BETTER TO BEST
than days or weeks. Finally, the stream- lined requirements review process placed all six ERP programs together to create a collective set of requirements. Together, they established an enterprise portfolio of common end-to-end software needs that combined contract line items for all six ERP programs versus having mul- tiple contract line items for various ERP programs. Ultimately the consolidated portfolio equates to reduced costs.
“SAP and the ELAs have transformed Army business processes by leveraging commercial technology and best business practices,” said COL William Russell, GFEBS project manager.
“Engaging
with industry allowed GFEBS to provide mature capability quicker and with fewer problems to over 35,000 users while also moving the Army one step closer to a fully auditable solution.”
WHAT MAKES THIS CONTRACT UNIQUE Trough ELAs, vendors and government entities
are optimizing spending and
maximizing the support they receive to get the most of what’s needed, which, in this case, are SAP licenses and mainte- nance support. However, this contract represents so much more than that—it represents the power of solid relationships.
“Te current ELA represents the true value of strategic sourcing, a collaborative part- nership among the ERP programs that are fielding SAP-based solutions across the Army, and the software procurement experts with CHESS and ACC-RI,” said Terry Watson, acting PEO EIS. “Te Army has built relationships with SAP software suppliers that enable more than just acquiring software at the lowest price. Open and transparent communication with industry partners enables the Army to remain
fully informed on industry trends for the next software agreement 116
while eliminating the overhead that results from redundant government contracts.”
A good working relationship with indus- try allowed the Army to leverage its size, scope and customer history to establish the current five-year SAP ELA 2 for $279 million, providing significant cost avoid- ance in deferred maintenance costs and new procurement price locks, reflecting pricing and maintenance support at rates even lower than the original SAP ELA 1. Tis contract also provides the Army with significant discounts from the General Services Administration Schedule, an estimated $1.2 billion in cost avoidance, while securing the best end-user license agreement terms
and conditions and
ensuring additional future savings for the term of the agreement.
Inability to amply license the ERP user community would cripple the Army’s abil- ity to supply, sustain, track and manage materiel and finances to support today’s military
landscape. With rising tech-
nology costs and falling DOD budgets, finding ways to streamline requirements, obtain best value and reduce costs are essential to the ERP programs’ future.
CONCLUSION With future estimates of more than 300,000 Army ERP users worldwide, being able to buy SAP software licenses and maintenance support packages
in
bulk while capitalizing on best price break points have put new meaning to category management for military tech- nology. As part of
the SAP IPT, each
stakeholder used lessons learned from previous contracts to establish this well- designed consolidated buy and category management package, breaking with the military’s tradition of being unlikely to buy technology as a group. Te Army’s ERP programs
support the Better Buying Power mission: “the
SAP ELA Contract Historical Overview
Before 2011: FY02-FY11 (22 contracts)
CONTRACT CHALLENGES • Separately purchased and program-managed contracts.
• License discount and mainte- nance fee rates varied.
• Lack of Armywide asset man- agement visibility.
• Prevented reuse and sharing of licenses with other programs.
SAP ELA 1: FY12-FY15 (One contract)
SAP ELA 1 KEY OUTCOME • Leveraged Army buying power. • Significant discount on licenses. • Fixed maintenance fee. • Consolidated from 22 con- tracts to one contract.
• Streamlined procurement process. • Reduced program administra- tive resources and cost.
• Centralized license tracking and inventory. • Allowed transferring and sharing of licenses among six ERP programs.
SAP ELA 2: FY16-FY20 (One contract)
SAP ELA 2 KEY OUTCOMES
• $1.2 billion in total cost avoidance estimated for the life of this contract.
• Obtained greater license dis- counts than ELA 1.
• Better maintenance rate terms and conditions than ELA 1.
• Accelerated contract award from an aver- age of 12-18 months to eight months.
• Reduced minimum annual license purchases.
Army AL&T Magazine April-June 2016
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