Summary
The Department of Defense (DOD) established a goal to achieve total asset visibility (TAV) over 30 years ago, but to date it has been unsuccessful. GAO was requested to (1) determine whether the Army has a systems strategy for achieving TAV, (2) determine if the Army's business system investment governance structure is consistent with DOD guidance, and (3) evaluate the Army's effort to correct previously reported problems with the Logistics Modernization Program (LMP). GAO obtained an understanding of the Army's efforts to achieve TAV, oversee and manage its business system investments, and address previously reported LMP problems.
Supply chain management has been on GAO's high-risk list since 1990. One area that has contributed to this long-standing problem has been DOD's inability to maintain control and accountability over hundreds of billions of dollars of assets. DOD plans to improve its asset management through its business system modernization. In this regard, GFEBS, the Global Combat Support System-Army (GCSS-Army), and LMP are aimed at achieving TAV within the Army. The Army estimates that it will invest approximately $5 billion to develop and implement these systems. However, this investment is being made without a clear integrated strategy. GFEBS, GCSS-Army, and LMP are not being developed in the context of a well-defined Army-wide enterprise architecture. As a result, the Army does not have an informed basis for determining if these systems will fit within the context of future Army business operations and will efficiently and effectively address the Army's long-standing weaknesses associated with the lack of asset visibility. The Army lacks a concept of operations that would describe, at a high level, (1) how the three business systems relate to each other in achieving the Army's TAV goal, and (2) how information flows from and through these systems. Moreover, GAO found that the Army's lack of a concept of operations has contributed to its failure to take full advantage of business process reengineering opportunities that are available when using an enterprise resource planning solution. Without these key foundational elements, the Army is at risk of investing about $5 billion in business systems and still not achieving DOD's and the Army's goal of TAV. Furthermore, while the Army has established a governance structure that is consistent with DOD guidance, its processes are still maturing. The Army's governance structure is designed to certify and review individual business systems rather than to evaluate these investments from a portfolio perspective. Such a perspective permits investments to be viewed in a comprehensive manner to help ensure that the organization's missions and objectives are achieved. GAO also found that the Army did not have reliable processes and analyses, such as an independent validation and verification function or economic analyses, to support its oversight of individual business systems. Until the Army's investment processes mature, it runs the risk of investing in business systems that do not provide the desired functionality and efficiency. Additionally, LMP continues to be plagued by problems that have beset the system since its implementation in July 2003. LMP continues to experience problems with accurately recognizing revenue and billing customers, which can, in part, be attributed to ineffective system testing.
Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director:
Team:
Phone:
McCoy Williams
Government Accountability Office: Financial Management and Assurance
(202) 516-6906
Recommendations for Executive Action
Recommendation: To improve the department's efforts to achieve TAV and further enhance its efforts to improve the control and accountability over business system investments, the Secretary of Defense should direct the Secretary of the Army and the Director, Business Transformation Agency (BTA), to jointly develop a concept of operations that (1) clearly defines the enterprise resource planning (ERP) vision for accomplishing total asset visibility within the Army; (2) addresses how its business systems and processes, individually and collectively, will provide the desired functionality to achieve TAV; and (3) determines the desired functionality among the selected systems.
Agency Affected: Department of Defense
Status: Open
Comments: The Department of Defense (DOD) partially concurred with the recommendation because the recommendation was jointly directed to the Secretary of the Army and the Director, Business Transformation Agency (BTA). In accordance with DOD's tiered accountability approach, the Army has complete authority for execution of its programs and responsibility for implementing the recommendation. BTA will continue to provide assistance and support to the Army from an enterprise viewpoint as needed. BTA has developed the Business Enterprise Architecture (BEA) and has provided specific recommendations to the Army in addressing Total Asset Visibility (TAV) and continues to work with the Army for the integration of the proper functionality. On June 12, 2008, the Army provided a briefing on the Army's progress towards integrating the Enterprise Resource Planning (ERP) systems to achieve TAV. Army officials stated that its Concept of Operations (CONOPS) for achieving ERP integration and cross domain architecture alignment is in development. The Army's CONOPS has a 3-phase approach beginning with the federation of GFEBS, GCSS-Army, and PLM+; the next phase focuses on analyzing LMP's relationship to the federated approach; and in the third phase, the Army plans to optimize its enterprise environment. The Army indicated that the CONOPS would be finalized by the end of calendar year 2008.
Recommendation: To improve the department's efforts to achieve TAV and further enhance its efforts to improve the control and accountability over business system investments, the Secretary of Defense should direct the Secretary of the Army and the Director, BTA, to jointly develop policies, procedures, and processes to support the oversight and management of selected groupings of business systems that are intended to provide a specific capability or functionality, such as TAV from a portfolio perspective, utilizing indicators such as costs, schedule, performance, and risks.
Agency Affected: Department of Defense
Status: Open
Comments: The Department of Defense (DOD) partially concurred with the recommendation because the recommendation was jointly directed to the Secretary of the Army and the Director, Business Transformation Agency (BTA). In accordance with DOD's tiered accountability approach, the Army has complete authority for execution of its programs and responsibility for implementing the recommendation. BTA will continue to provide assistance and support to the Army from an enterprise viewpoint as needed. DOD stated that it is the Department's intent, at an enterprise level, to continue maturing its portfolio management policies and procedures. On June 12, 2008, the Army provided a briefing on the Army's progress towards integrating the Enterprise Resource Planning (ERP) systems to achieve TAV. Army officials stated that they are working towards finalizing a cross-domain governance, which includes monthly executive steering group decision meetings and the use of a methodology approved by the Office of Management and Budget. The Army's approach will manage the ERP systems as a portfolio and make each decision in terms of cost, benefits, and risks. The Army will finalize these improvements later this year (2008) or early next year(2009).
Recommendation: To improve the department's efforts to achieve TAV and further enhance its efforts to improve the control and accountability over business system investments, the Secretary of Defense should direct the Secretary of the Army and the Director, BTA, to jointly establish an independent verification and validation (IV&V) function for GFEBS, GCSS-Army, and LMP. Additionally, direct that all IV&V reports for each system be provided to Army management, the appropriate investment review board (IRB), and BTA.
Agency Affected: Department of Defense
Status: Open
Comments: The Department of Defense (DOD) partially concurred with the recommendation because the recommendation was jointly directed to the Secretary of the Army and the Director, Business Transformation Agency (BTA). In accordance with DOD's tiered accountability approach, the Army has complete authority for execution of its programs and responsibility for implementing the recommendation. BTA will continue to provide assistance and support to the Army from an enterprise viewpoint as needed. On June 12, 2008, the Army provided a briefing on the Army's progress towards integrating the Enterprise Resource Planning (ERP) systems to achieve TAV. Army officials stated that the Program Executive Officer, Enterprise Information Systems (PEO EIS) is working towards finalizing the execution of an enterprise-wide independent verification and validation (IV&V) function. Army officials added that (1)PMO LMP formed an IV&V Team in February 2007 (Bearing Point) which reports to PEO EIS on a monthly basis; (2) PMOs of GFEBS and GCSS-Army awarded a joint IV&V services contract in February 2008 (SNVC); PEO EIS developed an enterprise-wide IV&V CONOPS in May 2008; and (4) PEO EIS established an ERP Risk Management Board at the Headquarters level to provide integrated risk management spanning all PEO EIS ERPs. Army officials added that the LMP IV&V Team is composed of qualified Government personnel and support contractor resources who have extensive ERP and former Enterprise Business System IV&V experience. The PMO LMP IV&V Team is Government-led and managed under the stewardship of the Communications-Electronics Life Cycle Management Executive Officer Enterprise Information Systems. Final execution of this IV&V process will be later this year (2008) or early next year (2009).
Recommendation: To improve the department's efforts to achieve TAV and further enhance its efforts to improve the control and accountability over business system investments, the Secretary of Defense should direct the Secretary of the Army and the Director, BTA, to jointly require that any future GFEBS economic analysis identify costs and benefits in accordance with the criteria specified by DOD and OMB guidance, to include a sensitivity analysis.
Agency Affected: Department of Defense
Status: Open
Comments: The Department of Defense (DOD) partially concurred with the recommendation because the recommendation was jointly directed to the Secretary of the Army and the Director, Business Transformation Agency (BTA). In accordance with DOD's tiered accountability approach, the Army has complete authority for execution of its programs and responsibility for implementing the recommendation. BTA will continue to provide assistance and support to the Army from an enterprise viewpoint as needed. On June 12, 2008, the Army provided a briefing on the Army's progress towards integrating the Enterprise Resource Planning (ERP) systems to achieve TAV. Army officials stated that the GFEBS economic analysis was updated in March 2008. On April 3, 2008, The GFEBS economic analysis was reviewed and approved by the Deputy Assistant Secretary of the Army for Cost and Economics (DASA C&E). However, in accordance with the Milestone B Acquisition Decision Memorandum for GFEBS, the DOD Director, Program Analysis and Evaluation still needs to review the updated economic analysis for GFEBS.
Recommendation: To improve the department's efforts to achieve TAV and further enhance its efforts to improve the control and accountability over business system investments, the Secretary of Defense should direct the Secretary of the Army and the Director, BTA, to jointly direct that LMP utilize systems testers that are independent of the LMP system developers to help ensure that the system is providing the users of the system the intended capabilities.
Agency Affected: Department of Defense
Status: Open
Comments: The Department of Defense (DOD) partially concurred with the recommendation because the recommendation was jointly directed to the Secretary of the Army and the Director, Business Transformation Agency (BTA). In accordance with DOD's tiered accountability approach, the Army has complete authority for execution of its programs and responsibility for implementing the recommendation. BTA will continue to provide assistance and support to the Army from an enterprise viewpoint as needed. On June 12, 2008, the Army provided a briefing on the Army's progress towards integrating the Enterprise Resource Planning (ERP) systems to achieve TAV. Army officials stated that in March 2007, the PMO LMP established development lifecycle process and testing improvements and initiated an aggressive test automation initiative to address requirements traceability through testing. Also, according to Army officials, in April 2007, the LMP prime vendor, Team Computer Sciences Corporation (CSC) formed an independent test group with direct reporting to the Team CSC Program Assurance Director and independent report to CSC's Corporate Quality Management Office. The PMO LMP Test Group is Government-led and managed by the Communications-Electronics Life Cycle Management Command's Software Engineering Center. GAO has not yet obtained supporting documentation demonstrating actions taken.
