Air Force mulls changes as major ERP system project stumbles

IDG News Service - The U.S. Air Force is close to making decisions on the future of a sprawling Oracle ERP (enterprise-resource-planning) project that is supposed to remake the military branch's worldwide supply chain, according to a recently released document.

The Expeditionary Combat Support System project dates back to 2005, when Oracle won an $88.5 million software contract, beating out SAP and other rivals. It will replace 240 legacy systems and more than 500 interfaces.

"Unfortunately, the development and implementation of ECSS have lagged," Air Force Deputy Chief Management Officer David Tillotson said in testimony last week before the House Armed Services Committee.

Along with the Office of the Secretary of Defense, the Air Force is "now engaged in strategic reassessment of the overall program," Tillotson said.

The joint team "will make recommendations on the way ahead for this program ... by December 2011, and we will make appropriate program changes immediately following that review," Tillotson added. "Alternatives under consideration include building on the current ERP software, leveraging other service/Defense Agency solutions, and/or modifying legacy capability."

ECSS' total cost will be far more than the $88.5 million awarded to Oracle, given the amount of systems integration work required. Its total estimated lifecycle costs ballooned from an original $3 billion to $5.2 billion, according to a U.S. Government Accountability Office report released last year.

Its schedule has also morphed from three to four phases and it is now estimated to be fully deployed in 2016, "a slippage of at least four years," the GAO said.

An Air Force spokesman didn't immediately respond Tuesday to a request for comment on the project, including the question of whether scrapping it entirely is one outcome under consideration. Systems integrator CSC and Oracle did not respond to requests for comment.

Organizations don't embark on ERP upgrades in hopes of wasting money, however. Indeed, the Air Force expects billions in savings over the years once the ECSS project is complete.

But projects like ECSS are disasters in waiting, according to one expert.

"The size and scope of government IT projects is staggering and failure rates are high," said Michael Krigsman, CEO of Asuret, a consulting firm that helps companies run successful IT implementations. "Then you take massive projects combined with the intense politics and information silos in the government," as well as the politics of dealing with various enterprise vendors during the procurement phase, he added.

However, while the expected costs of the project have nearly doubled, "merely having an increased cost does not in and of itself mean that it's a bad project," he said. "You have to look at what the cost increase is, and the reason for that cost increase. Did the project change midstream because there was some substantial change in scope?"