UN document details $300 million ERP mega-project

The massive undertaking has an equally staggering price tag

An early-stage planning document for the United Nations' ongoing global ERP (enterprise resource planning) project calls for a budget north of US$300 million and provides a detailed look at the challenges the effort must overcome.

Dubbed "Umoja," after a Swahili word meaning 'unity,' the project "presents a once-in-a-generation opportunity to equip the organization with twenty-first century techniques, tools, training and technology," the document states.

The UN's IT infrastructure is a staggering tangle of disconnected, redundant and antiquated legacy infrastructure, resulting in gross inefficiencies throughout the organization, according to the document.

Over the years, the organization has collected "at least" 1,400 information systems, many of which are "used to support or track paper-based processes," states the report, which was first brought to light in a Fox News report this week.

For example, the equivalent of up to 40 full-time employees is currently being used to process interoffice and interagency vouchers, and the total time spent each year processing travel claims "is more than the full-time equivalent (FTE) of 60 person-years," the report said.

IT operations are also heavily siloed, according to the report: "Most duty stations, and many organisational units within duty stations, contain their own stand-alone finance, human resources, supply chain, central support services and information technology areas."

If the ERP implementation is successful, it could provide between roughly $470 million and $770 million in "ongoing annual capacity improvements, costs savings and cost recovery," the document states.

But the project has a sizable price tag of its own. The report proposes a budget of $337 million, which is divvied up among a series of line items, including:

-- $76 million for "2,597 work months" of system build and implementation services.

-- $14 million for travel, which presumes 1,285 trips will be taken by "ERP team members, subject-matter experts and corporate consultants" at an average air ticket cost of $6,000. Each trip will also get $202 for "terminal expenses" and $5,000 for 20 days worth of per diems, for a total cost of about $11,000 per trip.

-- $1.8 million for office furnishings to support 234 workers, including 80 core staff, 66 subject matter experts, eight consultants and 80 system integrators, or about $7,700 per person.

-- $6.7 million for office rental, based on an annual rate of $14,300 per person

-- $564,200 for long distance telephone calls, teleconferencing and videoconferencing

-- $18 million for hiring "limited replacements" for subject matter experts involved in the project

-- $16 million for software licenses and maintenance fees

Also, according to the Fox News report, the project had originally been budgeted at $286.6 million.

The draft report has since been updated and the numbers in it have changed, said UN spokesman Farhan Haq. He could not say whether the project's scale had shifted significantly or confirm the budget figure cited by Fox News.

Haq declined to comment further, but said the UN would discuss the project in greater detail once the report is finalized.

What is clear is that the project remains in extremely early stages. An initial design phase began in May and is scheduled to last between nine and 12 months, according to the document.

In addition, the UN has yet to finalize a contract with its chosen vendor, SAP, and won't solicit bids for the integration work until the last quarter of this year.

Despite the project's staggering scale, the UN could recoup its investment within two years of "full deployment and stabilization," the report said.

In the UN's case, a slow pace may well be for the best, said Ray Wang, a partner with the analyst firm Altimeter Group.

While every global ERP rollout is difficult, the UN is in a special situation given its international makeup and set of missions, such as managing military peacekeeping forces and responding to emergencies, he said.

"You're trying to push a system out to people with different cultures, habits, levels of [connectivity]. It requires a lot of change management, a lot of face-to-face sessions for a project of this type to succeed.This isn't a standard business case. ... This isn't your standard ERP system," he said.

The UN report echoes the sentiment: "The enormous change in the human skills, working methods, procedures and technology required to fully realize the benefits of Umoja requires a strong commitment from staff at all levels."

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Chris Kanaracus

IDG News Service
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