Reduce the Cost of Business Operations
Defense business operations are being streamlined so that DoD can more effectively deliver warfighting capabilities, deal with growing pressures on resources, and benefit from economies of scale. Costly and outdated systems, procedures, and programs tax resources from warfighting and stifle innovation. Faster, more efficient processes reduce costs while delivering better support. Better investment management is also essential to achieve cost reductions. Better integration reduces costs by improving information quality, minimizing system customization, and allowing DoD to leverage commercial best practices in implementing business systems. The sections below highlight DoD's current efforts to reduce costs, and these efforts are already bearing fruit - for instance, the Defense Travel System (DTS) has reduced the processing cost of travel vouchers by millions annually on a path to $56M per year by Fiscal Year 2009 (FY09).
Investment Management to Control Spending
To support this objective, DoD is using an investment review process to ensure that our business systems investments are delivering measurable value and business capability improvements. Investment Review Boards (IRBs) with representation from the relevant Services, Defense Agencies, and Combatant Commands, are evolving their process to assess the value of modernization investments relative to their impact on end-to-end business process improvements that support warfighters.
Since the March 2007 Congressional Report, the Defense Business Systems Management Committee has approved 72 system certifications recommended by the IRBs. These systems represent approximately $2.1B in modernization investment funding. Overall, since the IRBs were established in 2005, the DBSMC has approved 304 system certifications recommended by the IRBs, representing approximately $7.5B in modernization investment funding.
The table below shows a breakout of the total number of systems certified, by Component and IRB, since the inception of the investment review process in 2005. The table does not count multiple certifications for the same system.
Systems Certified by Componenet and IRB
| Component | FM IRB | HRM IRB | RPILM IRB | WSLM
MSSM IRB | Total |
| | Certified to
Date | Certified to
Date | Certified to
Date | Certified to
Date | Certified to
Date |
| Army | 4 | 32 | 14 | 18 | 68 |
| Navy | 5 | 15 | 4 | 34 | 58 |
| Air Force | 9 | 17 | 3 | 30 | 59 |
| Joint Staff | 1 | 1 | 0 | 0 | 2 |
| OSD | 0 | 0 | 2 | 2 | 4 |
| USTRANSCOM | 2 | 0 | 0 | 11 | 13 |
| DECA | 0 | 5 | 0 | 0 | 5 |
| DISA | 2 | 0 | 0 | 1 | 3 |
| DFAS | 11 | 8 | 0 | 0 | 19 |
| DLA | 1 | 0 | 1 | 21 | 23 |
| MHS | 0 | 25 | 0 | 0 | 25 |
| DTIC | 0 | 0 | 1 | 1 | 2 |
| DHRA | 0 | 3 | 0 | 0 | 3 |
| BTA | 6 | 2 | 0 | 9 | 17 |
| DTRA | 0 | 0 | 0 | 1 | 1 |
| SOCOM | 1 | 0 | 0 | 0 | 1 |
| DSS | 0 | 1 | 0 | 0 | 1 |
| Total | 42 | 109 | 25 | 128 | 304 |
If programs are not delivering critical business capability improvements at an appropriate return on investment, funding from these programs may be shifted to other initiatives that offer higher business value potential but that require additional resources in the short term.
Reducing Costs through Integration of Enterprise Business Applications and Services
Transforming DoD's business operations requires a rapid flow of information across multi-level system and organizational boundaries to support the joint warfighter. Defense enterprise integration entails transforming component-specific Enterprise Resource Planning (ERP) systems into an interoperable set of service delivery capabilities by aligning with DoD-wide Business Enterprise Architecture (BEA) standards. Enterprise integration seeks to leverage best practices across DoD ERP implementation initiatives and work toward rapid adoption of DoD-wide information and process standards. Additionally, a desired outcome is to eliminate burdensome processes that hinder successful, rapid deployment of ERP capabilities within the Components. Enterprise integration helps the Components reduce the costs of configuring Commercial Off-The-Shelf (COTS) technology within and across their organizations - and to overcome the statutory, regulatory, and cultural issues of implementing commercial best practices.
Achieving Efficiencies through Enterprise System Portfolio Management
An important activity related to defense enterprise integration is the migration of IT systems from across DoD into a common portfolio of business enterprise programs to provide enhanced visibility, advocacy, and direct accountability to senior leadership and enable focused implementation of DoD Enterprise Business Capabilities.
In 2005, the DBSMC Chair established the Defense Business Systems Acquisition Executive (DBSAE) within the BTA to directly oversee designated enterprise-level business systems. As of September 28, 2007, 27 Enterprise systems and initiatives have been assigned to the DBSAE portfolio for oversight and management of system development and implementation. The DBSAE has adopted a structure that enables DBSAE programs to benefit from a portfolio view of their efficiency and cost-effectiveness in supporting a more operationally-driven and responsive business environment. Current DBSAE portfolios are Sourcing, Finance, and Human Resources. These portfolios allow the DBSAE to generate portfolio-driven strategies within and between portfolios, and therefore, enable the best strategies for resources, business intelligence, hosting, and change management.
Several DBSAE systems have reached or are nearing Full Operational Capability (FOC). As a result, the BTA will develop a strategy that outlines what the DBSAE's role will be in sustaining programs once they reach FOC.
Reducing the Cost of Defense Business Operations
In the last two years, the BTA, at the request of the DBSMC, has been leading an effort to instantiate a new set of processes designed to review business systems with a focus on risk identification and mitigation rather than on documentation compliance. Under the Enterprise Risk Assessment Methodology (ERAM), a team of business system experts from within the BTA is paired with functional and policy staff from across Office of the Secretary of Defense (OSD) to collaborate with the program offices, in a comprehensive risk analysis that involves extensive review of documentation and detailed interviews with key stakeholders. The output of these assessments is a documented set of risks and risk mitigation plans that are then embedded in the programs' risk management software systems. The assessment findings are briefed to the appropriate IRBs and are presented to the DBSMC, which includes the Milestone Decision Authority (MDA) for designated business Major Automated Information Systems (MAIS), for further action as appropriate.
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