Defense Business Transformation: DOD Needs to Take Additional Actions to Further Define Key Management Roles, Develop Measurable Goals, and Align Planning Efforts
Highlights
The Department of Defense (DOD) spends billions of dollars each year to maintain key business operations intended to support the warfighter, including systems and processes related to the management of contracts, finances, the supply chain, support infrastructure, and weapon systems acquisition. We have designated a number of these areas as high risk because of their vulnerability to fraud, waste, abuse, and mismanagement and because of opportunities to achieve greater efficiencies and free up resources for higher-priority needs. In 2005, we identified DOD's approach to business transformation as a high-risk area because (1) DOD had not established clear and specific management responsibility, accountability and control over business transformation-related activities and applicable resources; and (2) DOD lacked a clear strategic and integrated plan for business transformation with specific goals, measures and accountability mechanisms to monitor progress. Because of the complexity and magnitude of the challenges facing DOD in improving business operations, we have reported the need for a chief management officer (CMO) with significant authority and experience to focus the necessary attention and sustain progress. Both DOD and Congress have taken actions to address DOD's management of business transformation efforts. For example, DOD designated the Deputy Secretary of Defense as the CMO for DOD in May 2007. In the National Defense Authorization Acts for Fiscal Year 2008 and Fiscal Year 2009, Congress took steps that included: (1) designating the Deputy Secretary of Defense as the CMO for DOD; (2) creating a deputy chief management officer (DCMO) position; (3) requiring the secretaries of the military departments to designate the department under secretaries as CMOs; (4) requiring DOD to develop a strategic management plan (SMP); and (5) requiring the secretary of each military department to establish a business transformation office and to develop business transformation plans. Since we last reported, a DCMO has been confirmed by the Senate, DOD has updated its SMP, and DOD and the military departments have continued to refine their management approach to business transformation. This report addresses their progress since January 2009. We performed this review under the authority of the Comptroller General to conduct evaluations on his own initiative. Our objectives were to assess the extent to which DOD and the military departments have taken additional steps to (1) implement management frameworks for business transformation and (2) develop business transformation plans, supported by a strategic planning process, that enable them to align goals and planning efforts and to measure progress.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | To establish ongoing accountability and better leverage the unique positions of the CMO and DCMO to provide the leadership necessary to follow up the Secretary's recent efficiency initiative for the long term, the Secretary of Defense should assign specific roles and responsibilities to the CMO and DCMO for integrating the Secretary's efficiency initiative with ongoing reform efforts, overseeing its implementation, and otherwise institutionalizing the effort for the long term. |
DOD concurred with this recommendation, but did not specify the actions it planned to take to implement the recommendation. Based on a review of memos related to the efficiencies and discussions with the Deputy Chief Management Officer (DCMO), DOD did not issue guidance that assigned specific roles and responsibilities to the Chief Management Officer (CMO) and DCMO for integrating the Secretary's efficiency initiative with ongoing reform efforts, overseeing its implementation, and otherwise institutionalizing the effort for the long term. DOD planned to implement the efficiency initiative from fiscal years 2012 through 2016, so this recommendation can no longer be implemented.
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| Department of Defense | To enhance DOD's ability to set strategic direction for its business transformation efforts, and better align and institutionalize its efforts to develop and implement plans and measure progress against established goals, the Secretary of Defense should direct the CMO to ensure that DOD's revised SMP contains measurable goals and funding priorities linked to those goals. |
DOD concurred with this recommendation and agreed that the Strategic Management Plan (SMP) should contain measurable goals linked to the budget. In February 2013, GAO reported on DOD's 2012-2013 SMP stating that improvements in the SMP include links between its business goals and DOD-wide goals, as well as milestone or target data that would enable DOD to better measure performance and assess progress in achieving SMP goals. However, the SMP still lacks some key information including performance measures that fully reflect core activities needed to assess progress, and funding priorities linked to goals. Additionally, GAO reported that the performance information provided to the Defense Business Council provides a partial picture of the department's performance in various business areas, which limits the ability of DOD to assess overall progress towards business goals. As of early September 2015, DOD has issued an Agency Strategic Plan that supercedes its Strategic Management Plan, so this recommendation can no longer be implemented.
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| Department of Defense | To enhance DOD's ability to set strategic direction for its business transformation efforts, and better align and institutionalize its efforts to develop and implement plans and measure progress against established goals, the Secretary of Defense should direct the CMO to issue guidance to establish a strategic planning process with mechanisms---such as procedures and milestones---for routinely updating the SMP and military department business transformation plans. In particular, this guidance should include elements such as how DOD and the military departments---including the CMO, DCMO, and military department CMOs---will reach consensus on business priorities, coordinate review and approval of updates to plans, synchronize the development of plans with the budget process, and monitor the implementation of reform initiatives, and report progress, on a periodic basis, towards achieving established goals. |
DOD partially concurred with this recommendation. DOD developed a strategic planning process for updating its National Defense Business Operations Plan, which supersedes DOD's Agency Strategic Plan and Strategic Management Plan, and its Annual Performance Plan, which contains performance goals and measures to achieve the goals and objectives in the National Defense Business Operations Plan. The process identifies critical lines of input and output from the Secretary of Defense, Chief Management Officer (CMO), and military departments, among others, for developing these key documents. In addition, DOD outlined a 4-year strategic planning cycle from fiscal years 2017 through 2020 for updating its National Defense Business Operations Plan and Annual Performance Plan. Within this cycle, DOD identifies the milestones for updating these documents, incorporating input from the components and military departments, and reviewing performance on a quarterly basis. Further, the cycle shows how these milestones align with the release of the President's Budget. Finally, according to an Office of the CMO (OCMO) official, each military department's business operation plan or reform strategy is aligned with the overall DOD strategy and OCMO efforts to reform the department. While OCMO does not approve the plans specifically, the specific initiatives within those plans are discussed by the OCMO and the military departments, among others, as part of DOD's Reform Management Group meetings. As a result of these actions, DOD has enhanced its ability to set strategic direction for its business transformation efforts, and better aligned and institutionalized its efforts to develop and implement plans and measure progress against established goals.
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