NASA's SAP Launch Drags

Inspector general blasts the $116M financial systems upgrade

A major upgrade to the core financial systems of the National Aeronautics and Space Administration has encountered turbulence from end users and the agency's inspector general before getting far off the ground.

The $116 million financials upgrade is the cornerstone of a larger project, dubbed the Integrated Enterprise Management Program, which is expected to cost $1.1 billion. The IEMP uses R/3 financial applications from SAP AG, and when completed, it's expected to improve financial, contractual, asset management and other procedures throughout NASA.

However, critics claim that five years into the estimated eight-year project, the IEMP has suffered from end-user resistance, data integration problems and a lack of oversight.

Last month, NASA's Office of the Inspector General found flaws in the management of IEMP contracts and demanded improvement. "Despite the criticality of IEMP to the agency, NASA's monitoring of the contracts was informal and inadequate to ensure that IEMP products and services were procured in a satisfactory, cost-effective manner," according to the report.

For example, the report stated that as of September 2004, five of 14 SAP-related projects, worth $16.5 million, were for services not even officially funded. The inspector general's office warned that the lack of centralized oversight could impede NASA's ability to manage the contracts, and it urged that a single set of vendor policies be established.

End-User Concerns

End users of the software have concerns about the project, said Lee Stone, vice president of legislative affairs for NASA's union, the International Federation of Professional and Technical Engineers of the AFL-CIO and the Canadian Labour Congress. The organization has been critical of the IEMP and believes that the biggest problem is the way it imposes complex accounting processes, he said.

There are also various technical problems, including integration gaps between SAP and other applications, such as NASA's workforce management system. The SAP software can be hard to use, and it's not clear that it's boosting productivity, Stone said.

"It remains unlikely that NASA will achieve a clean audit again this year, despite the fact that SAP went live back in October of 2003," he claimed.

Patrick Ciganer, the program's executive officer, didn't deny the project's complexity and the technical and personnel-related challenges. "It's been very tough, because we were an early [federal] adopter and we've been under a lot of scrutiny by oversight organizations. There have been a lot of challenges," he said.

Ciganer said that the inspector general's criticisms were largely related to procurement and that those issues haven't affected the technology. He also said that since the core financials system went live in 2003, it has generally worked as anticipated.

However, Ciganer noted, the system did require some work-arounds. It replaced 150 custom-built applications that supported NASA's various organizations, he said, and the data-conversion process was extremely difficult.

Ciganer also acknowledged that there was some end-user resistance. "This is NASA. We have very smart people. You can't just say, 'It will be better for you,' " he said. For its part, SAP said in a statement that the overall project is a challenging one, but "in the long run NASA will benefit by becoming a more efficient agency." SAP will continue to work with NASA to "make this process design a success," it said.

NASA’s Costly Liftoff


RUNS ALL 10 NASA facilities


BY JANUARY 2005 82 IEMP contracts worth $630M awarded to 29 firms

FINAL PRICE TAG: $1 billion-plus

Source: NASA


Copyright © 2006 IDG Communications, Inc.

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