defense icon, source: [West Covina, California] Progressive Management, 2008

Defense: DOD's Business Systems

The Department of Defense’s business systems modernization: opportunities exist for optimizing business operations and systems.

Action:

The Department of Defense (DOD) needs to develop supporting component architectures and align them with its corporate architecture to complete the federated business enterprise architecture.

Progress:

DOD has defined a federated approach to its architecture and continues to make progress in developing its corporate Business Enterprise Architecture (BEA), but the architecture has yet to be federated through development of aligned subordinate architectures for each of the military departments, as GAO has recommended since 2007. In this regard, as GAO reported in May 2013, the department has made little progress in aligning its corporate and subordinate business architectures. DOD’s federated approach is intended to provide overarching governance across all business systems, functions, and activities within the department through a coherent family of distinct parent and subsidiary architectures that use a common structure and vocabulary to provide visibility across DOD’s efforts. GAO reported in May 2013 that DOD has not yet included common definitions of key terms and concepts to help ensure that these architectures will be properly linked and aligned. Further, GAO reported that the department has not yet clarified in policy or guidance the roles, responsibilities, authorities, and relationships between the Deputy Chief Management Officer and military department officials responsible for the BEA and its federation.

The DOD Chief Business Enterprise Architect stated that the approach to federating the architecture is currently being reassessed, and officials from the Office of the Deputy Chief Management Officer noted recent turnover in key positions as a major challenge in developing a federated architecture. In August 2013, DOD formally chartered its BEA Configuration Control Board, which is made up of senior officials representing corporate and component architecture efforts, and is responsible for reviewing proposals and providing recommendations to support component architecture federation and alignment with DOD’s corporate BEA. However, efforts to define the department’s formal approach for federating its business architecture remain a work in progress. In addition, although there are alignments of investment information with Business Enterprise Architecture content, such as operational activities and business rules, a number of these activities have not yet been further defined, and DOD has not developed a plan describing the steps the department will take to address this missing architecture content and align component architectures with its corporate BEA.  Further, in December 2013, the Office of the Secretary of Defense announced its intent to realign the oversight of business systems from the Office of the Deputy Chief Management Officer to the Office of the Chief Information Officer. This change is to be in place by January 1, 2015, and its impact remains to be seen. Until DOD completes these actions and further documents its plan for reassigning oversight responsibilities for business systems, the department risks not being able to develop an architecture that covers the entire department, thus making the architecture less useful for informing investment decisions.

Action:

The Department of Defense (DOD) should leverage its federated architecture to avoid investments that provide similar but duplicative functionality in support of common DOD activities.

Progress:

DOD has taken steps to better position itself to use its federated architecture to identify duplicative investments in the future, but has not demonstrated that its efforts to leverage its federated architecture have resulted in the consolidation or elimination of investments that provide similar but duplicative functionality, as GAO recommended in August 2008. Specifically, DOD has made progress in establishing conditions that better support its ability to leverage its federated Business Enterprise Architecture (BEA) to help consolidate or eliminate duplicative investments or functionality. In April 2013, the Office of the Deputy Chief Management Officer issued its business system certification and approval guidance for systems that were to be certified and approved prior to the obligation of appropriated fiscal year 2014 funds. This guidance and a January 2013 memorandum issued by the Deputy Chief Management Officer called for all defense business systems to use a single architecture compliance tool for documenting their compliance with the department’s BEA. In November 2013, DOD officials provided examples of charts developed based on data contained within this tool that map business systems to operational activities across the various defense business system portfolios. Such automated mapping and analysis can support improved identification of opportunities for consolidating or eliminating duplicative investments among DOD’s billions of dollars of business system investments. However, DOD has not yet demonstrated that its existing processes have resulted in business systems being denied funding because of the identification of overlap and duplication. Until DOD further leverages or improves its existing processes for identifying investments that provide similar but duplicative functionality in support of common DOD activities, it continues to risk making unnecessary investments in potentially duplicative business systems.

Action:

The Department of Defense (DOD) should work to institutionalize its business systems investment process at all levels of the organization.

Progress:

DOD has made mixed progress in defining and implementing investment management policies and procedures outlined in GAO’s information technology investment management framework and requirements set out in the National Defense Authorization Act for Fiscal Year 2012, the Clinger-Cohen Act, and relevant guidance. For example, in May 2013, GAO reported that DOD had issued investment review guidance in June 2012 that updated its investment review governance, structure, and certification procedures to address the new requirements. The updated guidance addresses key elements such as ensuring the alignment of portfolios with goals and outcomes, among others. In addition, in October 2012, DOD established a corporate-level board to oversee the approach and related guidance. However, the department had not fully established the foundation for its new portfolio-level investment management process or the criteria and procedures for making portfolio-based investment decisions. More specifically, the department did not (1) identify performance measures reflecting all key attributes prescribed by DOD’s guidance, (2) specify a process for assessing potential investments, (3) call for the use of actual versus expected performance data and predetermined thresholds, (4) require assessments of investments to include key areas identified by our investment management framework (benefits attained; current schedule; accuracy of project reporting; and risks mitigated, eliminated, or accepted to date), and (5) require organizational execution plans to include critical information for conducting assessments. 

In April 2013, DOD issued a new version of its investment management guidance, based on lessons learned and intended to continue the maturation of the investment review process for defense business systems. Specifically, the guidance contained additional requirements for capturing the cost of defense business systems and for strengthening the business enterprise architecture compliance process. While this new approach may provide DOD with greater insight into systems throughout the department and the ability make trade-offs among portfolios of investments, it is still maturing, and details for system approval and certification have not been documented. As DOD continues to mature its investment management process, ensuring that criteria and procedures for portfolio-level management are fully established and that all information needed to conduct portfolio evaluations is provided in key documents is important to ensure that investments are selected and controlled in a manner that best supports the department’s mission needs.

As part of its investment review and certification process, DOD has also taken steps to reengineer certain business processes supported by its defense business systems. However, the department has not demonstrated that it has begun to measure results from these efforts, leaving it uncertain to what extent these efforts have improved the efficiency of the underlying business processes. Specifically, GAO recommended in June 2012 that the department begin to report on the status and results of its reengineering efforts to ensure oversight and promote department accountability. However, as of November 2013, DOD had not yet demonstrated that it has formally reported on the status and results of its reengineering efforts. Until it takes these actions, the department and its stakeholders will not know the extent to which business process reengineering is effectively streamlining and improving business processes needed to transform the department as intended.

Action:

The Department of Defense (DOD) must ensure that effective system acquisition management controls are implemented on each business system investment.

Progress:

DOD continues to face challenges in ensuring effective system acquisition management controls are implemented for its business system investments, as GAO suggested in March 2013. In February 2012, GAO reported that DOD had taken steps to increase acquisition oversight. For example, in December 2012, a system intended to provide the Air Force with a single integrated logistics system was canceled by DOD when the program failed to achieve deployment within 5 years of obligating funds. However, ensuring that effective system acquisition and management controls are implemented and reported on for each business system investment continues to remain a formidable challenge. In this regard, GAO continues to identify large-scale, software-intensive system acquisitions that fall short of cost, schedule, and performance expectations. Specifically, the following are examples of investments that have recently experienced key system acquisition issues, including significant cost overruns, schedule slippages, and performance issues: 

  • A Navy Enterprise Resource Planning system’s cost estimate increased about 31 percent, from the program’s first acquisition program baseline estimate of approximately $2.0 billion in August 2004 to $2.6 billion as of September 2012. Program officials attributed this program’s cost increases to schedule slippages that occurred in September 2009 and August 2011 as a result of several changes in the program. This system was not fully deployed until December 2013—more than 2 years behind its first acquisition program baseline estimate of June 2011. Beyond these cost overruns and schedule slippages, this system also experienced performance issues. Specifically, in September 2010, a significant number of system deficiencies were identified, and by December 2012, certain deficiencies were resolved. However, as of March 2013, officials reported that 560 system defects remained open. .As of October 2013, officials reported that only 7 of the 560 system defects remained open. However, despite these improvements, this system continued to face delays, and was not fully deployed until a full 2 years after its initial estimate.
     
  • The system intended to provide the Air Force with a single integrated logistics system experienced significant schedule slippage and an increase in its cost estimate. Specifically, the planned date to obtain approval to begin development of the system had slipped 5 years. In addition, the program’s initial cost estimate of $3 billion, from June 2005, had increased by approximately $200 million, as of February 2011. Further, this system experienced several performance issues. For example, in April 2010, the Air Force’s Test and Evaluation Center reported that the initial pilot for the system had a limited scope, affecting its ability to determine whether the system was on track to deliver desired performance. In addition, the contractor for the system was unable to meet the system performance requirements. Because of its significant and ongoing issues, the Air Force canceled this system in December 2012.

Until DOD effectively monitors and reports on the status of its major business system investments and takes action to prevent known weaknesses as early as possible in the acquisition process, there is a risk that billions of dollars will not be invested effectively to deliver intended benefits.

  • portrait of
    • Carol R. Cha
    • Director, Information Technology
    • chac@gao.gov
    • (202) 512-4456