Audit Report

What We Did

We determined whether the Army Business Systems Information Technology Strategy (the Strategy) and its implementation provided adequate governance and program management of enterprise resource planning systems (ERPs). Specifically, we reviewed the February 2011 Strategy, related business transformation plans, supporting documentation, implementation tasks, and relevant laws and regulations.

What We Found

Army Office of Business Transformation (OBT) officials did not develop and implement a comprehensive Strategy needed for adequate governance and program management of its ERPs. Specifically, the Strategy did not include specific ERP implementation milestones and performance measures for accomplishing the Strategy’s goals, including a plan for using ERP capabilities, or clearly define the Army Enterprise Systems Integration Program’s ERP integration role or milestones. This occurred because OBT officials focused on near-term milestones but did not develop a comprehensive plan outlining milestones and performance measures for all planning periods. In addition, their Strategy did not focus on eliminating legacy system interfaces and incorporating additional functionalities into the ERPs. Finally, OBT officials did not decide on the scope and future of the Army Enterprise Systems Integration Program. In addition, although OBT officials included 25 implementation tasks in the Strategy, with due dates of May 2011 and August 2011, the Army did not complete 16 of these tasks as of March 2012. This occurred because OBT officials did not adequately monitor the development and completion of the implementation tasks. Without a comprehensive Strategy guiding the successful implementation of its ERPs, with an estimated life-cycle cost of $10.1 billion, Army management may not have the timely, accurate, and complete information it needs for decisionmaking. In addition, the Army risks not being able to achieve an auditable Statement of Budgetary Resources by FY 2014 or accomplish its goal of full financial statement audit readiness by FY 2017.

What We Recommend

The Director, OBT, should coordinate with Army Comptroller officials to schedule ERP audits. In addition, the Director should: 

• issue an updated Strategy to include a plan outlining specific milestones and performance measures that the Army is to use to govern and manage ERP implementations and to help achieve the Strategy’s goals, and 
• implement controls to monitor the development and completion of the Strategy implementation tasks and milestones.

Management Comments and Our Response

The Army Deputy Chief Management Officer provided comments on behalf of the Director, OBT, stating agreement with recommendations to schedule ERP audits and update the Strategy. We request additional comments from the Director, OBT, on Recommendation 3 regarding the implementation of controls to monitor the development and completion of the Strategy implementation tasks and milestones.