Guest post by Austin Yerks

Enterprise resrouce planning solutions are prominent among the large-scale federal information technology programs that have received such intense scrutiny in recent months. Mounting concern over their prospects has prompted calls for reforming federal IT management. "Underperforming" programs face ultimatums to turn around quickly or be terminated. "Turnaround" actions may call for limiting IT procurements to small chunks that are easier to manage, and whose benefits accrue faster.

Today's thorniest IT challenges, including those in the Department of Defense, require comprehensive reform well beyond  the "small chunk" approach. Federal Chief Information Officer Vivek Kundra, in his recently released 25 Point Implementation Plan to Reform Federal IT Management, acknowledges this reality.

One of the biggest factors driving DoD modernization efforts is too many systems that don't talk to each other. Creating a new set of disparate systems, however powerful and efficient, addresses only part of the problem. The degree of complexity within the DoD environment requires interoperable solutions that aggregate information at the enterprise level. That is what ERPs do.

The commercial world has demonstrated the effectiveness of commercial-off-the-shelf ERPs beyond any doubt. These solutions have become a way of life for most organizations that operate complex supply chains, handle huge volumes of financial data, and manage employee information for vast workforces. And they have yielded stunning results. Consider supply chain examples: 95 to 99 percent accuracy in execution, 50 to 75 percent less time from order to shipment, 30 to 60 percent reductions in inventory. If DoD, which spends over $170 billion each year on logistics, reduced its $90 billion inventory only 10 to 15 percent, it would save tens of billions of dollars.

DoD has made huge investments in COTS-based ERPs for its modernization efforts, but the programs invariably struggle. More often than not, they fall behind schedule. Implementation costs grow. Legacy systems - expensive to maintain - continue to operate. Return on investment recedes ever farther into the future.

Why the success gap?

Part of the answer is that the private sector operates outside the federal acquisition environment. Commercial ERP successes have taken a flexible, modular approach to implementation. Fortunately, Kundra's plan includes moving government acquisition strategy toward a similarly modular approach. This change will support three imperatives for success: (1) rolling out first those business capabilities that address the most urgent needs and greatest ROI; (2) involving the user community early and often, to promote a sense of ownership and to build a solution they will actually use; and (3) minimizing program risk with more frequent checkpoints, so that corrections can be made before huge overruns occur.

DoD also should be building on its own ERP successes. Rather than starting from scratch for every organization on the deployment list, DoD should begin with a working solution - one that has demonstrated end-to-end functionality - then identify critical gaps between that solution and the one desired, and address only the functions needed to fill those gaps.

Both DLA and the Army have ERPs, fully integrated into the DoD environment, that execute thousands of transactions every day in compliance with the 170,000-or-so laws, policies and regulations that govern ERPs within DoD. These systems would make excellent starting points for deployments to new organizations.

No matter what approach is taken, however, an ERP implementation will be difficult. Here are a few recommendations, based on extensive experience with government enterprise programs and with ERP implementations, both government and commercial:

• Remember that implementation is just the beginning of the transformation. With implementation, the machine has been built. People still must learn to use it.
• Maintain resources and funding well after deployment. Expect a productivity dip after go-live. Establish accountability for business performance improvements to ensure the new system is used as intended and the dip is short-lived.
• Change business processes to fit the software wherever possible. Customization is expensive and weakens the inherent integration of ERPs. Share data wherever possible and focus on a minimally sufficient solution.
• Leverage, leverage, leverage your investments. Harvest repeatable solutions and reuse them to support common lines of business. Focus on end-to-end interoperability and data aggregation.
• Establish governance to support transformation. It's not about IT. It's about changing the way your organization works - and your organization will resist. Leaders must address policy and cultural barriers. Accountability for performance must cross internal organizational lines.
• Develop in-house program management skills. The most successful ERP implementations are managed by the businesses they support. If your organization doesn't have the necessary skills, develop them.

DoD modernization efforts must continue. The Department is supporting a military stretched to its limits as it prosecutes multiple wars quite different from those past. The IT systems that support our forces must be both powerful and agile. ERP solutions can do the job. But acquisition strategy, like all other things military, must adapt to the challenge at hand.

Austin Yerks is president of Computer Science Corps.' defense group, which supports the Defense Department in ERP implementation.