2016 was a seminal year for the Australian Defence Industry. The Whitepaper, First Principles Review, an inaugural Minister for Defence Industry and a $195 billion/10-year spending plan have all propelled the industry to centre stage. Ship building, cyber security and submarines have become regular features of the evening news.
However, none of these will impact upon Defence as much as the Defence Enterprise Resource Planning (ERP) program.
A Decade in the Making:
Dating back to the adjourned final phase of JP2077, the quest for an Integrated Logistics Information System has now expanded to an all-encompassing ERP system. Scheduled to take eight years and with a budget of $1.5 billion, it will be the largest government program of its kind. By replacing, not replicating - a vital distinction - an estimated 600 legacy systems into SAP and with the added layer of SAP’s industry solution: Defence Force & Public Security (DFPS). It will certainly be the most complex.
At the heart of the DFPS solution is the functionality within SAP to flexibly plan and execute military operations and exercises, in recognition of the capability and readiness to do so. This DFPS functionality is supported by SAP’s core ERP platform.
A “full implementation” of DFPS will permeate the core and frequently used business processes of Defence. From flight and sea safety to ordering bullets, baked beans and band aids. DFPS will be a key enabler of Defence operations and enhance a force’s elements ability to prosecute operations in an effective and efficient manner - while maximising the availability of the assets needed.
In short, the Defence ERP Program will affect every facet of the ADF.
“The Defence INSIGHT is the largest ERP program implementation of its kind in Australian government and is based on the SAP Defence Force & Public Security (DFPS) industry solution. The solution seeks to enhance operational effectiveness and provide accurate and timely information to support Defence’s decision making, and reduce the total cost of Defence business.” - Department of Defence
SAP in the ADF:
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Presently, the ADF operates financial functions (ROMAN and BORIS) within their SAP environment, but this is far removed from an actual ERP system. Defence intend to roll out their first release of the “Garrison and Estate Management System” (GEMS) with which Defence infrastructure repair and maintenance will be managed. They’re also rolling out a minor (and non-integrated) component of the DFPS solution for management of personnel and functional equipment called PIMS.
Moving to a true ERP platform will require a paradigm shift in thinking for implementing and managing business management systems. The adoption of a fully integrated ERP system demands an integrated approach to organisational change management (OCM), learning and education, technical, functional and project management office (PMO) implementation skills. However, this runs contrary to the traditional ‘above the line, below the line’ model that all too often divides or excludes, and often creates an adversarial relationship. Those above the line focus on pushing down and those below on pushing up, often to the detriment of outcomes.
Veterans as a Sovereign Industry Capability:
Despite SAP being a commercial off the shelf (COTS) solution, the importance of having many military ERP experienced consultants on a defence SAP project should not be underestimated, due to the strong military integration DFPS places across the top of the existing business processes. This requirement can only be met by embedding military SAP consultants into all teams, including finance and human resources (presuming HR is added to the scope) as well as significantly increasing the number designing and building the logistics and Enterprise Asset Management processes.
While the definition of a Sovereign Industry Capability (SIC) is currently being defined through the Defence Industry Capability Assessment process with the newly launched Centre for Defence Industry Capability (CDIC), I believe a strong strategic case exists for military ERP expertise to be a SIC. When DFPS consultants in the southern hemisphere can be counted on three fingers and, I apologise to two of my colleagues in advance, are the wrong side of 50, strategies for this mission critical system’s implementation and sustainment need to be actioned.
To underscore the point, the Department of Human Service’s billion-dollar replacement of its welfare payments systems is about to ramp up in Canberra. Therefore, local demand for skilled SAP resources will rise. Internationally, other military ERP/DFPS programs in India, the Middle-East and NZ have either just commenced or made approaches to market. The global race for talent is heating up.
It's been fascinating to observe that aside from those directly involved, general awareness of such a wide-ranging program is limited. But interest, here and overseas, is high - particularly from veterans. DAS Consulting has long held the view that veterans could fill this looming capability gap. We’ve written a discussion paper on the topic and have developed our own internal DFPS training curriculum and training system.
This aligns perfectly with the PM’s Veteran’s Employment Initiative. If efforts can be harmonised and the right tempo set, not only will the challenge of the Defence ERP program be met, but an SIC that competes for export opportunities can be realised.
After the false dawn of JP2077, which culminated with an exhaustive open tender only for the program to be shelved, the $86 million purchase of five years of SAP licences in July 2015 signalled Defences’ intentions to proceed. Defence INSIGHT was born.
Eighteen months on we’ve had a Market Briefing, Questionnaire, ITR and even a name change, but First Pass remains elusive. Originally due in July, the latest communique suggests “early 2017”.
Hopefully First Pass can be achieved sooner rather than later. It will provide the missing piece of the puzzle - certainty. Everything else is falling into place.
Any veterans wishing to register their interest are encouraged to do so at: http://register.dasconsulting.com.au/
David McGovern is the COO of DAS Consulting. DAS (Defence And Security) Consulting was originally formed in 2011 as an extension of GMC Global (now SMEC Asset Management) to service the requirements of Defence & Public Security users of SAP. The DASC team combine experience of serving in military organisations along with SAP project know-how.
Today, DASC is an independent Australian company that is recognised for its specialist knowledge across the Asia-Pacific and Middle East. Providing an unmatched level of expertise in SAP’s defence industry solution: Defence Force & Public Security (DFPS), DASC is Australia’s industry capability for this complex, mission critical solution.
Prior to DAS, David's business background spans the IT, Engineering and Defence sectors. He has over ten years’ experience of Recruitment, Executive Search and Operations Management within Australia. Accomplished at building management and operational teams for technically challenging programs, David knows the impact the right team can make.