An Enterprise Resource Planning (ERP) solution is an automated system using commercial off-the-shelf (COTS) software consisting of multiple, integrated functional modules that perform a variety of business-related tasks such as general ledger accounting, payroll, and supply chain management. The major vendors providing ERP solutions are Oracle, SAP and IBM.
For more than a decade, DOD has dominated GAO’s list of federal programs, including all of the current eight ERP programs, as high risk of fraud, waste, abuse, and mismanagement. The DOD systems environment that supports these functions can be characterized by (1) little standardization across the department, (2) multiple systems performing the same tasks, (3) the same data stored in multiple systems, and (4) the need for data to be entered manually into multiple systems.
The following ERP systems are currently in progress:
The General Fund Enterprise Business System (GFEBS), initiated in October 2004, is intended to support the Army’s standardized financial management and accounting practices.
The Navy Enterprise Resource Planning System (Navy ERP), initiated in July 2003, is intended to standardize the acquisition, financial, program management, maintenance, plant and wholesale supply, and workforce management capabilities at Navy commands.
The Global Combat Support System–Marine Corps (GCSS-MC) initiated in September 2003, is intended to provide the deployed warfighter with enhanced capabilities in the areas of warehousing, distribution, logistical planning, depot maintenance, and improved asset visibility.
The Defense Enterprise Accounting and Management System (DEAMS), initiated in August 2003, is intended to provide the Air Force the entire spectrum of financial management capabilities, including collections, commitments and obligations, cost accounting, general ledger, funds control, receipts and acceptance, accounts payable and disbursement, billing, and financial reporting for the general fund.
The Expeditionary Combat Support System (ECSS), initiated in January 2004, is intended to provide the Air Force a single, integrated logistics system—including transportation, supply, maintenance and repair, engineering and acquisition—for both the Air Force’s general and working capital funds.
The Defense Agencies Initiative (DAI), initiated in January 2007, is intended to modernize the defense agencies’ financial management processes by streamlining financial management capabilities and transforming the budget, finance, and accounting operations.
According to GAO six ERPs have experienced schedule delays ranging from 2 to 12 years, and five had incurred cost increases totaling an estimated $6.9 billion.(1) Four ERP programs—DEAMS, ECSS, GFEBS, and GCSS-Army—did not develop reliable schedule and cost estimates. None of these programs had developed a fully integrated master schedule that reflected all activities, including both government and contractor activities. The DOD IG reported that the Army estimated it will spend $2.4 billion on the implementation of GFEBS but had not identified all of the requirements and costs associated with the project. The Army also used unsupported and incomplete life-cycle cost estimates to determine $1.4 billion in cost savings and used an inappropriate methodology to determine the estimated $3.9 billion in benefits.
Even with extended periods of development, ERPs are missing interfaces needed to integrate them with existing systems while others, slated to replace legacy systems, are delivered without some of the functionalities performed by the systems they are expected to replace.
Consequently, DoD continues to operate largely in the duplicative, stove-piped environment its legacy systems as well as ERPs that are attempting to provide the military with innovative replacements.
(1) GAO-12-177T, Implementation of Business Systems Could Impact Audit Readiness Efforts