 enterprise resource planning and the lessons learned from that. We have with us and logisticians who are actually capable of standing up their own name tents, which is a marvelous capability. A very wonderful panel here this morning. I will introduce each of them and then turn the microphone over to the panel lead, General John Handy. General John Handy, of course, has a long and distinguished Air Force career, including ultimately the commander of the U.S. Transportation Command. He was the Vice Chief of Staff of the Air Force. He was the commander of the U.S. Air Force Air Mobility Command. Now he is a consultant and of course he is a world-class expert on defense, transportation, logistics, and global supply chain management to the tune of very few others who come out of that arena. And we're really quite honored to have him here this morning. Joining him on the panel, Kevin Carroll, who was the former program executive officer of Enterprise Information Systems. Most of you know that the structure of acquisition decision-making in the Defense Department, as set up by the Goldwater-Nickels Act that Dr. Carter mentioned, the program executive officer is the critical link between the program and the ultimate acquisition executive at the service level. And so we're very privileged to have Kevin with us here this morning reflecting that from the Enterprise Information Systems perspective. And finally, David Fisher, who today is and in fact is the first permanent director of the Defense Department's Business Transformation Agency where he's been in place for the last three years, actually four years, but three years as a permanent director. Prior to that he had a very distinguished business career and he brings both aspects to the table today. So with that I will welcome our panel and turn the microphone over to General Handy. Thank you very much. Look at this assignment is one that much like I just told my two panelists here that we've got an hour and 10 minutes to solve world hunger. As I read it, ERP in the logistics world lessons learned. Now we could sit here for hours and perhaps days and weeks on that subject and so mindful of the time I've asked each of the panelists to give a brief description of of their any background that may not have been covered by David and then make a statement about this particular subject matter with an eye towards getting to the questions as soon as we possibly can. And much like any audience I find that it's the questions that are far more value than it is listening to us talk about our perspectives about anything to do with this particular topic. And I'll just emphasize David sort of made a hint when he introduced Ash Carter that there were no topics to be discussed with regards to tanker or 135. I would just like to emphasize and congratulate David on that point and and suggest that this is logistics and even if it's PBL we're not going to address it so thank you if you'll you'll stick to the topic at hand. I'm also pleased that so many of you decided to stay for the panel after the speaker. It's impressive to me as the as the leader Ray is chatting me a little bit. So with having said that let me start with Kevin we'll work across and then we'll get to your questions as soon as we possibly can. Okay well good morning I'm Kevin Carroll I actually started as a contracting officer that's my background so so I grew up as a contracting person but buying IT systems and then moved into program management and eventually moved into the ERP systems. So over my span of about 32 years in government service 28 of which was with the U.S. Army. The focus for me mostly was IT systems the acquiring of them the fielding of them the support of them and when I left PEOIS by the way to follow up to Mr. Carter's comments about people in theater the business system area really when when the first bush went to Iraq we basically had 10 people and in support of the services there at the PEO in Iraq. When I left two years ago we had 350 people more people than the other PEO's you would think there'd be more from the the ID guys more from the soldier guys more from whatever but actually we had the most of the people in supporting logistics medical personnel so you can see a big change in a fairly short time as to supporting the business system so so that's going to continue I don't think that'll change as most of you in logistics know it wasn't too long ago you had no connectivity to report back any readiness data now you have it for the most part the connectivity is there the systems have kind of matured enough to provide that most of them being legacy systems to provide that data and now we do have the issue of information overload how do we manage the data how can we get better at command and control and that's in true for logistics medical finance and personnel so really the the area that that I'm experienced and implementing ERPs have really forced us to do two things when I was at the PEO and I think it's still true today of Gary Winkler the person that replaced me is you've got that short-term thinking that you have to do to support the war fight and that does take up your day a good part of it but at the same time you cannot ignore where we're going to the future where the enterprise is going at and so as we try to implement the ERPs across the the army we really are trying at the PEO stage to really try to bring a lot of the things together and try to maneuver our way really with our customers with our oversight bodies with the Dave Fisher and the BTA at the DOD level and really try to find a way to again juggle the various communities in their interest to try to get something to the field and fast and I basically really break my lessons learned down into three categories and the first category would be people in governance we learned a lot about the importance of having a champion somebody in that functional community that could really be a champion and make things happen and we learned that at DLA because DLA really was the first ERP implementation where you had a commander who made it a daily topic of his life to drive DLA to change and the change towards ERP solution and that was a really a thing that we learned in the army we had limited success with that we had some people that were strong proponents but at the beginning that wasn't so true it took a little while before we could build up a champion that could really drive the community the functional community to be looking to change the way we do business and to be able to implement these ERPs because as you know most people outside of Washington you know they'll salute us when we get out that they're going to accept these ERPs when they come out but the truth is they don't see anything come out of Washington usually so most of the time they just are nice and friendly and would like to take our money if we bring it to them but for the most part they don't see that anything's going to happen in their lifetime so it takes a lot of there's a lot of not I guess it's passive resistance in a sense of not really wanting to change or expecting change so you really need somebody that has to force it down mid-management and into the community and do so with a person who is very well respected in the community and has that knowledge and control and in logistics that's important because as you know logistics there in the army even we have national logistics tactical logistics most soldiers and civilians know one or the other very few know both General Stevenson might be for example in the exception of that the g4 the army right now he knows both but it's very hard to find someone that understands the end-to-end logistics community and so finding a champion someone to do that's a big big deal the governance structure quite honestly we really didn't have one and still struggling to be honest with you to have one in the army at the enterprise level we could not bring together the communities the functional communities that well the finance logistics personnel on these ERP implementations and and that's been a struggle that's ongoing today I think it's gotten better today but it's been a struggle to get an enterprise integration look at these systems to help with integration versus interfacing and that's been a big big challenge for us to do that at the program level we had a lot of trouble and of getting the right people together and a good example I think that worked fairly well was the logistics modernization program once it became an acquisition program of record general Mortensen who was the deputy AMC commander took a personal interest he was there every month every spend a day to ensure that the issues were on the table as well as the PEO organization as well as the functional community that was receiving the systems in the army's case c com am com take com and as well as the contractor and i'll give a plug to austin yurks here they're not a client by the way they are not a client but um but uh to austin yurks because he took a day out of his time at csc to be there to ensure the issues that that were going on in that program got surfaced and that we had a more long-term not a short-term look at what we wanted to do to get that system fielding so that kind of really did gel well and created i believe an avenue for the program shops both on the contractor and the government side to get issues up get them to side to get them moving and get that system fielded and it's not quite fielded all the way yet that goes to take com this summer and then that would be the last fielding so that went pretty good the other area that i think is real important and i know i just a couple more minutes implementation basically you got to think big implement small we tended to think big implement big and that hasn't worked so well so we really uh the lesson learned to us was really we need to understand what we're doing better architecture is a good example of this quite honestly and i hope dave uh doesn't mind me saying this i would have to try to find a way around dave in a sense because there was an architecture but nobody really kind of in the army knew what we had to do but we knew if we went in there and felt around it we get our check mark and we needed that check mark or else they wouldn't give us any money so we uh so but we really didn't understand the relationship between architecture and the procurement or the acquisition and that's the thing that we learned and it's gotten and things have gotten better about this what artifacts come out of the architecture that lead into the acquisition process that then lead to delivering of a system that's looking at the the big picture that's looking at the enterprise and how things play together so that was a big big lessons learned uh and um i would also say uh the third area that i just wanted to mention that lessons learned is the act strategy and that means oversight as well the it oversight system doesn't really work i mean if you look at the defense panel uh the panel on defense reform that just came out and had 16 percent of major it systems are are successful and their judgment now i don't know the trouble we have is we don't know if um it's sort of like baseball if you don't know anything about baseball and you come to the united states or cuba or japan and you find out that people only get a hit 25 percent of their time at bat but that you know doesn't sound so good 25 percent is the only time to get a hit i don't know if an it systems of 16 percent is good or bad because we really don't know what industry successes are to benchmark it against but assuming it's similar and i bet it probably is uh the 16 percent might not be as bad as it sounds however i do know the oversight process has not added to any improved successes of those systems getting out it's very difficult very long to get these systems out lmp gcs army g fibs all those programs if you look back and and and could see and that we and they are documented to see what kind of of time it took to get approvals uh you would be shocked how long that took for little issues there were almost no value add quite honestly um so we need to kind of adopt a better oversight thing uh the bta with the er m uh which was a risk management systems better i mean that was a better way to look at least we're looking at risk we realize things are going to go bad how do we manage risk how do we keep under control and deliver so we definitely need to follow some of the work that ita ac is doing some of the work that john gilliam and the guys are doing with the defense sector right now with ideas of how to improve how we do it acquisition oversight and procurement and to do it in a way that's much more best commercial practice rather than the way we've been doing in the past and so those are kind of the generic lessons learned i think that i've experienced that peo eis thanks kevin david all right good morning thank you everybody for the the opportunity and for for coming out on this friday morning um lessons learned in erp um i'll agree with most of what what kevin said is some of the most important lessons that i would say we've identified i'm not sure how many we've actually learned though um we've identified a lot of lessons things that have been a problem if but by saying we've learned them that means we're doing something about it and we've gotten better and in many of the cases the ones that kevin has described in a couple that i'm going to articulate i'm not sure if that's really the case and i'll try to get to a point of where i'm optimistic in the end of our opportunity to learn them because of some of the fundamental changes that have just recently occurred in part thanks to legislation um but i want to highlight some of the things in this whole erp space um that i think are some of the critical ones that we need to learn and do something about just some perspective um you know for the business mission area the department of defense we have bet the farm on these erp systems we have stopped spending on the legacy we are spending a ton of money on the 14 or 15 or so things that we would call erp systems today we'll spend 1.15 billion dollars on those systems this year we have spent over nine billion dollars on them in the last decade let that number sink in for a second because i know in the department of defense nine billion dollars is not a lot of money for certain things for it systems about a dozen 14 or so systems nine billion dollars is a lot of money again if we want to compare to industry um that's not a number that industry can frankly even understand how much we've invested in trying to improve and then the question is what are the results and i think one of the indicators of results are well how much of these are actually being used and if you look at our toa our total obligation authority it's i know the navy just increased its usage of navy erp prior to that it was under 10 percent of our toa was actually being managed in this nine plus billion dollars worth of investment um it's probably it's over 10 percent now i'm not exactly sure where the number is but it's still a a small minority in terms of what we're actually using let alone getting productive benefit out of um so a couple of reasons why i think that might be first of all we treat these as technology projects they are not technology projects as somebody said to me not that long ago they are sociology projects this is all about people it's about us it's about change it's not about little change it's about real change big change we're not coming in with these new erp systems and simply taking what you do today and making it a little bit better a little bit faster a little bit more automated it's fundamentally changing how we do the business today and there is a lot of resistance to that and but we don't treat them as sociology projects that are change oriented we treat them as acquisition projects and technology projects and that's a problem uh because those focuses are not on the areas that are the most resistant and problematic in what we're trying to deliver um second piece of that and it's related and it ties it tied to how it's tied to how we're organized in the department of defense uh dr carter was talking earlier i mean about the issues of jointness and goldwater nickels and how we fight jointly but we don't necessarily acquire things jointly we certainly don't execute the business mission of the department jointly we execute the business mission of the department in as stovepipe to manner as you can possibly formulate um why is this a problem we talk about logistics erp systems that's a uh an oxymoron to me there's no such thing as in a logistics erp system that's not what erp systems are they are enterprise systems they are designed to facilitate end-to-end business process transactions you can't have a logistics transaction in an erp without a finance transaction associated with it you acquire an asset are we going to acquire that asset and track it from a property standpoint in one erp system yet we're going to depreciate it and track the dollars in a different erp system in the department of defense mindset the answer to that is yes that is what we are planning to do we are going to procure something in one system we are going to receive it in another erp system and we are going to account for it in another erp system that is not the way erp systems enterprise resource planning systems are designed to work but that's how we're organized that's how we think and part of the problem is to optimize that whole thing that end-to-end capability we sometimes need to sub-optimize a piece and that's where the resistance really kicks in so i liken it to um you know we are we are rational creatures of habit we we i liken it to our morning commute what do we do in the morning we drive to work at least i do exactly the same way every day why do we do that because that's a rational thing to do when i moved to washington about five years ago i chartered out a few different courses on how to get to work i figured out the best one and by gosh i'm going to do that every day i figured out the right one okay so we've been doing that for 20 well for me five years other people in business have been doing things for 20 years the same way and it's a rational thing to do and now here comes the change somebody comes in from the traffic planning corporate entity whoever that may be and says you know what we're going to redesign how we're going to everyone's going to commute and for 80 percent of you it's going to get better for 10 or 20 percent of you it's going to get a little worse but you know what do it anyway because it's for the greater good well from a greater good standpoint that's perfectly rational why would we not all comply with that to make the end-to-end the holistic view of this business process better we may have to sub-optimize a piece well am i the individual who is rationally driven to work the exact same way for five years going to simply say i got it okay i'll take one for the team we don't do that and part of the problem is in time back to business we don't figure out the resource reallocation necessary to do that because sometimes we tell pieces of our business they may have to take a little step back especially during the mig learning curve you know eventually that decrease in productivity may get better over time but initially you're going to take a little bit of a hit we just assume that they're going to suck it up and get it done we don't help them enough with training we don't help them enough with resource allocation so there's no incentive for them to take one for the team to make the end-to-end the whole thing better which is really what corporate wants to see so they're disincentivized to take a step back yet we can't make the whole in these highly integrated products these erp systems process-based systems to work unless we take that into account another major problem we have and it ties to the one i just mentioned is one that i label strategic alignment in most of these programs i would argue we are not strategically aligned and if we're not strategically aligned we have no chance of success we're alike and again i'll give you in a sports analogy it's the final four this weekend imagine if coach k and do came out on the court tomorrow night in indianapolis and he decided to give different plays to every player calls him the same thing but you do five different things for this play that's the lack of strategic alignment what would happen they'd all run into each other and oftentimes that's what happens in these large it programs we have all our different constituencies our different stakeholders playing from a different label our management says we are going to buy these enterprise-wide process oriented transformational programs we're going to use cuts products we're going to implement them out of the box we're going to re-engineer our business processes we're going to do all the things that the literature tells us to do that's that's what they are strategically aligned around then you get to the acquisition community and the ten or more functional communities that are involved plus the it folks the contractors and you lose alignment the finance team is looking at one thing the logistics team is looking at something else the procurement groups the personnel groups they're all aligned around their own world and many of them don't want to adopt the out of the box product and many of them don't want to simply change their processes and they don't want the sort of simplified version of the way they do business we have complex businesses and some people are so used to it they can't break away so you have alignment around simple things like simplicity versus complexity we have so many stakeholders in these very large programs these comprehensive business solutions that may be logistics-oriented but they span broader areas than that and we have so many stakeholders with different perspectives we wonder why they're all running into each other and the thing that is going to help us overcome that and kevin touched on it comes back to leadership and governance the only way we're going to overcome these stovepiped approaches getting people to optimize around the end to end as opposed to locally to be strategic aligned is to what i've all actually started calling we need for each of these programs almost fanatical leaders people who have what definition of fanaticism is excessive enthusiasm excessive enthusiasm for these programs for business systems though let's think about that department of defense how many senior leaders three star four star undersecretary level leaders are fanatics about a business system not a lot that's not what we are all about for the heart and soul of the department of defense we're fanatical about other things and that fanatical leadership helps us drive phenomenal results in other areas of our business of the department of defense we lack that fanatical leadership around these things and leadership in this case is not about endorsement it's about engagement a lot of times we will get that four star leader or a three star leader to endorse an erp program and maybe we'll see that leader again in six months for a 30 minute brief we need that level of leadership across this broad spectrum of stakeholders to engage virtually daily making decisions now whether or not we can afford to do that is an interesting question i mean Dr Carter was talking about how we are doing that in some of the key warfighter oriented activities of today and it's making a difference it is the difference i would argue that focus of leadership can we afford that level of leadership engagement in these kinds of programs i would argue if we can't we're not going to be successful so we have to figure out how to do that in the midst of our broader mission given that it is the source of our investment in trying to modernize the business environment to give us the kind of information we need to be able to run and manage the business so my optimistic point here to conclude my opening comments is we have a new structure in the department that hopefully will give this to us we have a management structure that has now been put into statute where we have chief management officers at the military department level we have a chief management officer in osd we have deputy chief management officers now at each of those areas so we have under secretary level orientation with statutory responsibility to own and manage this business space that's a first and i think my optimism is if we can improperly institute institutionalize those capabilities in those leaders and potentially very small teams they don't have to be big armies of teams but small focused top-down leadership that can try to overcome some of these institutional barriers we've got a we've got a shot it's it's new we finally now have our final one of these people who is who's just been confirmed and at the osd level we have a confirmation process underway so we're just getting these leaders on board we need to figure out a way to get those leaders to help us drive the kind of change that is necessary for us to be successful and i'll leave my opening comments on hopefully an optimistic note that that's exactly what will what will happen general thank you david let me make one last comment before we start the questions and it's a perspective from four years at transcom and certainly enhanced by the years and logistics before that and it touches on what david's final point is and it's this there are far too many people i think many of you will agree judging from your head nods in our department who get incredibly enthusiastic about weapon systems the system itself you can get quite enthusiastic about fighters bombers tanks in deference to dr carter even m a tv's the issue for those of us at transcom was not one of modes of transportation i needed to be an articulate spokesman for mobility aircraft i needed to be an articulate spokesperson for ships at sea and the modes of transportation but i can assure you all that the thing that concerned me the most that i felt like i was compelled to focus on was the greatest weapon system i had at my hands and that was information technology because all of the aircraft either mobility tanker or airlift or ships at sea or trucks train trailers barges i don't care or people don't move anything successfully unless you've got the information that can inform you about making decisions about what's moving and it's as simple as ups or fedx or dhl of where's my stuff because in that challenge of factory to foxhole there is some soldier sailor airman a marine who's sitting somewhere in the world in a theater of of operations either in a crisis or a haiti like an environment wondering where's my stuff and it's not informative to know that it's that they've got the aircraft or ships to deliver it it is where's my stuff and so information technology is the key and erp solutions for logisticians put it all together and so much like david who sounds enthusiastic about chief management officers i would tell you all i don't believe for a minute until chiefs of services stand up and chairmans and sec deaths stand up and say the most important thing to me is a successful erp or information technology solution like we do f-22s and tankers to be like we have this love of weapon systems information technology and erp solutions are weapon systems they're required in my view as a former commander they are absolutely required without them you can't get from here to there it doesn't work from factory to foxhole unless you know about it and there are a great number of people at dla and transcom today that understand that in spades but they are shouted down by the folks wanting to spend incredible time and money and effort on weapon systems and i'm not denigrating weapon systems buddy meets it's just that i see a priority from a parochial logistician that i'd like to see somebody stand up in congress and start screaming about erp solutions and funding appropriately for them refusing to confirm people if we don't get an ert solution and you know erp solution how many of you seen that happen so now i hope that some of this discussion has fired up questions your mind we're going to run this like an auction if you don't intend to ask a question sit on your hands because we will recognize hands no matter where you put them i'm pointing back over you there you had your hand up right away yes it's you and the glasses stand up no not you in the back right there um my name is john weiler i represent the ich and the it acquisition advisory council kevin carroll is one of our colleagues um in the last uh year there's been a lot of attention on the lack of effectiveness of federal it acquisitions and even more so in dod the march 23rd dab report that kevin referenced that was just released paints a very dark picture of how much we spend ineffectively acquiring it it talks about using weapon system approaches to buy it is not an effective way and then the ndaa uh that's been signed out section 804 directs the secretary to establish a new and separate it acquisition process now um for those who've been around during clara cohenack that was the same directive to streamline the it acquisition process and today 15 years later really nothing's been streamlined we've made minor modifications to a set of mil spec processes designed for 20 year life cycles and now we're asking the same people who own those processes to change them what is it going to take to bring in new kind of thinking that's necessary to affect the kind of change and can we actually change within or do we need some external forces and capabilities and expertise to help osd nii and atl to look within and saying my processes are ugly my babies are ugly thank you you're probably closest to that so um there are i would say two very active efforts underway to address what john is referring to and i actually testified to the house panel on acquisition reform about two or three weeks ago as they were wrapping up their piece where they were focused on alternative acquisition processes for both it and for services as two distinct elements of the acquisition process that at least the panel was identifying as opportunities to do differently from the traditional weapon system kind of acquisition mindset we at bta have actually been advocates for an alternative to the acquisition process for it in particular business it for about a year and a half um also for those of you who know the building well um it only takes one person to say no to stall innovation and that's basically what has occurred with the process that we have put forward that would both from an efficiency and an effectiveness we try to attack this problem from both levels we we have an inefficient process that's very paper intensive that requires lots of documentation some of which is probably not relevant for a business it system but we do it anyway because that's what we're taught to do and what the regs require and there's an effectiveness standpoint as we've talked about our effectiveness in it hasn't been great and so we were trying to introduce some concepts that would help on the effectiveness side and kevin referenced one of them uh with the thing called we we call e-ram on enterprise risk assessment methods focusing on risk assessments in the life cycle of the program um our challenge has been getting a hundred percent concurrence why because there's a couple of stakeholders out there that feel like we're taking away their authority in doing this effort to both streamline efficiency and effectiveness and so that policy recommendation has simply stalled for the last six or eight months there is another effort that takes some of the ideas that we had even further that's really coming out of nii right now and one of the interesting constraints on how far we can push transforming these processes is the law statute um we uh in our effort because we tried to do something quickly didn't succeed in that um was to take on any policy or regulation as fair game but not battle the statue what nii is doing and i commend them for it is to take that piece on as well and now it appears from what the house is telling us that they would be supportive of statutory relief or alternatives from that perspective and so um we we see a lot of goodness coming out of nii and some of the things that they're advocating for doing the acquisition of it differently um what we at bta would advocate is let us move forward today on the proposals that we've had on the books now for months because there's an immediate goodness there that's our belief and i'd say 90 of the people have who have coordinated on that have concurred with that we're still stuck in the process of trying to get approval in the meantime we would continue down the path that nii i think has some really good ideas they're out of the box and they will face some of the same obstacles that we faced um but it all comes back to ultimately somebody's got to say yes or no and sometimes we wait for a hundred percent concurrence and we get nothing done um we're at that point now where somebody's just going to need to say yes or no on some of these things so and i would just add that i know david's got tons of bruises from his time to try to change that and it hasn't worked i mean in the long in the big big time and and so i know how hard of a struggle it is it's almost like we have to have a BRAC commission for it but here uh acquisition reform i mean it really does feel that way because the resistance seems so strong and powerful that rational minds don't win out so yes ma'am hi i'm sheila ronis with walsh college and the project on national security reform um real transformations are the toughest things you can possibly do uh having been involved in several both in the corporate world and in government they always fail unless you attack the human dimension directly and with investment um do you have any sociologists psychologists cultural anthropologists working with you because the kind of enormous task you are taking on will fail unless you address it directly well so the short answer is no and i guess this goes back to lessons identified versus lessons learned um so again my opening remarks were consistent with everything that you said yet we really have not adjusted our approach um to how we're going about these programs we have an idea we turn them into an acquisition the acquisition arm hires a contractor it's it focused we designed something that is strategically aligned to what the original concept was and then the roadblocks just kick in um so you know i as i mentioned one way to overcome that is on the leadership aspect but the leadership aspect has to be able to do and be willing to do the kinds of things that you describe um uh and and largely we haven't done that and i would say look at most of the programs in the department the the 14 or 15 or so that i just that i described earlier are not doing that um it's an idea that we need to get senior leaders in these cmo's to engage on you know it's i in the in the ERP system that we implemented at bta that's that's being implemented out across all the other defense agencies um biggest mistake that i made and i made a i did a lot of what i would call untraditional things um i certainly tried to be that fanatical leader in fact put other responsibilities to the side because i knew without that level of leadership we weren't going to be successful at all uh and one of the things that i did a lot that i thought worked well is i kept saying no to things that my staff felt i had to do and i kept saying to them look i don't need that so why do you and i'm the director of the agency if i don't need it and i'm not going to manage that way why do you need it you don't need it don't worry about it no one's going to hold you accountable for that doing doing it that way anymore we're going to do it this way now that was eventually that that helped but here's the thing that i didn't do until after the fact and we're trying to do better now sooner and it comes to this whole concept of change management and training training we do traditionally for an it program you might get a cbt a computer-based training thing and maybe three or four days of classroom instruction i'm sorry that doesn't cut it train we are changing the way you are doing your entire business the only way to learn that is by doing it and what we in fact are now offering to other agencies who are coming on to this system is because i have built in my organization a what i call i have a center of excellence a small team five or six people and they are my experts on the processes and systems that we have transformed to the best way i think for any other agency to learn and be ready to adopt that new capability is to come and sit with my team for two weeks three weeks a month and actually do it it's almost like a an operational test but do it with people who have already learned all the hard lessons all the lumps my folks didn't have anybody go to so they were in the hard lumps in production i regret that that was not ideal but i didn't have anybody really to send them to and that's where some of these sociology kinds of things can come into play because these are people these are not people who are operating the system how it was designed to work they're operating the system as how it does work in production in real life in which you can't anticipate all the things that will really happen i think we need to figure out a way to do more of that is to get the target audience to understand the real life implications of this new end to end phenomenon long before they actually are expected to use it and that requires investment of time so far what most of the organizations have told me that i've offered that to the first thing they wow that's great you'd be willing to do that sign me up and then that goes from this level of the organization down to here down to here down to here to the people who are going to be impacted by that and their answer is simply i can't take three weeks out of my time to go do that i'm running the business today okay but you're going to pay the price and so i literally had an agency who i offered this to this week who canceled on us because they're too busy and they're supposed to go into production in october so i'm going to call them back up again back up the food chain and say do you really want to cancel that here's what will happen if you do it here's what will happen if you don't so it's a piece of trying to address again the sociology element of people change um of getting people to accept and understand the rationale of what doing things differently is all about there's a there's a chasm that everyone crosses it's just really hard to get there is to recognize you know that driving the different commute is for the greater good takes you a long time to say i got it makes sense i'll do it and there's lots of techniques that we need to do and try we tend not to do very many of them and so it's a long time before we get people over that hump but i'm sure there's more we can do there we just need to think about what it is and how to go about it and and get people's time to do it okay and i would just add it's interesting the logistics modernization program in the army a lot of lessons identified in the c-com fielding actually lessons learned only implemented amcom and all in all i mean it wasn't perfect but all in all it was pretty easy compared to what i thought would happen to go through and that's because they did take a lot of the lessons learned and build that in now it heads to take calm this summer disaster ahead in my opinion on the fielding of that because basically to your point i think they've kind of many i got the m-wraps going on they got all this more stuff going on that just give us the system and get out of here and we'll take care of it we have a gs-15 kind of running it in charge of it not an enthusiastic supporter just someone that got tasked with the job so in my opinion we're that's going to be a real troubled fielding because there hasn't isn't that psychological sociological or training feeling about that system and so i'm worried about that when they go out there just because of that and the money's been kind of cut in that area because training's usually a place you cut sometimes that's a that's actually a really important final point we always skimp on training we always do and especially when a program is going south and it needs more money somewhere else we cut the training i have advocated to every program i've spoken to whatever your training budget is going in double it i don't care what it is it's it's insufficient i know it by default double it and you might want to double it again so it's not only sort of how we train so the operational kind of training versus classroom training or whatever may be but our willingness to invest both dollars and time on the training aspect it's not it's readiness we do this in the military training and readiness this is what we do we know the impact that it has when we do it or when we don't do it why do we think it's any different for an it system next question back here admiral lippard i'm with excenture a former director of the defense logistics agency five years of which we implemented the erp solution that's being used as i tell people i was six foot five and had dark brown hair before we started this process of dla but i wanted to jump on with david and what kevin have said yeah you can put and i learned this as we went through this but you can put a software system in in any organization without that much trouble but it's the people side of the thing that is by far the most difficult and what we had to really focus on at dla through series of trials and errors was extensive change management training for the workforce now this this comments going to sound a little bit bad but the average age of dla was 48 it still is 48 years old if we took the new kids the ones that we just hired and brought in the sap and the system they thought it was the greatest thing that's ever happened to them at 48 and older and 48 sounds young to me by the way there was tremendous institutional resistance to this thing in fact i learned that you could send anonymous emails to the director if you went to the library okay and i was called things that challenged my intelligence my heritage my everything else about my background that i haven't been called in my 38 years in the navy but the point is that we had to go into this change management and had to redo it and redo it and redo it so that the inoculation took and the second piece of it was what you were talking about is the training when we did the initial training it was grossly inadequate and we had to go back and actually design college which we called college courses so it was erp 101 201 301 401 and then i think we eventually went to a graduate course before we would let people even to use the system because of when we tried it without that it was just a complete disaster so i concur with what you're saying but i just wanted to pile on about from someone who's been through the process well if i can just add a couple of quick points so we will we also learn frankly from dla we have a set of courses for our folks as well if you don't pass the course you don't get that responsibility and that was also a culture shock to our folks i mean i have to pass a course so i can use an it system well yes because if you don't have that basic competence going in we're just going to have problems in execution and so we had to reassign some folks who weren't able we had a pretty good throughput rate 85 percent or so would pass for this particular area that was at the heart of what we were doing for those that didn't pass they got a different responsibility the other thing i'll comment on admiral lippard's experience five years single leader i'll call fanatical leader in a very positive way it's by the by by far the best example that we've had in the department for not only engaged leadership but continuity of leadership which is another huge issue in the department both on the military side and the civilian side especially in the political realm continuity of leadership as well as engagement of leadership is absolutely critical to any program including it programs and dla under admiral lippard is about the only example where i think we can really say that we've had both that level of engagement and the continuity of leadership for any of these erp programs so again less than identified but maybe not less than learned in terms of what we can see as a critical success factor but haven't really pushed through these other other environments here you go right here and then i'll come back to you in the corner there next stand solidly with professional services council i want to pile on what admiral lippard said so we'll just keep jumping on this and come back to the change management piece and look at it sort of over a long period as opposed to immediate effect general handy and i went down to fedex in 1999 or 2000 we took a number of folks from dla with us we were looking at erp and they had the world-class system and all of the things david you described were the lessons they said don't do anything till you solve these problems of course we've now spent nine billion dollars and haven't solved all those problems but the other thing they pointed out was how they develop train and rotate their workforce and what it takes to get to leadership within fedex and so there's nobody in fedex at a senior level who has not spent a lot of time in various parts of the company but also in the information technology environment so part of the question the question i want to ask is how do we have to change how we develop whether it's civilians or professional military training the the orientation they have the understanding and the expertise they develop around these systems because it's so core to what they're going to have to execute down the road it strikes me that we don't do that other than in a stove piped environment so i'll be happy to take a shot to start and i think the the comparison with what general handy was saying earlier transcom is completely appropriate to fedex and other companies as well those are information technology companies yes they are transportation companies but the foundation of fedex's success is clearly information technology they had a business model it was at the heart of it they were innovative they changed the industry and it was all based on their ability to adapt to new ways of using information technology they are information it's an information company and there's huge advantages to that that we're not reaping because of some of our inabilities to get there the human capital element and the career path element of the business mission area the department is certainly again not at the forefront not in the military and not even in the in the civilian ranks uh doctor carter earlier mentioned that we now have general officer positions or more general officer positions in the acquisition workforce um we have general officer positions for cio's um we we largely don't have you know we have for finance they're very limited um and what we don't have both again organizationally um i think limited as well as individual career path limited is this idea of enterprise business i mean it's almost just an idea itself to think about business being an enterprise function not our individual function so uh we might have somebody spend 30 years becoming a general officer in acquisition we might have somebody spending 30 years to become a general officer in finance or 30 years becoming a general officer or a three-star level general officer in personnel how many of them have ever looked at any of the other three we we execute business by end to end processes not by function and the technology enablement that we're buying runs by process again i'll go back to dla dla is the example on how to do this they have reorganized their business around processes they have process owners transcom was our only process owner at the enterprise level of the department the distribution process owner virtually every other organization and every other uh command level uh piece of the business is by function so even if we have career paths and i would say they're limited for individual business functions we have virtually no career paths for more process oriented enterprise thinking kinds of business aspects of what we do but that's the heart of what we do talk about a cultural shift if we started reorienting the department i'm not necessarily an advocate of this dramatic change at the moment although it's an interesting thought piece around end to end processes and more process owners like the dpo and where we train and equip our people to think along the lines of nn business processes and if we don't want to reorganize the department along those lines we at least need to figure out how to cross pollinate and figure out how we are going to grow people to think along those lines and we largely don't do that so we do have career paths i think limited in individual functions where we do grow leaders into those but i'll tell you as we look at our erp breakdowns today um half or more of our problem comes when when we go from one of those functions to the other and part of the remarkable piece when you talk about change and willingness to change and you have an erp solution this is happens almost without fail you talk to an individual owner of a piece of a process and they will immediately recognize the need for change by everyone else it's instantaneous everyone else of course they need to change it's intuitively obvious to everyone well what about you of course not i can't change why would you change me i've been doing it right for 20 years why would you change what i'm doing just automate what i have today and that's part of that thinking is that we only think by function we optimize locally and so we don't have that human capital element that thinks more broadly and how we get that i don't know although again i'll come back to we now have somebody in each military department who is chartered to think that way and that is the chief management official it's first time we've ever had in a role a statutory responsibility to think cross-functionally in the business mission yeah and i and i if i could just add something real quick very quick completely agree with everything that you said and a point that brought that that showed that to us in the program side was when we had to do and david you kind of insisted that we do this when we did end-to-end logistics and finance scenarios that run our erps through because we didn't develop them that way when we kind of tried to do that we ran about i forget the number of 57 different scenarios to go through the transactions that you'd have to occur we that's what we find out there's nobody that knew the answers to all of those that everybody knew little chunks and pieces again again there's a national logistics a tactical logistics and there's a finance nobody knows all okay you're up no no i'm you're you're tackling when it goes by with that microphone general uh... the gym hall i'm with ibm could i ask you to share your perspectives on the benefits of erp implementation on the departmental objectives of readiness responsiveness reliability whatever whatever you pick but let's wave our magic wand assume it's somebody's lifetime and the the systems are now in place and uh... where the commercial world gets benefits and faster clothes and better asset productivity where do you see the benefit come into the department when this is all successful and just give you one quick example is right off the top of my head and then i'll get the more serious examples here in in my world it would be that the bottle of water that needs to get to sergeant jones leave somewhere in the u.s. and gets to sergeant jones without getting diverted or misplace somewhere in that that supply chain it can be a being a bullet i don't care what it is but someday there will be an end to end supply chain solution that is erp oriented that will that will guarantee much like our major small package carriers guarantee today through it that that event happens without question that's real reliability that's real progress jim i i look at any opportunity for improvement along sort of three parameters um efficiency effectiveness and cost and if we're doing these systems and programs correctly we should gain benefits in all three and general handy's example touches on all three how quickly can we get something from here to there efficiency the optimization of the process there's a throughput element that these systems can provide us uh... based on how they're designed and if we're willing to keep things simple and adopt them the way they are our throughput our end to end process efficiency should dramatically improve effectiveness um and effectiveness in information systems is about information so how accurate are we in both executing the business so there's an efficiency element so the the bottle of water is going quickly to from a to b but it's also going from the right a to b so it's effective but also our information capacity to pull information from these systems so our senior leaders can make good decisions so we can reallocate resources if if necessary uh we we can be accountable to the taxpayer and to congress um can we make better decisions based on having this information in a reliable timely manner and we know many of the decisions we make today by our most senior leaders is based on inaccurate unreliable and non timely information well how how optimal can our decisions be if that's the case so efficiency effectiveness process information and then cost we spend an enormous amount of money fixing business transactions after the fact ounce of prevention pound of cure we live in the world of pound of cure or ton of cure or whatever the dynamic may be the amount of money we spend reconciling and fixing stuff after the fact both hits efficiency and effectiveness by the way but the cost associated with that is mind-boggling if we use these tools properly and we put discipline in place to get the beginning of the process right and allow the data and transaction to flow through them the way they were designed to flow at least to the maximum extent that we can our cost to operate will go way down well come back to what i said earlier that may require us it's me driving and i in my 10% of the people who are driving are not going to have to do things a little bit suboptimal i've got to invest some additional resources up front let's say 10% more to get it right so i don't have to pay the 80% on the back end to fix the problem and we don't do well in that sort of resource reallocation to help us get it right at the beginning so efficiency effectiveness cost i think affects all of us and i think that's our opportunity and trust because i know i i ordered a whole bunch of bottles of water from different people only because i i knew only one of them might arrive right so i don't have faith in the system so okay you had to have a quick and then money i'll get you next week very short on time got about three minutes from national defense university kevin kevin actually addressed my point the bottom line is the bottom line is in fact trust that's the answer your question is that an effective erp will produce trust across the enterprise and and that's what we're going for money go ahead i serve money montero i know that everything's been said but not by everybody so i do want to make use two examples and then in with the conclusion it is probably a statement of the obvious is this a speech or a question no it's it's it's if i can make a statement is that okay it won't take long if you go back and remember all of us remember why 2k that was it was an event that we thought that the world would cease to exist as we knew it unless some real quick actions were taken dr. hamry was that person so when you talk about a fanatical leader somebody that was engaged not just came through for briefings everybody was required all the services and he had the power and he had the authority and he made it happen now that's that's a positive example but there wasn't a lot of other things going on as i recall at the time so there was total focus on a unity of effort unity of purpose and we got it done and so it was it was a non-event back a few years from that date i was in korea with a guy named general gary luck he was the commander in chief they were allowed to call him commander in chiefs at the time and and uh just in time logistics was the bumper sticker phrase at the time and general luck would look me in and i say i don't want to hear you talk about just in time because in his mind it was what if it's almost in time and so what that resulted in yes we were not efficient but we were effective and probably what's going on in afghanistan and iraq there's a certain amount of effectiveness versus efficiency so to my statement of the obvious conclusion and i think it was mentioned by dr carter is the focus for most people and i think rightly is on the current ops it's not that they don't care people don't care in this room about efficiency but for now we got to be effective what is a driver to get us to the efficiency part it could be the um not balancing the budget because we won't get there probably in my lifetime but reducing the deficit so maybe that is a catalyst that all of us can use to get to the efficiency part so there's got to be some event that's going to force it other until we get out of iraq and afghanistan so thanks for your time great thanks money i that'll have to be our last speech of the morning and we've clearly run out of questions my suggestion would be that you know that you're about to take a break here which is is a wonderful idea but that you also have by judging from the hands a number of questions that i'm sorry we couldn't answer but i know that dr. gantzler can so i'm sure that you're going to stay in and put them all on him for me please thank you