Defense

October 24, 2012

Westphal: Collaboration with industry saves Army money

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Gary Sheftick
Army News Service

Under Secretary of the Army Joseph Westphal discusses the value of collaborating with industry on best business practices.

Industry forums such as this week’s Association of the U.S. Army Annual Meeting and Exposition can save the Army money through collaboration on best business practices, service officials said.

“Whether you’re talking about personnel, finance, logistics, acquisition — these are all business functions,” said Under Secretary of the Army Joseph Westphal. He explained that these functions performed by the Army are not much different than what major corporations do to deliver a product to a customer.

Meeting with industrial partners over the past year, for instance, has helped the Army cut in half the cost per unit for the Joint Light Tactical Vehicle, or JLTV, now under development.

Collaboration between engineers and industry experts helped the Army identify and trade off less crucial requirements in order to lower the JLTV price to a range of $250,000 per vehicle, program officials said. They added these trade-offs will also help the Army to shorten the vehicle’s Engineering and Manufacturing Development period from the traditional 48 months to only 27-33 months.

Acquisition initiatives over the past few years have helped the Army speed equipment through the development phases to Soldiers who need it in theater, Westphal said.

“We’re looking at governance of processes so that we can purchase more quickly, more effectively at best cost, best value to the taxpayer,” he said.

“We’re still going to have the difficulties of figuring out what are the best platforms,” Westphal said. “People have different opinions of how you should build a tactical vehicle of the future. So we’re still going to have those debates, but those are healthy debates, and we have them with our industry partners. I think we’re in a very good place there.”

The Army has also looked at some commercial off-the-shelf solutions to provide soldiers what they need in theater.

“We’ve had to adapt to buy things quickly and off the shelf in very unique ways,” Westphal said. “While we can’t do that all the time – because we have rules and regulations and laws that govern how we buy and purchase materials – we’ve learned a lot of lessons at how to do this well.”

Business operations underscore everything the Army does, Westphal said.

“To provide trained and ready soldiers to combatant commanders, you must have a lot of your business operations running pretty efficiently,” he said. “We’re doing a lot of planning to make sure we capitalize on the best things about our Army to get our business processes as efficient and effective as we can.”

Collaboration with industry has helped here too. From Lean Six Sigma streamlining of processes to eliminating outdated business systems, the Army has saved considerable resources through Business Transformation, Westphal said.

“Over the last year, combined with the other departments – the Navy and the Air Force – we have eliminated hundreds of these systems at savings of billions of dollars,” Westphal said. “So we’re making huge inroads into this. We’re modernizing our information technology piece. We’re reducing our footprint as far as information technology centers around the world.”

Many software programs have been consolidated. For instance, dozens of different geographic applications at various installations have been replaced with a new “Army Mapper” program, said William Smith, director of the Army’s Business Transformation Directorate. He said all installations now use the same web-based program, enabling aggregate data.

Systems need to interface and “talk to each other,” Westphal said. For instance the Army is now developing an Integrated Personnel and Pay System.

When it’s fully implemented, IPPS-A will replace 55 different systems, Smith said.

“We can’t continue to proliferate systems,” Smith said. “It used to be, anytime anybody got an idea, they came up with a new system.”

Increment 1 of IPPS-A is tentatively scheduled for implementation late next summer, Smith said, and it will consolidate personnel systems for the active Army, Army Reserve and National Guard. It will provide the same Soldier Record Brief for all components.

When IPPS-A is fully implemented, Smith said it will enable the Army to take over what the Defense Finance and Accounting Service currently does so that the Army will pay its own soldiers.

The plan over the next five years is to eliminate 260 legacy systems, said Llyle Hogue, deputy director of the Business Innovation Directorate. But he said the real challenge is to transform the culture of the Army so that leaders don’t go into an operation expecting a “blank check book.” He said they must now realize that the Army is in a more austere environment when it comes to budgets.

The Army is working toward full audit ability, Westphal said. On Oct. 15, he signed a Declaration of Full Deployment of a new software system that will enable Army audits, provide internal controls and support other business processes: the General Fund Enterprise System, or GFEBS.

The Army didn’t come up with GFEBS on its own, though. Smith said it’s based on a program developed by SAP, a multinational company known for its enterprise software to manage business operations. GFEBS is based on one of the corporation’s enterprise resource planning, or ERP, applications.

“I’m not saying we used it entirely out of the box,” Smith said, “but for the most part, we’re following most of the best business practices built into the ERP.”

Westphal emphasized that the Army is modernizing all of its enterprise systems. “We’re saving a lot of resources.” Today versus five years ago, “it’s night and day difference,” when it comes to business processes, he said.

“This has really been a holistic effort on the part of the Army – the G-3, the G-2, the G-1, the M&RA, the IE&E – these are all the elements of the Army coming together on a governance piece, to agree to work together.”




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