DHS moves quickly to redirect Emerge2

Early metrics didn’t look good, so the agency will adopt shared-services model

One size doesn’t fit all for the Homeland Security Department when it comes to financial management.

Officials decided to completely overhaul its Elec-tronically Managing Enter-prise Resources for Gov-ernment Effectiveness and Efficiency 2 (Emerge2) program and let department components choose among an array of existing financial-service providers. DHS then will pool the data in a warehouse to allow financial managers to drill down into separate components’ financial records.

“We now plan to use a center-of-excellence model,” said Andy Maner, DHS’ outgoing chief financial officer.

The Emerge2 project will not be rebranded, though there may be some new contractors, he added.

DHS now plans to let its components choose among five DHS providers of financial management services as well as outside federal agencies that provide the services, such as the Interior Department’s National Business Center and the ERP services of the Treasury Department’s Bureau of Public Debt.

New direction

“Everybody in DHS is going to go on a shopping trip,” Maner said.

DHS has spent $9 million on Emerge2 so far with prime contractor BearingPoint Inc. of McLean, Va., Maner said. The total potential value of the Emerge2 contracts was $229 million.

Maner holds that the department gleaned a full $9 million of value from the first stab at Emerge2 by gathering the components’ functional requirements, preparing a portal to be used by financial managers and developing training and rollout plans, among other deliverables.

Work on DHS’ financial management system slowed to a crawl last year after DHS allowed a task order by BearingPoint to expire in June. DHS halted the work after Emerge2 fell behind schedule and exceeded costs.

Maner said he suspended the project after its metrics began to signal that Emerge2 was missing deadlines.

“When I saw we were off track in February [2005], I brought in the vendor [BearingPoint] and said, ‘What could we do better?’ ” Maner said. “I’m not going to turn this into big integrator bashing.”

DHS’ decision to point Emerge2 in a new direction comes in the wake of a similar move by the Interior Department, which is recompeting its ERP project after ousting the prime contractor, also BearingPoint, from the job.

Meanwhile, the Justice De- partment announced last week that it had awarded a seven-year contract worth as much as $150 million to upgrade its financial systems to a team led by IBM Corp. that includes BearingPoint.

In addition to the new direction, Emerge2 will come under new leadership.

Maner announced his resignation last week, and the administration nominated David L. Norquist, the Defense Depart- ment’s deputy undersecretary for financial management, to fill the CFO slot.

And late last year, Catherine Santana, formerly program manager for Emerge2, moved over to the Energy Department in a move the department did not announce.

Lessons learned

Santana spoke by phone from the Management and Operations Office of DOE. She declined to answer questions about her new role at the Energy Department.

The Emerge2 program now is being led by John Makepeace, formerly Santana’s chief of staff, DHS said.

The Emerge2 project drama, and how DHS officials learned to avoid a calamity by closely monitoring the project’s progress and ultimately deciding to build on existing successful systems, holds lessons for federal project managers.

“One of the huge things I learned was that the government does not invest enough of its own resources in these projects,” Maner said, referring to federal employees charged with monitoring contractors.

A second key point Maner cited is that “people don’t manage their vendors closely enough.”

The third and final lesson Maner learned from his analysis of failed projects is that “a lot of times their schedules were too aggressive.”

DHS’ decision to redirect Emerge2 reflects a process of the government getting more adept at adopting enterprise resource planning systems, said Randy Hite, Government Accountability Office’s IT archi-tecture and systems director.

“There is not one recipe for success in implementing big systems,” Hite said. “I think the government is getting wiser in implementing ERP and [commercial] systems.”

Hite emphasized that federal managers are coming to the realization that adopting a commercial ERP package involves accepting the business rules embedded in that system. As a result, the process calls for a lot of change management to prepare and train agency employees for their new jobs. n

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