Focus On | e-Government
Business Goal | To become more responsive at less cost
Technology Issue | Hundreds of old, duplicative and incompatible legacy systems that work poorly, if at all
Management Challenge | Entrenched bureaucracy, changing budgets, political infighting, cultural resistance and revolving leadership
Results So Far | Mixed, or pending

The Pentagon's surface scars—its charred outer perimeter, its damaged roof, the gaping hole left by American Airlines Flight 77 when it slammed into the building on Sept. 11 at an estimated 400 mph—are no longer visible, though cranes are still positioned on the western front of this five-sided icon of American military might.

In the past year, rebuilding the Pentagon has become a symbol of the administration's resolve to win a new kind of war, with 21st-century weapons systems that rely more heavily on information technology than did the tanks and dumb bombs of the Cold War. A key part of the strategy is a battle being waged within the walls of the Pentagon, to topple organizational barriers that have long stood in the way of meaningful change: old technologies, incompatible systems and a Defense Department bureaucracy so entrenched that it can, at times, keep the Air Force from communicating with the Navy and the Army from sharing data with the Marines.

Ironically, it was on the afternoon of Sept. 10, 2001, less than 24 hours before the first planes hit the World Trade Center, that Defense Secretary Donald Rumsfeld first declared his war on the Pentagon's bureaucracy. At the time, Rumsfeld's initiative was viewed internally as yet another in a long line of peacetime initiatives waged over the years to cut costs, reduce staff and dole out lucrative technology contracts to favored firms in the defense establishment. "In this building," Rumsfeld told several hundred stone-faced Defense Department bureaucrats seated in the agency's auditorium, "despite this era of scarce resources taxed by mounting threats, money disappears into duplicative duties and bloated bureaucracy—not because of greed, but of gridlock." Some 673 different and uncoordinated financial systems inside the DoD, for example, had been making it impossible to track $2.3 trillion in financial transactions. "Innovation is stifled," Rumsfeld continued, "not by ill intent, but by institutional inertia." A new idea from an officer, he said, had to climb 17 levels of bureaucracy to get to the Defense Secretary's desk.

Then Rumsfeld, a former CEO of drugmaker G.D. Searle & Co. and of DoD contractor General Instrument Corp., said the agency's computer systems had become so complex and incompatible that information could not be shared from one floor of the Pentagon to the next, except in paper form. "The technology revolution has transformed organizations across the private sector," Rumsfeld told the group, "but not ours, not fully, not yet. We are, as they say, tangled in our anchor chain."

The mission now, says Rumsfeld: Use information technology not only to build smarter weaponry, but also to modernize and streamline front- and back-office operations to speed the response times of the Army, Navy, Air Force and Marines to new types of enemy threats. In the parlance of the military establishment, the Pentagon's new technology-heavy approach to war in the post–Sept. 11 world is known as C4IST, which stands for Command, Control, Communications, Computers and Intelligence Systems Technology—the heart of so-called "network-centric" warfare. The idea is to have real-time information about where everything is and where it's all going, even to know how much the enemy knows, thus permitting more efficient and innovative defense operations in wartime and in peace.

Funding is squarely behind it: All told, this seemingly monolithic agency spends nearly a billion tax dollars every day; its budget before Sept. 11, at $328 billion, was the largest among government agencies. It continues to be the largest, with $379 billion being sought for 2003. Further ahead, the budget is proposed to rise to $470 billion. Says Jay Farrar, a former Marine who is vice president for the Center for Strategic and International Studies, a Washington, D.C.-based think tank: "At the Pentagon, a lot of technology has been bought to upgrade weapons, but traditionally, not enough energy, attention and money has been put toward upgrading and streamlining the level of back-office technology. At the end of the day, the thinking had been: 'Do you put money out on the battlefield where you save lives, or do you put it in the office building to streamline a process?'"

Now, DoD is starting to do both. Even skeptical government watchdogs have taken note that Rumsfeld set aside $100 million in this year's DoD budget for financial modernization and a study aimed at reforming the Pentagon's IT architecture. At press time, President George W. Bush was proposing a 17 percent increase, or $53 billion, in federal IT spending. If approved in late September, the Department of Defense will get half, or $26.4 billion (see "Fighting Back"). "The events of Sept. 11 and the homeland security crisis have fundamentally changed how the government is thinking about its missions now," says Payton Smith, an analyst with Input, Inc., an IT market research firm in Chantilly, Va. "Sept. 11 gave the DoD and all federal agencies a new sense of urgency for making these things actually happen."

Meanwhile, the Pentagon's CIO, John Stenbit, a 30-year technology veteran and former defense systems expert at defense contractor TRW Corp., has put on hold troubled IT programs and has instituted strict new management controls, at one point requiring a progress review of the Navy Marine Corps Intranet before giving the project more funding. Further, new committees, councils and boards have been created to control spending and modernize business practices. Previously, there were few, if any, such agencywide checks and balances—or attempts at cross-agency business cooperation. "Power today," President Bush said months after the attacks, "is defined not by size anymore, but by mobility and swiftness." In that vein, the push to start transforming the DoD's creaky information backbone into a real-time tracking, coordination and support tool for a new-age military establishment and its operations—"is part of an entirely new approach to how the DoD now thinks about the rules of war," says Stenbit.

This article was originally published on 08-19-2002
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