Enterprise Resource Planning Software
Enterprise resource planning (ERP) tools are administrative software systems based on commercial off-the-shelf software and may be used throughout an organization. ERP systems integrate information and business processes—including human resources, finance, manufacturing, and sales—to enter information once and to share it among departments throughout the organization. ERP systems force business process reengineering, potentially fostering improved operations that can lead to future savings. However, to achieve these savings requires an extensive knowledge of business processes by those designing and implementing ERPs. Performance following automation in the absence of this understanding will fail to meet expectations. Although an ERP system is configured commercial software and should be treated as such, we highlight this type of effort because of the unique difficulty of estimating its implementation costs and duration.
GAO has previously reported on the challenges of implementing government ERPs resulting in cost increases and schedule delays. For example, in a 2010 report, we found that six of the nine DOD ERPs we examined had experienced schedule delays ranging from 2 to 12 years and five had incurred cost increases ranging from $530 million to $2.4 billion. DOD stated that the ERPs would replace over 500 legacy systems that cost hundreds of millions of dollars to operate annually. However, delays in implementing the ERPs required DOD to fund the legacy systems longer than anticipated, thereby reducing the funds available for other DOD priorities.68