Information Technology: DLA Needs to Strengthen Its Investment Management Capability

GAO-02-314 Published: Mar 15, 2002. Publicly Released: Mar 15, 2002.
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Highlights

The Defense Logistics Agency (DLA) relies extensively on information technology (IT) to carry out its logistics support mission. This report focuses on DLA's processes for making informed IT investment decisions. Because IT investment management has only recently become an area of management focus and commitment at DLA, the agency's ability to effectively manage IT investments is limited. The first step toward establishing effective investment management is putting in place foundational, project-level control and selection processes. The second step toward effective investment management is to continually assess proposed and ongoing projects as an integrated and competing set of investment options. Accomplishing these two steps requires effective development and implementation of a plan, supported by senior management, which defines and prioritizes investment process improvements. Without a well-defined process improvement plan and controls for implementing it, it is unlikely that the agency will establish a mature investment management capability. As a result, GAO continues to question DLA's ability to make informed and prudent investment decisions in IT.

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Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Defense Logistics Agency To strengthen DLA's investment management capability and address the weaknesses discussed in this report, the secretary of defense should direct the DLA director to designate the development and implementation of effective information technology (IT) investment management processes as an agencywide priority.
Closed - Implemented
The Office of the Under Secretary of Defense for Acquisition, Technology, and Logistics concurred with this recommendation, but took alternative steps to communicate their support for DLA executive leadership to fully implement stage 2 and 3 of the ITIM maturity framework. Accordingly, a directive from the Secretary to the DLA Director was not necessary to implement the intent of this recommendation.
Defense Logistics Agency The secretary of defense should have the DLA director, develop a plan, within six months, for implementing IT investment management process improvements that is based on GAO's ITIM stage two and three critical processes.
Closed - Implemented
DLA's ITIM Implmenetation Plan was approved in April 2002 by the Chief Information Officer. The Plan addresses the tasks to resolve deficiencies in Stage 2 critical processes and tasks to implement Stage 3 critical processes.
Defense Logistics Agency The secretary of defense should have the DLA director, ensure that the plan specifies measurable goals and time frames, defines a management structure for directing and controlling the improvements, and establishes review milestones.
Closed - Implemented
DLA's April 2002 ITIM Implementation Plan specifies measurable goals and time frames, defines a management structure for directing and controlling the improvements, and establishes review milestones.
Defense Logistics Agency The secretary of defense should have the DLA director, ensure that the plan focuses first on correcting the weaknesses in the ITIM stage two critial proceses, because these processes collectively provide the foundation for building a mature IT investment management process.
Closed - Implemented
The April 2002 ITIM Implementation Plan provides measurable goals and timeframes for initially improving Stage 2 critical processes and then implementing Stage 3 critical processes.
Defense Logistics Agency To ensure the the plan focuses first on correcting the weaknesses in the ITIM stage two critical process, because these processes collectively provide the foundation for building a mature IT investment management process DLA should develop and issue guidance covering the scope and operations of DLA's investment review boards. Such guidance should include, at a minimum, specific definitions of the roles and responsibilities within the IT investment process; an outline of the significant events and decision points within the processes; an identification of the external and environmental factors that will influence the processes (for example, legal constraints, the behavior of key suppliers or customers, or industry norms), and the manner in which IT investment-related processes with be coordinated with other organizations plans and processes.
Closed - Implemented
DLA has issued guidance covering the scope and operations of DLA's investment review boards. This guidance includes a description of the roles and responsibilities of individuals involved with the IT investment process, such as the Enterprise Portfolio Manager and includes an outline of significant decision points and events in the process, such as In Progress Reviews conducted quarterly. In addition, the guidance specifies environmental and external factors that will influence the process, such as customer requirements and industry changes. Finally, the guidance explains how the IT investment process will be coordinated with other organizational plans and processes, such as the budget process and acquisition mangement process.
Defense Logistics Agency To ensure that the plan focuses first on correcting the weakness in the ITIM stage two critical processes, because these processes collectively provide the foundation for building a mature IT investment management process. DLA should develop and issue policies and procedures for maintaining DLA's IT projects inventory for investment management purposes.
Closed - Implemented
Policies and procedures for utilizing the DLA Profile System (DLA's IT investment inventory) were issued on August 1, 2002.
Defense Logistics Agency To ensure that the plan focuses first on correcting the weaknesses in the ITIM stage two critical process, because these processes collectively provide the foundation for building a mature IT investment management process. DLA should finalize and issue policies and procedures (including the use of information from the IT systems and project inventory) for the PEO Review Board's oversight of IT projects.
Closed - Implemented
Policies and procedures for the PEO Review Board's oversight of IT projects (DLAD 8120.3 and DLAD 8120.1) have been published.
Defense Logistics Agency To ensure that the plan focuses first on correcting the weakness in the ITIM stage two critical process, because these processes collectively provide foundation for building a mature IT investment management process. DLA should develop and issue similar policies for the other investment boards.
Closed - Implemented
DLA's other investment review boards are the Program Business Review Group and the Program Business Review Group Executive Council. (A recommendation regarding policies and procedures for the Program Executive Office, DLA's primary investment review entity, has already been closed/implemented.) The charter for these two boards was issued on September 9, 2003 and contains policies and procedures that describe the board's roles and responsibilities, membership, processes and procedures for board operations, process rules, and meeting schedules.
Defense Logistics Agency To ensure that the plan focuses first on correcting the weakness in the ITIM stage two critical process, because these processes collectively provide the foundation for building a mature IT investment management process. DLA should finalize and issue guidance supporting the identification of business needs and implementing management controls to ensure that proposals submitted to DLA for review clearly identify and define business requirements.
Closed - Implemented
DLA has finalized and issued guidance supporting the identification of business needs and implementing management controls in DLAD 8120.4 and DLAD 8120.1.
Defense Logistics Agency To ensure that the plan focuses first on correcting the weakness in the ITIM stage two critical processes, because these processes collectively provide the foundation for building a mature IT investment management process. DLA should develop and issue guidance for the proposal selection process in such a way that the criteria for selection are clearly set forth, including formally assigning responsibility for managing the proposal selection process and establishing management controls to ensure that the proposal selection process is working effectively.
Closed - Implemented
DLA has developed and issued guidance for its proposal selection process (Automated Information Systems Portfolio Management guidance in the OneBook). This guidance sets forth the minimal acceptance criteria for a proposed IT investment. In addition, decision criteria are shown in a document with a flowchart of the selection process. Responsibility for the proposal selection process is assigned to the Enterprise Portfolio Manager under the direction of the Chief Information Officer. Management controls have also been incorporated in the guidance, such as Executive Director Approval and Conduct Milestone A Review.
Defense Logistics Agency The secretary of defense should have the DLA director, ensure that the plan next focuses on stage three critical processes, which are necessary for portfolio management, because along with the stage two foundational processes, these processes are necessary for effective management of IT investments.
Closed - Implemented
DLA's ITIM Implementation Plan outlines the activities necessary to drive DLA toward stage 3 critical processes.
Defense Logistics Agency The secretary of defense should have the DLA director, implement the approved plan and report on progress made against the plan's goals and time frames to the secretary of defense every six months.
Closed - Implemented
DLA has reported three times on progress made in implementing their approved IT investment management reform plan dated April of 2002. These reports have been at approximately six month intervals (October 9, 2002; May 21, 2003; October 15, 2003).

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