With Pentagon budgets coming down, the Defense Department wants to take a smarter approach to the way it buys big business systems. Congress does too, and lawmakers are telling DoD to change its approval process for those systems.

Among the thousands of provisions in the 2011 Defense authorization bill just passed by Congress and soon to be signed into law by President Barack Obama is a change to the way DoD handles investment review boards. Those panels already are tasked with signing off on DoD business systems that are expected to cost a million dollars or more over their lifetime. But lawmakers now have tasked the department’s Deputy Chief Management Officer, Beth McGrath, with developing a process for making sure those decisions aren’t made in isolation.

“That’s opposed to saying, ‘I’m going to set up investment review for financial systems. I’m going to set up a review for human resources. I’m going to set up an investment review for logistics.’ That’s the way the system works today,” she said at a recent luncheon sponsored by AFCEA Northern Virginia. “It’s taking a much more corporate look, and it will move that investment review board process into my office. Because my job is to make sure that we’re always taking a holistic perspective across the environment.”

Congress set a deadline of March for DoD to set up the new investment review process. McGrath said her office will make sure DoD considers the big picture when it decides how to invest money in business systems.

“I think that’s critically important, because without the transparency of information, you can’t get to IT rationalization. You can’t get to establishing a cost culture. You can’t get to enabling the cost reductions and efficiencies that we always talk about,” she said. “You can always take across-the-board cuts. You just give everybody a bill. But you don’t know the impact of what you’ve done until much later. Instead, what we’re trying to do is establish what the priorities are from a business perspective. How can I enable greater transparency? What do I need to accomplish, and when, to get where we need to go?”

Cross-functional approach

McGrath says that cross-functional notion fits with the approach her office took in developing DoD’s newly-released Strategic Management Plan.

Strategies, she said, aren’t worth much if they aren’t connected to the core missions of the organization they’re supposed to be guiding. So she went door-to-door, asking questions of the undersecretaries of defense who are responsible for the various business areas in the Pentagon.

“I asked them what their priorities were, from a business perspective,” she said. “And they gave them to me.”

The outcome, which makes up the DoD business plan for the next two years, identifies seven strategic business goals, such as increasing the department’s buying power, building secure and agile IT capabilities, increasing energy efficiency, creating agile business processes in war zones, and strengthening and rightsizing the DoD workforce.

Workforce considerations are one area in particular in which DoD will need to have good information to back up its decisions in an era of declining resources, McGrath said.

“The workforce numbers are coming down. Significantly. And so what you want to do is understand what makes up your workforce,” she said. “How do you bring down the total, but also bring up and fill in gaps that we know we have? The acquisition workforce is an area where we know we need additional people and skills. Same with IT, same with cyber. But you have to be able to justify that growth in those key areas, and you have to have a big picture strategy and you have to have transparency of the information so you can make informed decisions.”

DIHMRS revisited

The idea of trying to collect and use data to make workforce decisions is not a new one in DoD. The Pentagon spent 12 years and more than $1 billion trying to build a massive enterprise resource planning system, The Defense Integrated Human Management Resources System (DIMHRS), before finally cancelling it in 2010.

McGrath said the Pentagon still wants to be able to capture the data DIMHRS was originally envisioned to aggregate. But instead of a one-size-fits-all approach, it’s leaving the human resources ERP solutions to the individual military services. “But we’re keeping a corporate perspective,” she said. “The data is essential for the corporation to have. And so we’re driving the total acquisition through the use of standards, so at the end of the day, you know how many Farsi-speaking first lieutenants you have across the entire department. We’re driving the aggregation of that kind of data through the standards, using a common architecture, the investment review process and many other tools.”

McGrath said whether it’s human resources or any other business area in DoD, her office is focused on efficiency and driving changes to business processes. She said the past 10 years have not been fertile ground for those efforts. The nation was at war, and DoD has generally got whatever funding its appetite called for, a reality that no longer holds true.

“A burning platform is usually very helpful to enable change,” she said. “We need to make sure we have enough money to hit the capabilities we really need, but there are challenges and opportunities for both government and industry as we try to figure out what it is that we really want. With that conversation comes clarity.”

This story is part of Federal News Radio’s daily DoD Report. For more defense news, click here.

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