Tuesday, March 20, 2001

Cal State Hires Unisys to Run its PeopleSoft Administrative Software By FLORENCE OLSEN The California State University System has signed a $60.1-million outsourcing deal with the Unisys Corporation to have Unisys run its PeopleSoft software. The new administrative software will be used to manage human resources, finances, and student information systemwide. Nancy Raca, the director of education and government for PeopleSoft Inc., says the five-year deal, signed earlier this month, is "one of the largest outsourcing agreements for a PeopleSoft implementation in the higher-education industry." "I know campuses that have outsourced or contracted out their data-center activities, but nothing on the scale we're talking about," says David J. Ernst, the assistant vice chancellor for information-technology services at Cal State. Other colleges have had problems making the transition from older administrative systems to the newer and considerably more complex administrative systems developed by PeopleSoft. But Cal State officials believe that the strategy of consolidating their data-center operations in one commercial data center will help them avoid similar costly problems. "One of the things I've said several times to people is, Shame on us if we make the same mistakes that others have made on this project," says Mr. Ernst. "We'll make our own mistakes, for sure, but let's not make the other ones." Mr. Ernst says the Cal State system can do business more efficiently with just one administrative computer center, instead of the 20 such centers that Cal State currently operates. In an age of high-speed computer networks, that center doesn't even need to be in California, he says. During the next five years, Cal State expects to shift its business operations to a computer data center in Salt Lake City that will be operated by Unisys. Cal State has leased high-speed network connections to the Salt Lake City data center from two different locations on 4Cnet, the high-speed state education network that links the 23 Cal State campuses and the state's community colleges. The Salt Lake City computer center will be "impervious to earthquakes and all the rest of it," Mr. Ernst says. California's current power-supply problems played no part in the outsourcing decision, he adds. Cal State officials say the multimillion-dollar outsourcing deal will help them through a big transition to the administrative software that they purchased from PeopleSoft in October 1999. Cal State employees have been preparing for nearly 18 months for the transition, which will get under way in earnest in July. Cal State will spend $350-million to $400-million on the PeopleSoft project, which began in 1999 and will take seven years to complete. The projected cost includes the Unisys contract and the purchase of PeopleSoft software to manage human resources, university finances, and student information. When the administrative systems project is done, all 23 Cal State campuses will have one general ledger in common, instead of 23 different ones. "You don't need 23 general ledgers to do a good job," Mr. Ernst says. Cal State enrolls about 370,000 students and employs more than 41,500 faculty and staff members. Cal State's campus computing facilities, or data centers, will "shrink" as business operations are consolidated in Salt Lake City, Mr. Ernst says. The university system now spends about $60-million a year to operate its administrative data centers, or about five times what it expects to pay Unisys to handle those operations for five years. But the cost savings will not be immediate. The costs of operating 20 data centers, says Mr. Ernst, are mostly people costs. But "no one's going to be laid off," he says. University officials are talking with union and nonunion employees to secure other information-technology jobs on their campuses for those who will be affected by the change, he adds. "These people have done a good job for a lot of years." Easy-to-print version E-mail this article

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