DLA modernization program delayed

A limited deployment of the Defense Logistics Agency's $500 million Business Systems Modernization (BSM) program is taking longer than expected to "stabilize," forcing the agency to delay the expected 2005 completion date by about six months, according to DLA officials.

BSM is the cornerstone of the agency's transformation initiative and is designed to improve business practices and replace aging legacy systems with commercial off-the-shelf (COTS) products. The enterprise resource planning (ERP) solution is designed to help the agency better support military readiness through rapid access to logistics information. It uses a COTS system for supply chain management.

DLA, which provides worldwide combat logistics support for the Pentagon, began a limited fielding, or "concept demonstration," last summer when it began processing customer orders for selected items using BSM's tools and re-engineered practices, said David Falvey, program executive officer for DLA information operations.

Rumors surrounding the program had its completion date being delayed by a full year, but Falvey, along with Allen Banghart, DLA enterprise transformation director, said that while the completion date "requires some adjustment, it has not been pushed back a year." "Our concept demonstration [limited deployment], which commenced July 31, 2002, has taken a bit more time to stabilize than anticipated," Falvey and Banghart told FCW in a joint e-mail. "Additionally, we have learned a great deal over the past seven months about rolling out BSM in a manner that appropriately mitigates risk, ensures success and strikes the right balance between the myriad other factors impacting an ERP program of this size and complexity...not the least of which are cost, schedule and system capability." The limited deployment includes 390 users and 100 supervisors (about 4 percent of the targeted user population) 170,000 line items (also about 4 percent of the total) and 80 percent functionality. It "was designed to teach us how to successfully deliver this incredibly complex ERP in the uncharted waters of Defense logistics," the two men said. "We learned the lessons the concept demo promised, and our schedule adjustments realistically reflect the time required to bring 4.6 million line items and 4,000-plus personnel into the BSM environment."

The DLA officials said the agency's senior leadership is close to completing any required adjustments to the roll-out schedule and will present that plan to Navy Vice Adm. Keith Lippert, DLA director, by the middle of the month for further adjustments and approval.

"While we have not reached the end of those discussions, it appears that some capabilities will be delivered earlier than originally planned, and full functionality in a demonstration environment will be achieved in March '04," Falvey and Banghart said. "We will commence the full-scale rollout of materiel and people into the fully functional BSM ERP in mid-summer '04. At the same time, we anticipate the last of DLA's 4.6 million line items will not be folded into BSM until 120 to 180 days into [fiscal 2006] — four to six months after our original wrap-up date." In an interview last year, Falvey said DLA and its systems integrator partner, Accenture, stayed on schedule and within budget to field the first release. American Management Systems Inc., SAP America Inc. and Manugistics Group Inc. also are involved in BSM.

A spokesman for Accenture refused to comment and deferred all questions to DLA.