Defense Business Transformation

The Department of Defense (DoD) is the largest organization in the world, with operations that span a broad range of agencies, activities, and commands. With an annual budget over $500 billion, DoD employs millions of people that operate worldwide and maintains an inventory system that is an order of magnitude larger than any other in the world. However, the business systems used to manage these resources are outdated and inefficient. DoD relies on several thousand, non-integrated, and non-interoperable legacy systems, that are error prone, redundant, and do not provide the enterprise visibility necessary to make sound management decisions. In order to meet current and future challenges, DoD needs business systems that enable it to be flexible, adaptive, and accountable. Transformation of business systems and process will not only reduce costs and improve performance, it is critical for improving warfighter support. Recognizing this, former Defense Secretary Donald Rumsfeld began a business transformation initiative in July 2001. This report is divided into two parts. Part I evaluates DoD's business systems transformation effort, identifies lessons learned, and make recommendations to improve the prospects for success of the current business transformation effort. Part II includes several cases studies of business systems transformation in the federal public sector, at the Business Transformation Agency (BTA), and in the Military Services. Each case describes a specific transformation initiative and identifies lessons learned from the experience.