Accenture’s track record: a brief history lesson

The Texas State Employees Union CWA Local 6186 in a recent broadcast to members said that it obtained a draft of the University of Texas at Austin’s Shared Services Plan, which the union describes as a blueprint for consolidating and privatizing campus services.

Among other things, the plan calls for the consolidation of IT, human resources, and financial services that would eliminate 500 of the 2,500 jobs in these departments.

The Shared Services Plan is part of larger plan entitled Smarter Systems for a Greater UT, drafted by the Committee on Business Productivity.

The committee is composed of 13 business executives and led by Steve Rohleder of Accenture.

The Shared Services Plan estimates that the proposed consolidation will save $30 million to $40 million a year over the next ten years, but in order to realize these savings, UT will need to invest $160 million to $180 million to build new services and reporting capabilities, redesign processes and jobs, provide training, and enhance technologies.

According to Seth Hutchinson, TSEU’s organizing coordinator, Accenture and some of the other corporations represented on the committee will likely bid on the multi-million contracts needed to implement the Shared Services Plan.

A brief history lesson might be in order before UT commits millions of dollars in public funds to a plan drafted by Accenture and its cohorts.

Back in the mid 1980s, the Texas Attorney General’s child support program was not meeting its goals.

Then Attorney General Jim Mattox called in Arthur Andersen, one the US’ big five accounting firms, to conduct a review of the program and recommend improvements.

The review was conducted by Arthur Andersen’s consulting division, which eventually renamed itself Andersen Consulting and established itself as an independent company. In the early aughts, Andersen Consulting rebranded itself as Accenture.

Among other things, Andersen/Accenture recommended that the Child Support Division build a new computer system.

Since the child support system was antiquated and the federal government was requiring all states to build new systems anyway, the attorney general decided to follow the Andersen/Accenture recommendation.

Coincidentally, Andersen/Accenture bid on and won the contract for the design and development of the new system that would come to be called TXCSES.

Work on TXCSES began in 1991 and was supposed to be completed by 1993.

But the project took four years longer than planned. The Texas State Auditor’s Office reported in 1997 before implementation of TXCSES that the delay was partially due to “problems with design of the system and unresolved issues between (Andersen/Accenture) and the Office of the Attorney General.”

The Texas Sunset Commission in a 1998 report said that the cost of TXCSES was originally estimated to be $24 million but ballooned to $75 million.

The commission also reported that “TXCSES is a major source of problems associated with delays in (child support) payments to the families” and that “one year after implementation there were 865 outstanding requests (by users) to change TXCSES.”

One of TXCSES’ design flaws was that it had to be taken off line for up to 30 hours at the end of the month for periodic batch runs. The shutdowns delayed payments going to families at the end and beginning of months.

In another report, the commission noted that after the Andersen/Accenture-designed system was implemented, the child support program failed to meet five of the program’s six key productivity measures.

After TXCSES came online, only a handful of Andersen/Accenture staff remained on the job. Nearly all of the work it took to fix TXCSES was done by state employees, who the commission said were underpaid and worked in a department that was understaffed.

It took state workers three years to fix TXCSES, but finally in 2000, the child support program was able to meet or exceed its productivity measures.

Five years later, another state agency decided to contract with Accenture to redesign the way that Texas provided health and human services.

In 2003, the state legislature passed HB 2292, which among other things called for the consolidation and privatization of Texas’ health and human services.

Rep. Arlene Wohlgemuth sponsored HB 2292, and she had help from a former staffer named Chris Britton drafting the bill.

After HB 2292 passed, Britton went to work for Accenture.

In 2005, the Texas Department of Health and Human Services (DHHS) awarded to Accenture an $899 million contract to redesign its services as required by HB 2292.

In 2007, DHHS fired Accenture because wrote State Senator Eddie Lucio, Jr in an op-ed piece that appeared in the Harlingen Valley Morning Star., “it failed miserably to provide services or save money.”

After the firing was announced, the Corpus Christi Times ran an editorial describing some the redesign failures:

The promised $646 million in savings never materialized from the deal that would have transferred the job of determining eligibility for social services to private call centers. Instead, thousands of families complained of abandoned phone calls, long waits, lost records, abruptly canceled coverage for children’s health insurance, and faxed applications that disappeared.

Accenture’s work took a farcical turn when hundreds of faxed applications for services ended up in a Seattle warehouse.

Accenture’s farce descended into tragedy with the death of 14-year old Devonte Johnson, who died of stomach cancer. His mother’s application for insurance from the Children’s Health Insurance Program was inexplicably mishandled by an Accenture call center causing a delay in his treatment.

After Accenture’s contract was terminated, DHHS’ then Executive Director Albert Hawkins told legislators that the cost of the redesign project was $500 million and that the agency had paid Accenture $186 million. When asked whether the state had realized any savings, Hawkins could not identify any.

According to Sen. Lucio, “the Accenture contract . . . cost the state $100 million more than budgeted, while fewer children and families received the needed benefits.”

Once again, state workers had to step in and clean up Accenture’s mess.

Hutchinson said, TSEU wants to ensure that state employees at UT won’t have to do the same.

“Silence and lack of involvement does no good,” said Hutchinson to UT workers. “The only response that has any chance of stopping this is plan is to stand up and fight back in defense of our jobs, our livelihoods and our future. It is time to get involved. Join the union!”

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3 thoughts on “Accenture’s track record: a brief history lesson

  1. “After TXCSES came online, only a handful of Andersen/Accenture staff remained on the job. Nearly all of the work it took to fix TXCSES was done by state employees . . .” The same thing happened with the state’s unemployment insurance system redesign in the late ’90’s. Anderson Consulting only had to stick around for 3 months after the thing went online. Then they went laughing all the way to the bank, while we TWC workers were stuck with all the problems. I didn’t know they were involved in child support, also.

  2. Oh, please. Is anyone surprised?

    IT will be one of the biggest and most visible areas impacted by Shared Services. Brad Englert, the UT CIO, retired as a senior partner from Accenture. (see http://www.utexas.edu/cio/about/brad_englert.php) Keven Hegearty, the UT CFO, was key in talking Englert to come to UT. Englert spent several years reorganizing campus IT operations, driving away a number of good people and laying off many. Julienne VanDerZiel, whom he hired as ITS Applications Director, is another Accenture veteran. (see http://www.linkedin.com/in/juliennevanderziel)

    If folks on campus feel the winds of change blowing now, it’s the UT/Accenture revolving door spinning wildly.

    Reason in revolt now thunders.

  3. Pingback: Left Labor Reporter | Shared Services and Other Bad Ideas

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