GAO-11-181R Defense Business Transformation
United States Government Accountability Office
Washington, DC 20548
January 26, 2011
Congressional Committees
Subject: Defense Business Transformation: DOD Needs to Take Additional Actions
to Further Define Key Management Roles, Develop Measurable Goals, and Align
Planning Efforts
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.
1
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.
2
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. We also recommended that DOD
develop a comprehensive, integrated, and enterprisewide transformation plan,
supported by a strategic planning process. Moreover, we recommended that DOD
institutionalize in directives the roles, responsibilities, and relationships among the
various business-related entities and committees that comprise its management
framework and expand that framework beyond business systems modernization to
all business transformation efforts.
3
Both DOD and Congress have taken actions to address DOD’s management of
business transformation efforts. For example, DOD designated the Deputy Secretary
1
See for example, GAO, High-Risk Series: An Update, GAO-09-271 (Washington, DC.: Jan. 2009).
2
GAO, GAO’s 2005 High-Risk Update, GAO-05-350T (Washington, D.C.: Feb. 17, 2005).
3
GAO, Defense Business Transformation: Achieving Success Requires a Chief Management Officer
to Provide Focus and Sustained Leadership, GAO-07-1072 (Washington, D.C.: Sept. 5, 2007).
