A recipe for success: ERP by the slice

Enterprise resource planning software has never been an easy sell in the government.

This is especially true in the case of the software's "maximum vision" mode, in which one big ERP system would manage most of an agency's basic operations, from procurement and finances to logistics and human resources. Vendors have pitched this solution to the federal government, but implementing an all-in-one package, not to mention the organizational changes required, is not a realistic option for most agencies.

But that's not to say that government officials have been totally uninterested in ERP. Rather, many agencies are learning that slicing off parts of ERP packages, such as financial management capabilities, meets their needs quite well. Another area attracting interest is finding better ways to manage an agency's human resources systems.

For example, the U.S. Marine Corps just finished deploying a multimillion-dollar system that updates its human resources management system, and the Defense Department recently launched an ambitious $50 million project that will integrate the medical personnel systems for the three military services, boosting oversight and efficiency.

Typical of ERP government deployments, a main challenge for the implementation teams is adapting the software to the special requirements of the government while minimizing the number of costly changes to the commercial products.

Three Into One

The Defense Medical Human Resources System-Internet (DMHRS-i), to be completed by 2005 at a cost of $50 million, is using Oracle Corp.'s Oracle E-Business Suite 11i to integrate and enable Web applications from the Army, Navy and Air Force.

Replacing service-unique systems, DMHRS-i will manage human resources for about 150,000 medical personnel from the services' entire military and civilian workforce, said Edward Welsh, project director for DMHRS-i.

The system will standardize human resources management and eliminate the need "to maintain service-unique systems," providing immediate cost savings and improved data quality, Welsh said.

The consolidation of personnel information should also improve medical service performance.

"It will help us put the person with the right skills at the right place at the right time," said Navy Capt. Ben Long, program manager of the Resources Information Technology Program Office (RITPO), which is part of the Military Sealift Command in Washington, D.C.

Command officials will have easy access to information such as training and assignment history of new employees to enable advance planning, added Michael Snyder, principal deputy program manager of RITPO.

DMHRS-i will also provide better oversight of the services' human resources operations, Long said. With the current system, "it is hard to do any analysis on HR programs," which accounted for 60 percent of the Defense Health Plan budget, or about $12 billion, last year.

These benefits will come only after an extensive implementation process, which is being managed by the Office of the Assistant Secretary of Defense for Health Affairs, Tricare Management Activity and RITPO with assistance from Oracle, Science Applications International Corp., Planned Systems International and ASM Research Inc., the prime integration contractor.

The Oracle product was selected from a field of competitors that included off-the-shelf software from PeopleSoft Inc., enterprise software from Lawson Software and systems built and maintained by the government. Oracle got the nod because it offered a completely integrated application and database, Welsh said, adding that Oracle technologies are widely used in DOD and have achieved numerous security certificates.

The system is using core human resources management functions from the Oracle 11i suite, such as manpower and training, along with a self-service tool that allows users to electronically update personal information, submit timesheets and "sign up online for classes offered by their activity," Long said.

First Things First

For now, DMHRS-i is not using the logistics or the financial tools included in the suite, Welsh said.

For the task at hand, the human resources applications have proved flexible enough to allow for modification while still meeting the program stipulation of zero customization. "It is not that users haven't requested changes in functionality that would lead to customization," Welsh said.

Customization can introduce several complications to a project, said Ray Bjorklund, vice president of consulting services at Federal Sources Inc., a market research firm. There are always "risks the vendors will screw up the customizations," he said. When it comes to updating the customization, the customer "will have to spend money again instead of getting the next commercial release."

This stipulation, however, can spark the type of cultural resistance that often accompanies commercial off-the-shelf implementations.

A key challenge in deploying an ERP "is getting people to rethink how things are done," said John Hagerty, vice president of enterprise management service at AMR Research Inc.

"When you are working with three services, you are dealing with parochial interests and perspectives," Long said. "They each have their view of how the world should look, and trying to build consensus on common business rules has been a real challenge."

On other fronts, the integration team is working closely with the Defense Information Systems Agency to ensure that the system has sufficient bandwidth, Welsh said.

DMHRS-i, which has prototypes at three test sites, will eventually be deployed to about 600 sites. System rollout could begin in January and be completed in about 18 to 24 months, according to Long.

In the military, the pace of a program is critical because of routine changes in command structure, said Mark Johnson, group vice president of Oracle's federal division.

The DMHRS-i program was designed "not to spend six years nailing down requirements [but] to get something out there," Long said.

"We're trying to get an 80 percent solution out there and then build on that," he said. "It is better to have less performance and get a stable platform out there and demonstrate that you can effectively and efficiently get things to market in a timely manner."

McKenna is a freelance writer based in the San Francisco Bay area.