Army Logistics Modernization: The Human Factor
 When the U.S. Army Materiel Command (AMC) contracted with Computer Sciences Corporation (CSC) to modernize its logistics automation support capability, it initiated the first government contract in which both modernization and day-to-day operations were outsourced to one IT services provider, CSC. Though the Logistics Modernization Program (LMP) required extensive business process reengineering and commercial-off-the-shelf technology, two essential components of its success were organizational and cultural — the human factor.
Organizational and cultural challenges
AMC today is comprised of approximately 50,000 logistics professionals who manage and supply the weapons systems and commodities — artillery, tanks, aircraft, missiles, ammunition, field electronics and chemical and biological weapons protective gear — essential to warfighter readiness and success in war.
Over the years, AMC’s logistics system had evolved into a complex web of more than 2,200 legacy applications. Despite the systems’ inefficiencies, AMC employees, many with more than 20 years experience, were comfortable with the old processes and procedures.
In order to update its logistics system, AMC decided on a bold approach: outsourcing the design, implementation and day-to-day operations of a new logistics system that included best commercial practices and commercial-off-the-shelf technology.
Best practices and new technology, however, were only two components essential to the success of a modernized logistics system. The organizational and cultural components were of equal importance for AMC’s established employees and processes. For example:
- More than 200 AMC in-house legacy central design employees, along with 150 contractors, were outsourced to CSC. They had questions and concerns about their benefits, salary, job security and career opportunities in a private sector firm.
- The AMC logistics professionals who used the logistics system were concerned about disruptions to their day-to-day operations as a new system was designed and implemented.
- Because this was a first-of-its-kind contract with the private sector, the effort faced resistance among some within AMC and Army. To overcome this resistance, AMC organizations and defense organizations impacted by this modernization required a continual flow of information and status updates.
For the modernization effort to be successful, a broad organizational transformation strategy was necessary to assess all issues and concerns, which were addressed by open communication with all stakeholders. The stakeholders were also prepared for change through comprehensive training and information sharing.
Retaining and transitioning employees successfully
The first step in Team LMP’s organizational change strategy was to retain all of the AMC employees whose positions were to be outsourced to CSC. These individuals had extensive knowledge of the complexities and intricacies of the 2,200 legacy systems CSC would inherit. Their expertise was essential to sustaining the legacy environment as well as guiding the modernization program to success.
Through one-on-one meetings between each of the employees and key members of the CSC management team, employee issues and concerns were identified. Based on these issues and concerns, Team LMP developed a multi-layered employee communications strategy that included frequent all-hands meetings, an employee Web site that posted questions and answers on a routine basis and a newsletter that examined broader issues and concerns and provided more context.
Team LMP succeeded in retaining 205 of the 207 employees whose positions were outsourced to CSC.
The outsourcing transition
The second phase of the organizational change strategy was to prepare these AMC employees for the outsourcing transition to CSC. During the initial period of the transition, CSC continued to support the existing legacy systems and few technical changes were made. However, new employees and contractors still needed to adopt new processes, including a new governance model and CSC methodologies and tools. The new processes needed to be established without business disruptions to AMC computer users.
During the first two years of the contract, the improved processes and procedures generated approximately $8 million in savings, which the team was able to reinvest in the modernization effort.
Preparing for LMP implementation
 In July 2003, following an extensive analysis of AMC needs and a broad business process reengineering and solution design effort, Team LMP was ready to implement the first phase of the LMP solution. This solution was based on commercial-off-the-shelf technologies using SAP’s merged public sector and defense industry modules.
To help AMC logisticians embrace a major change in the way business would be done, an extensive communication and training effort was conducted during a three-and-one-half month period before the cutover and go-live phases of the project. This effort included continuous communications and a mix of classroom and Web-based training to ensure that every identified AMC-LMP user was prepared to go live.
The AMC employees and contractors that transitioned to CSC were instrumental in preparing users for rollout. Team LMP trained these individuals to serve on site readiness teams at client locations to offer navigation training, classroom support and hands-on support after the rollout. Other individuals offered their expertise and support through the LMP Help Desk. Because of their unique knowledge of the prior system, they were able to help move AMC users to the new LMP system with greater ease and efficiency.
Throughout the entire effort, high-level CSC staff members briefed AMC and Army to provide status updates and address issues as they emerged. Army and AMC leaders were thus prepared with useful information they could share with their staff members and overcome resistance to changes.
Continuous improvement
An essential component of a successful organization change strategy is continuous feedback that flows in from all areas of the organization. As the LMP deployment rolls out across AMC, Team LMP is receiving feedback continuously, incorporating lessons learned and adjusting processes, procedures, communications and training as the rollout continues. The goal is to improve continually the effectiveness and seamlessness of the implementation by preparing the entire organization effectively for the coming changes.
As a result of Team LMP’s organizational change strategy, the early phases of deployment have been successful. AMC is now enjoying significant new benefits and improvements as the organization makes use of the modernized logistics system.
Related Information:
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The Logistics Modernization Project is a landmark for military logistics and supply chain management. Read the LMP overview article for other facets of the project.
Learn about CSC’s government offerings.
Learn about CSC’s supply chain management practice.
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