DOD Business Systems Modernization:

Further Actions Needed to Address Challenges and Improve Accountability

GAO-13-557: Published: May 17, 2013. Publicly Released: May 17, 2013.

Additional Materials:

Contact:

Valerie C. Melvin
(202) 512-6304
melvinv@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

What GAO Found

The Department of Defense (DOD) continues efforts to establish a business enterprise architecture (a modernization blueprint) and transition plan and modernize its business systems and processes, in compliance with key provisions of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 and amendments. Nonetheless, long-standing challenges remain. The following reflects the status of DOD’s actions to fulfill selected requirements of the act.

  • Develop a business enterprise architecture
    DOD continues to develop content for its business enterprise architecture, such as business rules, and is proceeding with efforts to extend the architecture to its components. However, even though DOD has spent more than 10 years and at least $379 million on its business enterprise architecture, its ability to use the architecture to guide and constrain investments has been limited by, among other things, the lack of a detailed plan.
  • Develop an enterprise transition plan
    The department’s latest version of its transition plan included data on more than 1,200 covered defense business systems; however, important content, such as time-phased milestones and performance measures, is still needed to address the act’s requirements.
  • Establish an investment approval and accountability structure along with an investment review process
    DOD has taken steps to establish a portfolio-based approach to certifying defense business systems, including the establishment of a corporate-level board to oversee the approach and guidance for selecting, controlling, and evaluating the investment portfolio. However, it has yet to fully establish the foundation for its new portfolio-level investment management process or the criteria and procedures for making portfolio-based investment decisions.
  • Certify any business system program costing in excess of $1 million as compliant with the business enterprise architecture and as having undertaken appropriate business process reengineering
    DOD’s portfolio-based investment approach included reviewing and certifying more than 1,200 business systems for fiscal year 2013, totaling about $6.8 billion in funding. However, while DOD continues to perform compliance assertions, it has not ensured the accuracy of business enterprise architecture alignment through validation of individual investments. Further, appropriate business process reengineering assertions were not completed and the associated results and outcomes have yet to be reported.

In addition, the Office of the Deputy Chief Management Officer has yet to determine and follow a strategic approach to managing its human capital needs, thus limiting its ability to, among other things, effectively address the act’s requirements. Collectively, these limitations put the billions of dollars spent annually on approximately 2,100 business system investments that support DOD functions at risk. GAO’s previous recommendations to the department have been aimed at accomplishing these and other activities related to the business systems modernization. However, to date, the department has not implemented 29 of the 63 recommendations that GAO has made in these areas.

According to DOD officials, recent turnover, changes to the act’s requirements significantly expanding the number of systems subject to certification, and the short time frame for implementing the new investment review process contributed to the aforementioned weaknesses. Until DOD implements GAO recommendations and addresses the weaknesses described in this report, it will be challenged in its ability to manage the billions of dollars invested annually in modernizing its business system investments.

Why GAO Did This Study

GAO designated DOD’s multibillion dollar business systems modernization program as high risk in 1995, and, since then, has provided a series of recommendations aimed at strengthening DOD’s institutional approach to modernization and reducing the risk associated with key investments. The act requires the department to report on actions taken relative to its business systems modernization efforts and GAO to assess DOD’s actions to comply with the act. In evaluating DOD’s compliance, GAO analyzed, for example, the latest version of the business enterprise architecture and enterprise transition plan, investment management policies and procedures, and certification actions for its business system investments.

What GAO Recommends

GAO is making recommendations to help ensure that the department’s modernization program is fully compliant with provisions of the act and to improve the department’s architecture, transition plan, and business system investment management and human capital management within the Office of the Deputy Chief Management Officer. DOD concurred with two recommendations, partially concurred with three, and did not concur with three. GAO continues to believe its recommendations are warranted given the department’s need to more effectively manage its billions of dollars of business system investments and minimize or eliminate system overlap and duplication as appropriate.

For more information, contact Valerie C. Melvin at (202) 512-6304 or melvinv@gao.gov.

Recommendations for Executive Action

  1. Status: Open

    Comments: As of September 2017, the Department of Defense (DOD) had taken steps to address the recommendation; however, more steps are needed to meet its intent. For example, as of July 2015, the department had taken steps to improve the integration of business enterprise architecture (BEA) information with other existing information. This integration was intended to allow DOD to identify information such as mapping of existing business systems to individual BEA system functions. In addition, in January 2017, the department issued a plan to improve the usefulness of the architecture by delivering three major capabilities, including the ability to conduct process and system reviews within and across domains, which can help better identify potential duplication and overlap, by January 2017. The plan also included other activities that may help support the identification of duplication and overlap, such as developing a federated ontology for BEA data structures, migrating legacy architecture data into the federated ontology, and defining requirements to enable extensible data structures for future updates, by June 2016. However, the department has not developed the ontology or delivered the capability to conduct process and system reviews within and across domains. An official from the Office of the Deputy Chief Management Officer stated in September 2017 that the BEA ontology work is ongoing and that a plan for moving the existing BEA content to the new framework is in development. The official also stated that delivery of the capability to conduct process and system reviews within and across domains is now planned for June 2018, depending on contract award. However, DOD has not updated its BEA improvement plan to reflect the revised delivery dates. In addition, the department also has not identified the business capabilities associated with the Hire-to-Retire and Procure-to-Pay business processes. The department continues to update its business architecture, but it has not demonstrated that it has defined by when and how it plans to develop an architecture that would extend to all defense components and include business capabilities for the Hire-to-Retire and Procure-to-Pay business processes.

    Recommendation: To effectively implement key components of DOD's business systems modernization program, the Secretary of Defense should direct the Deputy Chief Management Officer to define by when and how the department plans to develop an architecture that would extend to all defense components and include, among other things, (a) information about the specific business systems that support business enterprise architecture (BEA) business activities and related system functions; (b) business capabilities for the Hire-to-Retire and Procure-to-Pay business processes; and (c) sufficient information about business activities to allow for more effective identification of potential overlap and duplication.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: As of August 2017, the Department of Defense (DOD) had met the intent of this recommendation. According to the department, its transition plan is comprised of information from functional strategies, component organizational execution plans, and data in the DOD Information Technology Portfolio Repository (DITPR), Select and Native Programming Data Input System for Information Technology (SNAP-IT), Integrated Business Framework Data Alignment Portal (IBF-DAP), and the DOD Information Technology Investment Portal (DITIP). In August 2017, the department provided current examples of enterprise transition plan information that met the intent of our recommendation. For example, the department documented that system milestones are maintained in its DITPR system. The department also provided documentation that its system-specific problem statements identify performance measures and that funding information is contained in its SNAP-IT system. In addition, DOD provided examples of risks and challenges to integration associated with a specific system and documented in its IBF-DAP system. Moreover, the department provided examples of time-phased end dates for terminating legacy systems and documentation of business systems that will be part of the target environment from its DITPR system and an example functional strategy. In addition, DOD documented that is maintains information about how systems are to be sequenced in its functional strategies and its business intelligence tool.

    Recommendation: To effectively implement key components of DOD's business systems modernization program, the Secretary of Defense should direct the Deputy Chief Management Officer to define by when and how the enterprise transition plan will include, among other things, (a) milestones, performance measures, and funding plans for all business systems expected to be part of the target architecture and each system's risks or challenges to integration; (b) time-phased end dates associated with terminating legacy systems in phases; (c) a listing of all other defense business systems (including systems that are considered to be core systems) that will be a part of the target defense business systems computing environment and a strategy for making modifications to those systems that will be needed to ensure that they comply with the defense BEA, including time-phased milestones, performance measures, and financial resource needs; and (d) information about how systems are to be sequenced according to, among other things, dependencies among investments.

    Agency Affected: Department of Defense

  3. Status: Open

    Comments: As of August 2017, the Department of Defense (DOD) had taken some steps to address the intent of this recommendation. However, more remains to be done to fully address the intent of the recommendation. For example, we reported in July 2015 that the department established performance measures in its functional strategies that addressed at least some of the five attributes called for in DOD guidance. In particular, all of the fiscal year 2015 functional strategies identified examples of quantitative metrics. However, not all functional strategies identified metrics that addressed the other attributes. As of August 2017, this continues to be the case. For example, the fiscal year 2017 human resources management functional strategy did not address prior year business outcomes and initiatives progress, as required by the February 2015 investment management guidance.

    Recommendation: To effectively implement key components of DOD's business systems modernization program, the Secretary of Defense should direct the Deputy Chief Management Officer to ensure that the functional strategies include all of the critical elements identified in DOD investment management guidance, including performance measures to determine progress toward achieving the goals that incorporate all of the attributes called for in the department's guidance.

    Agency Affected: Department of Defense

  4. Status: Open

    Comments: As of August 2017, the Department of Defense had not addressed the recommendation. In February 2017, the department issued DOD Instruction 5000.75, Business Systems Requirements and Acquisition, to assist in managing defense business systems. Further, in April 2017, the department updated its investment management guidance. However, neither the instruction nor the revised guidance call for a process for evaluating portfolio performance that includes the use of actual versus expected performance data and predetermined thresholds. The instruction and the revised guidance also do not specify a process for ensuring that portfolio assessments are conducted in key areas identified in our information technology investment management framework: benefits attained; current schedule; accuracy of project reporting; and risks that have been mitigated, eliminated, or accepted to date. Further, the department has not demonstrated that it has ensured that documents provided to the Defense Business Council (i.e., the investment review board) include critical information for conducting assessments, such as information about system scalability to support additional users or new features in the future and cost in relationship to return on investment.

    Recommendation: To effectively implement key components of DOD's business systems modernization program, the Secretary of Defense should direct the Deputy Chief Management Officer to select and control its mix of investments in a manner that best supports mission needs by (a) documenting a process for evaluating portfolio performance that includes the use of actual versus expected performance data and predetermined thresholds; (b) ensuring that portfolio assessments are conducted in key areas identified in our IT investment management framework: benefits attained; current schedule; accuracy of project reporting; and risks that have been mitigated, eliminated, or accepted to date; and (c) ensuring that the documents provided to the Defense Business Council as part of the investment management process include critical information for conducting all assessments.

    Agency Affected: Department of Defense

  5. Status: Open

    Comments: As of August 2017, the Department of Defense (DOD) has taken steps to address the intent of the recommendation; however, more remains to be done. For example, the 2015 Congressional Report on Defense Business Operations included some information consistent with our recommendation. In particular, it contained information about weaknesses for systems that were certified with qualifications. The report stated that the department conditionally approved 29 military department and 30 defense agency requests pending Defense Business Council (DBC) approval of their problem statements. The report also cited the specific systems that were conditionally approved pending approval of their problem statements. In addition, in February 2017, the department issued an instruction (DOD Instruction 5000.75, Business Systems Requirements and Acquisition). The instruction requires that the certifying official verify that a capability is aligned with the business enterprise architecture (BEA) prior to a decision to proceed with a solutions analysis phase. The instruction also requires the certifying official to validate that sufficient business process reengineering (BPR) has been conducted to determine that a business system is required. The Office of the Deputy Chief Management Officer (DCMO) explained in August 2017 that the office reviews BEA compliance assertions in BEA compliance reporting tools, and if any issues are found with the assertions they are documented in investment decision memos. In addition, for BPR assertions, the office stated that DCMO portfolio leads review the assertions to determine if a system has required documentation. For those that have no plan of action or BPR assertions, according to the office, the DCMO team works with the domain or portfolio owners to ensure that a plan of action is documented. However, the department did not provide evidence to demonstrate that BEA assertions have been validated for selected investments or that BPR assertions have been validated for all its investments as part of its last annual certification process.

    Recommendation: To effectively implement key components of DOD's business systems modernization program, the Secretary of Defense should direct the Deputy Chief Management Officer to implement and use the BEA and business process reengineering compliance assessments more effectively to support organizational transformation efforts by (a) disclosing relevant information about known weaknesses, such as BEA and business process reengineering compliance weaknesses for systems that were not certified or certified with qualifications in annual reports to Congress; (b) establishing milestones by which selected validations of BEA compliance assertions are to be completed; and (c) ensuring that appropriate business process reengineering assertions have been completed on all investments submitted for the fiscal year 2014 certification reviews prior to the certification of funds.

    Agency Affected: Department of Defense

  6. Status: Open

    Comments: As of September 2017, the Department of Defense (DOD) had not addressed this recommendation; and the Office of the Deputy Chief Management Officer (DCMO) stated that it does not plan to address it. Specifically, it said that the department did not concur with the recommendation, and that, further, it had been overcome by other events. According to DOD officials, the recommendation has been overcome by several reorganizational changes, including one based on reviews of the department's business processes and systems. The Office of the DCMO stated that the department used a skills inventory, needs assessment, and gap analysis to do these reorganizations, and there are no open positions beyond those occurring from normal attrition. However, the Office of the DCMO did not provide evidence of the skills inventory, needs assessment and gap analysis that it said it used in its reorganizations. We still consider the recommendation to be valid and will continue to monitor its implementation as part of our periodic assessments of DOD efforts to manage its defense business systems.

    Recommendation: To effectively implement key components of DOD's business systems modernization program, the Secretary of Defense should direct the Deputy Chief Management Officer to develop a skills inventory, needs assessment, gap analysis, and plan to address identified gaps as part of a strategic approach to human capital planning for the Office of the Deputy Chief Management Officer.

    Agency Affected: Department of Defense

  7. Status: Open

    Comments: As of September 2017, the Department of Defense (DOD) had taken some steps to address the intent of this recommendation, and other aspects of the recommendation have been overcome by events. However, more work is needed to demonstrate that the department has more fully addressed the intent of our recommendation. For example, in July 2015, we reported that the department demonstrated that it had completed documentation, such as root cause analyses, assessments of existing interfaces for reuse opportunities, and performance metrics related to the reengineering efforts, and that the documentation was provided as part of the certification and approval process for the Air Force Integrated Personnel and Pay System investment. However, since we made the recommendation, the department has changed its approach to evaluating business process reengineering for its defense business systems. As a result of this change, the department requires different documentation than the documentation required when we prepared our report. The department now requires business process reengineering to be documented in a problem statement. In particular, the December 2014 DOD problem statement guidance requires a description of and validation that a thorough review of the business process reengineering was conducted, and no longer specifically requires root cause analyses, assessments of existing interfaces for re-use opportunities, or performance metrics related to reengineering efforts. Regarding the Integrated Personnel and Pay System - Army, in September 2017, the department demonstrated that it had completed a March 2016 description of its business process reengineering efforts and provided supporting documentation as part of its review and certification process. However, as of September 2017, the department had not demonstrated that complete documentation related to reengineering efforts has been submitted as part of its annual certification and approval process for the Integrated Personnel and Pay System-Navy (IPPS-N) investment. According to an Official from the Office of the Deputy Under Secretary of the Navy (Management), the department expects the IPPS-N problem statement to be complete by the end of September 2017. Regarding the Integrated Electronic Health Record investment, the Office of the Deputy Chief Management Officer stated that the department does not plan to conduct business process reengineering because the investment is now in sustainment, and the department does not require business process reengineering for systems in sustainment.

    Recommendation: The Secretary of Defense should direct the appropriate authority to ensure that complete documentation, such as root cause analyses, assessments of existing interfaces for reuse opportunities, and performance metrics related to the reengineering efforts, is provided as part of the fiscal year 2014 certification and approval process for the Integrated Personnel and Pay System - Army (IPPS-A), Integrated Personnel and Pay System - Navy (IPPS-N), Air Force Integrated Personnel and Pay System (AF-IPPS), and Integrated Electronic Health Record (iEHR) investments.

    Agency Affected: Department of Defense

  8. Status: Closed - Implemented

    Comments: As we reported in July 2015, officials from the Office of the Deputy Chief Management Officer demonstrated that the department has addressed the intent of this recommendation. Specifically, while the department did not concur with the recommendation and did not make the recommended determination, it has taken mitigating steps to help ensure compliance with business process reengineering requirements. For example, officials stated that, as part of the fiscal year 2013 certification and approval process, conditions were imposed by the investment review board requiring all components to submit a plan on how core defense business systems would become compliant with the act's business process reengineering requirement. These officials also provided documentation showing that the department tracked these conditions. In addition, the department has reported much higher levels of compliance with the act's business process reengineering requirements in subsequent annual review cycles. For example, in May 2013, we reported that, according to DOD, appropriate business process reengineering had been undertaken on only about 41 percent of the approximately 1,200 systems for the fiscal year 2013 certification reviews. In contrast, officials from the Office of the Deputy Chief Management Officer stated that only 2 systems were certified and approved during the fiscal year 2014 certification and approval cycle and 6 systems were certified and approved during the fiscal year 2015 certification and approval cycle that did not have complete business process reengineering assertions. Moreover, these officials provided justifications for why each of these systems did not have complete business process reengineering assertions.

    Recommendation: The Secretary of Defense should direct the appropriate authority to determine whether funds were properly obligated under 10 U.S.C. 2222(a)-(b) for systems for which appropriate business process reengineering assertions were not completed.

    Agency Affected: Department of Defense

 

Explore the full database of GAO's Open Recommendations »

Oct 16, 2017

Oct 5, 2017

Sep 29, 2017

Sep 28, 2017

Sep 27, 2017

Sep 26, 2017

Sep 19, 2017

Sep 12, 2017

Looking for more? Browse all our products here