Agencies want their apps off the shelf, survey reveals

After decades of catering to its own unique requirements, the federal government is
newly eager to try commercial software, according to an exclusive GCN survey.

Leading integrated business application vendors such as PeopleSoft Inc., Oracle Corp.
and SAP AG are more than willing to oblige.

Part of the heightened appeal of commercial software comes from improvements in the
applications, which let users tailor functions through simple table changes rather than
writing new C code.

"When applications were based on flat files and Cobol, you had to rewrite
code" to customize commercial software, said Perry Keating, director of strategic
market development for PeopleSoft of Pleasanton, Calif. In some cases, that meant agencies
bought custom programming services at 10 to 20 times what they had paid for the commercial
software.

Table-driven packaged applications are much easier to modify. "This is not a
Trojan horse to get a lot of consulting dollars out of unsuspecting customers," said
Mark Nittler, vice president of product strategy for PeopleSoft. He dismissed the idea
that expensive implementation services cancel out the savings from buying commercial
applications.

Quite a few federal managers like the straight-out-of-the-box idea and have bought
commercial applications for financial accounting, human resources, procurement and
electronic commerce.

Of 127 managers responding to the recent GCN survey, 58.3 percent said they use
commercial software for one or more of those purposes. "Why reinvent?" asked one
respondent. "Commercial software is the wave of the future."

Most agencies have limited experience replacing applications developed in-house with
integrated commercial packages. The Veterans Affairs Department is just now testing the
PeopleSoft Human Resources Management Software for Federal Government base benefits
package at six VA medical centers, the Austin Finance and Automation Center, and at its
headquarters. VA will begin a similar pilot with PeopleSoft federal payroll modules around
the end of November.

The U.S. Mint this month bought more than a dozen PeopleSoft integrated application
modules to handle everything from finance and personnel processing to manufacturing, order
processing, sales and distribution.

The Army's Sustaining Base Information Services program in September 1996 bought
integrated property management modules from Intergraph Corp. of Huntsville, Ala., for the
Army Real Property Management system.

So far, only two standalone installations are up and running at Fort Drum, N.Y., and
Fort Knox, Ky. Lack of funds--not technical problems--limited the deployment, said David
Munger, a support engineer with the Army Information Systems Engineering Command at Fort
Huachuca, Ariz.

Rarely do agencies agree on a rule of thumb for what percentage of requirements must be
met out of the box. Intergraph's commercial software met about 80 percent of SBIS
requirements straight from the box, said Roxanne Austin, SBIS program manager.

Meeting even half the requirements is a good starting point, she said. The Intergraph
application matched the Army's requirements better than most because its geographic
information system already used DOD's tri-service spatial data standard.

VA officials, though not far into the implementation of PeopleSoft, said the federal HR
base benefits package is meeting 95 percent of VA requirements. Sandra Weisman, associate
deputy assistant secretary for financial systems, is convinced the investment in
commercial software will more than pay for itself.

For $60 million, VA not only will replace its 30-year-old mainframe HR and payroll
system but will field self-service HR applications for employees and managers as well as a
centralized information and transaction processing service center in Topeka, Kan.

Weisman said annual savings will amount to more than 1,100 full-time equivalents when
HR and payroll applications are up and running throughout VA.

The VA has done additional C programming within the PeopleSoft HR applications to meet
its data security requirements, but most changes so far have been limited to new values in
the database tables and minor screen changes, Weisman said.

"We're accepting the software as much as we can to minimize costs in the
upgrades," she said.

If users go too far customizing commercial software, it comes back to haunt them when
they upgrade to the vendor's next release.

"You never want to take on customization lightly, because customized functions may
no longer work after a patch or new system release," said Lawrence E. Lloyd, BDM
program manager for the Postal Service's National Customer Management System.

Oracle officials at the company's Bethesda, Md., federal office said integrated
payroll, personnel and financial application software has become the primary focus of
Oracle's federal business.

"We're verticalizing our approach to selling software," said Tim Hoechst,
vice president of technology for Oracle government, education and health sectors.

Rather than saying to law enforcement officials, "Here's a database, go knock
yourself out and build something," Hoechst said, Oracle now says, "Here are
tools to enforce the law."

It will take another year or two, the VA's Weisman said, for agencies to get a clearer
idea of how well this trend toward commercial software will meet the expectations it has
created.