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Tuesday, November 07, 2006

Interior's ERP project in a bind

Inadequate systems, pending lawsuit could hinder modernization project

The Interior Department’s troubled project to build an enterprise resource planning system faces a series of stumbling blocks, including limited bandwidth among some of its geographically dispersed offices, a ragtag menagerie of legacy systems and a pending lawsuit from its previous contractor.

Department officials and vendor sources said Interior’s long-running Financial Business Modernization System project is at risk of turning into a fiasco unless the initiative is improved.

Additionally, Interior faces litigation from BearingPoint Inc. of McLean, Va., the systems integrator it ousted last year after about two years of work.

Interior officials plan to deploy the FBMS core financial system to two bureaus on Nov. 13, the Office of Surface Mining and the Minerals Management Service. And while officials expect those implementations will go well, they are concerned about what happens when the system is expanded.

The FBMS system relies on enterprise resource planning software from SAP America Inc. of Newtown Square, Pa. Interior plans to roll out SAP’s core financial system as well as its other integrated administrative tools designed to replace the department’s diverse array of legacy applications.

Hope Mentore-Smith, deputy CIO and chief technology officer of the Fish and Wildlife Service, described some of the problems during a recent lunch meeting of the Industry Advisory Committee in Washington.

She said the CTOs in the department’s bureaus had been working closely with the FBMS project management office “to identify some of the technical challenges that we may have [in deploying FBMS].”

Mentore-Smith said: “Unfortunately, DOI is still a very decentralized organization. We don’t have a lot of standard configurations in our bureaus for the workstations that we need to use this application. We all have different infrastructure in our bureaus to use this application.”

Mentore-Smith added that the range of technologies at different offices is quite broad. “I’ve got people on satellite, I’ve got people on dial-up. So if they need to use this application there are going to be some real, real challenges there,” she said.

That disparity makes it difficult to use apps such as FBMS.

An industry specialist in ERP projects noted that, “There is nothing unique about [Interior’s implementation of] the SAP system. If someone is concerned about a new solution taxing their infrastructure, they should have thought about that beforehand.”

The industry source said, “The Interior Department has an IT infrastructure that is a collection of a multitude of systems and products, and the SAP implementation will reduce the cost of that.”

On top of these problems, the FBMS project also faces a legal tangle resulting from Interior’s decision in mid-2005 to fire BearingPoint, the systems integrator that had been implementing the SAP software.

After Interior fired BearingPoint, the department conducted a competitive procurement to recruit a new systems integrator for FBMS, and chose IBM Corp. under a contract with one base year and five one-year options that could be worth about $100 million.

Industry analysts suggested that Interior could not have terminated BearingPoint’s contract on the grounds of “convenience,” because if the department had done so, it could not have immediately sought to recruit a replacement contractor.

The analysts noted that it is very likely in this case that Interior terminated the contract for “default,” and that BearingPoint’s litigation is a means of clearing its reputation in the field of providing systems integration services for ERP projects.

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