. To date, the implementation recent college graduates and interns to perform the
has been anything but timely, and the total expendi- work, all while billing the city at much higher rates
tures of the project have grown to over $363 million, typically used for experienced workers. Agarwal has
nearly six times the original budget. long since quit his post, and the city has struggled to
Project monitors from within the administration attract experienced and capable managers from the
filed reports that described the chronic mismanage- private sector. The city was eventually able to switch
ment, cost overruns, and general waste plaguing the Accenture to fixed-price billing.
project, but the city continued ahead with the project Accenture has put the blame on the city for
without making any significant changes. One report increasing the scope and functionality of the project
from as far back as 2003 detailed that “no sense of beyond the original specifications while it was being
economy, efficiency, or value is evident in any area developed. As time passed and the city grew desper-
of the project.” These reports indicated that the pri- ate for a functioning version of the system, the city
mary reason for the project’s ballooning costs and abandoned development on many of the capabili-
myriad delays was lack of strong leadership. ties that the system was intended to have. Nearly
The NYCAPS project was controlled by govern- 10 years after the project was launched, the city has
ment officials who did not have the authority or a live version of NYCAPS, but thousands of retir-
expertise to make important project decisions, and ees still cannot access the site and thousands more

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