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DOD Approach to Business Transformation

Problem: The Department of Defense (DoD) is one of the largest and most complex organizations in the world; transforming the Department??s business operations and aligning its strategy, controls, people, processes and technology to truly effect this transformation is an enormous challenge.

Goal: Further develop the DoD strategic plans and governance structure, which include the necessary roles and responsibilities, policies, procedures and metrics, to enable business transformation throughout the Department.


  • Develop a clear, comprehensive, integrated, and enterprise-wide business transformation plan that addresses all of DoD??s major business areas and includes specific goals, measures, and accountability mechanisms to measure progress.

    • The Enterprise Transition Plan (ETP), which is released annually in September and updated annually in March, serves as the strategic plan for business transformation and as the central document within the family of plans that supports the DoD??s enterprise-wide business transformation efforts.
    • The DoD Strategic Management Plan (SMP), released in July 2008 as called for in the 2008 National Defense Authorization Act ?? 904, continues the evolution of the DoD??s strategic business planning. In addition to providing an overview of the governance framework used by the DoD??s senior decision makers, this inaugural version includes the procedures for approving plans and budgets for changes in business operations, monitoring the progress toward meeting performance goals and measures, and overseeing all budget requests for defense business systems. Future versions will include performance goals and measures for approving and evaluating the overall efficiency and effectiveness of business operations and key initiatives to be undertaken in meeting performance goals and measures.
    • The DoD also tracks the progress of its business transformation efforts through the use of leading indicators that are of high importance to the DoD??s senior leaders or that have been identified as high risk by the DoD??s external partners. These leading indicators include the Department??s 25 Transformation Priorities, which are the basis for the DOD Organizational Assessment, and the GAO High Risk Areas.
  • Establish sustained leadership that is responsible and accountable for overall business transformation efforts.

    • On 18 September 2007, the Secretary of Defense issued DoD Directive 5105.02 designating the Deputy Secretary as the CMO. This designation was confirmed in the FY2008 NDAA, which formally designated the Deputy Secretary as the CMO, created the position of Deputy CMO (DCMO) and designated the Under Secretaries of the Military Departments as the CMOs of their respective organizations. The DoD is currently implementing these provisions and once implemented, this new CMO structure will further align the business transformation efforts at all levels of the Department.
    • The senior career civil servants of the Department are a critical component of maintaining sustained leadership over time for business transformation. As the Department approaches the transition to a new administration, the role of these senior career leaders will only grow in importance. For example, the Department has designated a senior career civil servant to lead the standup of the Office of the Deputy Chief Management Officer to help posture both the office specifically and business transformation and management improvement in general for success in the new administration.
    • The Deputy??s Advisory Working Group and the Defense Business Systems Modernization Committee, both chaired by the Deputy Secretary of Defense, are senior governance bodies that are venues for the senior leadership of the Department to focus on business transformation efforts.
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