Logistics program needs more cash

A program to provide faster access to military supply information will take four months longer than originally planned and will be $36 million over budget, officials said this week.

The Defense Logistics Agency's Business Systems Modernization (BSM) project, originally set for completion in 2005, has been pushed back to fiscal 2006, said David Falvey, the agency's program executive officer. The delay will add $36 million to the program's cost, which was originally estimated at about $500 million.

Accenture is the main systems integrator on the program, with American Management Systems Inc., SAP America Inc. and Manugistics Group Inc. as subcontractors. Most of the additional $36 million will go to Accenture, Falvey said.

"It's a realistic and reasonable amount of money when you consider the training and systems integration costs," Falvey said.

The program applies commercial practices and back office technology to give military planners better information about supply availability. Last summer, the logistics agency began a limited field test, or concept demonstration, by using the modernization program's new tools and practices for certain supply orders, Falvey said.

The pilot, which involved about 390 users, 100 supervisors and 170,000 line items, helped the agency determine what areas needed more work before moving forward, said Allan Banghart, enterprise transformation director for the logistics agency.

Officials plan to introduce the program in two major releases, with gradual improvements, before becoming fully operational in 2006. The program originally was supposed to be rolled out in four stages.

"The program runs safer and more efficiently if there is an [information technology] rollout and then we add users and line items," Banghart said, adding that about 80 percent of the system's planned features are available.

About 890 users and 170,000 line items are using the program, Banghart said. Plans call for the system to eventually handle about 4,500 users and 3.5 million items.

The next major release is scheduled for July 2004, when the system should be operating with almost all of its features with an increased number of users and items available, agency officials said.


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