DOD Business Transformation: Improved Management Oversight of Business System Modernization Efforts Needed
GAO-11-53
Published: Oct 07, 2010. Publicly Released: Oct 07, 2010.
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Highlights
The Department of Defense (DOD) invests billions of dollars annually to modernize its business systems, which have been on GAO's high-risk list since 1995. DOD is in the process of implementing nine enterprise resource planning (ERP) efforts which perform business-related tasks such as general ledger accounting and supply chain management. These efforts are essential to transforming DOD's business operations. GAO was asked to (1) provide the status of the ERPs as of December 31, 2009; (2) determine whether selected ERPs followed schedule and cost best practices; and (3) determine if DOD has defined the performance measures to assess whether the ERPs will meet their intended business capabilities. To accomplish these objectives, GAO reviewed data on the status of each ERP from the program management officers and interviewed the DOD and military departments' chief management officers.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | To strengthen DOD's management oversight and accountability over business system investments and help provide for the successful implementation of the ERPs, the Secretary of Defense should direct the Secretary of the Army to ensure that the Chief Management Officer of the Army directs the program management offices (PMO) for the General Fund Enterprise Business System (GFEBS) to develop an integrated master schedule (IMS) that fully incorporates best practices. The schedule should 1) sequence all activities, 2) assign resources to all activities, 3) integrate schedule activities horizontally and vertically, 4) establish the critical path for all activities, 5) identify float between activities, 6) conduct a schedule risk analysis, and 7) update schedule using logic and durations to determine dates. | In our October 2010 report, we recommended that the Army develop a reliable integrated master schedule for the General Fund Enterprise Business System (GFEBS) program that fully incorporated best practices, such as sequencing all activities, assigning resources to all activities, integrating schedule activities horizontally and vertically, establishing the critical path for all activities, identifying float between activities, conducting a schedule risk analysis, and updating schedule using logic and durations to determine dates. GFEBS is the Army's General Fund general ledger and became the Army's system of record at the beginning of Fiscal Year 2013. On July 1, 2012, the Army completed... GFEBS deployment to more than 53,000 users at 227 locations. In June 2015, we obtained and reviewed the April 2015 GFEBS integrated master schedule and evaluated the schedule using the criteria described in GAO's Schedule Assessment Guide. We determined the extent to which the schedule was prepared in accordance with the above best practices. The Army's April 2015 GFEBS schedule addressed one best practice, sequencing all activities. However, we continued to identify that the remaining best practices were not yet fully addressed. Therefore, the Army did not fully meet best practices in developing a reliable schedule for the GFEBS program. The GFEBS IMS has an end date of December 2015 and is no longer relevant and we do not reasonably expect DOD to take any further actions to address this recommendations. Therefore we are closing this recommendation not implemented.
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| Department of Defense | To strengthen DOD's management oversight and accountability over business system investments and help provide for the successful implementation of the ERPs, the Secretary of Defense should directs the Secretary of the Army to ensure that the Chief Management Officer of the Army direct the PMO for GCSS-Army to develop an IMS that fully incorporates best practices. The schedule should 1) capture all activities, 2) sequence all activities, 3) integrate schedule activities horizontally and vertically, 4) establish the critical path for all activities, and 5) conduct a schedule risk analysis. | In our October 2010 report, we recommended that the Army develop a reliable integrated master schedule for the Global Combat Support System-Army (GCSS-Army) program that fully incorporated best practices, such as capturing all activities, sequencing all activities, integrating schedule activities horizontally and vertically, establishing the critical path for all activities, and conducting a schedule risk analysis. In our September 2014 report, GAO-14-470, we found that although the Army made some improvements to the schedule that supported the December 2012 full deployment decision, the Army did not fully meet best practices in developing a reliable schedule for the GCSS-Army program....
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| Department of Defense | To strengthen DOD's management oversight and accountability over business system investments and help provide for the successful implementation of the ERPs, the Secretary of Defense should Direct the Secretary of the Air Force to ensure that the Chief Management Officer of the Air Force directs the PMO for Defense Enterprise Accounting and Management System (DEAMS) to develop an IMS that fully incorporates best practices. The schedule should 1) capture all activities, 2) sequence all activities, 3) integrate schedule activities horizontally and vertically, 4) establish the critical path for all activities, 5) identify float between activities, 6) conduct a schedule risk analysis, and 7) update schedule using logic and durations to determine dates. | In our October 2010 report, we recommended that the Air Force develop a reliable integrated master schedule for the Defense Enterprise Accounting and Management System (DEAMS) program that fully incorporated best practices, such as capturing all activities, sequencing all activities, integrating schedule activities horizontally and vertically, establishing the critical path for all activities, identifying float between activities, conducting a schedule risk analysis, and updating schedule using logic and durations to determine dates. In our February 2014 report, we found that the Air Force's schedule that supported the February 2012 Milestone B decision for DEAMS did not fully meet best...
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| Department of Defense | To strengthen DOD's management oversight and accountability over business system investments and help provide for the successful implementation of the ERPs, the Secretary of Defense should Direct the Secretary of the Air Force to ensure that the Chief Management Officer of the Air Force directs the PMO for Expeditionary Combat Support System (ECSS) to develop an IMS that fully incorporates best practices. The schedule should 1) sequence all activities, 2) assign resources to all activities, 3) integrate schedule activities horizontally and vertically, 4) establish the critical path for all activities, 5) identify float between activities, 6) conduct a schedule risk analysis, and 7) update schedule using logic and durations to determine dates. | In 2011, after failing to achieve a full deployment decision within 5 years after funds were first obligated for ECSS, DOD initiated a program assessment to improve the performance of the program. After this assessment, DOD implemented actions to improve the ECSS program. These actions included establishing performance-based success criteria to measure program progress and addressing concerns that relate directly to our recommendation. While these actions occurred too late to provide significant improvement in program performance, however, they did provide DOD officials critical information to evaluate the overall ECSS program. As a result, in December 2012, DOD terminated development...
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| Department of Defense | To strengthen DOD's management oversight and accountability over business system investments and help provide for the successful implementation of the ERPs, the Secretary of Defense should direct the Secretary of the Army to ensure that the Chief Management Officer of the Army directs the PMO for GFEBS to update the cost estimates by preparing sensitivity and risk and uncertainty analyses using best practices. | In our October 2010 report, we recommended that the Army update the cost estimate for the General Fund Enterprise Business System (GFEBS) by preparing sensitivity and risk and uncertainty analyses using best practices. GFEBS updated the cost estimate for sustainment. Sustainment costs were estimated in a Project Office Estimate (POE). This POE was reviewed by the Office of the Deputy Assistant Secretary of the Army for Cost and Economics (ODASA-CE) for sufficiency. Army PMO officials stated that the POE as modified by ODASA-CE will reflect best practices with respect to sensitivity and risk and uncertainty analyses prior to being submitted as an official updated Army Cost Position. GFEBS...
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| Department of Defense | To strengthen DOD's management oversight and accountability over business system investments and help provide for the successful implementation of the ERPs, the Secretary of Defense should direct the Secretary of the Army to ensure that the Chief Management Officer of the Army directs the PMO for GCSS-Army to update the cost estimates by using actual cost and preparing a sensitivity analysis using best practices. | In our October 2010 report, we recommended that the Army update the cost estimate for the Global Combat Support System-Army (GCSS-Army) by using actual cost and preparing a sensitivity analysis using best practices. In our September 2014 report, GAO-14-470, we found that while the Army made some improvements to the cost estimate that supported the December 2012 full deployment decision, the Army did not fully meet best practices in developing a reliable cost estimate for the GCSS-Army program. For the 2012 cost estimate, we found that the Army had made progress, but we continued to identify deficiencies in documentation related to the sensitivity analysis, risk and uncertainty analysis,...
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| Department of Defense | To strengthen DOD's management oversight and accountability over business system investments and help provide for the successful implementation of the ERPs, the Secretary of Defense should Direct the Secretary of the Air Force to ensure that the Chief Management Officer of the Air Force directs the PMO for ECSS to update the cost estimates by preparing a sensitivity analysis using best practices. | In 2011, after failing to achieve a full deployment decision within 5 years after funds were first obligated for ECSS, DOD initiated a program assessment to improve the performance of the program. After this assessment, DOD implemented actions to improve the ECSS program. These actions included establishing performance-based success criteria to measure program progress and addressing concerns that relate directly to our recommendation. While these actions occurred too late to provide significant improvement in program performance, however, they did provide DOD officials critical information to evaluate the overall ECSS program. As a result, in December 2012, DOD terminated development...
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| Department of Defense | To strengthen DOD's management oversight and accountability over business system investments and help provide for the successful implementation of the ERPs, the Secretary of Defense should direct the department's Chief Management Officer and the chief management officers of the military departments to establish performance measures based on quantitative data that will enable the department to assess whether each respective military service's ERP efforts are providing the intended business capabilities to the system users. | In our October 2010 report, we recommended that the military departments establish performance measures based on quantitative data that will enable the department to assess whether the military service's ERP efforts are providing the intended business capabilities to the system users. DOD concurred with the recommendation and cited that the Department of Defense (DOD) would issue guidance requiring its business systems to include performance measures which can be used to assess expected business benefits. Also, the Department added that these measures would also be incorporated into the Business Enterprise Architecture. The Office of the Deputy Chief Management Officer (DCMO) stated that...
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