LogMod offers new business model

Army, CSC use commercial technologies for logistics program

Computer Sciences Corp.

Based: El Segundo, Calif.

Chairman & CEO: Van Honeycutt

Employees: 90,000

2003 revenue: $11.4 billion

2003 net earnings: $440 million


Ticker: CSC

As the first phase of the Army's new logistics systems rolls out, both the service and prime contractor Computer Sciences Corp., El Segundo, Calif., are realizing the benefits of using commercial software to get the job done.

On July 7, CSC switched on the first leg of the Army's Logistics Modernization Program, called LogMod. The 10-year contract was awarded to CSC in 1999 for $680 million.

The Army's Materiel Command wanted CSC to use commercial technologies to replace aging logistics systems and re-engineer the way the Army ordered parts from vendors. Key to the rollout was enterprise resource planning software offered by the American division of SAP AG, Waldorf, Germany. CSC said that when fully deployed, it would be one of the largest ERP deployments ever completed.

"This is a new business model for us," said Larry Asch, Army program manager for LogMod. In previous contracts, the Army would specify how the software would be developed and would end up with specialized applications as a result.

The downside to the old approach was that the Army, by commissioning customized software, could not take advantage of updates to commercial logistics packages. Invariably, systems would go out of date or would require expensive individual upgrades.

By going with an SAP solution, the Army is "part of the marketplace," Asch said. The system can be upgraded easily as SAP releases successive versions of its enterprise software, including updates that otherwise would have been done by hand.

This is part of the Defense Department's ongoing transition to using as much commercial technology as possible, said Chris Colen, CSC vice president and LogMod program manager.

The project taught CSC that it should not try to modify commercial software packages for its government customers. Otherwise, they could not use the updates subsequently provided by the vendor, Colen said.

In this case, CSC got SAP to incorporate some of the changes the Army needed for its own system into the commercial releases of SAP's software. As a result, the ERP provider may even release a defense enterprise version of its software.

In the first phase of the rollout, the LMP system will host more than 4,000 users at the Army's Communications and Electronics Command, the Tobyhanna Army Depot, the Army Security Assistance Command, the Defense Finance and Accounting Service and the Army's Soldier and Biological Chemical Command.

Over the next year, the system will be deployed at other materiel commands, depots and arsenals.

The program originally was scheduled go to go live in February, but was delayed until all the interfaces to the legacy databases were fully implemented, Colen said.

The system works with two 30-year-old mainframe databases, the Commodity Command Standard System and the Standard Depot System.

"It really goes back to the complexity of legacy systems. You have systems that have evolved over 30 years, and when you move to a single system, there are number of challenges in building bridges and scaffolding to move away form the legacy environment," Colen said.

To get the new system up and running, the old systems had to be taken offline, so the command would have no support for up to five days. On July 2, when the system was opened for high-priority requisitions, it had 90,000 hits. The system was well able to withstand this initial burst of activity, Colen said.

On July 7, the system went live for all initial users. Now it is processing between 60,000 and 70,000 transactions per day.

The initial feedback from parts clerks has been positive, Colen said. One person processed 597 transactions in about 20 minutes, a job that would have taken days under the old system, Colen said.

On the management side, the Materiel Command now can predict more precisely how many parts it will need and how much inventory it already has, Asch said.

"One of the strengths of a software product such as SAP is that it is an integrated system. Before we had all these separate systems, and the data in each was different.

Item managers spent a lot of time reconciling data," Asch said. "Now when you have one integrated system for logistics and financial data, the [greater] accuracy of the data is key to being able to make some good, rapid decisions."

CSC has also picked up some benefits as well. Colen said they've learned a lot of the skills and the business processes are able to be transferred and leveraged. This knowledge will allow CSC "to move faster and have a higher quality solution," he said. *

Staff Writer Joab Jackson can be reached at jjackson@postnewsweektech.com. Dawn Onley, who writes for Government Computer News, contributed to this story.

About the Author

Joab Jackson is the senior technology editor for Government Computer News.

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