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Defense Business Transformation: Achieving Success Requires a Chief Management Officer to Provide Focus and Sustained Leadership

GAO-07-1072 Published: Sep 05, 2007. Publicly Released: Sep 05, 2007.
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Highlights

In 2005, GAO added the Department of Defense's (DOD) approach to business transformation to its high-risk list because (1) DOD's improvement efforts were fragmented, (2) DOD lacked an integrated and enterprisewide business transformation plan, and (3) DOD had not designated a senior official at the right level with the right authority to be responsible for overall business transformation efforts. This report assesses (1) the progress DOD has made in setting up a management framework for overall business transformation efforts and (2) the challenges DOD faces in maintaining and ensuring the success of those efforts. GAO conducted this work under the Comptroller General's authority to conduct evaluations under his own initiative. In conducting its work, GAO compared DOD's actions to key practices of successful transformations.

Recommendations

Matter for Congressional Consideration

Matter Status Comments
Given DOD's view that the Deputy Secretary of Defense should be assigned CMO duties, Congress may wish to consider enacting legislation to establish a separate, full-time position at DOD with the significant authority and experience and a sufficient term to provide focused and sustained leadership and momentum over business transformation efforts.
Closed – Implemented
In the National Defense Authorization Act for Fiscal Year 2008, Congress designated the Deputy Secretary of Defense as the Chief Management Officer (CMO) for DOD and created a full-time deputy chief management officer (DCMO) position. Although the congressional action does not establish a separate, full-time position for the CMO as we suggested, we believe that these congressionally-mandated positions are significant achievements that, if successfully institutionalized within the department, would meet the intent of our original matter for congressional consideration. We will continue to monitor DOD's business transformation efforts as well as whether its CMO and DCMO management structure ultimately provide the focused and sustained leadership need to maintain momentum over those efforts.

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Defense To ensure successful and sustained business transformation at DOD, the Secretary of Defense should institutionalize in directives the roles, responsibilities, and relationships among various business-related entities and committees, such as the Defense Business Systems Management Committee, investment review boards, the Business Transformation Agency, and the Deputy's Advisory Working Group, and expand the management framework to capture overall business transformation efforts, rather than limit efforts to modernizing business systems.
Closed – Not Implemented
DOD has not institutionalized in directives the functions of the Defense Business Systems Management Committee.
Department of Defense To ensure successful and sustained business transformation at DOD, the Secretary of Defense should develop a comprehensive strategic planning process for business transformation that results in a comprehensive, integrated, and enterprisewide plan or set of interconnected functional plans that covers all key business areas and provides a clear strategic direction, prioritizes initiatives, and monitors progress across the department.
Closed – Implemented
DOD uses a family of plans approach to cascade enterprise business priorities in the Strategic Management Plan which represents DOD?s plan for business operations and includes a performance management framework. We will continue to monitor DOD's use of the family of plans approach.

Full Report

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Topics

Defense operationsFederal agency reorganizationGovernment job appointmentsLegislationManagement reengineeringStrategic planningSystems managementSystems conversionsFederal agency leadershipBusiness transformationBusiness planning