CLIMBING aboard the high-technology train can result in a costly crash, as the University of Hawaii has discovered the hard way. Burned by an Arizona company designing software for computer information systems to colleges, UH is out $4.7 million. Entering into the contract turned out to be foolhardy and can be chalked up as an expensive lesson in how institutions should exercise caution in entering the computer age. Foremost is assurance that computer technology is buttressed by old-fashioned business sense and reliability.
For UH, Buzzeo
was an expensive bust
The issue: The University of Hawaii
lost $4.7 million in the purchase
of a computer software design
that was never delivered.
The shortage of those attributes caused many of last year's dot-com crashes and played a role in the evaporation of Buzzeo Inc., created in 1993 by Eugene C. Buzzeo, who carried solid credentials as having been a software executive for Dun & Bradstreet. As the Star-Bulletin's Tim Ruel set forth in an extensive report on Sunday, the plan was to sell software that would enable college students and administrators to manage class schedules, transcripts and financial aid through a Buzzeo Web site.
A junior college system in the Phoenix area signed onto the system in 1996. The University of Hawaii awarded Buzzeo a $4.7 million contract the following year, completing payments in two years. The only safeguard in case the deal went bad was that UH would receive a small amount of stock in Buzzeo. However, Buzzeo never delivered the software and went out of business a few months ago. The stock is worthless.
A former Buzzeo employee told Ruel that the company kept shifting directions to keep up with new technologies and lost sight of its clients, failing to deliver. Better management might have led to the company's success, the former employee said.
Buzzeo's shortcomings in that area were foreseen by John Hoag, a retired First Hawaiian Bank president who was a UH regent at the time of the contract, which he opposed. "I think the problem, frankly, is that people who work for a university don't necessarily have the business acumen to study these issues, and tend to get sold on salesmanship rather than on hard figures," Hoag said.
Prior to the UH contract, Buzzeo had not established much of a track record. Ironically, the company later cited the UH contract in trying to persuade other colleges to stick with Buzzeo. Hawaii Pacific University decided not to sign on. "Out biggest shortcoming with it was it wasn't established," said Justin Itoh, HPU's chief information officer.
UH has acquired the unfinished program code created by Buzzeo. However, university officials have yet to decide whether to build the system on their own, contract the job out to vendors or do a combination of both. The university should not rush into that decision.
The Bush administration continues to beat the drums on its energy strategy even though the plan's flaws are beginning to show. The energy crisis the president pointed to when the administration unveiled its plan last May has failed to materialize as gasoline and natural gas prices have dropped and supplies have increased in the past six weeks.
Bush persists in pushing
a flawed energy plan
The issue: The no-show energy crisis
weakens the drive behind the
administration's program, but
the president presses on anyway.
In California, which Bush and his chief energy adviser, Vice President Dick Cheney, often waved as a warning flag of the crisis, power prices have fallen to the lowest levels in more than a year. This was due in part to new supplies and price controls, but a significant element in averting the blackouts that plagued California earlier this year was conservation, something Cheney had given short shrift in the administration's plan.
The White House had hoped sounding the crisis alarm would push Congress to allow drilling on protected lands and to alter or abandon regulations. However, lawmakers balked, heeding their constituents' concern about environmental trade-offs. Without a sense of emergency, Congress has been reluctant to do what Bush wants, turning away administration proposals to open national monument land for gas, oil and coal exploration and banning drilling under the Great Lakes. Bush was also forced to scale back plans to drill for oil in the Gulf of Mexico to obtain Senate approval.
Yet, the administration is forging ahead as Cheney, Cabinet members and Republican lawmakers fan across the country this week to drum up support for its plan. This stubbornness undercuts the administration's denials that its policies do not favor the interests of big oil.
If, indeed, the nation "in the year 2001 faces the most serious energy shortage since the oil embargoes of the 1970s," as stated in his energy strategy report, the president should be seeking solutions from every angle and re-formulate his plan to include conservation as well as more development of renewable energy sources. His so-called "sound, comprehensive energy policy" should be just that. Peddling a faulty plan does little good.
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