For fiscal year 2015, the department requested about $10 billion for its  business system investments. DOD’s Approach to Business Systems Modernization

DOD’s approach to business systems modernization includes reviewing  systems annually to ensure that they comply with the fiscal year 2005  NDAA’s business enterprise architecture and business process  reengineering requirements. DOD Has Made Progress Strengthening Its Management of Business Systems, but Needs to Continue Implementing Recommended Improvements

The department has implemented 5 of the 16 recommendations that GAO  has made since June 2011 to address each of the overarching provisions  for improving business systems management in the fiscal year 2005  NDAA. For example, the  department has implemented the recommendation to improve its  reporting of business system data in its annual budget request. Appendix II provides additional information about the  recommendations that DOD has fully and partially implemented. Implementing the remaining 11 recommendations will improve DOD’s  modernization management controls and help fulfill the department’s  execution of the requirements of the act. DOD Needs to Improve the Usefulness and Effectiveness of Its Business Enterprise Architecture and Business Process Reengineering Initiatives

DOD’s business enterprise architecture and process reengineering efforts  are not fully achieving the intended outcomes described in statute. With  respect to process reengineering, managers reported these efforts were  moderately effective at streamlining business processes, but less so in  limiting the need to tailor commercial off-the-shelf systems. Portfolio managers cited a number of challenges impeding the usefulness  and effectiveness of these two initiatives, such as the availability of  training, lack of skilled staff, parochialism, and cultural resistance to  change. The department’s improvement efforts only address selected reported  challenges. Addressing the challenges cited by the portfolio managers could help  increase the utility and effectiveness of the department’s business  enterprise architecture in driving greater operational efficiencies and cost  savings. In particular, 70  percent reported that efforts have resulted in streamlined business  processes. More fully addressing the challenges cited by the portfolio  managers would help the department achieve better outcomes, including  limiting the tailoring of commercial off-the-shelf systems. Among  other things, portfolio managers reported that the architecture does not  enable DOD to produce reliable and timely information for decision- making purposes. DOD has  various improvement efforts under way; however, gaps exist and portfolio  managers provided suggestions on how to close some of them. Recommendation for Executive Action

To help ensure that the department can better achieve business process  reengineering and enterprise architecture outcomes and benefits, we  recommend that the Secretary of Defense utilize the results of our  portfolio manager survey to determine additional actions that can improve  the department’s management of its business process reengineering and  enterprise architecture activities. Appendix I: Objectives, Scope, and Methodology

Our objectives were to (1) assess the actions by the Department of  Defense to comply with section 332 of the National Defense Authorization  Act (NDAA) for Fiscal Year 2005, as amended and (2) determine the  usefulness and effectiveness of DOD’s business enterprise architecture  and business process reengineering processes. We obtained responses from all surveyed portfolio managers (24 in  total). When data from the survey were analyzed, an independent analyst  reviewed the computer program used for the analysis of the survey data.
Why GAO Did This Study

GAO designated DOD's multibillion dollar business systems modernization program as high risk in 1995, and since then has provided a series of recommendations aimed at strengthening its institutional approach to modernizing its business systems investments. Section 332 of the NDAA for fiscal year 2005, as amended, requires the department to take specific actions consistent with GAO's prior recommendations and included a provision for GAO to review DOD's efforts. In addition, the Senate Armed Services Committee Report for the NDAA for fiscal year 2015 included a provision for GAO to evaluate the usefulness and effectiveness of DOD's business enterprise architecture and business process reengineering processes. This report addresses both of those provisions.
In evaluating the department's compliance, GAO analyzed DOD's efforts to address open recommendations made in previous reviews. To evaluate the usefulness and effectiveness of the department's business enterprise architecture and business process reengineering processes, GAO surveyed the military department portfolio managers (24 in total) and interviewed officials. The response rate for the survey was 100 percent, making the results of the survey generalizable.

What GAO Found

The Department of Defense (DOD) has implemented 5 of the 16 recommendations made by GAO since June 2011 to address each of the overarching provisions for improving business systems management in the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 , as amended (NDAA) (10 U.S.C. § 2222) (see table). For example, it has implemented the recommendation to improve the data available for its business systems by making improvements to its repositories used for tracking information about the systems. Based on GAO's analysis, the department has partially implemented the remaining 11 recommendations. Implementing all recommended actions will improve DOD's modernization management controls and help fulfill the department's execution of the act's requirements.
Source: GAO analysis of DOD documentation. | GAO-15-627 .
DOD's business enterprise architecture and process reengineering efforts are not fully achieving the intended outcomes described in statute. More specifically, portfolio managers reported through GAO's survey that the architecture was not effective in constraining system investments or enabling DOD to produce reliable and timely information for decision-making purposes, among other things. As a result, the architecture has produced limited value. Portfolio managers reported that the department's business process reengineering efforts were moderately effective in streamlining business processes, but much less so in limiting the tailoring of commercial off-the-shelf systems. They also reported that these efforts have been useful in realizing selected benefits, such as improved documentation of business needs.
Managers GAO surveyed reported various challenges that impede the department's ability to fully achieve intended outcomes, such as cultural resistance to change and the lack of skilled staff. The department has work under way to address some of these challenges; however, gaps exist and the portfolio managers provided suggestions on how to close some of them. More fully addressing the challenges cited by the portfolio managers would help the department achieve better outcomes, including greater operational efficiencies and cost savings.

What GAO Recommends

GAO recommends that DOD utilize the results of the survey to determine additional actions that can improve management of its business process reengineering and enterprise architecture activities. DOD concurred with the recommendation.