U.S. Air Force ERP Bonfire The U.S. Air Force operates a very large supply chain to sup- slowed progress. Air Force leaders did not execute a thorough port its flying operations. This logistics mission, composed of a gap analysis, too many leaders supervised the project, and no one workforce of more than 90,000 individuals, is managed by Mate- seemed to specify the desired capabilities of the new ERP system. riel Command (AFMC). AFMC is responsible for the purchasing, Finally, as the project lurched forward, far too much customization tracking, and use of thousands of parts and millions of gallons of was built into the ERP system as Air Force managers insisted that fuel at more than 150 installations worldwide. AFMC supports the the new ERP system needed to support existing processes rather Air Force, an organization with a yearly budget of about $165 bil- than adopt the inherent processes offered by Oracle. lion with about 300,000 service members. This makes it about the After numerous setbacks and several failed attempts to restart size of General Motors or General Electric. the program, in November 2012, the Air Force canceled the entire In 2003. Air Force leadership began to notice the marked project after spending $1.03 billion. The Air Force concluded that improvement in logistics enjoyed by other large organizations the new system had provided no significant military capability. when they adopted an ERP system. Two years later it launched the Senate investigations revealed three main problem areas: beginning of its own ERP implementation, a system grandly titled the Expeditionary Combat Support System (ECSS). The ECSS was . Cultural resistance to change within the Air Force to be an Oracle system designed to replace 240 outdated information . Lack of leadership to implement needed changes systems used throughout the United States and overseas with a . Inadequate mitigation of identified risks at the outset single ERP system. The proposed system would be about 30 times Military culture makes changing processes difficult. Investi- larger than any system ever built by the Department of Defense gators found entrenched civil servants had a strong pride in how and 100 times larger than any in the Air Force. Not only would the things are done, and military officers too quickly rotated between supply chain become more efficient and better managed, the new jobs. The AF had to change the way it purchased parts and how ERP would help the Air Force comply with new regulations requir- those parts flowed between bases in order to use the ERP sys- ing federal agencies to produce auditable books by 2017. tem effectively, a disruptive change. They had to be willing to Unfortunately the implementation of ECSS stumbled at nearly change their business processes, but no culture of business process every step. The Air Force failed to specify achievable objectives improvement existed. for the system, justifying the system with simplistic statements AF leadership failed. The leadership team had no prior experi- about how many different computer systems would be integrated. ence with ERP systems, process change, or IT governance; they Sadly, the number of information systems to be replaced grew were in over their heads. As mentioned, the system was perhaps Ac from 240 initially to more than 900. Other self-inflected injuries 100 times larger than any system the Air Force had successfully GoCHAPTER 7 . SUPPORTING PROCESSES WITH ERP SYSTEMS 183 created. Couple that with six project managers and five assistant parts and inventories, and it will need to implement an ERP sys- project managers over its lifespan, and it was clear that leadership tem at some point in the future. had failed its responsibilities. Many of the risk factors-cultural change, leadership, and Questions project size and scope-were identified by AF leaders along the 7-11. What benefits was the Air Force seeking? Are they like way, but these issues were never addressed. The culture did not those sought by CBI? change, the turnover in leadership never abated, and confronting 7-12. Are the challenges similar for the Air Force as with civilian other risk factors never happened. For example, one particular risk ERP implementations? Which are unique to the military? was identified early: project ownership. The risk was that no one 7-13. Figures 7-13 and 7-15 list decision-making challenges and or no office would accept responsibility long term. Unfortunately. people challenges. Which of these are evident in this case? all the positions on the project team were temporary positions, List the top three challenges, and briefly explain what the filled on a short-term basis. As a result, officials working on the Air Force should do differently next time. project were motivated to achieve short-term goals so they could 7-14. Which activity in the implementation process was done well? continue their careers elsewhere. Leadership had identified the risk 7-15. It's time to try again. The Air Force can't keep wasting but failed to address it. money with its current inefficient legacy logistics system. While the Air Force had good reason to pull the plug on the You're about to brief top Air Force leaders. What three project, the need for a system-wide ERP platform still exists. The things would you tell them will be essential to avoid Air Force has an antiquated and inefficient system of tracking its repeating a disastrous result?ERP vendor selection FIGURE 7-13 Implementation Decision . Gap analysis-decide on "like to dos" and what to do with gaps Challenges Configuration-identifiers, order sizes, BOM . Data issues . Cutover methodFIGURE 7-15 Management . Moves on prematurely Implementation People . Oversells Challenges . Fails to anticipate cultural resistance . Poor project management skills Team . Collaboration breaks down Individual . Users feel pain and get no gain . Difficult to use software