GAO

United States General Accounting Office

Report to the Chairman, Committee on 

Government Reform, House of 

Representatives

July 2000 INFORMATION 

TECHNOLOGY

Selected Agencies’ 

Use of Commercial 

Off-the-Shelf Software 

for Human Resources 

Functions

GAO/AIMD-00-270

Page 1 GAO/AIMD-00-270 Commercial Off-the-Shelf Software for HR

United States General Accounting Office

Washington, D.C. 20548

Accounting and Information

Management Division

B-285087 Letr

July 31, 2000

The Honorable Dan Burton

Chairman, Committee on Government Reform

House of Representatives

Dear Mr. Chairman:

Commercial off-the-shelf (COTS) systems and applications for human 

resources (HR) functions are automated tools that can help streamline 

management activities such as position management and classification, 

recruitment and staffing, personnel action administration, benefits 

administration, labor management and employee relations, and workforce 

development. In response to your request, we reviewed the use of COTS 

software applications to improve HR functions within federal agencies. You 

requested that we review the Department of Health and Human Services’ 

(HHS) Centers for Disease Control and Prevention (CDC) and the 

Department of Veterans Affairs (VA); we chose three other agencies—the 

Department of Defense (DOD), the General Services Administration (GSA), 

and the Department of Labor (DOL)—based on their size and type of COTS 

products used. 

Accordingly, our objectives were to (1) determine how the five agencies 

were using COTS systems/applications to improve their HR functions, and 

(2) for these five agencies, identify the agencies’ reported estimated costs 

and expected benefits from using HR COTS systems. 

In our review, we determined that the five agencies have acquired the 

services of two primary HR COTS vendors—Oracle and PeopleSoft—to 

provide most of the functional system requirements called for by the 

federal Joint Financial Management Improvement Program (JFMIP),1

which issued a common set of human resources and payroll systems 

requirements. In addition, DOD, CDC, and VA have contracted with other 

vendors, such as Avue and Resumix, to augment the services of the primary 

vendors in areas such as recruitment. 

1

A joint undertaking of the Department of the Treasury, the Office of Management and 

Budget, the Office of Personnel Management, and GAO. JFMIP’s mission is to work 

cooperatively to improve financial management practices in government. 
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To determine HR system capabilities and assess the basis for investment 

decision-making, we used criteria from the Government Performance and 

Results Act of 1993, the Clinger-Cohen Act of 1996, and JFMIP’s Human 

Resources and Payroll Systems Requirements of April 1999. We reviewed 

documentation of the five agencies’ efforts to use the HR COTS systems 

and interviewed HR and information technology (IT) officials about their 

applications. We also observed demonstrations of implemented or planned 

systems. We did not verify cost or benefit information provided by the 

agencies. Finally, we provided representatives of the five agencies with 

draft copies of the slides pertaining to their individual agencies; 

clarifications and corrections have been made as appropriate. 

On July 17, 2000, we briefed your staff on the results of our work, and this 

report summarizes those results. The briefing slides are included as 

appendix I.

We performed our work at the Washington, D.C., headquarters of each 

agency, as well as at the Atlanta headquarters of CDC, from February 

through July 2000, in accordance with generally accepted government 

auditing standards.

Results in Brief DOD, GSA, HHS/CDC, Labor, and VA all have efforts underway to use COTS 

systems and applications to improve their HR functions. Quantifiable 

benefits expected included requiring fewer employees to perform HR 

functions, reducing manager time for transactions and data analysis, 

eliminating duplicative or multiple systems, and implementing self-service 

HR functions, such as employee changes to health and life insurance 

benefits. Nonquantifiable benefits expected included a more user-friendly 

environment, easier manager/employee access, better decision-making and 

data analysis, improved data accuracy, and better information sharing. 

Despite these expectations, four of the five agencies’ systems efforts have 

encountered delays, while three of the four agencies have increased cost 

estimates. To date, three of the five agencies—DOD, Labor, and VA—have 

reportedly achieved quantifiable benefits, such as full-time equivalent 

(FTE) reductions from their HR COTS systems or related efforts. 

Department of Defense Based on a 1994 study, DOD decided to move to regional servicing of its 

civilian personnel and a single, integrated information system, referred to 

as the modern Defense Civilian Personnel Data System, that—when fully 
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implemented—is expected to contain records for about 800,000 employees. 

DOD expects the quantifiable benefits to include enhanced productivity 

requiring fewer field employees and the ability of personnel specialists to 

service greater numbers of customers: from 1 for every 60 employees in 

1996, to 1 for every 77 this year, to 1 for every 88 in 2001. Nonquantifiable 

benefits expected include providing improved data to the DOD payroll 

system and a more responsive, open systems environment. 

According to DOD, the system was originally expected to be deployed by 

September 1999; however, the current estimate is March 2001 because of 

the need for additional testing and a delay in internal DOD committee 

approval. The estimated cost has grown by $248 million to about 

$1.3 billion, while estimated quantifiable benefits have decreased by $340 

million, to about $2.4 billion. Cost increases were attributed to 

developmental delays, vendor revisions to the COTS products, and limited 

customization. Estimated monetary benefits have decreased, according to 

DOD, because of increased regionalization costs and delayed 

implementation of the modernized system.

To date, the system has been implemented at 3 of 25 regional/centralized 

servicing sites. Total project costs reported, as of September 30, 1999, were 

$351 million; total quantifiable benefits as of that date were $123 million.

General Services 

Administration

In 1996, GSA began to plan for a new, integrated HR/payroll system, 

referred to as the Comprehensive Human Resources Integrated System, to 

replace its current legacy system. GSA expects fiscal year 2001 quantifiable 

benefits to be $4.5 million, due to reduced costs for such activities as 

transaction processing in HR offices, external recruitment, and internal 

competitive staffing. Nonquantifiable benefits expected include more 

timely report generation, better data control, and increased manager and 

employee satisfaction. 

The system is expected to be deployed next month, an 8-month delay from 

original estimates. According to GSA, this delay was caused by a lack of 

maturity in the Oracle product relative to the HR needs of federal agencies, 

a lack of skilled resources, and GSA’s decision to implement the system 

with internal staff. System cost is estimated at $34 million. 

At present, GSA is conducting parallel testing of the old and new systems. 

The first test was completed on June 21, and the testing is continuing. Pilot 

testing of some of the HR COTS products supporting the new system is 
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taking place in GSA’s national capital region. As of December 6, 1999, total 

reported costs incurred were $20 million.

Department of Health 

and Human Services

HHS’ aging legacy system was the driving force behind the October 1999 

initiation of a new system to improve HR/payroll operations, called the 

Enterprise Human Resource Project, which will be used at CDC. The new 

system is a global module intended to allow customers to build fully 

integrated HR processes and databases that are shared across the 

department. Savings of $127 million are expected from having flexible 

processes to use in HR actions and eliminating duplicative systems in 

various operating divisions. Nonquantifiable benefits expected include 

improved decision-making and data analysis, trend analysis, insight into 

combined civilian and commissioned officer personnel data, assurance of 

regulatory compliance, and more customer satisfaction.

Work on the new system started in October 1999, with HHS approving 

continued work on June 2, 2000. System deployment is expected in 

February 2003. The cost to build the system is set at $214 million, and total 

costs incurred as of June 30, 2000, were reported as $2.2 million.

Department of Labor In 1998, Labor initiated a new, integrated HR/payroll system—referred to as 

PeoplePower—after it was informed that its legacy HR system, an Air 

Force personnel system, would not be made Year 2000 compliant. The 

department expects quantifiable benefits of $226 million by replacing 

multiple systems with a single system and reducing a number of FTEs over 

15 years. Nonquantifiable benefits expected include increased efficiency 

due to reduction in cycle time, better information, higher staff satisfaction, 

and time for more value-added work.

Work on the new system started in February 1998; full system deployment 

is running 1 year late, now projected for September 2002. According to 

Labor, this delay was caused by its decision to reexamine payroll 

alternatives. The initial cost was estimated at $26.5 million, based on a 

5-year time frame for system implementation. The estimated total cost has 

now risen to $71 million because, according to Labor, it did not initially 

account for operating costs after the system is fully deployed and because 

it underestimated implementation costs, including database, hardware, and 

end-user equipment needs. Further adding to the increase, according to the 

department, were (1) lack of maturity of the vendor’s COTS application and 
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(2) technical programming staff charges and billing rates that were higher 

than expected.

The new system has already replaced the legacy HR system and currently 

supports Labor processes for personnel actions, benefits administration, 

training administration, position management, automated workflow, 

workforce analysis, and HR reporting. As of June 30, 2000, reported costs 

incurred totaled $15.3 million, while reported savings were estimated at $3 

million due to the elimination of about 30 FTEs.

Department of 

Veterans Affairs

VA’s new system, referred to as HR LINK$, was initiated in October 1994 to 

replace a 30-year-old legacy system; the new system is expected to 

incorporate HR and payroll and include managers’ and employees’ 

modules—and a presence at VA headquarters and at each field office. The 

system is intended to push transaction processing to the lowest 

appropriate level, changing HR from a gatekeeper role to one of strategic 

partner. Quantifiable benefits are estimated at $664 million; nonquantifiable 

benefits expected include employee and manager self-servicing, VA-wide 

information sharing, and the “One VA” vision being achieved through 

integrating HR and payroll processes.

System development began in 1994; system deployment is now expected to 

be completed in September 2001—2 years later than originally planned. VA 

attributes the delay to union negotiations, cultural change, additional 

development and testing, and the desire for a seamless integration of all 

COTS and custom-designed applications. The total estimated cost has risen 

as well: from $170 million to $417 million. This rise, according to VA, is due 

to inflation and cost overruns stemming from unanticipated expenditures 

for extended development time frames, software maintenance for an added 

2 years, additional shared service center equipment, more marketing and 

contractor services, upgrades to primary vendor software, and regulatory 

changes to self-service functionality.

The shared service center was opened in February 1998; employee selfservicing has been deployed, along with other personnel modules; and total 

reported expenditures were $147 million as of March 30. Quantifiable 

benefits as of that date were reported as $172 million.
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As agreed with your office, we will not distribute this report until 30 days 

after its issue date. At that time, we will send copies to Representative 

Henry A. Waxman, Ranking Minority Member, Committee on Government 

Reform; the Honorable David J. Barram, Administrator of General Services 

Administration; the Honorable William S. Cohen, the Secretary of Defense; 

the Honorable Hershel W. Gober, the Acting Secretary of Veterans Affairs; 

the Honorable Alexis M. Herman, the Secretary of Labor; Jeffrey P. Koplan, 

Director, Centers for Disease Control and Prevention; the Honorable Jacob 

J. Lew, Director, Office of Management and Budget; and the Honorable 

Donna E. Shalala, the Secretary of Health and Human Services. Copies will 

also be made available to others upon request.

Should you have any questions on matters discussed in this report, please 

contact me at (202) 512-6253 or Helen Lew, Assistant Director, at (202) 

512-9356. We can also be reached by e-mail at willemssenj.aimd@gao.gov

and lewh.aimd@gao.gov, respectively. Key contributors to this report were 

Nabajyoti Barkakati, Mary J. Dorsey, Michael P. Fruitman, Amanda C. Gill, 

Pamlutricia Greenleaf, Robert G. Kershaw, and Michael R. Sanchez.

Sincerely yours,

Joel C. Willemssen

Director, Civil Agencies Information Systems
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Appendix I

July 17, 2000, Briefing to House Committee on 

Government Reform ApendxiI

HUMAN RESOURCES

COMMERCIAL-OFF-THE-SHELF

APPLICATIONS AT SELECTED

FEDERAL AGENCIES

Briefing for Staff of the

Committee on Government Reform

House of Representatives

July 17, 2000
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

Page 9 GAO/AIMD-00-270 Commercial Off-the-Shelf Software for HR

2

• Objectives, scope, and methodology

• Background

• Summary of agency human resources (HR) systems and

commercial-off-the-shelf (COTS) vendors

• Agency HR COTS summaries

• Department of Defense (DOD)

• General Services Administration (GSA)

• Department of Health and Human Services (HHS)

which includes the Centers for Disease Control and

Prevention (CDC)

• Department of Labor (DOL)

• Department of Veterans Affairs (VA)

OVERVIEW
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

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3

OBJECTIVES

• Determine how five federal agencies—DOD, GSA, HHS/

CDC, DOL, and VA—are using COTS systems/applications

to improve their HR functions

• For these five agencies, identify reported estimated costs and

expected benefits from using HR COTS systems/applications
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

Page 11 GAO/AIMD-00-270 Commercial Off-the-Shelf Software for HR

4

SCOPE

• Performed work at the Washington, D.C., headquarters

offices of DOD, GSA, HHS, DOL, and VA

• Committee identified two agencies—VA and HHS/CDC

• We selected three remaining agencies based on size and

type of COTS products being used

• Performed work at the headquarters office of CDC in Atlanta

• Performed work in accordance with generally accepted

government auditing standards
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

Page 12 GAO/AIMD-00-270 Commercial Off-the-Shelf Software for HR

5

SCOPE

• Used criteria from the Government Performance and Results

Act of 1993, the Clinger-Cohen Act of 1996, and Joint

Financial Management Improvement Program’s (JFMIP)

Human Resources and Payroll Systems Requirements of

April 1999 to determine HR system capabilities and basis of

investment decisions

• Reviewed documentation of the five agencies’ efforts to use

HR COTS systems/applications

• Observed demonstrations of the HR COTS systems

implemented or planned by the five agencies
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

Page 13 GAO/AIMD-00-270 Commercial Off-the-Shelf Software for HR

6

• Interviewed HR and information technology (IT) officials at

the five agencies about their HR COTS systems/applications

• Observed demonstrations of the HR products by the primary

and supporting HR vendors under contract to the agencies

• Did not verify agencies’ reported costs and benefits

• Updated information through July 27, 2000, and included as

appropriate

METHODOLOGY
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

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7

BACKGROUND

HR COTS systems/applications are commercially

available automated tools that can help streamline human

resources management activities, including position

management and classification, recruitment and staffing,

personnel action administration, benefits administration,

labor management and employee relations, and workforce

development
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

Page 15 GAO/AIMD-00-270 Commercial Off-the-Shelf Software for HR

8

BACKGROUND

(CONTINUED)

• The five agencies in our review have acquired the

services of two primary HR COTS vendors—Oracle

and PeopleSoft—to provide most of the HR functional

system requirements called for by JFMIP

• Some of the agencies have also acquired the services

of other HR COTS vendors—Avue and Resumix—to

augment the services of primary vendors in areas such

as recruitment
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

Page 16 GAO/AIMD-00-270 Commercial Off-the-Shelf Software for HR

9

SUMMARY OF AGENCY HR SYSTEMS AND

COTS VENDORS

Agency Name of System Vendors

DOD Modern Defense Civilian

Personnel Data System

(DCPDS)

Oracle, Resumix

GSA Comprehensive Human

Resources Integrated

System (CHRIS)

Oracle

HHS/CDC Enterprise Human

Resources and Payroll

Project (EHRP)

PeopleSoft (Avue &

Resumix at CDC)

Labor PeoplePower PeopleSoft

VA HR LINK$ PeopleSoft, Avue
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

Page 17 GAO/AIMD-00-270 Commercial Off-the-Shelf Software for HR

10

AGENCY HR COTS SUMMARY—DEFENSE

System Description

• Based on a September 1994 study, DOD decided to move

to regional servicing and migrate the Defense Civilian

Personnel Data System (DCPDS) to a modern environment,

supported by a single, integrated information system

• When fully implemented, the modern DCPDS is expected to

contain records for approximately 800,000 employees and

be used in 25 regional/centralized servicing offices and 300

customer support units. Managers at installations will have

access to the system
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

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11

AGENCY HR COTS SUMMARY—DEFENSE

(CONTINUED)

System Description (cont’d)

• HR COTS applications in the modern DCPDS address

position management, recruiting and referrals, personnel

action administration, labor management and employee

relations, and workforce development. DOD has

supplemented its core HR COTS system with DODdeveloped applications and stand-alone modules
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

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12

Reported Estimated Costs, Benefits, Milestones

Item Original Current Difference

System life (years) 15 16 1

Milestones

Initiation

Deployment

May 1995

Sept 1999

May 1995

Mar 2001

-

18 mos.

Cost $1,085M $1,333M $248M

Quantifiable benefits $2,737M $2,397M ($340M)

AGENCY HR COTS SUMMARY—DEFENSE

(CONTINUED)
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

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13

Differences in Milestones

• DOD reported that full implementation was delayed until

March 2001 due to a variety of reasons, including

unanticipated additional testing and a delay in receiving

milestone III* approval

AGENCY HR COTS SUMMARY—DEFENSE

(CONTINUED)

*Milestone III approval involves an internal DOD committee review of systems in

limited production and/or development
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

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14

Differences in Costs

• DOD reported that estimated costs have increased

because of developmental delays, vendor revisions to the

federal and HR COTS products, and limited

customization

Differences in Benefits

• DOD reported that estimated benefits have decreased

because of increased regionalization costs and delayed

deployment of modern DCPDS

AGENCY HR COTS SUMMARY—DEFENSE

(CONTINUED)
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

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15

Quantifiable Benefits Expected

• Productivity enhancements (i.e. performing the same HR

function with fewer resources) due to reduction of field HR

personnel facilitated by regionalization and DCPDS

modernization

• DOD expected to continue to improve the ratio of

personnelists to employees serviced

• January 1996: 1 to 60

• June 2000: 1 to 77

• March 2001: 1 to 88

AGENCY HR COTS SUMMARY—DEFENSE

(CONTINUED)
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

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16

Nonquantifiable Benefits Expected

• Supports regionalization of civilian personnel offices and

eliminates redundant component systems and operations

• Improves data provided to payroll system and reduces

reliance on paper documents and files

• Creates user-friendly, open systems environment and

improves responsiveness to customers

• Extends system access to managers and, eventually, to

employees

AGENCY HR COTS SUMMARY—DEFENSE

(CONTINUED)
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

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17

Project Status to Date

• Implemented at 3 of 25 sites

• Total reported modernization and regionalization costs

incurred as of September 30, 1999: $351M*

• Total reported quantifiable benefits achieved from

regionalization as of September 30, 1999: $123M

* DOD officials later told us that of the $351M incurred as of

September 30, 1999, $172M was for modernization

AGENCY HR COTS SUMMARY—DEFENSE

(CONTINUED)
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

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18

System Description

• Comprehensive Human Resources Integrated System

(CHRIS) was initiated in October 1996 and is designed to

replace the current personnel legacy system

• GSA is developing CHRIS as an integrated HR/payroll

management system. CHRIS is expected to support

personnel requirements in the areas of recruiting, staff,

compensation, benefits, and personnel processing and

management

AGENCY HR COTS SUMMARY—GSA
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

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19

Reported Estimated Costs, Benefits, Milestones

Item Original Current Difference

System life* (years) 6 6 --

Milestones

Initiation

Deployment

Oct 1996

Dec 1999

Oct 1996

Aug 2000

--

8 months

Cost $34M $34M --

Quantifiable benefits $4.5M (FY2001) $4.5M (FY2001) --

AGENCY HR COTS SUMMARY—GSA

(CONTINUED)

*GSA views system life as beginning with operation in August 2000
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

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20

Differences in Milestones

• Eight-month delay in completion date due to lack of maturity

in the Oracle product relative to federal needs, according to

GSA

• Project delays due to lack of skilled resources and GSA’s

decision to implement system with internal staff, according

to the CHRIS project manager

AGENCY HR COTS SUMMARY—GSA

(CONTINUED)
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

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21

Quantifiable Benefits Expected

• Estimated cost avoidance in FY 2001: $4.5M

• Eliminates cost associated with old legacy system

• Reduces cost of transaction processing in HR offices

• Reduces cost of external recruitment and internal

competitive staffing

• Reduces customer support staff time for transaction

processing and data acquisition

• Reduces manager time for transactions and data

analysis

AGENCY HR COTS SUMMARY—GSA

(CONTINUED)
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

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22

Nonquantifiable Benefits Expected

• Reports generated on a more timely basis

• Better control of data

• Increased manager and employee satisfaction with reports,

query capability, accuracy of data, and self-service

capability

• Increased manager satisfaction with results of recruitment

process

AGENCY HR COTS SUMMARY—GSA

(CONTINUED)
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

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23

Project Status to Date

• GSA expects CHRIS to be operational in August 2000

• First parallel testing with CHRIS and legacy system

completed on June 21, 2000

• CHRIS is currently in second parallel testing

• Pilot testing of Avue’s COHO (position classification and

management) and Chinook (employee relations) modules in

GSA’s National Capital Region

• Total reported costs incurred as of December 6, 1999:

$20M

AGENCY HR COTS SUMMARY—GSA

(CONTINUED)
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

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System Description

• The Enterprise Human Resource Project (EHRP) was

initiated in October 1999 to improve the efficiency and

effectiveness of HHS’ human resources and payroll

operations. One of the primary factors driving this effort

was HHS’ aging legacy system

• EHRP is intended to implement the PeopleSoft HR COTS,

which is a global module intended to permit customers to

build fully integrated HR processes and databases that are

shared across the enterprise

AGENCY HR COTS SUMMARY—HHS/CDC
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

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25

System Description (cont’d)

• EHRP is expected to provide tools allowing:

• managers to strategically manage their workforce

• human resource staff to efficiently perform core

functions

• employees to enter data and change specific personal

information from their desktops

• the agency to enhance HR/payroll operations, reduce

its dependence on paper processes, and reduce the

number of duplicative systems in use

AGENCY HR COTS SUMMARY—HHS/CDC

(CONTINUED)
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

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Item Original Current Difference

Systemlife* (years) 10 10 --

Milestones

Initiation

Deployment

Oct 1999

Feb 2003

Oct 1999

Feb 2003

--

--

Cost $214M $214M --

Quantifiable benefits $127M $127M --

Reported Estimated Costs, Benefits, Milestones

AGENCY HR COTS SUMMARY—HHS/CDC

(CONTINUED)

*HHS views system life beginning with full operational capability in FY 2003
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

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Quantifiable Benefits Expected

• Implementation of EHRP is expected to provide cost

savings and flexibility in processes used to initiate, manage,

and monitor HR actions

• EHRP implementation is expected to enable operating

divisions to eliminate duplicative personnel systems within

their organizations. Overall operations and maintenance

cost for HHS can also be reduced because fewer systems

will need to be maintained

AGENCY HR COTS SUMMARY—HHS/CDC

(CONTINUED)
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

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28

Nonquantifiable Benefits Expected

• Improve decision-making and data analysis

• Provide organization and trend analysis

• Offer added features and functionality

• Provide insight to combined civilian and commissioned

officer personnel data

• Improve data accuracy and reporting capability

• Provide assurance of regulatory compliance

• Increase user-friendliness and customer satisfaction

AGENCY HR COTS SUMMARY—HHS/CDC

(CONTINUED)
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

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Project Status to Date

• HHS approval to continue work on EHRP was given on

June 2, 2000

• Preparing for PeopleSoft Release 8

• Total reported cost incurred as of June 30, 2000: $2.2M

AGENCY HR COTS SUMMARY—HHS/CDC

(CONTINUED)
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

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System Description

• PeoplePower was initiated in February 1998 because the

legacy HR system (Air Force personnel system) was not

Y2K compliant and did not support Labor’s vision

• PeoplePower was intended to be an integrated Webenabled HR/payroll system based on PeopleSoft’s Federal

HR & Payroll COTS

• PeoplePower has replaced the legacy HR system with

added functionality. It now supports Labor’s processes for

personnel actions, benefits administration, training

administration, position management, automated workflow,

workforce analysis, and HR reporting

AGENCY HR COTS SUMMARY—LABOR
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

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Item Original Current Difference

System life (years) 5* 15** Not comparable

Milestones

Initiation

Deployment

Feb 1998

Sept 2001

Feb 1998

Sept 2002

--

1 year

Cost $26.5M* $71M** Not comparable

Quantifiable benefits Not estimated $226M Not comparable

Reported Estimated Costs, Benefits, Milestones

AGENCY HR COTS SUMMARY—LABOR

(CONTINUED)

* Based on DOL estimates of time and effort to develop and deploy system, not to operate system over its useful life

** Current DOL estimates include time and cost to develop, deploy, and operate system over its 15-year system life
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

Page 39 GAO/AIMD-00-270 Commercial Off-the-Shelf Software for HR

32

Differences in Milestones

• According to Labor, the 1-year delay is due to its decision to

reexamine payroll alternatives

Differences in Cost

• According to Labor, differences in cost are due to (1) not initially

accounting for operating costs in years after the system is fully

developed and deployed, and (2) underestimating effort to

implement HR COTS product, including costs to address

• Database, hardware, and end user equipment needs

• Lack of maturity of the PeopleSoft Federal COTS products

• Technical programming staff charges and billing rates higher

than for older technology systems

AGENCY HR COTS SUMMARY—LABOR

(CONTINUED)
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

Page 40 GAO/AIMD-00-270 Commercial Off-the-Shelf Software for HR

33

Quantifiable Benefits Expected

• Reduce costs

• Reduce/eliminate handoffs and reconciliation tasks by

replacing multiple systems with one integrated system

• Reduce number of FTEs* in human resources, payroll, and

budget areas

* Although DOL officials provided us with an unofficial estimate of FTE

reductions, they later told us that DOL is unable to provide an official estimate

AGENCY HR COTS SUMMARY—LABOR

(CONTINUED)
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

Page 41 GAO/AIMD-00-270 Commercial Off-the-Shelf Software for HR

34

Nonquantifiable Benefits Expected

• Increase efficiency due to cycle time reductions

• Improve access to and accuracy of information

• Enhance availability and quality of information

• Increase HR staff, manager, and employee satisfaction

• Create time for more important, valued-added work

AGENCY HR COTS SUMMARY—LABOR

(CONTINUED)
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

Page 42 GAO/AIMD-00-270 Commercial Off-the-Shelf Software for HR

35

Project Status to Date

• Replaced legacy HR system functionality in June 1999

• Added workflow, training, position budget management, analytical

reporting, and a system upgrade in March 2000

• PeopleSoft Payroll on hold pending review of alternatives

• Numerous benefits already achieved, according to DOL

(improvements in efficiency; timeliness; quality, accuracy, control, and accessibility

of data; use of system for management, budgeting, and strategic planning; and

freeing up time for more important, valued-added work)

• Total reported costs incurred as of June 30, 2000: $15.3M

• Reported savings as of June 30, 2000, due to task reductions:

$3M (eliminated need for about 30 FTEs)

AGENCY HR COTS SUMMARY—LABOR

(CONTINUED)
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

Page 43 GAO/AIMD-00-270 Commercial Off-the-Shelf Software for HR

36

AGENCY HR COTS SUMMARY—VETERANS

AFFAIRS

System Description

• HR LINK$ was initiated in October 1994 to replace VA’s 30-

year old legacy HR and payroll system

• HR LINK$ incorporates a COTS HR and payroll solution;

and is to consolidate, integrate, and standardize HR and

payroll business processes across the department. It

includes employees’ self-service and managers’ self-service

modules, a shared service center in Topeka, Kansas, and

an on-site strategic HR presence at headquarters and each

field office
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

Page 44 GAO/AIMD-00-270 Commercial Off-the-Shelf Software for HR

37

System Description (cont’d)

• HR LINK$’ goals include

• reengineering HR/payroll service delivery processes

• moving the HR function from the role of gatekeeper to

that of strategic partner

• pushing transaction processing to the lowest

appropriate level, and

• maximizing use of technology and COTS products to

automate manual processes and eliminate paper

AGENCY HR COTS SUMMARY—VETERANS

AFFAIRS

(CONTINUED)
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

Page 45 GAO/AIMD-00-270 Commercial Off-the-Shelf Software for HR

38

Reported Estimated Costs, Benefits, Milestones

Item Original Current Difference

System life (years) 12 12 --

Milestones

Initiation

Deployment

Oct 1994

Sept 1999

Oct 1994

Sept 2001

--

2 years

Cost $170M $417M $247M

Quantifiable benefits $624M $664M $ 40M

AGENCY HR COTS SUMMARY—VETERANS

AFFAIRS

(CONTINUED)
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

Page 46 GAO/AIMD-00-270 Commercial Off-the-Shelf Software for HR

39

Differences in Milestones

• According to VA, two-year delay due to

• union negotiations/agreements

• cultural changes

• additional development/testing to achieve VA sizing and

workload requirements

• seamless integration of all COTS and custom-designed

applications

AGENCY HR COTS SUMMARY—VETERANS

AFFAIRS

(CONTINUED)
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

Page 47 GAO/AIMD-00-270 Commercial Off-the-Shelf Software for HR

40

Differences in Cost

• According to VA, difference of $247 million attributable to a variety

of factors, including

• Inflation

• Cost overruns due to unanticipated expenditures for

• extended development timeframes

• software maintenance for the extended 2 years

• additional shared service center equipment

• additional marketing and contractor services

• upgrades to primary HR vendor software

• regulatory changes to self-service functionality

AGENCY HR COTS SUMMARY—VETERANS

AFFAIRS

(CONTINUED)
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

Page 48 GAO/AIMD-00-270 Commercial Off-the-Shelf Software for HR

41

Differences in Quantifiable Benefits

• Longer period of time to achieve FTE savings due to

extended development/implementation timeframes,

according to VA officials

Quantifiable Benefits Expected

• Reduced FTEs due to reengineering HR processes and

implementing self-service HR capabilities

• Cost avoidance relating to maintenance and operational

costs associated with legacy system

AGENCY HR COTS SUMMARY—VETERANS

AFFAIRS

(CONTINUED)
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

Page 49 GAO/AIMD-00-270 Commercial Off-the-Shelf Software for HR

42

Nonquantifiable Benefits Expected

• Increased efficiency

• Employee and manager self-servicing

• Agencywide information sharing

• HR and payroll systems’ continuity and reliability

• “One VA” vision achieved through integration of HR and

payroll business processes

AGENCY HR COTS SUMMARY—VETERANS

AFFAIRS

(CONTINUED)
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

Page 50 GAO/AIMD-00-270 Commercial Off-the-Shelf Software for HR

43

Project Status to Date

• Opened shared service center

• Deployed employee self-service capability

• Deployed Avue’s COHO (position classification system)

• Preparing to prototype managers self-service modules

• Preparing to prototype Avue’s Casting (recruitment and

staffing system)

• Total reported estimated costs incurred as of March 30,

2000: $147M

AGENCY HR COTS SUMMARY—VETERANS

AFFAIRS

(CONTINUED)
Appendix I

July 17, 2000, Briefing to House Committee 

on Government Reform

Page 51 GAO/AIMD-00-270 Commercial Off-the-Shelf Software for HR

44

AGENCY HR COTS SUMMARY—VETERANS

AFFAIRS

(CONTINUED)

• Project status to date (cont’d)

• Total reported quantifiable benefits achieved as of March

30, 2000: $172M due to reductions in FTEs (872*) and

cost avoidance relating to its legacy system

* VA officials later told us that the original FTE reductions were cumulative rather than

annual. Therefore, we revised the figure from 3,413 to 872 to reflect actual VA FTE

reductions as of March 30, 2000.

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