GAO offers Navy some praise on ERP controls

The Navy has made substantial progress in implementing some management controls on its multi-year Enterprise Resource Planning (ERP) project, according to the Government Accountability Office. However, continuing weaknesses in others have contributed to a two-year delay in the program and could produce further delays and even larger cost overruns, GAO also said in a recent report.The ERP, the Navy’s integrated business management system, which will eventually cover 88,000 users when completed, achieved initial operating capability May 12. The initial version, Release 1.0, is scheduled to be installed at the Space and Naval Warfare Systems Command in October.The next version, Release 1.1, will combine the operations of retail and wholesale support for the Navy, and should be implemented at the Naval Supply Systems Command in February next year.To the Navy’s credit, the control associated with managing systems requirements is being effectively developed, and important aspects of other controls have been at least partially implemented, including those involved with justifying investment and managing risks, GAO said.However, the bulk of what’s needed to effectively measure the program’s progress is still not in place,  GAO found.As an example, GAO said important practices that use historical data from comparable programs to estimate reliable costs and timelines were not employed on the ERP program. Also, while proactive risk management controls are being used, mitigation strategies for significant risks such as those associated with data conversion and change management  have not been effectively implemented, it said.These weaknesses have already contributed to a more than two-year schedule delay and cost overruns of nearly $600 million, GAO said, and will probably contribute to more if they are not corrected.The Defense Department either concurred or partially concurred with all of GAO’s recommendations for fixing the problems. Paul Brinkley, deputy undersecretary of Defense for business transformation, said DOD has already taken steps to deal with some of GAO’s concerns.