Defense Business Transformation: DOD Should Improve Its Planning with and Performance Monitoring of the Military Departments
Highlights
What GAO Found
The Department of Defense (DOD) and the military departments have established roles and responsibilities for senior business transformation positions, such as Chief Management Officers (CMOs) and Deputy CMOs (DCMOs), who are responsible for business transformation efforts—actions to increase the efficiency of or to decrease the costs associated with DOD's business functions, such as acquisitions and logistics. However, DOD has had challenges retaining individuals in some positions, as shown in the figure.
Turnover in Chief Management Officer (CMO) and Deputy CMO (DCMO) Positions since 2010
DOD and the military departments have issued strategic or business transformation plans, but DOD has not coordinated with the military departments to align their strategic planning efforts for business transformation with those of the department. For example, the military department CMOs or DCMOs do not have a defined role in DOD's strategic planning process to develop department-wide business transformation goals and objectives. Further, DOD has not aligned the military departments' goals and objectives to those of the department in DOD's Agency Strategic Plan. Leading practices for results-oriented management state that goals should align throughout an organization. In doing so, DOD would be better positioned to ensure that the military departments' strategic planning—as well as goals and objectives—directly contribute to those of the department.
The DOD DCMO has used DOD's principal business governance forum—the Defense Business Council—to monitor some department-wide business transformation efforts, but has not effectively monitored the military departments' performance on business transformation efforts. For example, defense business systems certification and approval initiatives were the most frequently discussed forum items since October 2015, while military department performance on business transformation efforts were not discussed. The DOD DCMO instead relied on the military departments to conduct their own performance monitoring. GAO found that the Council's charter does not specifically outline its responsibility for monitoring the military departments' performance. Without improved department-wide monitoring, DOD may not be well-positioned to assess the overall impact of its efforts to achieve business transformation.
Why GAO Did This Study
While DOD maintains military forces with unparalleled capabilities, it continues to confront management weaknesses related to its business functions that support these forces. GAO designated DOD's approach to business transformation as high risk in 2005 because DOD had not taken steps to achieve business reform on a strategic, department-wide basis.
This report (1) describes the roles and responsibilities established by DOD and the military departments for overseeing business transformation and the continuity of leadership in senior business transformation positions, (2) assesses the extent to which DOD has coordinated with the military departments to align strategic planning efforts for business transformation, and (3) evaluates the extent to which the DOD DCMO has used the Defense Business Council to effectively monitor department-wide performance. GAO reviewed documentation, including summaries from Defense Business Council meetings, and interviewed cognizant officials.
Recommendations
GAO recommends that DOD define a role for the military department CMOs or DCMOs in DOD's strategic planning process, and align DOD's and the military departments' goals and objectives for business transformation in its Agency Strategic Plan. GAO also recommends that DOD take action to improve its monitoring of the military departments' performance. DOD concurs with GAO's recommendations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Defense | The Deputy Secretary of Defense, in his capacity as the CMO and as part of DOD's strategic planning process, should define a role for the military department CMOs or DCMOs in developing department-wide goals and objectives for business transformation. |
DOD concurred with this recommendation. In response to an Office of Management and Budget (OMB) memorandum requiring agencies to develop a reform plan to improve their efficiency, effectiveness, and accountability, the Deputy Chief Management Officer issued a memorandum requiring each DOD component--including the military departments--to conduct a thorough review of business operations and to propose reform initiatives to improve the efficiency, effectiveness, and accountability within their respective organizations. For those initiatives selected for implementation, components were required to provide additional information on their initiatives, to include performance goals and measures. DOD submitted its agency reform plan to OMB in September 2017, which included the military department-level reform initiatives. The National Defense Business Operations Plan for Fiscal Years 2018-2022--issued in May 2018 and signed by the Chief Management Officer (CMO)--states that DOD integrated the reform initiatives from the agency reform plan as performance goals, measures, and milestones. In addition, DOD established the Reform Management Group (RMG) to, among other things, identify opportunities for reform and foster ongoing working relationships, aligning all stakeholders involved in reform efforts. The CMO and the Director of Cost Assessment and Program Evaluation lead the RMG, and according to Office of the CMO officials, members of the RMG include the Under Secretaries of the Army, Navy, and Air Force, who also serve as the CMOs of their respective military departments. As a result, we have closed this recommendation as implemented.
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| Department of Defense | The Deputy Secretary of Defense, in his capacity as the CMO and as part of DOD's strategic planning process, should coordinate with the military department CMOs or DCMOs to align the military departments' goals and objectives for business transformation with department-wide goals and objectives, including in DOD's Agency Strategic Plan. |
DOD concurred with this recommendation. In response to an Office of Management and Budget (OMB) memorandum requiring agencies to develop a reform plan to improve their efficiency, effectiveness, and accountability, the Deputy Chief Management Officer issued a memorandum requiring each DOD component--including the military departments--to conduct a thorough review of business operations and to propose reform initiatives to improve the efficiency, effectiveness, and accountability within their respective organizations. For those initiatives selected for implementation, components were required to provide additional information on their initiatives, to include performance goals and measures. DOD submitted its agency reform plan to OMB in September 2017, which included the military department-level reform initiatives. The reform initiatives align with the department-wide goal for reforming the department's business practices, which is included in the National Defense Business Operations Plan for Fiscal Years 2018-2022 that also serves as DOD's agency strategic plan. In addition, DOD established the Reform Management Group (RMG) to, among other things, identify opportunities for reform and foster ongoing working relationships, aligning all stakeholders involved in reform efforts. The CMO and the Director of Cost Assessment and Program Evaluation lead the RMG, and according to Office of the CMO officials, members of the RMG include the Under Secretaries of the Army, Navy, and Air Force, who also serve as the CMOs of their respective military departments. As a result, we have closed this recommendation as implemented.
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| Department of Defense | The Deputy Secretary of Defense, in his capacity as the CMO and in coordination with the DOD DCMO, should take action, as appropriate and necessary, to improve the monitoring of the military departments' performance on business transformation efforts. This could be done by revising the Defense Business Council's charter to make the council responsible for monitoring such performance to reflect the responsibilities of the DOD DCMO to monitor performance across the entire department. |
DOD concurred with this recommendation, and the DCMO and CMO took steps to implement it. Following the disestablishment of the CMO position in January 2021, the Office of the Director of Administration and Management (DA&M) assumed responsibility for this recommendation. In January 2022, the Deputy Secretary of Defense issued a new charter for the Defense Business Council as well as supplemental guidance designating the DA&M as DOD's Performance Improvement Officer (PIO). The revised charter includes representation from the military departments assigned the council responsibility to assist the Secretary and Deputy Secretary in developing DOD's defense management and reform agendas, and overseeing implementation of management, reform, and performance improvement initiatives approved by the Secretary and Deputy Secretary, and the DA&M's responsibilities on the council include executing its responsibilities as the PIO. According to Office of the Director for Administration and Management officials, this responsibility includes oversight of military department's reform initiatives. In the supplemental guidance designating the DA&M as DOD's PIO, the DA&M is also responsible for, among other things, monitoring performance across the department; tracking and reporting DOD components' progress on the delivery of the Secretary and Deputy Secretary of Defense's strategic goals and priority objectives; and working with heads of DOD components on business enterprise investment, management, and reform initiatives. In addition, DOD's performance improvement framework, which it issued in October 2022, incorporates reporting on performance improvement initiatives-including business reform efforts-by DOD components. By taking these steps to improve the monitoring of the military departments' performance, DOD will be better able to fully know the status of department-wide performance management efforts across key business areas and to assess the overall impact of its efforts to achieve business transformation, and we are closing this recommendation as implemented.
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