ENTERPRISE RESOURCE PLANNING IN THE AIR FORCE

2012

Enterprise Resource Planning in the Air Force

Copyright

Mr. Ross United States Air Force 3/8/2012

Table of Contents
Table of Contents ...........................................................................................................................................................2 Proposal...........................................................................................................................................................................3 Introduction.................................................................................................................................................................3 Business Problem........................................................................................................................................................3 Benefits to Organization.............................................................................................................................................4 Business Approach......................................................................................................................................................4 Technology Approach.................................................................................................................................................5 Audience.....................................................................................................................................................................5 Milestone 1......................................................................................................................................................................5 Background.................................................................................................................................................................5 Business Issues............................................................................................................................................................6 Cost Benefit Analysis..................................................................................................................................................6 Initial Approach..........................................................................................................................................................7 High Level Solution....................................................................................................................................................7 Milestone 2......................................................................................................................................................................7 ERP Vendor Comparison............................................................................................................................................8 Common ERP Features...........................................................................................................................................8 ERP Solutions.........................................................................................................................................................8 Microsoft.................................................................................................................................................................9 Sage.........................................................................................................................................................................9 Oracle....................................................................................................................................................................10 ERP Selection...........................................................................................................................................................10 Milestone 3....................................................................................................................................................................11 Business Processes....................................................................................................................................................11 Project Management.................................................................................................................................................12 Project Planning........................................................................................................................................................13 Conclusion and recommendation..............................................................................................................................13 References.....................................................................................................................................................................15

Proposal

Introduction The United States Air Force has distinct occupations that cross different platforms and use different information systems to retrieve and store data for senior leaders to make critical decisions. The leadership uses these management information systems to make critical decisions about operations, personnel and resources to maintain the mission of the unit. The Air Force is downsizing and trying to enhance their IT strategy for all operations. They can reduce information redundancy, increase leadership efficiency and productivity if they incorporate an Enterprise Resource Planning (ERP) system. Integration of supply chain, maintenance, personnel and financial systems can facilitate the decision making process at the executive level and give middle managers to information that can add value to tasks and increase efficiency throughout the Air Force. Business Problem The Air Force is comprised of several entities that can be called enterprises and each of these enterprises has a different method of conducting operations, and retrieving information. The vision of each enterprise will determine how information is managed and stored. The first problem is identification of an enterprise to implement the ERP. The leadership must identify the

information systems and the requirements needed and outsource the ERP to a reputable contractor that meet the requirements of the Air Force. The intellectual property rights of the different information system can be a roadblock to the project. The developers of the information systems will have to part of the project team or identified as a stakeholder to facilitate productivity and reduce risks. The funding of the project will have to come from an executive level since this is an enterprise project that has the potential to impact all enterprises. Headquarters Air Force can make ERP implementation an Air Force initiative and ask Congress for funding to support the downsizing goals of the Department of Defense. Benefits to Organization The Department of Defense can benefit from ERP implementation if the Air Force takes the lead and the other military departments benchmark their project and continuously improve to make future projects easier and less risky. The military department will be able to share information and the Air Force will be to save money and continue to streamline their resources and still perform their mission. Technology has changed and the Air Force is behind and utilization of an ERP system can pave the way for future technological projects. Business Approach The Air Force must envision the project from a large corporation prospective and solicit inputs from leaders and users of the current information systems. The team can help the Air Force increase efficiency and update the archaic systems that require more resources to operate and maintain. The approach must be phased and the ERP system functionality can be increase exponentially after implementation and testing.

The selection of a user friendly ERP system is critical to the Air Force requirements; users do not have the same educational backgrounds as civilians and may require additional training to obtain all of the cost savings benefits an ERP system can provide for an organization. Technology Approach The project will use the latest technology and provide funding for future updates and additional information systems integration. The ERP system and software will be purchased and the vendor will assist the Air Force in the integration and training process.

Audience The audience is composed of military leaders and civilians and they will use the system to store and extract information to meet the goals and objectives of the Air Force and other military departments. Milestone 1 The consolidation of management information systems in the Air Force is a prudent business decision that will save money, reduce manpower, and increase efficiency. An ERP will provide numerous benefits for executive decision making because they will be able to extract accurate and timely data from the ERP system. The maintenance and flying operations are paramount to the Air Force vision, and integrating the maintenance, manpower and supply chain systems will directly support the downsizing initiative, while increasing productivity. Background The current information systems are independent and leaders do not have access to retrieve information expeditiously without coordinating through leadership channels. The leadership hasnt bought into the big picture concept and has tried to limit the access of the management

system under their scope. The leadership has refused to invest in technology and update information systems for operations and maintenance. The mission is to fly, fight and win and protect the people of the United States while maintaining Air superiority. The DOD budgets are focused on adding new aircraft and updating aircraft systems to sustain the advantage we have over other countries. Business Issues The identification of requirements for selection of a system and software is critical to success. The Air Force has unique procurement requirements that can cause delays in the selection of a vendor and system. The process can be lengthy if the implementation is not led by a project manager. The leadership may want to scale the project to a lower level and benchmark after success. If the project is funded at the Air Force level the project budget will be scrutinized and the required funding to start the project may not be available for years. The security and intellectual property rights of the system can be high level risks that must be mitigated. Civilians may have access to classified or sensitive material that can create havoc for operations in the United States and abroad. The suitability and background checks may eliminate vendors from the proposal process. Cost Benefit Analysis The ERP will increase operational efficiency and incorporate new technology into the vision. The manpower and resources required to operate and maintain these antiquated inefficient systems can be reduced, saving million dollars in procurement and training projects. The elimination of leadership through IT development will pave the way for future technological projects that require innovative and forward thinking to obtain Air Force objectives. Leaders will

be able to share strategic initiatives and financial information without laborious coordination through obfuscates lines of communication.

Initial Approach In the past we would update the management systems and not coordinate with the executive decision makers. We would allocate the funding for the future upgrades without considering the future state of the operational environment or management. The Air Force changes leadership every two or three years and that normally changes the methodology and behaviors of the organization. We have to develop a technological roadmap to implement new systems and increase efficiency in lieu of upgrading antiquated systems. This vision must be shared and the process owners and developers of these system must work together to implement an ERP system that will satisfy the needs and specified requirements. High Level Solution The solution to MIS integration is a phased implementation of a user friendly ERP system. The project will include selection of a test site/location, procurement and validation of the ERP system and training for personnel. The funding upgrades of the old systems will be used for the project and the system owners will seek additional funding if required. Executive leaders will have to prioritize their resources to ensure that the resources are available for ERP system implementation. Milestone 2 The integration of an ERP system requires exceptional project management or the implementation will be delayed, costs will be escalated, and the feasibility of new technology cannot be leveraged. The civilian sector has successfully integrated ERP systems into their

processes and the Air Force can benchmark an ERP implementation plan to save money and time. The first step is to identify the site for the ERP project and then we can determine the systems we want to replace. A phased approach can help leverage new technology and train personnel on how to use the new systems to reap the benefits. Then we must identify the system requirements and expected benefits to select a vendor and a project team. ERP Vendor Comparison There are numerous ERP software vendors and the project must choose a system that aligns closely with the current processes or they will have to change directives and procedures for their business process. If the vendor has to customize a product that will increase implementation time and extend the project budget. The research has revealed that Microsoft, SAP, Sage and Oracle are the best vendors that meet the needs of the Air Force ERP project with minimal disruption in production. Common ERP Features The ERP suites contained a broad range of modules; however; the most beneficial modules are listed below: - Manufacturing Includes features for project and process management, engineering, scheduling, capacity management, engineering, material requirements planning, and quality management.
-

Supply Chain Management Capabilities to support order entry, purchasing and procurement, inventory control, planning, goods inspection, and claims processing.

Financial Management Provides functionalities such as general ledger, cash management, accounts payable and receivable, and fixed asset management. ERP Solutions

Big bang ERP implementations are very

risky and most businesses do not have the required )It is critical to select an ERP vendor with

resources to deploy all of the functionalities at once. (

a flexible modular platform, so the implementation can be rolled-out in phases. ERP modules normally replace antiquated business applications, and we must ensure the new system has data migration tools to help with the transfer of information from the legacy systems to the new ERP applications suites. Microsoft Microsoft is a very reputable company that produces and distributes quality products and services. And as a key ERP solution provider, Microsoft knows that the fundamental success factors in this competitive global marketplace constant: produce the right productsin the right quantities, at the right time, with good quality, and at a price the customer is willing to pay. Capitalizing on these opportunities and demands involves quickly adapting to needs of customers. Microsoft Dynamics is a line of integrated, adaptable ERP business management solutions that automate and streamline financial, customer relationship, and supply chain processes in a robust, powerful way that helps drive business success. Seamlessly integrates internal and external communication and collaboration Sage Sage has delivered easy-to-use, scalable, and customizable software for accounting, customer relationship management, human resources, merchant services, time tracking, as well as for the specialized needs of the construction, distribution, healthcare, manufacturing, nonprofit, and real estate industries. Sages flagship ERP applications have won a Readers Choice Award for being the top vote-getters in the Client-Side Accounting Systems/Accounting for Larger Entities category, beating out Microsoft and its Dynamics.

SAP SAP ERP has over 30 years of experience with more than 40,000 customer implementations to deliver powerful functionality, global orientation, and flexible enhancement options. Their SAP enhancement packages, can replace a companys the traditional technique of improving and augmenting core processes supported by SAP ERP. In lieu of waiting for functionality that is packaged with a new release, they can implement innovation from SAP without having to run a major upgrade project. Oracle Oracles ERP solution suites help customers achieve 30% - 80% lower total cost of ownership, benefit from a predictable cost model, and reduce risk. Oracles on-demand software technology has served over 3.6 million end users and increased their productivity and competitive advantage, resulting in a superior ownership experience. Oracles Enterprise Manager is the only management software that provides complete management solution for business applications, using a unique top-down approach. ERP Selection The project manager or executive leadership must do their due diligence to select the best vendor the project. There are many pitfalls, and one of the goals is to select the right vendor the first time and minimize the implementation risks. ERP is not a panacea for ineffective processes but it can help an organization collaborate and eliminate redundant systems. There is no need to

rush through the selection process; strategy identification and deployment are crucial to the success of the project. The organization may want to keep the legacy systems around for awhile or they may want to do a two tier approach. These decisions must be carefully analyzed prior to implementation. Executive leaders normally want to expedite this process so they can reap the benefits while they lead the innovation projects. The Project Manager has to ensure the project team has all of the information about the vendors and the requirements of the users to select the best vendor. If the project manager can answer the following questions the selection process will be easy. How do we want to run the organization? What business problems will be solved? Do we understand the priorities? Do we fully understand our as-is condition versus our could be/should be processes? Have we defined an action plan for pre-implementation? What tasks will be accomplished and when? What are the missing links in our current software? What are the real costs, benefits and timetable for the project?

Once we can answer these questions we can proceed to the next milestone and finish the project on time. Milestone 3 Business Processes The consolidation of business processes into one management information system has its benefits but it also has it risks. The tiered approach will be beneficial for the Air Force management systems because they will not disrupt the current systems, and the personnel will have

adequate time to train on the new systems with minimal down time or loss of production. The executive leaders must ensure they choose the right team members to lead this initiative because lack of project management experience can be detrimental to the success of the project and cost the Air Force millions of dollars. The Air Force has tried to implement ERP systems on a smaller scale and the projects had numerous delays. There is adequate history and lessons learned from these projects and the project manager must ensure that the team doesnt make the same mistakes. The Air Force is similar to a large corporation; it has layers of management, and rules and regulations that govern financial, personnel and maintenance systems. The directives will have to be changed or amended to incorporate the new information systems and this process can be very lengthy. The project team must complete a comprehensive risk analysis to ensure high risks activities are identified and mitigated. The leadership must develop a business strategy and plan and provide the project team with the resources and support to successfully integrate the new ERP system. Project Management The Air Force leaders must address the following issues before the project is initiated: Executive Leadership Support Culture and Morale Organizational change

The leadership must be involved in every step of the ERP implementation plan; they should be identified as key stakeholders in the communication plan to prevent bottlenecks and facilitate support from the users. The leadership must prepare the culture for the change because so of the organizational may involve downsizing and restructuring of key business processes. There will definitely be resistance from the users because they will be required to learn a new system. The

amount of resistance will depend on the experience and knowledge of the users and the leadership must help the project team by providing a roadmap for the users and stakeholders. Knowledge is power and if the users are involved in the decision making and implementation it will facilitate the transition from the old information systems to the new ERP system. Project Planning The project manager will develop a charter and project plan that will outline the project scope, budget and schedule for all of the stakeholders. The charter will identify the team members and their responsibilities during the ERP project. The charter is the justification for the ERP project and all of the stakeholders will view the charter before the work is initiated. The team will develop a communication plan to ensure that key personnel receive the required information in the medium identified. The baseline budget will be developed and strictly adhered to because the Air Force has unique budget constraints that may prevent changes during the project. The fiscal year project funding accounts for Air Force projects have to be used when they are allocated or they will be wasted. This can cause substantial project delays; especially in technological projects. The project team must manage the risks and changes in accordance with the project plan; and utilize the resources provided the executive leaders to ensure project success. If the team encounters an issue beyond the scope of the project that cannot be resolved by the project team then they must elevate the issue to the appropriate level for an expeditious solution. Conclusion and recommendation The goal of the ERP project is to replace antiquated management systems to improve organizational efficiency and allow the users to leverage technology and communicate effectively with critical information systems in the key business processes. The proposal of and ERP system

for the Air Force aligns with business strategies of large corporations and will save the Air Force millions of dollars while increasing overall efficiency. The ERP system also supports the Air Force restructuring and downsizing initiatives, and will help reduce the manpower required to operate the old systems.

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