The Navy's global enterprise

2008 GCN Award winner: Navy ERP project gets the service's business systems under control, increases efficiency<@VM>SIDEBAR: Navy ERP plans call for further growth

ORGANIZATION: Navy.


PROJECT: Navy Enterprise Resource Planning Program.


CHALLENGE: Transform Navy business systems by adopting
best-practice tools.


SOLUTION: A commercial ERP system.


IMPACT: Standardized and modernized processes, increased
financial transparency, total asset visibility, and increased
effectiveness and efficiency.


DURATION OF PROJECT: 2004-2013.


COST THROUGH 2013: $1.4 billion.

LONG GONE ARE THE DAYS when a ship's captain kept a chest
of gold on hand to buy provisions and used the local tavern as a
recruiting station. To bring its support infrastructure up to the
level of its weapons systems, the Navy is deploying one of the
world's largest enterprise resource planning systems, called
Navy ERP, to manage its financial and human resources matters.
After three years of preparations, the system was deployed to
15,000 users at eight locations in October 2007, with an expected
tenfold increase in its user base by the time it is completed.
'The end result is a betterequipped Navy that is better able
to support the warfighter,' said Valerie Carpenter, the Navy
ERP's program manager.





Changing the operating structure of an organization the size of
the Navy is anything but simple. In this case, the work began a
decade ago and won't be completed for several more years.


'About 11 years ago, we had some visionaries in the Navy
who wanted to examine if ERP would be beneficial to use in a
government agency,' said Susan Keen, technical director of
Navy ERP. 'They initiated four pilots set up across different
business units of the Navy, each with competitive awards of a
solution set.'


The Navy wanted to switch from its existing custom-built systems
to commercial software and best practices. The goal was to
integrate the decision-making processes and business activities in
areas such as acquisition, logistics and finance.


For each of the four pilot projects, which ran from 2001 to
2003, leaders independently chose SAP's ERP tool as the best
solution. Based on those projects' successful completion,
service officials decided to use SAP's product as its
enterprise system.


However, replacing the custom-built systems scattered throughout
the service was a daunting task. Although many private-sector
organizations have successfully deployed SAP's software,
there were no publicsector implementations that matched the size
and scope of the Navy's project to use as a guide. The
service had to chart its own course.


Initially, BearingPoint and IBM oversaw the integration, but in
2006, Navy officials decided to bring program management in-house
while still using the outside contractors. In addition to giving
the service full control over the development and deployment
process, the change also facilitated implementing a fully
integrated work breakdown structure, integrated master schedule and
earned value management system. Even so, it wasn't all smooth
sailing.


'It can be expected that a system the size of Navy ERP
will have technology challenges,' Carpenter said. 'But
our very experienced team has created a sound technology foundation
for our solution.'


Two of the main challenges were in the areas of change
management and data migration. The data-migration challenge
primarily resulted from the number of systems and the volume of
data involved.


'The Navy has funding and contracts that last for many
years,' Carpenter said. 'Migrating this data from many
different legacy systems to the ERP solution is challenging and
time-consuming.'


Staying focused


The Navy ERP program is primarily run from an office in
Annapolis, with 55 government employees and as many as 500
contractor employees. In addition to addressing technical issues,
the program office also deals with all workforce issues.


'It's never too early to start planning for the
changes or to start working on your data,' Carpenter said.
'The earlier you start working these top issues, the easier
it is to adopt the new system and new business
processes.'


To help with change management, the program team created 14
Web-based courses and 65 instructor-led courses to train users. The
work paid off, although the feedback from users varies depending on
how long they have been using the system. Employees at headquarters
who have been using Navy ERP for two years tend to be more positive
about it than those who have been using it for shorter periods of
time. However, the complaints are often related to processes, not
software.


'Sometimes we hear objections to policy issues where users
think the new system created a new policy,' Carpenter said.
'Usually, the policy already existed, but it is now being
rigorously enforced by the ERP system.'


It took hard work and long hours to create the system and train
employees to use it properly. She said a critical element of
success is having the support of senior managers and designating
one senior executive who will lead the implementation. Another key
is to keep the end result in mind.


'I think it helps us to stay focused on the reasons we are
doing this work,' Carpenter said. 'The Navy needs to
modernize and standardize business operations to meet financial
compliance law, increase efficiency and improve asset visibility.
If we can keep those really significant goals in mind, we can
handle the day-to-day challenges just fine.'



The Navy Enterprise
Resource Planning Program
is the largest public-sector
deployment of SAP software
in the world. It relies on the
Navy Marine Corps Intranet
to provide network and security
functions.




The software consists of a
single instance of SAP ERP
Central Component 5.0 with
SAP's NetWeaver technology
stack, a service-oriented
application and integration
platform. Users log in using a
Citrix Systems client or a
Web interface.

The initial Navy ERP
release interacts with 12
Navy programs and 18
Defense Department programs.
It addresses financial,
human resources, supply,
acquisition and maintenance
across the Navy's maritime,
aviation, nuclear, sustainment
and supply business
areas.

Before launching the system,
officials led more than
265 business blueprint workshops,
conducted more than
1,500 SAP product transactions,
and added more than
200 custom reports, interfaces,
conversions and
enhancements to the standard
SAP ERP product.
Employees executed more
than 21,000 test scripts,
tracked more than 1,500
configuration change
requests, converted 52.7 million
objects and loaded about
13.5 million data objects
with a 99.99965 percent
success rate.

Release 2.0 of Navy
ERP, scheduled for
February 2010, will incorporate
the Navy's supply
solution and manage the
retail and wholesale
aspects of the service's
wide-ranging supply system.
Release 3.0 will
include a system for managing
intermediate-level
maintenance requirements
for ships, aircraft
and weapons systems.

When fully implemented,
the program will interface
with more than 49
Navy systems and 22
DOD programs. Another
13 commands and
109,000 users will be
added, bringing the total
number of users to
185,000. By 2021, Navy
ERP is expected to handle
the service's entire
budget, replacing the
Standard Accounting and
Reporting System.

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