Over the past decade, I have often been asked to share my view on success factors for enterprise resource planning (ERP)-led defense transformations.
In a career that comprises more than 40 years in military supply chain and logistics, I was fortunate to spend five years as the Director of the United States Defense Logistics Agency (DLA). This agency is large and complex—when I took over it managed 5.2 million items and had 23,000 civilian and military personnel dealing with 58,000 requests for material a day. I assumed the role two months before 9/11 and, as a result, my tenure coincided with unprecedented demands placed on the United States military. Meeting these demands required significant modernization and transformation, which the DLA undertook with Accenture.
Opportunities are available today—technology, digital and advanced analytics—present capabilities of which I could only have dreamed as a junior officer in the United States Navy back in the 1970s. In particular, it is exciting for me to see the evolution of technology and big data accuracy and how defense organizations can take full advantage to build high-performing supply chains.
What should defense organizations consider before they undertake an enterprise transformation journey?
If you are planning a large-scale transformation, it has to generate passion from the top. Senior management will need to communicate around this project constantly and consistently across the workforce, so leaders need to be involved and dedicated to the effort. If the initiative is viewed as a supply chain project or an IT project, you may not gain the support you need.
Is change management important in a transformation program?
I was fortunate to spend five years as the Director of the United States Defense Logistics Agency (DLA), a large and complex agency that managed 5.2 million items and had 23,000 civilian and military personnel dealing with 58,000 requests for material a day when I took over. Deciding to introduce SAP with its new processes and procedures was a big cultural shift—and the greatest challenge is people. Fortunately, there are techniques available from a training perspective that are there to help people embrace change.
What are the critical steps for a successful ERP implementation?
Developing a business case is a critical step. Establish the anticipated costs, the resultant savings and the payback for the implementation. I would also advise assigning accountability for each category of anticipated saving to a senior member of the leadership team. You’ll need to create performance objectives as part of the annual review process and assign external auditors to drive accountability within the leadership team, too.
How vital is board decision making in a successful ERP transformation?
You must create a single point of responsibility to avoid decision making by committee—or lack of decision making. The governance board should include members of the leadership team accountable for implementation and/or savings and a member from each partner who is assisting the implementations. This board should meet as required, make decisions to solve problems as soon as possible and agree a code of conduct ahead of time.
What is your experience around finding the right team to implement an ERP project?
When I managed the DLA business transformation and ERP replacement effort, I saw the importance of benefitting from each other’s strong suit. We worked with Accenture, and bringing our workforces together had a multiplier effect on the outcome. In particular, Accenture aligned quickly with the mission of the Defense Logistics Agency and the Department of Defense, giving everyone a strong sense of purpose in trying to make the project a success.
What advice would you give to anyone who is about to embark on ERP transformation?
The advice I usually give is to start out on a small project, show it can work, then expand it. Identify your informal transformation leaders—not the ones you see in the management chart but the ones that people go to constantly because of their professionalism and what they have achieved. If you can get them on board first, the rest of the organization will follow much more easily.