The Department ofDefense (DoD) is one of the largest and most complex organizations in the world. DoD’s budget dwarfs that of the world’s largest corporation, it employs millions of people that operate worldwide, and the Department carries orders-of-magnitude more inventory items than the largest retail corporations. Yet its business systems are far from world class; they are still based on several thousand, non-integrated, non-interoperable legacy systems. In addition to the inefficiencies and errors generated by this amalgam, it is difficult, if not impossible, for the senior leadership to get the enterprise visibility necessary to make sound management decisions.

In order to meet the 21st century national security requirements, the Department needs business systems that enable it to be flexible, adaptive, and accountable. Recognizing these deficiencies, the Secretary of Defense initiated a transformation initiative in July 2001. This report aims to examine this effort; review the lessons learned; and, finally, make recommendations aimed at maintaining and accelerating the program’s recent momentum.