Summary
In 1995, GAO first designated the Department of Defense's (DOD) business systems modernization program as "high-risk," and continues to do so today. In 2004, Congress passed legislation reflecting prior GAO recommendations that DOD adopt a corporate approach to information technology (IT) business systems investment management, including tiered accountability for business systems at the department and component levels. To support GAO's legislative mandate to review DOD's efforts, GAO assessed whether the investment management approach of one of DOD's components--the Department of the Navy--is consistent with leading investment management best practices. In doing so, GAO applied its IT Investment Management (ITIM) framework and associated methodology, focusing on the stages related to the investment management provisions of the Clinger-Cohen Act of 1996.
The Department of the Navy has yet to establish the management structures needed to effectively manage its business systems investments or to fully develop many of the related policies and procedures outlined in GAO's ITIM framework. The department has implemented two of the nine key practices that call for project-level management structures, policies, and procedures, and none of the five practices that call for portfolio-level policies and procedures. Specifically, it has developed procedures for identifying and collecting information about its business systems to support investment selection and control, and assigned responsibility for ensuring that the information collected during project identification meets the needs of the investment management process. However, the department has not established the management structures needed to support effective investment oversight. It also has not fully documented business system investment policies and procedures for directing Investment Review Board operations, selecting new investments, reselecting ongoing investments, integrating the investment funding and investment selection processes, and developing and maintaining complete business system investment portfolio(s). Department officials stated that they are aware of the lack of an Investment Review Board and the absence of documented policies and procedures in certain areas of project and portfolio-level management, and are currently working on new guidance to address these areas. According to these officials, the new policies and procedures are expected to be approved by March 2008. However, until the department assigns responsibility for overseeing project-level management and portfolio management to a departmentwide review board and fully defines policies and procedures for both individual projects and portfolios of projects, it risks selecting and controlling these business system investments in a way that is inconsistent, incomplete, and ad hoc, which in turn reduces the chances that these investments will meet mission needs in the most effective manner.
Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change
from "In process" to "Implemented" or "Not implemented" based on our follow up work.
Director:
Team:
Phone:
Valerie C. Melvin
Government Accountability Office: Information Technology
(202) 512-6304
Recommendations for Executive Action
Recommendation: To strengthen the Department of the Navy's business system investment management capability and address the weaknesses discussed in this report, the Secretary of Defense should direct the Secretary of the Navy to ensure that well-defined and disciplined business system investment management policies and procedures are developed and issued. At a minimum, this should include instituting project-and portfolio-level policies and procedures that address establishing an enterprisewide IT Investment Review Board composed of senior executives from IT and business units, including assigning the investment board responsibility, authority, and accountability for programs throughout the investment life cycle.
Agency Affected: Department of Defense
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: To strengthen the Department of the Navy's business system investment management capability and address the weaknesses discussed in this report, the Secretary of Defense should direct the Secretary of the Navy to ensure that well-defined and disciplined business system investment management policies and procedures are developed and issued. At a minimum, this should include instituting project-and portfolio-level policies and procedures that address documenting an investment management process that includes how it is coordinated with JCIDS, PPBE, DAS, and the precertification process.
Agency Affected: Department of Defense
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: To strengthen the Department of the Navy's business system investment management capability and address the weaknesses discussed in this report, the Secretary of Defense should direct the Secretary of the Navy to ensure that well-defined and disciplined business system investment management policies and procedures are developed and issued. At a minimum, this should include instituting project-and portfolio-level policies and procedures that address ensuring that systems in operations and maintenance are aligned with ongoing and future business needs.
Agency Affected: Department of Defense
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: To strengthen the Department of the Navy's business system investment management capability and address the weaknesses discussed in this report, the Secretary of Defense should direct the Secretary of the Navy to ensure that well-defined and disciplined business system investment management policies and procedures are developed and issued. At a minimum, this should include instituting project-and portfolio-level policies and procedures that address selecting new investments, including specifying how cost, schedule, and benefit data are to be used in making decisions and specifying the criteria and steps for prioritizing and selecting these investments.
Agency Affected: Department of Defense
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: To strengthen the Department of the Navy's business system investment management capability and address the weaknesses discussed in this report, the Secretary of Defense should direct the Secretary of the Navy to ensure that well-defined and disciplined business system investment management policies and procedures are developed and issued. At a minimum, this should include instituting project-and portfolio-level policies and procedures that address documenting an annual review process that includes the reselection of ongoing IT investments.
Agency Affected: Department of Defense
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: To strengthen the Department of the Navy's business system investment management capability and address the weaknesses discussed in this report, the Secretary of Defense should direct the Secretary of the Navy to ensure that well-defined and disciplined business system investment management policies and procedures are developed and issued. At a minimum, this should include instituting project-and portfolio-level policies and procedures that address integrating funding with the process of selecting an investment, including specifying how department officials are using funding information in carrying out decisions.
Agency Affected: Department of Defense
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: To strengthen the Department of the Navy's business system investment management capability and address the weaknesses discussed in this report, the Secretary of Defense should direct the Secretary of the Navy to ensure that well-defined and disciplined business system investment management policies and procedures are developed and issued. At a minimum, this should include instituting project-and portfolio-level policies and procedures that address overseeing IT projects and systems, including specifying the processes for the investment boards' operations and decision making during project oversight.
Agency Affected: Department of Defense
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: The Secretary of Defense should ensure these well-defined and disciplined business system investment management policies and procedures should also include portfolio-level management policies and procedures that address creating and modifying IT portfolio selection criteria for business system investments.
Agency Affected: Department of Defense
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: The Secretary of Defense should ensure these well-defined and disciplined business system investment management policies and procedures should also include portfolio-level management policies and procedures that address defining the roles and responsibilities for managing the development and modification of the IT portfolio selection criteria.
Agency Affected: Department of Defense
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: The Secretary of Defense should ensure these well-defined and disciplined business system investment management policies and procedures should also include portfolio-level management policies and procedures that address analyzing, selecting, and maintaining business system investment portfolios.
Agency Affected: Department of Defense
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: The Secretary of Defense should ensure these well-defined and disciplined business system investment management policies and procedures should also include portfolio-level management policies and procedures that address reviewing, evaluating, and improving the performance of its portfolios by using project indicators, such as cost, schedule, and risk.
Agency Affected: Department of Defense
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
Recommendation: The Secretary of Defense should ensure these well-defined and disciplined business system investment management policies and procedures should also include portfolio-level management policies and procedures that address conducting post-implementation reviews for all investment tiers and specifying how conclusions, lessons learned, and recommended management actions are to be shared with executives and others.
Agency Affected: Department of Defense
Status: In process
Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
