The New Reality for Customer Engagement
The challenge is formidable, and it's not certain whether Stenbit can pull it off: This is by no means the first attempt to torpedo the Pentagon's entrenched back-office operations. In the late 1980s, a modernization plan, called the Corporate Information Management Initiative, was supposed to replace 2,000 duplicative systems and save billions by streamlining operations. Instead, it wound up costing $20 billion and produced few results, according to David Walker, the comptroller general of the General Accounting Office, the watchdog arm of Congress.
The danger, of coursewhether in e-government or private industryis that by adding new technology, managers also run the risk of creating whole new layers of red tape. Further, trying to forge quick and fundamental change in a bureaucracy built by trillions of dollars over decades on millions of lines of outdated or misunderstood computer code is analogous to trying to make a U-turn in an aircraft carrier.
As in the private sector, politics, legions of rules and regulations and the need for multiple levels of project reviewa tangle of red tape reflected in the scandals in the 1980s over $640 toilet seat covers and $400 hammershave often doomed even the best of intentions, and have delayed and lengthened projects of any kind to the point of cost overruns and obsolescence. Legacy systems abound. The Defense Logistics Agency, the arm of the DoD that supplies military forces with food, clothing, fuel and $15 billion in annual supplies, has COBOL systems so old that components are no longer supported by the computer maker.
Further, cultural roadblocks can be daunting. The average 1.7-year tenure of the department's top political appointees hinders long-term planning and management accountability. IT operations have tended to be developed piecemeal, with a lack of agencywide performance measures and incentives for change, thanks to turf wars between the service branches.
Consider the Pentagon's Standard Procurement System, a $3.7 billion digital purchasing project that was supposed to replace 76 different legacy systems and automate the process by which the DoD's various branches and departments buy everything from weapons to shaving cream. When American Management Systems Inc. won the contract in 1997, the system was scheduled to be up and running by March 2000. But by September 2001, only about half of DoD's 43,000 users were online. Stenbit froze the project this summer. "People were installing technology without regard to deadlines and budgets," says Randy Hite, who heads up technology reviews for the GAO. "Government invests in technology to provide business value but this wasn't happening." The GAO, in a report, added: "DoD's management of SPS is a lesson in how not to justify, make and monitor the implementation of information technology investment decisions."
To be sure, the Pentagon has a longstanding credibility problem when it comes to talk of reform. But even the agency's staunchest critics say Sept. 11 has, in some ways, put the agency onto a new course. "I think [DoD] learned something after Sept. 11. They have the momentum now. The stars are aligned, and change is much more likely to happen now than it would have been a year ago," says Lawrence Korb, a former assistant defense secretary during the Reagan administration and now a defense strategy analyst with the Council on Foreign Relations, a Washington, D.C.-based think tank. Still, Korb adds, change won't come quickly. He estimates the technology transformation could take at least a decade to complete.
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