When we last reported on NASA’s IEMP effort, in September 2005, NASA  had begun to implement a number of recommendations from our earlier  reports—including steps toward implementing the disciplined processes  necessary to manage IEMP. Develop a risk mitigation plan. Specifically, NASA has, as we  previously recommended, implemented more effective requirements  management and testing processes, improved its performance metrics  program related to tracking system defects, and developed an IEMP risk  management strategy. However, until the end of March 2007, the upgrade was in a  “stabilization” phase as NASA worked on correcting a number of system  errors, including posting errors for certain types of transactions. Because  the upgrade was still quite new and NASA was continuing to stabilize the  system, we were unable to determine the significance of these  weaknesses. NASA Uses a Recognized Industry Best Practice to Move from One Project Phase to the Next

In addition to the disciplined processes discussed above, NASA has also  taken action to establish the use of quantitative entry and exit criteria to  move from one phase of an IEMP project to another. Improved Requirements Development and Project Scheduling Needed

Weaknesses in the areas of requirements development and project  scheduling offset some of the benefits associated with NASA’s improved  requirements management and testing processes—causing NASA to  assume a greater risk that it would not identify significant system defects  prior to implementation. Despite the  implementation difficulties, NASA financial managers have indicated that  the core financial upgrade is now functioning as expected for most  transactions. NASA has not yet fully  considered the higher-level strategic issues that affect how useful IEMP  will be in addressing long-standing management challenges—including  problems associated with stovepiped systems and parochial interests of  individual NASA components as well as problems in overseeing contractor  performance and properly accounting for its property, plant, and  equipment. To achieve this vision, it is critical that NASA develop an  agencywide concept of operations and adopt standard business processes  that are supported by its software. Concept of Operations Would Provide an Important Foundation for IEMP

NASA officials stated that they have undertaken a critical first step to  achieving their vision for IEMP—they have begun developing a concept of  operations to describe how all of its business processes should be carried  out. NASA created a framework for developing a concept of operations in  fiscal year 2006 and plans to complete it by the summer of 2008, according  to NASA officials. Ideally, a concept of operations should be completed  before system development begins so that it can serve as a foundation for  system planning and requirements development. Nonetheless, the  completion of such a document even at this late stage in NASA’s IEMP  effort would be beneficial for the development of the remaining IEMP  modules as well as any future upgrades to the core financial module. Such a document would be invaluable in getting various  stakeholders, including those in the programs and administrative  activities, to understand how the business systems are expected to operate  cohesively and how they fit into “the big picture.”

		Adopting Enterprise Business Processes Would Help NASA Transform the Way It Does Business

As part of an agencywide concept of operations, to best leverage its  investment in IEMP, NASA should also analyze the agency’s current  business processes and determine how these processes can be made more  efficient and effective. Specifically, NASA needs to ensure that the  business processes supported by this system are developed and  implemented to support the enterprise’s needs rather than primarily  focusing on the needs of a specific organizational entity. Appendix I: Scope and Methodology

To determine whether the National Aeronautics and Space Administration  (NASA) has improved its management processes for implementing the  Integrated Enterprise Management Program (IEMP), we reviewed project  management documentation for several IEMP projects, including the core  financial upgrade and the contract management module. To determine the extent to which NASA has considered the higher-level  strategic issues associated with developing an enterprisewide concept of  operations and defining standard business processes, we met with senior  management from IEMP and the OCFO.
Why GAO Did This Study

Since 1990, GAO has designated the National Aeronautics and Space Administration's (NASA) contract management as an area of high risk in part because it lacked modern systems to provide accurate and reliable information on contract spending. In April 2000, NASA began a system modernization effort, known as the Integrated Enterprise Management Program (IEMP). When GAO last reported on the status of IEMP in September 2005, NASA had begun to implement disciplined processes needed to manage IEMP, but had yet to implement other best practices such as adopting business processes that improve information on contract spending. This GAO report addresses (1) actions taken by NASA to effectively implement the disciplined processes needed to manage IEMP and (2) the extent to which NASA has considered the strategic issues associated with developing a concept of operations and defining standard business processes. GAO interviewed NASA officials and obtained and analyzed documentation relevant to the issues.

What GAO Found

Since GAO last reported on NASA's IEMP efforts, NASA implemented its IEMP contract management module and upgraded the software used for its core financial module. NASA has also taken steps to improve its processes for managing IEMP--including implementing improved requirements management and testing processes, enhancing its performance metrics related to tracking system defects, and developing an IEMP risk mitigation strategy. Further, NASA has developed quantitative entry and exit criteria for moving from one phase of an IEMP project to another--a recognized industry best practice. However, NASA has not yet addressed weaknesses in the areas of requirements development and project scheduling, which ultimately caused the agency to assume a greater risk that it would not identify significant system defects prior to implementation of the core financial upgrade. Despite these difficulties, NASA financial managers have stated that the core financial upgrade is now functioning as expected for most transactions. As of the end of GAO's audit work in May 2007, NASA was working to correct a number of system errors, including posting errors for certain types of transactions. Because NASA was still working to stabilize the system, GAO was unable to determine the significance of these weaknesses. Further, NASA has not yet fully considered higher-level strategic issues associated with developing an agencywide concept of operations and defining standard business processes. With a planned investment of over $800 million for IEMP, NASA must immediately and effectively address these strategic building blocks if IEMP is to successfully address long-standing management challenges--including overseeing contractor performance and properly accounting for NASA's property, plant, and equipment. NASA officials stated that they have begun developing a concept of operations to describe how all of its business processes should be carried out. According to NASA officials, they expect to complete the concept of operations by the summer of 2008. Ideally, a concept of operations should be completed before system development begins so that it can serve as a foundation for system planning and requirements development. Nonetheless, while NASA's IEMP efforts are already well under way, the completion of such a document remains essential for guiding the development of the remaining IEMP modules as well as any future upgrades. As part of developing a concept of operations, NASA should also define standard business processes that are supported by its IEMP software. NASA needs to ensure that its business processes and the information that flows from those processes support the enterprise's needs. Efforts that primarily focus on the parochial needs of a specific organizational unit, such as accounting, do not provide reasonable assurance that NASA's agencywide management information needs are addressed.