Air Force scraps massive ERP project after racking up $1B in costs

IDG News Service - The U.S. Air Force has decided to scrap a major ERP (enterprise resource planning) software project after spending US$1 billion, concluding that finishing it would cost far too much more money for too little gain.

Dubbed the Expeditionary Combat Support System (ECSS), the project has racked up $1.03 billion in costs since 2005, "and has not yielded any significant military capability," an Air Force spokesman said in an emailed statement Wednesday. "We estimate it would require an additional $1.1B for about a quarter of the original scope to continue and fielding would not be until 2020. The Air Force has concluded the ECSS program is no longer a viable option for meeting the FY17 Financial Improvement and Audit Readiness (FIAR) statutory requirement. Therefore, we are cancelling the program and moving forward with other options in order to meet both requirements."

The Air Force will instead need to use its "existing and modified logistics systems for 2017 audit compliance," the statement adds.

Air Force officials restructured the program three times within the past three years, and ultimately determined the military division "will be better served by developing an entirely new strategy versus revamping the ECSS system of record again," it states.

The system dates back to 2005, when Oracle won an $88.5 million software contract, securing the deal over rival SAP and other vendors. It was supposed to replace more than 200 legacy systems. CSC had served as a systems integrator on the project, until its contract was terminated in March, according to an Air Force spokesman. An Oracle spokeswoman declined comment on Wednesday.

CSC "completed work on the ECSS contract in April," a spokeswoman said in a statement. "The Air Force's recent ECSS program announcement has no impact on CSC or its employees."

ECSS' demise had been foreshadowed for some time, with Air Force officials publicly stating they were assessing their options, and others openly bemoaning the project's failings.

Military officials' decision to stop the project now drew a stinging rebuke from analyst Michael Krigsman, CEO of consulting firm Asuret and an expert on IT project failures.

"This situation raises more questions than answers," Krigsman said. "Why did it take the [Air Force] $1 billion and almost 10 years to realize this project is a disaster? What kind of planning process accepts a billion dollars of waste?"

Krigsman also questioned whether the Air Force will in fact have auditable books by 2017. "How can they achieve such a goal when this program is cancelled?" he said. Instead, it would be wise to revisit the topic in 2017, "at which time I suspect we will see another failure story accompanied by many excuses," Krigsman added.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com