Business Agility and Accountability: Driving Transformation Forward

For the past several decades, the Defense Department’s business model has been configured to support a military dependent on large-scale weapons systems and prepared for sustained, predictable battlefield engagements in specific parts of the world. The contemporary defense business model must be different, to keep pace with the changing nature of the DoD’s warfighting challenges. Today’s model must allow the defense business enterprise to adapt and flex as decision makers deal with growing competitive pressures, changing regulations, and strategic and tactical course shifts. In this model, transformation is about reacting instantly and effectively to what today’s modular, agile, technologically-advanced joint force demands. This new reality has given increased urgency to transforming the Department’s business operations. Transforming those operations is no longer just a matter of achieving cost, schedule, and performance requirements. It’s about business agility.

The Department has made significant strides in breaking down the cultural and systems barriers that hinder business agility. There is an increased need for tighter alignment of end-to-end business functions, better management visibility into operations, and a noticeable bias toward execution excellence. The current climate of making measurable business improvements every six months, tied to releases of the Enterprise Transition Plan, has succeeded in driving progress. Changing the cultural mindset has meant redefining defense business in terms of the customers it serves, rather than the functions it performs. Breaking down systems barriers has meant, among other things, using common standards to integrate the business data owned by the Components.

The Department is employing industry and warfighter best practices in designing and managing its transformation effort. To that end, DoD has adopted a governance structure that implements tiered accountability based on the existing organizational structure of the Department. These tiers include a “corporate” or DoD Enterprise level and a Component level (the Military Departments, Defense Agencies, DoD Field Activities, and Combatant Commands). This distinction recognizes that, while the Secretary of Defense sets the tone from the top, each of the Components has its own way of achieving its mission, its own natural constituencies, and its own appropriations.

To coordinate DoD Enterprise and Component transformation efforts, the Department established the Defense Business Systems Management Committee, the DBSMC, as the apex of the formal structure to engage executive leadership in both the direction and execution of business transformation efforts. The structure includes new investment oversight, enhanced program management, and increased engagement and coordination among the Components. The DBSMC was chartered by the DoD in February 2005 to oversee business transformation and to ensure that transformation meets the needs and priorities of the warfighter.

Component-level business transformation is the responsibility of the Component headquarters. Components develop strategies, schedules, and budgets for their Component transformation, then implement these plans. Components are responsible not only for executing their individually assigned missions, but also for ensuring that joint operations run smoothly, and that information flows freely across the enterprise so DoD can function as a cohesive whole.

Enterprise-level transformation includes data standards, business rules, specific systems, and an associated integration layer of interfaces for the Components. These standards, which are established through joint cooperation, represent the "rules of engagement" to which all DoD Components must adhere. Thus, while the Department is not dictating how to transform, it is ensuring that each Component’s transformational program increases the Department’s ability to reap the benefits of improved information exchange across organizational boundaries. This type of integration will drive the Department down the path to interoperability and accelerate the Services’ transformation efforts.

DoD Enterprise-level business transformation previously lacked a single organization responsible for overseeing the day-to-day work of business transformation. Therefore, in October 2005, the Deputy Secretary of Defense directed the establishment of the Defense Business Transformation Agency (BTA) as the entity responsible for execution of Enterprise-level business transformation to meet the strategic objectives. The rapid implementation of the BTA reflects the urgency for defense business modernization and an acknowledgement that certain capabilities are needed at the DoD Enterprise level to support the joint warfighter and senior DoD decision makers.