ZOOM 294 CHAPTER 10 Information Systems within the Organization IT's About Business 10.1 The Army Transitions from Legacy Systems to more than $1 billion on the project. In that same year, a Navy ERP Enterprise Resource Planning Tools system was deemed a "qualified" success because it did work, but it was one-third over budget and more than two years late. MIS ACCT In 2005, the Army began working with Accenture (www Almost every organization that is more than 20 years old has some accenture.com) to develop a SAP-based (www.sap.com) ERP sys- type of legacy information system-an outdated IT system that was tem called the General Fund Enterprise Business System (GFEBS). usually developed with a specific focus and designed without con- By 2012 (seven years later!), the Army had begun phasing in the sidering future needs. In essence, legacy systems were developed new system. As of late 2016, the Army was still phasing out its as silos. (Silos refer to functional area information systems that do legacy systems, some of which had been in use for more than four not communicate with other FAIS or organizational information decades. The ERP rollout is scheduled to be completed in 2018. systems.) Furthermore, each legacy system was typically created The GFEBS is designed to create paper trails so that the Ar- with its own data in a specific format. Unfortunately, these formats my's business operations are accountable and auditable. It is a are often incompatible within the same organization. In these sce- web-based tool, meaning it is accessible anywhere with Internet narios, one legacy system cannot use the data from other systems. access. The GFEBS standardizes, streamlines, and shares critical The U.S. Army (www.army.mil) is one of the oldest national data across all Army divisions. This will help decision makers ana- organizations in our country. Information technology plays a criti- lyze business processes, cost structures, and inventories. It will also cal role in all of the Army's processes. It is no surprise that the Army help implement the DOD's greater transparency initiative. As of late has numerous legacy information systems that, while successfully 2016, the Army had been subjected to several audits by indepen supporting various operations over the years, nonetheless do not dent auditing firms, which found no major causes for concern. This share data efficiently or effectively. is a sign that the implementation is moving the right direction.' Today, however, the Army must pass audits as part of a fed- erally mandated Department of Defense (www.dod.gov; DOD) fi- Sources: Compiled from M. Hoffman, "Army Taps 10 Small Businesses for 846M ERP Services Contract," Govcon Wire, January 8, 2016; H. Kenyon, nancial audit scheduled for 2017. The Army's legacy systems, while "Army ERP System Enables Financial Transparency," InformationWeek, April proficient within their specific areas, could not produce the docu- 15, 2014; H. Kenyon, "DOD Pushes Toward Joint Information Environment," mentation required by the DOD. InformationWeek, March 26, 2014; D. Perera, "ERP Implementation Con- Many organizations, when they retire their separate legacy tinues to Challenge the Military," fiercegovermentit.com, March 31, 2013; systems, merge the relevant functions into one enterprise resource D. Perera, "Air Force Cancels ECSS," fiercegovernmentit.com, November 29, 2012; D. Perera, "Navy ERP a 'Qualified Success," fiercegovernmentit. planning (ERP) system. The migration to an ERP is very difficult, com, September 9, 2012; T. Weiss, "Accenture wins $537M Army Financial however, often taking several years and costing large amounts of Services Contract," Computerworld, June 28, 2005; www.army.mil, accessed money. Large organizations such as the Army cannot simply turn November 21, 2016. off one or more legacy systems until they have assurance that the new ERP system will work and that employees are trained on how Questions to use the new system. 1. Why do you think the U.S. Army's legacy systems were not as Other branches of the military have transitioned to ERP sys- useful today as they were when they were developed? tems. Some of the implementations failed, and some succeeded. In 2. How does this military example parallel large businesses 2012, for example, the Air Force canceled an ERP system implemen like Sears and Walmart that have had to maintain their own tation (the Expeditionary Combat Support System) after spending legacy systems? ERP II systems are interorganizational ERP systems that provide web-enabled links among a company's key business systems-such as inventory and production-and its cus-ZOOM organizations in our country. information technology plays a criti- cal role in all of the Army's processes. It is no surprise that the Army help implement the DOD's greater transparency initiative. As of late has numerous legacy information systems that, while successfully 2016, the Army had been subjected to several audits by indepen supporting various operations over the years, nonetheless do not dent auditing firms, which found no major causes for concern. This share data efficiently or effectively is a sign that the implementation is moving the right direction.' Today, however, the Army must pass audits as part of a fed- erally mandated Department of Defense (www.dod.gov; DOD) fi- Sources: Compiled from M. Hoffman, "Army Taps 10 Small Businesses for $846M ERP Services Contract," Govcon Wire, January 8, 2016; H. Kenyon, nancial audit scheduled for 2017. The Army's legacy systems, while "Army ERP System Enables Financial Transparency," InformationWeek, April proficient within their specific areas, could not produce the docu- 15, 2014; H. Kenyon, "DOD Pushes Toward Joint Information Environment," mentation required by the DOD. InformationWeek, March 26, 2014; D. Perera, "ERP Implementation Con- Many organizations, when they retire their separate legacy tinues to Challenge the Military," fiercegovermentit.com, March 31, 2013; systems, merge the relevant functions into one enterprise resource D. Perera, "Air Force Cancels ECSS," fiercegovernmentit.com, November 29, 2012; D. Perera, "Navy ERP a 'Qualified Success," fiercegovernmentit. planning (ERP) system. The migration to an ERP is very difficult, com, September 9, 2012; T. Weiss, "Accenture wins $537M Army Financial however, often taking several years and costing large amounts of Services Contract," Computerworld, June 28, 2005; www.army.mil, accessed money. Large organizations such as the Army cannot simply turn November 21, 2016. off one or more legacy systems until they have assurance that the new ERP system will work and that employees are trained on how Questions to use the new system. 1. Why do you think the U.S. Army's legacy systems were not as Other branches of the military have transitioned to ERP sys- useful today as they were when they were developed? tems. Some of the implementations failed, and some succeeded. In 2. How does this military example parallel large businesses 2012, for example, the Air Force canceled an ERP system implement like Sears and Walmart that have had to maintain their own tation (the Expeditionary Combat Support System) after spending legacy systems? ERP II systems are interorganizational ERP systems that provide web-enabled links among a company's key business systems-such as inventory and production-and its cus- tomers, suppliers, distributors, and other relevant parties. These links integrate internal-facing ERP applications with the external-focused applications of supply chain management and cus- tomer relationship management. Figure 10.4 illustrates the organization and functions of an ERP Il system. The various functions of ERP II systems are now delivered as e-business suites. The ma- jor ERP vendors have developed modular, web-enabled software suites that integrate ERP, customer relationship management, supply chain management, procurement, decision sup- port, enterprise portals, and other business applications and functions. Examples are Oracle's e-Business Suite and SAP's mySAP. The goal of these systems is to enable companies to execute most of their business processes using a single web-enabled system of integrated software rather than a variety of separate e-business applications. ERP II systems include a variety of modules that are divided into core ERP modules- financial management, operations management, and human resource management-and extended ERP modules-customer relationship management, supply chain management