In The Service: EDS Gets Intranet Project Back On TrackIn The Service: EDS Gets Intranet Project Back On Track

EDS's effort to build the Navy and Marine Corps Intranet has been plagued by problems ever since the services vendor won the original $6.9 billion contract in 2000. Resistance from local base commanders, unwilling to give up the right to choose their own technologies, proved to be among EDS's biggest challenges. Then there were the conflicts in Afghanistan and Iraq; many of the personnel EDS needed to get the system up and running had been shipped overseas. Because of that and because EDS had planned an overly aggressive rollout schedule and failed to account for some of the complexities behind construction of the world's biggest intranet, the project was marred by delays and logistical problems. "We ran it as a separate silo, and we didn't have our best and brightest committed to it," EDS chairman and CEO Michael Jordan says.

Now, EDS has reorganized its NMCI staff, creating in effect a SWAT team of specialists that report to chief operating officer Jeffrey Heller. It's also deploying new technology from the Feld Group to help speed up deployment of 360,000 seats that will eventually make up the network. The tool, Software Manager, automates much of the work involved with provisioning and updating systems on NMCI. To date, EDS has cut more than half of the Navy and Marine workstations destined for deployment on the network. Jordan also has worked personally with the Navy to ensure high-level backing for the project. "We got very halting cooperation absent a strong drive by senior officers," Jordan says.

The changes bode well for the project, observers say. "EDS is now in a much better position to deliver on the services as promised," Gartner analyst Lorrie Scardino says. Also, Navy Rear Adm. James Godwin III is set to assume command of the project later this year, replacing Rear Adm. Charles Munns, who's taking charge of the nation's submarine fleet.

A successful implementation of NMCI is critical for both EDS and the Navy, which wants to leverage IT to become a more-efficient fighting force. EDS has invested millions in hardware, software, and staff hours into the effort. It gets paid back only when certain milestones are met. The delays have meant that EDS has forfeited millions in fees while watching the project eat through cash reserves. A more-efficient rollout schedule adopted this year has helped EDS stanch some of the losses, CFO Robert Swan says. In 2004, the NMCI contract will consume $450 million in free cash flow, down from $800 million in each of the past two years, Swan says.

Beyond financials, EDS needs to prove that it can successfully handle a project of NMCI's scope. It's a massive undertaking. In a conference room at the North Island Naval Air Station in Coronado, Calif., just off San Diego, panels on a wall pull back to reveal a glass partition, beyond which rows of technicians monitor huge, NASA-style display screens. This is the Network Operations Center for NMCI, one of three such facilities across the country. This one features automatic failover capabilities to the other locations "in case we become a smoking hole in the ground," says a burly technician in Navy whites.

The center is staffed by crews made up of a mix of Navy and EDS personnel. From workstations inside the operations center, they can monitor the entire NMCI network and respond to contingencies as they arise, such as the need for systemwide deployment of a software patch to deal with a new virus or other security threats. There are "endless hacker attempts," EDS network operations center manager Mark Jarret says. The network averages 169 million unauthorized entry attempts per month. The sheer size of the project is giving EDS experience handling issues of scale rarely found in the commercial world. NMCI represents the second-largest Microsoft Active X directory in the world, second only to the Internet itself, Jarret says. About 180 terabytes of user data is backed up on the network nightly.

The multibillion-dollar project is crucial to giving fighting units so-called "reachback" capability, the Navy says. That is, a ship with a damaged rudder could securely tap manufacturer specifications to determine repair operations. Or a Marine in the field could communicate with specialists to learn about a chemical agent he suspects is in use on the battlefield. Eventually, NMCI will provide pier-side connectivity to Navy vessels in port and link hundreds of thousands of desktops across the United States as well as sites in Puerto Rico, Iceland, and Cuba. EDS is contemplating extending NMCI out to the wireless realm, but current protocols don't meet the Department of Defense's security standards.

Return to main story, In Search Of Agility