Army comes to attention on biz apps

'Our systems don't let us provide timely, reliable financial information,' says the Army's John Argodale. 'Our information is dated.' None of the service's core financial systems comply with the CFO Act.

Olivier Douliery

The Army needs help.

Faced with wrangling its financial systems into a coherent structure, it's turned to integrators for a hand with an effort that has so far eluded the service.

The Army plans to release a request for quotations this month for a financial system that can clean up the service's accounting and finance practices.

Dubbed the General Fund Enterprise Business System, the Army effort got approval as a pilot from Defense Department brass last fall. Ultimately, the revamped Army accounting and financial system will come under the aegis of DOD's Business Management Modernization Program.

The broader Defense initiative seeks to consolidate more than 2,300 business systems. DOD has broken down the modernization framework into seven business areas: logistics, acquisition, accounting and financial management, program and budget, personnel and readiness, technology infrastructure and real property, and environmental liabilities.

Ultimately, successful pilot efforts will form an underlying business modernization platform for use across DOD.

In its pilot, the Army plans to face up to a chief problem it's had with its financial systems: None comply with the Chief Financial Officers Act. The 1990 law ordered agencies to centralize finance systems so they can better account for spending. DOD estimates it will achieve compliance by fiscal 2007.

'Our systems don't let us provide timely, reliable financial information. Our information is dated,' said John Argodale, deputy assistant Army secretary for financial operations.

Argodale said his service's financial pilot will consolidate the functions of its Standard Financial System and the Standard Operations and Maintenance R&D System. Eventually, the two legacy Army systems will be phased out.

Each of the services runs comparable systems to track spending. A goal of the overarching Defense financial modernization is to consolidate and link systems departmentwide so DOD will have a better idea of how money is spent through the general fund, Argodale said.

The Army's general fund includes operations and maintenance, and research, test, development and evaluation.

Specifically, the RFQ will call on integrators to recommend a way for DOD to use commercial enterprise resource planning software, Argodale said last month at the Program Executive Office for Enterprise Information Systems' Industry Day in Arlington, Va. The plan calls for testing an ERP approach at Fort Jackson, S.C., first.

Whatever ERP software vendors recommend must have Joint Financial Management Improvement Program certification. The winning systems integrators will be responsible for the program management and architecture development, Argodale said.

The service plans to award a performance-based contract by July and begin running the pilot system nine months later.

Argodale said the pilot system must link to DOD's Business Enterprise Architecture and be able to perform four chief tasks:
  • General ledger, payments and receivables management

  • Funds management

  • Cost management

  • Financial reporting.

Cherie Smith, the pilot's project officer, said the program started as a way to replace the Army's unreliable, aging, legacy financial systems. 'The idea is not to do business the same old way,' she said.

Smith said both the Standard Financial System and the Standard Operations and Maintenance R&D System are more than 30 years old. STANFIN, she said, 'has just moved from platform to platform. It's not an integrated system. It wasn't built around the general ledger.'

If the pilot is successful, the Army will move to full development by fall 2006.

In all, the new ERP system will replace 69 Army systems that feed data to legacy finance and operations systems.

'There's a lot of legacy interfaces out there. We need to find those financial systems that have grown up and bring requirements into our ERP,' she said.

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