After completing several stages of development, the U.S. Army has built one of the largest enterprise resource planning (ERP) systems on the planet with transactions worth more than $164 billion every year.
As part of its campaign to consolidate the military’s logistical and housing activities, the Pentagon has tasked the Army’s General Fund Enterprise Business SystemOpens a new window , which manages all the service’s procurement and financial activities, to run some of the Navy’s and Air Force’s ERP systems, too.
The Army is beginning to track the accounting and receivables systems for several Navy and Air Force hospitals, with the objective of eventually replacing the hospitals’ own ERP systems with its General Fund system.
A gradual rollout
The rollout to the other service hospitals has been gradual, with a trial conducted in 2019 followed by implementation at selected sites beginning this year.
The rollout includes the Navy’s prestigious medical facilities in the Washington, D.C., area — the Naval Medical Research Center and the Walter Reed National Military Medical Center, both in the Maryland suburbs.
The move reflects recognition by Pentagon leaders that some parts of the military were still running on older computer systems that were simply not up to the job. The Army’s ERP system is more advanced than other services and has met many of the demanding requirements by the federal government for the military.
Army ERP is also going through an upgrade, migrating its processes to a commercial cloud environmentOpens a new window . Like many corporate organizations, the Pentagon recognizes that operating in the cloud is necessary to meet the demands of the 21st century battlefield.
The military services experienced plenty of teething problems when it first went to work on a comprehensive ERP platform.
At first, it was carried out on a service-based program that saw each military branch seeking its own solutions. There was little cross-service cooperation in a multi-billion-dollar program that predictably recorded cost overruns and failed deadlines.
Hundreds of systems replaced
But the need to modernize was pressing, and the Pentagon embarked on a 10-year drive to install cutting-edge ERP systems, replacing literally hundreds of legacy systems. The Air Force alone replaced more than 240 systems and saved some $12 billion.
The military services typically award large contracts that run into the millions and even billions of dollars. For example, an IBM contract for the Army provided an ERP solution that integrated private cloud computing, software development and cognitive computing. That contract alone was valued at $135 million.
Many of the Army’s initial requirements called for data management that would allow it to control a diverse and sophisticated logistical command that included 70,000 soldiers and civilian workers in the United States and at bases in dozens of countries.
Now the Army’s ERP needs are likely to include more prosaic demands, including managing the Navy’s hospitals.
Key takeaways:
- The United States Army has built one of the largest and most sophisticated ERP platforms in the world. It is the product of more than a decade of consolidation and investment that has seen the Army’s new ERP platform replace dozens of legacy systems.
- The Army’s logistical and procurement management system has been so successful that it’s starting to support Navy and Air Force medical services, with a rollout that began last year.
- While the big ERP contracts with the military are already in place, with the big names in the business, there are still niche areas that the military may need to upgrade in the near-term future.