This Q&A report reviews how the Department of Defense is managing and reforming its business operations. DOD spends billions of dollars each year to maintain business systems and processes, such as those for contracts and financial management.
DOD has updated its approach to managing its business operations. The agency has also begun using more data to help make business decisions, including using a data analytics tool to monitor decisions and results.
As DOD is in the early stages of reforming and following these processes, it's too soon for us to determine if this approach is working. We will continue to monitor DOD's business reform efforts.
What GAO Found
The Department of Defense (DOD) is in the early stages of implementing a new approach to reforming its business operations. Following the disestablishment of the Chief Management Officer, DOD has made updates to its organizations and governance structures to oversee business operations and reform. As a part of this new approach, DOD officials have emphasized aligning reform efforts with department priorities and using existing department processes to drive reform.
DOD has developed and is in the process of implementing a new Performance Improvement Framework to serve as a guide for defining, identifying, tracking, and reporting on existing and planned reform initiatives across the department. The framework includes new categories and definitions of reform, and DOD is working to establish reporting and prioritization processes for reform.
DOD has also taken steps to make greater use of data in managing and reforming its business operations. DOD uses Advana—a centralized data analytics platform that links various DOD data sources— to monitor its business operations and reform efforts. The department also established a process for using data to manage and reform its business operations, but implementation is ongoing. Specifically, under the Advana platform, DOD has begun to populate and plans to use an application suite called Pulse to monitor and report on business operations. The Business Health Metrics is an application within Pulse and is currently used by DOD organizations to provide senior DOD leaders an overview of how the department’s business operations are performing.
GAO selected three Business Health Metrics within Pulse and found that DOD is currently using them to make certain management decisions to improve programs and results. However, GAO also found that DOD is not consistently applying key practices to successfully address high-risk areas related to the use of data. Specifically, DOD does not have a monitoring plan to help leaders determine whether corrective actions that they take related to business reform are sustainable or effective. Specifically, DOD does not have guidance that explains how to implement and use Business Health Metrics in the management and reform of the DOD business operations. Without guidance on how to use Business Health Metrics to manage and reform DOD business operations, DOD cannot ensure that the data it collects using these metrics are being used effectively to help manage department-wide reform efforts.
Given that DOD is in the early stages of establishing its approach to reform it is too early to determine whether the new approach is working. However, the department continues to lay the groundwork for its reform efforts, including through further development of Pulse. DOD officials have acknowledged it will take time to fully implement their new approach to business reform. GAO will continue to monitor DOD’s business reform efforts and assess the extent to which the department is achieving its goals for improving the department’s business operations.
Why GAO Did This Study
DOD spends billions of dollars each year to maintain key business operations intended to support its mission, including systems and processes related to the management of contracts, finances, the supply chain, and weapon systems acquisition. These operations are linked to the department’s ability to perform its overall mission, and GAO has reported that achieving greater efficiencies in defense business operations is one of the key mission challenges facing the department. In addition, DOD’s approach to business transformation is among the areas identified in GAO’s High-Risk report.
The William M. (Mac) Thornberry National Defense Authorization Act for Fiscal Year 2021 repealed the position of Chief Management Officer, which oversaw DOD’s business operations and reform efforts. In addition, section 911 of the Act, codified at 10 U.S.C. § 125a, required DOD to take steps to reform the department to (1) improve the efficacy and efficiency of the department and (2) improve the ability of the department to prioritize reform efforts and assess the costs and benefits of reform. It also directs DOD to develop and implement policies, guidance, and a reporting framework to measure the progress of its reform efforts. In addition, it includes a provision for GAO to evaluate the extent to which DOD’s policies, guidance, and reporting framework will enable consistent measurement of progress in reform and prioritization of department reform efforts. This report examines the extent to which DOD is managing and reforming its business operations, including the extent to which it has established organizations and guidance and is using data in these efforts.
GAO is recommending that DOD develop and issue guidance clarifying the requirements for using Business Health Metrics in accordance with best practices related to the use of data to effectively help manage department-wide reform efforts.
Recommendations for Executive Action
|Department of Defense||The Secretary of Defense should ensure that the Director of Administration and Management and the Chief Digital and Artificial Intelligence Officer develop and issue guidance clarifying the requirements for using Business Health Metrics in accordance with best practices related to the use of data to effectively help manage department-wide reform efforts.||