Oracle, SAP Snare New ERP Wins

By Nick Wakeman, Senior EditorOracle Corp. and SAP Public Sector and Education Inc. have snared important new federal contracts for enterprise resource planning, signaling continued strong government interest in ERP solutions.Oracle of Redwood Shores, Calif., within the past month won contracts with the National Institutes of Health and the Small Business Administration. Other recent wins include the departments of Energy and Veterans Affairs.SAP Public Sector and Education of Washington landed an award in early October with NASA. That win follows others in recent months, such as a series of pilots with the Navy and a major implementation as part of the Army Wholesale Logistics Modernization contract held by Computer Sciences Corp. of El Segundo, Calif.Officials with Oracle and SAP said they are seeing more solicitations for ERP implementations than they were a year ago. Officials with PeopleSoft Inc. of Pleasanton, Calif., which won a major ERP deal with the Treasury Department in May, were not available for comment."The year 2000 is behind us, and the government is now unleashing the requirements for modernizing financial systems and e-gov is over running everything," said Barbara Bleiweis, director of federal initiatives for SAP.Modernizing financial systems is one of the key steps for moving an agency into electronic government applications, said Steve Perkins, vice president and general manager of Oracle Federal.Of Oracle's recent wins, only the NIH is implementing a broad package of ERP software that includes financials, supply chain management, advanced planning, asset management and procurement, Perkins said. The others are concentrating just on back-office applications such as financials, human resources and procurement, he said.Most agencies are adopting ERP in a piece-by-piece approach, Perkins said. "No one buys and implements in one fell swoop," he said. "Everyone picks a spot to start."Financial applications are usually a good place to start because they play an important role in making electronic government applications work, Bleiweis said."Without the back office applications in place, a request will come in [through a Web site application] and nothing will happen," she said.To make electronic government work, agencies need the ability to get more information from one system to another and to be able to track costs and activities, she said.At NASA, SAP is implementing a single financial system that will replace 10 separate systems. The contract is worth $6.67 million in the first year.The new system will give NASA more capabilities in managing projects and their costs and generating financial reports, Bleiweis said.The way the government is approaching ERP is similar to how ERP was adopted in the commercial world several years ago, Perkins said.Most agencies are starting in one of three areas: back-office applications; supplier applications, such as procurement and supply chain management; or citizen facing applications, such as customer relationship management, he said. Eventually, agencies will be doing all three, Perkins said.With that in mind, ERP vendors have been taking software they developed for commercial markets and are adapting it for the government market, company officials said.Other companies such as American Management Systems Inc. of Fairfax, Va., which always has had a strong position supplying financial systems to federal agencies, have been forming close alliances with software developers who can bring in new applications.AMS has alliances with Ariba Inc. of Mountain View, Calif., a provider of electronic commerce software; Siebel Systems Inc. of San Mateo, Calif., a maker of customer relationship management software; FreeMarkets Inc. of Pittsburgh, an online auctioning company; and govWorks Inc. of New York, a developer of online government services for citizens.Litton-PRC Inc. of McLean, Va., in May won one of the biggest ERP deals of the past year with the Treasury Department.Under the $110 million, three-year contract, PRC will be implementing PeopleSoft's human resources software. The software will replace more than 100 legacy systems used for personnel and payroll throughout Treasury and its 14 bureaus. When fully operational, the system will manage personnel data and payroll for more than 160,000 federal employees.Analysts following the ERP market in the government estimate that 70 percent of federal, state and local governments are looking at implementing some form of ERP.Part of the reason for the growth potential in ERP projects is that about half of federal, state and local government agencies still rely on old systems, according to the Meta Group, a research firm in Stamford, Conn.Neither Perkins nor Bleiweis would put a number on how many more ERP projects are in the works now as compared to a year ago, but both said the government market is an important growth area for their companies."This is a significant business and a growing business for us," Perkins said.