How Not to Waste One Million Dollars on Time Clocks

Posted by Jake Richardson on Dec 19, 2014 9:12:00 AM


Sad Story of Hawaii Department of Education

Picture nearly one million dollars worth of brand new time clocks still in boxes stacked in a break room. They were purchased in 2010 by a state government department in order to track employee work efforts better.

However, when it was noticed that the time clocks also needed software and cables to connect them, plus labor to configure the system and getting it running correctly, it was decided not pursue the project any longer!


The cost to connect the whole system, according to the vendor, would be another five million dollars or more!  If implemented, the entire employee time tracking system for the Hawaii Dept. of Education could have cost well over six million. That’s just the estimated cost. As we know, many government projects tend to go a bit over budget. So, when decision-makers at the department realized that an additional five million would need to be spent, they abandoned the project.

Let’s rewind the story a little.

The department’s original goal was to document the in and out times for hourly workers, and to track the presence of salaried workers as well. The reason for having the time clocks was to keep a small number of employees from cheating on their timesheets and getting paid for hours they did not work. Another separate goal, common for any time clock systems, was to make sure employees showed up on time and didn’t leave early. All in all, close monitoring of employee movements is a good way to thwart employee timesheet fraud.

However, choosing a time clock and time tracking system is not a trivial matter. The department might not have been experienced mapping out an organization’s needs, or know how to conduct the proper research to identify viable technologies and the appropriate vendor solutions available.

In fact, the Hawaii Dept. of Education was looking to make a big leap forward when it tried to move from paper to electronic timesheets. However, it turns out they conducted no due diligence. In the meantime, the state of Hawaii is reportedly looking into establishing its electronic time and attendance tracking system, so the state Department of Education is making no moves on its own currently.


Yes, this story sounds like yet another government waste of tax payer money, but this could happen to any organization that does not carefully evaluate its options when moving to electronic time tracking. This could happen to you!

So what went wrong here?

The Psychology of Bad Decisions

Why do buyers make purchasing mistakes?

If you don’t know much about something, and have to make an important decision about it, you are in trouble.

According to some research, one of the main errors we tend to make as a species is overconfidence. Here’s what David Dunning, Cornell University Professor, says:

“A whole battery of studies conducted by myself and others have confirmed that people who don’t know much about a given set of cognitive, technical, or social skills tend to grossly overestimate their prowess and performance, whether it’s grammar, emotional intelligence, logical reasoning, firearm care and safety, debating, or financial knowledge. College students who hand in exams that will earn them Ds and Fs tend to think their efforts will be worthy of far higher grades; low-performing chess players, bridge players, and medical students, and elderly people applying for a renewed driver’s license, similarly overestimate their competence by a long shot.”

So, in short, we think we know a lot more than we do.

And because we are this way, we don’t know this either. Therefore, we assume that our decisions on things we know little about, are a lot better than they are. Scary. But now you know.

The Group Think Factor

Then there is the group think factor.

Research has shown that when we are in groups we often shape what we do and don’t say in relation to what the group believes or wants. Consequently we often feel that voicing our true concerns is not safe because we want to preserve our status within the group and our jobs.

Perhaps you work in an organization with employees, who like you, no little about the latest technology. Your company culture is one where you sit in meetings that drive decisions to some group norm.

When you combine the psychology of “overconfidence” with “group think” you can get an extremely bad outcome:

Uninformed bad decisions that seem even better when amplified by the overconfidence of decision makers in the room driving to some group norm.    

What steps can you take to lessen the effects of overconfidence and group think?


Do The Right Things

1. Software First, Hardware Last

Think about personal software for a minute. Let’s say you were living under a rock the last twelve years. You emerge and have a conversation with your best friend about a new hearing test application he’s using while wearing his ear buds. Pretty cool, you’re thinking. I want that. I’ve got a little wringing in my ears.

You forget to ask “what are ear buds?” Then you go to the local mall and into the first store you see: Staples! A sales guy walks up, smiles and shakes your hand. An hour later you’re home unpacking your brand new laptop computer. He said it would be good “portable” solution, or something like that.

Now you own this new hardware. You start searching on Google for ear testing applications. It turns out they are only on the App Store, and they only run on smartphones like an iPhone, or tablets like an iPad.

Now the only major difference with this made up story is that the State Department of Education in Hawaii software for their time clocks would cost $5 million. The iPhone hearing test app is free. You get the idea.

The Department should have thought about SOFTWARE FIRST, and HARDWARE LAST!

2. Knowing What You Don’t Know

If you are in a government agency, or if you are operating somewhat or very outdated information technology, you might not be best resource to effectively evaluate new systems. Do not commit to making any large system purchases before consulting first with organizations that can point you in the right direction.

3. Consulting Other Resources

Your own IT department might be this resource. Or perhaps you have a friend or professional colleague in who works in another part of your organization known for its superior use of technology and information systems. Or maybe you met such a resource at a trade show.

4. Use Consultants

Another option is to identify consultants who operate independently from software and hardware vendors. These consultants would be charged with explaining the new technologies to you, and perhaps recommending options after conducting research and evaluations on your behalf. You should do this when no internal staff are available with the knowledge to examine new systems for evaluation.

5. Don’t Start Talking To Vendors Until You Know The Basics

If this story scares you to death, it should. Not only did a buyer not follow the above rules and made a big bad terrible mistake, apparently there are vendors out there who don’t follow these rules either! How could a vendor sell almost a million dollars’ worth of time clocks to a customer, without making sure they understood that another five million dollars or more would be required to purchase the rest of the system and get it operational? That without the software, the time clocks were like a bridge to nowhere! In the Hawaii case, it’s true that an uninformed buyer with little knowledge of electric employee time tracking systems might assume that just purchasing time clocks was enough. Or the vendor tried to communicate this (or did so vaguely).

Which brings us to: there are two important parts of every software systems evaluation process:

First Define Your Requirements

This is where you manage a process to identify your organization’s needs for time tracking. It can include timesheets for payroll, attendance, time off requests and approvals, accruals, or more. Remember, employee time off is critical because you always want the complete picture of hours worked and employee absences with reasons for their absence. Employee time off is also critical to understanding employee attendance. If an employee starts at noon, when he normally starts at 8AM, are you tracking the approved half-day vacation with your attendance data?

If the Hawaii department of education ever got into implementation their software, the issue of how to track employee time off and absences would need to have been addressed. Another good example of why software should always come first in your evaluations.

Here is a great blog post that will help you understand the requirements phase of your evaluation: "Rolling Stones Logic When Selecting Software" 

Then Start Identifying Vendors

After defining your requirements, the next step is to identify the best vendors to evaluate.

Here is a great blog post that explains how to do this:  "How To Evaluate Timesheet and Work Tracking Software"

The goal of this step is to finalize a short list of worthy vendors to evaluate, and then make the right selection.

At Pacific Timesheet we honestly do our best to never oversell. It only leads to unhappy customers and bad newspaper articles, which we don’t want. We honestly try out best to offer customers the best approaches to address any issues you have with time clocks or your timesheet software needs.

The Solution for Time Clocks that Don't Connect

If you are stuck with time clocks, like the Hawaii Department of Education, that do not connect with timesheet software, we have a solution that you might want to evaluate: Integrating Legacy Time Clocks.

When you are ready to start evaluating software and systems solutions, you might enjoy taking our product tour to see if we match your needs.

Images: 1. Mick Baker, Flckr 2. Georgio Minguzzi  Flckr 3. YuJeen

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