Summary

GAO discussed the Department of Defense's (DOD) Corporate Information Management (CIM) initiative to reengineer its business practices and make better use of information technology. GAO noted that: (1) CIM would save $2.2 billion over the next 5 years by eliminating duplicative systems and implementing standard systems; (2) functional work groups of industry and defense experts are studying current DOD business practices and its present information base, but have reported that they did not possess the necessary expertise to prepare a standardization strategy; (3) DOD reorganization will make it even more important to develop management continuity and establish clear lines of authority and accountability for achieving specific CIM goals; (4) DOD was examining whether interim systems could support its requirements for specific functional areas; and (5) CIM was a long-term effort which would likely not provide near-term improvements in the quality and reliability of DOD financial information. GAO believes that: (1) military services were reluctant to abandon their own system development efforts, since CIM was not expected to produce standard systems for 8 to 10 years; and (2) DOD components will need to coordinate closely with the DOD Comptroller to ensure that financial management requirements are met and appropriate internal controls are included in the development of standard systems.