April 02, 2012, 4:04 PM — Public-sector ERP (enterprise resource planning) software projects historically have experienced some of the industry's most dramatic cost overruns and delays, a fact that a new report by the U.S. Government Accountability Office brings into sharp relief.
The GAO report, issued March 30, provides updates on the status of ongoing ERP projects by the U.S. Department of Defense and is a follow-up to an October 2010 GAO report on military ERP systems. DoD officials provided updates for the new report, describing the systems' state as of Dec. 31, according to the GAO. The information wasn't independently validated by GAO officials.
Many of the projects are years behind schedule and significantly over budget, including one that is expected to rack up nearly 10 times its initial cost, according to the report.
That effort, the Marine Corps' Global Combat Support System, "is intended to provide the deployed warfighter with enhanced capabilities in the areas of warehousing, distribution, logistical planning, depot maintenance and improved asset visibility," according to the GAO's report.
It was started in September 2003 with a planned "full deployment" date of November 2009, but now there is no such date scheduled, the report states.
GCSS originally had a cost estimate of US$126 million, but that has ballooned to $1.1 billion, according to the report.
"The increase in the life-cycle cost estimate is primarily attributed to the difficulty of developing a technical solution for GCSS-MC use in a deployed environment and changes in DOD logistics policies that resulted in fielding additional requirements," it states.
Meanwhile, the Navy Enterprise Resource Planning System project was started in July 2003 with a planned completion date of fiscal 2011, according to the report. But now full deployment is set for August 2013, and estimated costs are US$2.7 billion, up from the original $1.9 billion.
Navy ERP program officials blamed those rising costs on "(1) the 2 year schedule slippage; (2) an increase in demand for on-site support and stabilization activities; and (3) the addition of new compliance requirements, such as evolving business enterprise architecture requirements," according to the report.
The Air Force's Expeditionary Combat Support System, which is supposed to modernize the organization's supply chain and will replace more than 200 legacy systems, is expected to be done in September 2017 instead of this fiscal year, the report adds.
Estimated costs have gone from US$3 billion to $5.2 billion. ECSS officials recently announced that two pilot programs would be scrapped and that the overall project would undergo a restructuring.