ERP Helps U.S. Army Manage $220B BudgetBy Samuel Greengard | Posted 2012-10-24 Email Print
The U.S. Army has deployed one of the world's largest ERP systems, which helps its leaders manage its $220 billion budget, as well as making smarter, faster decisions--in this country and in the field.
By Samuel Greengard
Managing finances for an organization as large as the U.S. Army is a constant battle. With 227 bases scattered in 71 countries and more than 1 million financial transactions a day flowing through IT systems, tight fiscal oversight and efficient financial management aren't just options: Maximizing tax dollars and adhering to congressionally mandated governance procedures are necessities.
Like many organizations, the Army is marching into the digital age. In July, it deployed one of the world's largest enterprise resource planning systems: the General Fund Enterprise Business System (GFEBS). The SAP application, which encompasses the Army's $140 billion general fund budget and an $80 billion overseas contingency budget, is designed to help leaders "make smarter, faster decisions, ranging from provisioning troops in the midst of battle to budget planning," says Army spokesperson Pamella Gray.
GFEBS will replace 107 Army legacy accounting, financial and asset management systems and will integrate 50 additional systems--some of which are more than 30 years old. More than 52,000 users from the Army, Army National Guard and Army Reserve will tap into the application on a daily basis. Among other things, the system--designed and built in conjunction with Accenture Federal Services--allows the Department of Defense (DoD) to enable real property management at joint bases, process foreign national payrolls and integrate with medical logistics.
In the past, multiple interfaces and systems translated into lags and latency, as well as higher costs and less informed decision-makers. Secretary of the Army John McHugh notes that the value of GFEBS extends beyond an accounting system: It enables the Army to allocate and assign costs in a more detailed manner, produce comprehensive cost data reports, tie costs to outcomes and performance, and enable cost planning measures and controls that previously weren't possible.
These capabilities derive from real-time visibility into transactions across the organization, along with an ability to view historical data. There are also tools for implementing best practices, and the system can be updated and enhanced at any time without rewriting code.
"We are talking about a cultural change that involves … effective stewardship and an ability to make decisions about resources wisely," says Kristyn Jones, director of financial information management and assistant secretary of the Army.
The Army was forced to overcome a number of obstacles on the path to implementing GFEBS. In some cases, it had to install systems in high-conflict high-security zones. It also had to manage standard IT personnel rotations, as well as civilian teams. In addition, there was a strong need for ongoing training--including more than 4,000 in-person sessions--to ensure that the right IT and business processes were used with the new application.
The Army completed deployment of the GFEBS system in seven years. When it fully retires all legacy financial systems in 2016, it expects to save $120 million annually. In fact, GFEBS is projected to slash $950 million in costs over a decade.
Moreover, the system will enable the Army to more fully comply with statutory and regulatory requirements. GFEBS is "one of the most important financial management transformations in the history of the U.S. Army," Gray concludes.