US gov't: Navy sank $1B into four failed ERP pilots

14.11.2005
The U.S. Navy has wasted US$1 billion since 1998 on four flawed ERP pilot projects based on SAP software, according to the Government Accountability Office.

The GAO said in a September report to Congress that the installations were redundant and incompatible and that they failed to meet Navy requirements because of their limited scope. "In short, the efforts were failures, and $1 billion was largely wasted," the GAO report concluded.

The Navy is now in the midst of an $800 million project to consolidate the pilot efforts and create a mammoth ERP system that is slated to go live in 2011. That project, started two years ago, is also in jeopardy unless best practices are adopted and followed, the GAO report said.

The Navy vigorously disagrees with the GAO's conclusions, said Capt. Tim Hollande, deputy director of Navy ERP programming. "Both the [U.S. Department of Defense] and the Department of the Navy are quite happy with how the pilots have gone," Hollande said. "We've gotten a tremendous amount of knowledge in how to do an enterprise solution in a military environment."

Hollande said that prior to the pilot projects, Navy officials were uncertain whether such implementations were feasible. Now, he said, the Navy is confident that it can do them. "We think we got a lot of value," Hollande said.

The pilot implementations involved separate Navy system commands and a number of systems integrators, including IBM, Electronic Data Systems Corp. and Deloitte & Touche LLP.