DOD makes bold move to fix biz systems

New Defense Business Transformation Agency will unify programs and funding

With its business processes and systems modernization efforts under intense scrutiny by Congress, the Defense Department has created the Defense Business Transformation Agency to unify the military's programs and funding.

For years, DOD tried to streamline business systems through separate organizations, which caused problems as the department tried to integrate disparate systems, said Paul Brinkley, deputy undersecretary of Defense for business transformation, during a media briefing last week.

Now DOD will centrally administer the multibillion-dollar modernization initiative that includes $4.2 billion for fiscal 2006. This course promotes collaboration among employees and offices and reduces redundancy in programs and spending, Brinkley said.

The new agency "shifts the resources working on business process and system modernization into a unified, focused organization structure," Brinkley said.

Congress and the Government Accountability Office have criticized DOD's business systems modernization in hearings and reports for mismanagement and inefficiency. Lawmakers cut the program's budget this year and threatened to take legislative steps to withhold promotions for its program managers because of a lack of progress.

Brinkley said the new agency addresses two congressional concerns. He said it will allow DOD's senior leaders and managers to be more involved and will provide more central control of programs and funding.

DOD has not been successful "getting its arms around its business management systems in an effective manner," said Rep. Todd Platts (R-Pa.), chairman of the House Government Reform Committee's Government Management, Finance and Accountability Subcommittee. He said he is encouraged by the interest of Gordon England, acting deputy secretary of Defense, who oversees the new agency.

"His active involvement in this matter is a good sign," Platts said.

England said DOD established the new agency to advance departmentwide business transformation. He announced the reorganization earlier this month in a memo to senior leaders at DOD and the military services.

The new agency will manage 18 critical systems, including the Defense Travel System (DTS) and the Defense Integrated Military Human Resources System. DTS survived a Senate vote earlier this month on an amendment to the 2006 Defense Authorization bill that had proposed canceling its future funding.

Brinkley said DOD could eliminate some programs, but DTS will not be one of them because, in "our view, it is an emerging success."

The agency's creation shakes up the existing business, systems bureaucracy, said Dov Zakheim, former DOD comptroller and now a vice president at Booz Allen Hamilton. "It reinforces his signal that he takes this seriously," Zakheim said, referring to England, who has served as the Navy's secretary and General Dynamics' executive vice president.

Zakheim said England knows how to run DOD's daily operations and can make a difference in fixing the department's business processes and systems.

"This is not a bad way for the deputy secretary of Defense to get what he wants done," Zakheim said.

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