Nicholas Mencias
Instructor’s Name
December 6, 2018
DMV Crisis
The DMV is a place where individuals go to take care of business. When it comes to the DMV you can get your license renewed, take your driving test, get your permit and many other things. The DMV is known for the long wait times regardless if you have an appointment, the line is always out the door, causing customers to become weary and agitated. The bright side about dealing with the DMV is that you can now go online to renew a license, schedule tests and find out the wait times at each location. The DMV is the most popular business running due to its high demand that it has so it can meet the needs of its valued customers. The DMV has many achievements as well as losses. The DMV has suffered from financial loss due to putting money into the wrong investments.
Overtime the DMV has developed a large and very complex database to support the activities that they fund. Over a million transactions at the DMV are processed in the database system each day. The application software program and current databases being used by the DMV were developed in 1960, meaning that the technology is 30 years old and has become harder to maintain the old systems. The DMV decided that it was best and necessary for them to upgrade their systems. The DataBase Redevelopment was created in 1987 and was developed to redesign the DMV’s systems and meet the requirements and functions. The purpose of this was to create a structure that would be more responsive to any future changes and improve the efficiency of all electronic data processing services. This program was intended to provide a wide range of variety of improvements to the system which would further allow the DMV to improve their service levels and any moves into the future. Other than technical concerns, the DMV wanted the DBR to address strategic objectives. These objectives were reviewed and taken into action by the legislative mandates. Proposals were made which would require the DMV to cross-match information from their prior database.
During the audit of the DMV’s DBR project, the DMV continued to put in full effort to implement the project despite their significant amount of unresolved problems and deficiencies which led to the failure of the project in 1994. The DMV’s audit revealed that the Office of Information Technology recommended additional funding for the project although the DMV did not follow the approved policies which would minimize any financial risks to the state. The DMV’s actual obligated costs were $5.1 million higher for the project than the original report to the legislature and department of finance. The DMV was found to have violated multiple contracting laws and regulations which included falsifying a purchased order for about $46,000. In the unsuccessful attempt to implement the DBR, the DMV went ahead and spent an additional $34.6 million, rather than completing each step of the plan the DMV modified the stages that were to be completed or completely failed them.
Although the DMV established meaningful sets of development objectives for an operational assessment and working model of the project, these objectives were to be accomplished before moving forward with the project and additional expenses. The DMV continued to go on with the development of the system and incur any expenses without solving any technical and performance complications that arose. OIT continued to recommend additional funding to the DBR project, which allowed the DMV to attempt to implement the DBR project into the operation even though OIT knew that the DMV had not yet successfully developed a working model of the project before proceeding with the project. The DMV did not use any formal cost reporting that would allow them to monitor expenditures that were related to the DBR project. About $28,000 were for services that were provided before the DMV was awarded Tandem with a contract. After awarded, $18,000 were for services that Tandem provided throughout the contract period, while sufficient funds did not exist under the contract to pay for the services. Even though the DMV paid an invoice that indicated the software was received, no products were ever delivered. This continued to happen with the DMV due to the company not adequately justifying its use of sole-source consulting contracts for the DBR projects. Eventually, OIT did not continue to exercise their authority to insist that the DMV needed to accomplish the working model before being recommended to continue any funding.
The DMV was called to another audit which was expected to cost around $800,000 and yield to a final report by March. The biggest complaints about the DMV in California started with long wait times which increased up to six hours at certain locations. A data operator costed the state more than $40,000 in 2014 due to sleeping on the job, this was the biggest complaint next to the misses of state resources from the workers. Another complaint occurred when a statewide outage due to computer glitches which caused about 70 out of 172 DMV offices to be delayed for hours. This blackout affected individuals from having their drivers licenses, identification cards and vehicle registrations tone processed. To add onto the complaints of the California DMV, the company mishandled about 23,000 voter registrations through their new “motor voter” system which incorrectly registered them for the wrong political party.
In 2013, the DMV had a $208 million upgrade for new drivers license and vehicle registration system. In February 2013, Californias CIO informed state legislators that the DMV management decided to cancel this plan at the end of January with the remainder of the $208 million. In 2006, the DMV IT modernization program was started in the wake of a previous DMV project failure which resulted in a $44 million loss. This hopeless failure was initially supposed to be a 5-year plan with a $28 million effort. When the project was terminated seven years in, the projects cost to be completed skyrocketed through the roof to about $201 million without an expected finish date.
An assessment done on the DMV reported that the workers had limited experience in computer technology, lacked consistent and sustained management and grossly underestimated the projects scope and size. Failure of the project sparked a full legislature probe. In 1994, Governor Pete Wilson, decided to pull the plug on a DMV computer project after state spent $50 million on a system that was useless since it never worked. The California Department of Technology took control over the states largest IT projects as an effort to improve efficiency and prevent future wasteful project. The take over was to ensure success in the future with any projects and funding the government and any companies would have to provide.
In conclusion, I believe that the lessons they learned in the 1994 failure did not help them mitigate for the 2013 failure. I believe it did not help because they still made the same financial mistakes which dug them into a deeper hole when it came to the company. As an IS professional, I would recommend to the State on any future system developments for the DMV that they have a well thought out planned in order to stay finically secure and that there are no failures with any future projects. Furthermore, I believe that when creating a project for a big company it requires a lot of patience and everyone has to be onboard and knowing what is going on. When it comes to the financial structure of the project, there should be someone who is the financial advisor before the project is started. This type of teamwork within a company can lead to great success and many future endeavors.
References
Gomez, Luis. “Finally, California DMV to Be Audited. Here's a Brief History of Its Problems.” Sandiegouniontribune.com, 24 Sept. 2018, www.sandiegouniontribune.com/opinion/the-conversation/sd-california-dmv-problems-that-led-to-audit-20180924-htmlstory.html.
“Report 94107 Summary – April 1994.” California State Auditor – A Message From the California State Auditor, www.bsa.ca.gov/reports/summary/94107.
“Welcome to the Senate Standing Committee on Business, Professions and Economic Development.” Welcome to the Senate Standing Committee on Business, Professions and Economic Development | Senate Business, Professions and Economic Development Committee, sbp.senate.ca.gov/.