Despite billions invested in DoD ERP systems, few financial managers see reduction in workload

The Defense Department has spent well over a decade and tens of billions of dollars to buy enterprise resource planning (ERP) systems with the hope that they would help the military adopt modern, automated business processes and pave the way to financial auditability. But a strikingly small number of DoD financial managers think the systems have done anything to make their jobs easier.

The finding is part of an annual survey and report by the American Society of Military Comptrollers and Grant Thornton. Only 20 percent of the Defense financial workforce said the ERPs had reduced their workload. Another 20 percent said they had made no difference, and 15 percent said they’d actually made their lives more complicated than working with the decades-old legacy systems the ERPS are replacing.

This year’s report represents the ninth year in a row in which researchers have surveyed hundreds of rank-and-file and senior executive members of the Pentagon’s financial management community. Aside from IT modernization, it found at least three other common themes that repeated themselves year-after-year.

Among the most obvious: comptrollers have become fed up with budget uncertainty after having to navigate through eight consecutive years of continuing resolutions, government shutdowns and limitations imposed by the Budget Control Act. As one anonymous respondent put it: “We’re great at building a budget and manpower models based on forecast costs and requirements,” but budgets have had to be “modified continually in response to lower than expected levels of actual receipt of funds.”

- FederalNewsRadio.com
https://shar.es/1O4IMB via @fednewsradio

HUD MARKS A MAJOR SHARED SERVICES MILESTONE WITH FINANCIAL SERVICES MIGRATION

Department’s New Core Project is on a path to become first cabinet-level agency to fully migrate financial systems
WASHINGTON, D.C. – October 21, 2015 – (RealEstateRama) — Today, October 20, 2015, the U.S. Department of Housing and Urban Development (HUD) announces another major milestone in transitioning HUD’s financial management and procurement operations to the U.S. Department of Treasury’s Administrative Resource Center (ARC).  This milestone marks the shift of financial and procurement management functions from HUD to ARC. Although significant work remains, HUD is the first cabinet-level agency to move core financial systems to a Federal Shared Service Provider.In 2010, HUD reviewed its aging financial systems, and decided to transition from costly legacy systems that did not provide the necessary scale and breadth required to meet today’s financial management needs. 

This collaborative relationship between HUD and Treasury is the result of the Federal IT Shared Services Strategy. In May 2012, the Office of Management & Budget (OMB) announced the strategy to agencies for identifying and operating shared services for commodity, support, and mission IT functions. That strategy recommended a phased approach for implementing shared services, (e.g., “crawl-walk-run”) beginning with intra-agency commodity IT, to allow agencies to gain proficiency, then evolving to support and mission IT areas.

The transformative project has made significant progress to date. In October 2014, HUD began its phased implementation, migrating travel functions, and in February 2015, its time and attendance functions. Together with the most recent payment processing milestones, HUD’s New Core project continues to enhance financial transparency and analytical capabilities, increase regulatory compliance, and improve efficiency through the transition of HUD’s core financials and key administrative systems and services. 


### 
About HUD:

HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business. More information about HUD and its programs is available on the Internet at www.hud.govand http://espanol.hud.gov. You can also follow HUD on twitter @HUDgov, on Facebook at  www.facebook.com/HUD, or sign up for news alerts on HUD’s News Listserv. 

About Treasury’s Administrative Resource Center (ARC):  

ARC helps customers, like HUD, focus on their mission by delivering responsive, customer-focused, cost-effective administrative support to  other federal agencies. The reimbursable administrative services that ARC provides include financial management, human resources, procurement, travel and relocation, and information technology services.  For more information please visit: our website at https://fiscal.treas.gov. 

Jereon Brown 202-708-0685 
http://www.hud.gov/news/index.cfm

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Col. Patrick Burden takes the Army's financial ERP into a new phase

As project manager, Col. Patrick Burden oversees the operations of one of the military’s largest enterprise resource planning (ERP) programs, the General Fund Enterprise Business System. Designed to help the Army track finances, assets and accounting, the $1.8 billion program represents a significant step forward for Defense Department ERPs, particularly as the Pentagon drives toward audit-readiness. 

In a recent interview with Federal Times Senior Writer Amber Corrin, Col. Burden outlined GFEBS’ top goals, its evolution over time and where the program is headed as part of broader DoD financial management reform.

-FederalTimes.com
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Air Force's progress raises DoD's confidence toward audit readiness

Air Force officials say the service is making up the most ground of any of the military services as part of the push to finally get the Defense Department to successfully close its financial books.

But government auditors say this entire Pentagon effort is at risk because of shortcomings in the services' technology systems.

Jamie Morin, the assistant secretary of the Air Force for financial management and comptroller, said he is more optimistic than ever before because the service put money and people behind the problem.

Morin said during a hearing Tuesday before the Senate Homeland Security and Governmental Affairs Committee that there is an increased likelihood that the Air Force will meet the 2017 deadline to have its financial statements fully auditable and the September deadline of being able to assert audit readiness for its schedule of budgetary activity.

This is a major change since last October when Morin told Senate Armed Services Committee members that the Air Force would struggle to meet the 2014 deadline, and 2017 wasn't going to be any easier.

But over the last six months, the Air Force has accomplished specific tasks one- by-one to meet the congressionally mandated deadlines.

Each of the services and DoD on the whole remain at different points in the process to achieve audit readiness. DoD is the only federal department that can't successfully account for its spending to meet third-party auditors requirements. The Marines Corps in fiscal 2012 received an unqualified opinion on its schedule of budgetary activity (SBA) — the first DoD service ever to receive that result.

Robert Hale, the out-going DoD comptroller, said he expects the Marines Corps to earn the same result for 2013.

While each of the services is at different points, the one common major challenge the Army, Navy, Air Force and the Office of the Secretary of Defense all face is updating and integrating their technology software, specifically the enterprise resources planning (ERP) systems, to meet the audit readiness requirements.

Take the Air Force as one example. It's still using a system from 1968.

Morin said the Defense Enterprise Accounting Management System (DEAMS), is under development to replace that 40-year-old system.

He said the service received a positive assessment from the Air Force Operational Test and Evaluation Center on DEAMS as currently deployed at more than six bases.

The Air Force plans to complete DEAMS deployment to all Air Mobility Command in the next couple of weeks and then more bases by Oct. 1. Morin said the Air Force also is on track to complete deployment Air Force-wide before the full financial statement audits begin.

The Army, on the other hand, is in better shape.

Robert Speer, the Army's acting assistant secretary for financial management and comptroller, said the general fund enterprise business system (GFEBs) is used by 53,000 service members and civilians at 200 locations worldwide.

Sen. Tom Coburn (R-Okla.), the ranking member of the committee, said in no uncertain terms if the ERPs don't work, this effort is in real trouble. Coburn has asked both the IG and GAO to continue looking at DoD's ERP efforts.

-Jason Miller, FederalNewsRadio.com
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How the Air Force blew $1 billion on a dud system

The Air Force’s controller, Jamie Morin, admitted publicly in April that the service spent seven years and $1 billion on a logistics management system that had “negligible” capability.

But that’s not what drove Air Force leaders to finally cancel the Expeditionary Combat Support System project this month.

And it wasn’t because technical glitches forced the Air Force to repeatedly scale back expectations for the new system — from replacing 240 legacy systems, as originally planned, to just 12.

In the end, officials canceled ECSS because continuing it would have cost another $1 billion to gain a quarter of the capability it was originally supposed to have, with fielding delayed until 2020.

Johnson attributed the project’s extensive problems to an array of factors.

The project became plagued with technical glitches and delays.

The system had once been touted as revolutionizing the management of parts and equipment. The ECSS’ success was a critical component in the Defense Department’s strategy for meeting a congressional deadline for having audit-worthy books by 2017.

The ECSS was among almost a dozen “enterprise resource planning” systems undertaken by the Defense Department and the military services to modernize management of logistics, finances and other business operations. The systems are supposed to replace numerous smaller-scale legacy systems that are decades old in some cases.

But while the ECSS is the only one that has been canceled so far, a half-dozen other enterprise systems are years behind schedule and a combined $8 billion over their original budgets, the Defense Department’s inspector general said in a July report. The delays not only undercut anticipated cost savings, but also risk putting the department behind in reaching the 2017 goal to clean up its books, the IG said.

Lawmakers have already asked the Air Force for a briefing on the ECSS cancellation, according to an aide to Sen. James Inhofe, R-Okla., who is in line to become the top Republican on the Senate Armed Services Committee next year.

-Sean Reilly, FederalTimes.com
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IG: DoD may miss audit deadlines because of delays in system upgrades

The Defense Department could miss deadlines for improving its financial audits because of delays in six modernization projects affecting financial management, logistics and other areas, the agency’s inspector general said in a report released Monday.


Those projects — known as enterprise resource planning systems — have collectively experienced $8 billion in cost overruns and schedule delays of a year-and-a-half or more in development and implementation, the report said (PDF).

Besides cutting into hoped-for cost savings, the delays increase the odds that the Pentagon will not meet a statutory September 2017 target for passing a full financial audit. Defense Secretary Leon Panetta’s 2014 goal of successfully completing a budget audit — one of four steps involved in meeting the full audit-readiness goal — is also at growing risk, the report said.


-Sean Reilly, FederalTimes.com
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DoD budget planning systems plagued by inefficiencies

The Defense Department's quest to be auditable in 2017 relies on using Enterprise Resource Planning systems, or ERPs, to perform tasks like accounting and supply chain management.


But according to a GAO report released last week, "To date, however, DOD's ERP implementation has been impaired by delays, cost increases, failures in delivering the necessary functionality, and a lack of compliance with required standards."

Asif Khan, director of Financial Management and Assurance Issues at the Government Accountability Office, has been looking at the ERPs at the Pentagon.
The GAO found six of the 10 ERPs that DoD identified as critical had "time slippages" of between two to 12 years, Khan said. And none of the programs had a master schedule.


A big hang-up for DoD is its collection of 2,000 legacy systems. These 10 ERPs are expected to replace more than 500 legacy systems.

-Jolie Lee, FederalNewsRadio.com
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DoD ERP implementation woes include feeder systems

Worries about the Defense Department's implementation of enterprise resource planning systems increasingly encompasses data quality from feeder systems.
The Army has hired an independent auditor to examine its financial management ERP, the General Fund Enterprise Business System, for whether "we are using it in a way to include the feeder systems that's auditable," said Robert Hale, the DoD comptroller, during a July 27 Senate hearing.

Hale said plans exist to do a similar check with the Navy "in the context of a major defense acquisition program" and later with the Air Force ERP, the Defense Enterprise Accounting and Management System.

Jamie Morin, the Air Force comptroller, told the committee that DEAMS detects bad data from feeder systems more readily than legacy systems. DEAMS "told us thousands of transactions were not meeting standards, which instantly brought the level of management attention to fix the problem," he said.

Meanwhile, when parts deemed worth saving from the to-be-shuttered Business Transformation Agency are moved into the office of the Defense Department deputy chief management officer, the modernized financial system the BTA has been using will go on hiatus for a while, DCMO Elizabeth McGrath said.

The financial system, the Defense Agencies Initiative, would be an anomaly among secretary of defense offices were the DCMO to start utilizing it immediately, McGrath said before the subcommittee.

But the plan is not to shutter DAI, McGrath said. "We're moving to DAI. We're not doing it today, because I'm a component of the overall OSD budget," she added.

-David Perera, FierceGovernmentIT.com
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Biggest ERP Failures of 2010

No year in the IT industry would be complete without a number of high-profile ERP (enterprise resource planning) project failures, ones that burn through mountains of cash, bring company operations to a standstill, generate bad publicity for vendors and toss careers in the trash.


There's no one reason why ERP projects run off the rails. In fact, you can equate a typical project to a three-legged stool, with the customer, vendor and systems integrator each serving as a leg.

Customers have to plan well, budget enough money for training and evolve their usual way of working. Vendors must deliver software that functions properly and matches up well with a customer's business processes. And implementation teams have to set the right expectations, meet project milestones and avoid waste.

If one or more of these "legs" doesn't hold up, things can get ugly.

-Chris Kanaracus, PCWorld.com
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CACI and Oracle Team To Provide Functionality for Federal Procurement Contracts Management

CACI and Oracle announced today that the two companies have entered into an agreement to jointly develop a Contract Lifecycle Management solution that helps federal organizations author, execute, and manage procurement contracts in compliance with the Federal Acquisition Regulation (FAR), Defense Federal Acquisition Regulation Supplement (DFARS), and other agency supplements. CACI will provide subject matter expertise gained from years of experience designing and implementing contract management systems for the Department of Defense and federal civilian agencies to help Oracle enhance the functionality of its commercial-off-the-shelf (COTS) Oracle(R) E-Business Suite. This functionality is expected to support both simplified and complex acquisitions and be integrated with Oracle's procurement and financial management applications to provide a complete procure-to-pay process that meets government compliance mandates and transforms federal contract management.

Oracle Contract Lifecycle Management is an enterprise solution that helps create and enforce better contracts by enabling standardized contract processes, reduced time-to-contract, and contract compliance. The solution builds on existing procurement and contract lifecycle management functionality within Oracle E-Business Suite, providing capabilities to help significantly cut supply management costs for federal customers by integrating requisitioning, sourcing, purchasing, and supplier collaboration with business intelligence. It provides contract professionals with capabilities to author, approve, sign, monitor, track, modify, renew, and close out contracts.

CACI will leverage its experience gained from over 30 years in the federal procurement space to transition the current user community from existing solutions to Oracle's enhanced contract management offering. CACI's depth and breadth of capabilities stem from the development and implementation of widely used acquisition systems and contracting operations that encompass the full spectrum of procurement, ranging from shopping cart buys to complex acquisition management. In addition, the company works with federal customers as a systems integrator to achieve consolidation of acquisition, financial, and other business systems into enterprise resource planning (ERP)-centric models through its broad-based implementation services. The company also specializes in the development and delivery of end-user training programs that integrate agency procurement business processes with automated acquisition applications.

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DOD works communication issues for transformation

Communications among people, not technology, is the key to the successful transformation of Defense Department’s business systems.

“The challenge is that we have multiple systems being developed in parallel,” said Prashant Gaur, director of enterprise integration at the Defense Business Transformation Agency (BTA) at a breakfast event sponsored by Federal Sources. “How do we move them together?”

The integration of financial and logistics systems is a major goal of DOD business transformation, Gaur said, as is the consolidation and rationalization of redundant financial, logistics and human resources systems.

“The Enterprise Services Group is where it all comes together,” he added. “Communications is the key.”

Gaur said DOD’s technology model is moving toward a service-oriented architecture characterized by loosely coupled and reusable application components.

But, he added, “having lived through [enterprise resource planning] and business intelligence implementations, the issues and challenges that make these things successful remain the same: governance and data standards. Without them, you can have the best technology but it will not work. You can’t have shared services without the systems understanding the same language.”

-Peter Buxbaum, FCW.com

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DFAS Awards Financial Integrated Systems Services (DFISS III)

The contract was awarded to CSC, EDS, Lockheed Martin and Booz Allen Hamilton on April 24, 2007 for a total value of $475 million to fulfill the Defense Finance and Accounting Service (DFAS) Financial Systems Organization's (FSO) continuing requirement for services to support more than 200 automated information systems in the areas of finance, accounting, payroll, transportation, logistics, personnel and management.

Navy Awards SAP ERP SeaPort Contract

The Navy has awarded a task order worth up to $22 million over three years to Science Applications International Corp. for enterprise resource planning work under the SeaPort contract.

SAIC will provide support to the Navy Enterprise Resource Planning Program Office during the deployment of the Navy Enterprise Resource Planning Systems, Applications and Products common business solution.

The Navy’s Space and Naval Warfare Center in Charleston, S.C., issued the order.

- Michael Hardy, WashingtonTechnology.com

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World's Collide

Enterprise resource planning and service-oriented architecture are coming together. Three of the major software vendors of ERP software are moving their own platforms to ones that support Web services.

Oracle Corp. is rolling out its Fusion platform, which updates the PeopleSoft HR software with Web services interfaces. Already, its Fusion Middleware allows users to build their own composites, or applications that reuse already-existing functionality in other programs, said Wayne Bobby, vice president for solutions for finance and administration at Oracle Federal.

Likewise, SAP AG, based in Waldorf, Germany, has migrated its MySAP ERP software to a new Web services-based platform called Netweaver.

It is now exposing all the core functionality as Web services. So far, more than 1,500 functions are available. “We are going to expose every single element of our solution as a Web service,” said David Ditzel, director of public services technology solutions for the company.

In a similar move, CGI Inc. of Montreal has migrated its federal ERP software, called Momentum, to a Java 2 Enterprise Edition-based platform, allowing developers to easily hook their own J2EE applications into CGI’s software, said Heidi Green, head of CGI's state and local ERP practice, based in Fairfax, Va.

ERP systems traditionally are known as large, monolithic applications that tend to be difficult to install, maintain and upgrade. SOA promises to make software more responsive, namely by making it easy to reconfigure to meet changing needs.

In many ways, the federal government has tried to simplify ERP deployment by breaking the job into smaller chunks. For instance, when the Social Security Administration wrote the business case for a new core financial-management system in 2001, it broke fiscal duties into discrete functionalities, following Clinger-Cohen Act tenets to mitigate risk, said Tom Bianco, who manages the Social Security Online Accounting and Reporting System.

SSA’s system uses components of the Oracle Federal Financials package, including the general ledger, accounts payable, accounts receivable and purchasing modules.

With Web services-based interfaces, the modular approach could now become more fine-grained, advocates said.

As the Organization for the Advancement of Structured Information Standards said last summer, the SOA Reference Model is “a paradigm for organizing and utilizing distributed capabilities that may be under the control of different ownership domains.”

By reusing capabilities, theorists say, organizations could make better use of available resources or meet changing needs more quickly.

- Jacob Jackson, WashingtonTechnology.com

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Data management master class

Master Data Management, or MDM, is touted as the silver bullet for ridding companies of inconsistent and untrustworthy business data. But does its real value lie in being an enabler of SOA?

MDM isn't new by any means. So why do proponents think it will fare better than past approaches? There are several reasons. First, MDM works by establishing master data rather than by focusing on operational (transactional) data. Second, MDM is an active approach to managing the entire information lifecycle, allowing companies to define new data, monitor exceptions as the data changes and rationalise and synchronise data as it is updated.

Last, and perhaps most promising of all, is that MDM takes a services-based approach that is in line with modern service-oriented architecture (SOA) initiatives. In other words, it treats data as another enterprise service in an SOA. Some refer to it as the 'fourth layer' of an IT architecture that sits between data and the business logic and presentation layers.

Master data management has gained prominence in recent years because of a highly fragmented application landscape caused by lines of business applications optimised for specific functions or departments. Having these multiple ERP and CRM instances and home-grown IT systems creates data silos that make it difficult for a business to get a single authoritative source against which all other data is compared, or, in MDM parlance, a 'golden record'.

"The problem stems from the fact that companies don't have all their business data in one place," notes Cliff Longman, chief technology officer at data warehousing and MDM firm Kalido.

Longman ultimately blames a lack of strategic thinking about data as one of the root causes of the problem. "Companies didn't treat data as an asset," he says. "There was no holistic discipline or training for managing it like financial assets." For instance, financial accounts software supports a consolidation process for a unified chart of accounts, mapped to multiple financial systems for integrated reporting and performance management. So why aren't other types of business data treated with the same level of respect?

Clearly having a shared and flexible IT architecture that works with consistent, accurate and up-to-date master data is vital. For that reason many point to MDM as a seminal development for IT setting the goal of moving towards SOA.

The MDM approach seems to sit nicely with how SOAs are supposed to work - ie by decoupling master data from business applications. The real promise of SOA is that you don't need to know in advance which applications will be talking to each other. But with that paradigm it's critical to first agree on common data definitions.

Longman argues that one can't have SOA without having an enterprise data service. "MDM inherently creates that data service component within an enterprise SOA, actively synchronising clean and consistent data to applications as an on-demand service," he says.

- Madan Sheina , CBRonline.com

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ERP's learning curve

"Agencies taking on enterprise resource management projects often find themselves in over their heads, and they are are beginning to turn to government centers of excellence for help.

Doug Bourgeois, director of the Interior Department's National Business Center, knows the drill. 'Invariably,' he said, 'the question that such agencies ask when they approach us is, 'This is bigger and more complex than we thought it was going to be. Can you take it over for us? Can you manage it? Can you host it for us?' NBC provides ERP services to 'between 20 and 30 agencies,' Bourgeois said, several of which have had troubled ERP projects and asked him for help.

He said that, in several cases, he has had to turn down the appeals. Even though his center runs more than 600 servers, taking over the ERP functions of some agencies could involve adding as many as 200 more.

ERP systems form the back-office sinews of federal agencies.

Properly functioning ERP systems provide agency leaders with accurate, detailed financial data quickly, but faulty systems invite management disarray - and punishment by overseers in the Office of Management and Budget, Congress and other agencies. "