DLA tinkers with its modernization

A Defense Logistics Agency program designed to provide faster access to military supply information will take four months longer to complete and will cost $36 million more than planned, said DLA officials.

The Business Systems Modernization project, originally set for completion in 2005, has been pushed back to fiscal 2006, said David Falvey, DLA's program executive officer. The delay will add $36 million to the program's cost, which originally was estimated at about $500 million.

BSM is designed to use commercial practices and enterprise resource planning technology to give the Defense Department better information about the availability of supplies when planning missions. Accenture is the main systems integrator on the program. Subcontractors are American Management Systems Inc., SAP America Inc. and Manugistics Group Inc.

"It's a realistic and reasonable amount of money when you consider the training and systems integration costs," Falvey said.

But not everyone is convinced.

Paul Brubaker, a partner in the consulting firm ICG Government and former deputy chief information officer at DOD, said most SAP government implementations, including a few with the Navy, have proven to be overly complicated and more difficult than expected.

"The limitations seem to point to the software," Brubaker said. "SAP has proven time and time again that they are not ready for prime time."

A pilot project — which involved about 390 users 100 supervisors and 170,000 line items — helped the agency determine what areas needed more work before moving forward.

Among those areas were data conversion, including the need to cleanse data from legacy systems, and stabilization of the training schedule, he said.

Allan Banghart, DLA's enterprise transformation director, said DLA now plans to introduce the program in two major releases, with gradual improvements, before it becomes fully operational in 2006. The program originally was to be rolled out in four stages.

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By the numbers: Business Systems Modernization

The Defense Logistics Agency's Business Systems Modernization effort is designed to improve business practices and replace aging systems with commercial off-the-shelf products. Currently in Release 1, the system eventually will have more than 4,500 users and an inventory of 3.5 million items.

As of July 1, the program had about 890 users and 170,000 line items, said Allan Banghart, DLA's enterprise transformation director.

Despite extending the implementation schedule four months into fiscal 2006, Banghart said the system already has:

99.9 percent system availability.

$195 million of inventory.

$281 million in customer sales to date in the current fiscal year.

206,000 sales orders filled.

14,000 vendor payments collected, worth $206 million.

32,000 goods receipts processed.