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US Navy 'wastes' $1bn on SAP ERP

The US Navy has wasted $1bn (£588m) since 1998 on four flawed enterprise resource planning pilot projects based on SAP software, according to  a report from the US Government Accountability Office (GAO).

The GAO, the equivalent of the UK’s National Audit Office, said that the installations were redundant and incompatible, and that they failed to meet US Navy requirements because of their limited scope.

“The efforts were failures and $1bn was largely wasted,” said the GAO report.

The latest US Navy ERP project, begun in 2003, is costing $800m, and is planned to go live in 2011. But the GAO said this project was also in jeopardy unless best practices are adopted and followed.

The US Navy disagreed with the report’s conclusions on the pilots however, and said it had been able to learn how to roll-out enterprise solutions in a military environment with their help.

The navy said the projects had allowed it to cut out a number of unnecessary legacy applications.

SAP said the pilots had enabled the navy to deliver a proof of concept for the bigger consolidated ERP implementation. IBM, Deloitte & Touche LLP, and EDS had been involved in these pilots.

The pilots are still in use in various parts of the navy’s systems, but they will be replaced by the single SAP implementation now being rolled out.

The GAO however pointed out that this project would not be fully comprehensive and some parts of the navy are currently being left out, such as ship-yards. This could lead to problems if they had to be integrated in the future, said the GAO.

 


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