For fiscal year 2002, DLA’s IT budget  is about $654 million. These  groups are primarily responsible for implementing investment  management process improvements. DLA’s Capabilities to Effectively Manage IT Investments Are Limited

In order to have the capabilities to effectively manage IT investments, an  agency should (1) have basic, project-level control and selection practices  in place and (2) manage its projects as a portfolio of investments, treating  them as an integrated package of competing investment options and  pursuing those that best meet the strategic goals, objectives, and mission  of the agency. To  properly focus and target IT investment process improvements, an  organization should fully identify and assess current process strengths and  weaknesses (that is, create an investment management capability  baseline) as the first step in developing and implementing an improvement  plan. Without such a plan that allows the agency to systematically prioritize,  sequence, and evaluate improvement efforts, DLA jeopardizes its ability to  establish a mature investment process that includes selection and control  capabilities that result in greater certainty about future IT investment  outcomes. Conclusions

Until recently, IT investment management has not been an area of DLA  management attention and focus.
Why GAO Did This Study

The Defense Logistics Agency (DLA) relies extensively on information technology (IT) to carry out its logistics support mission. This report focuses on DLA's processes for making informed IT investment decisions.

What GAO Found

Because IT investment management has only recently become an area of management focus and commitment at DLA, the agency's ability to effectively manage IT investments is limited. The first step toward establishing effective investment management is putting in place foundational, project-level control and selection processes. The second step toward effective investment management is to continually assess proposed and ongoing projects as an integrated and competing set of investment options. Accomplishing these two steps requires effective development and implementation of a plan, supported by senior management, which defines and prioritizes investment process improvements. Without a well-defined process improvement plan and controls for implementing it, it is unlikely that the agency will establish a mature investment management capability. As a result, GAO continues to question DLA's ability to make informed and prudent investment decisions in IT.