Pentagon to services: Ante up more for your BPR programs

Military IRM managers interested in business process
re-engineering (BPR) can call on central Defense Department funding now, but starting in
1997 they'll have to reach into their own pockets.


In the five years since DOD's Corporate Information Management initiative was launched,
the services and agencies have been able to tap the CIM Central Fund, managed by the
assistant secretary of Defense for command, control, communications and computers. The
contributions have been modest--the fund averaged around $100 million per year--and the
bulk of BPR funding always had to come from the services themselves.


But starting next year, the CIM Central Fund will be reduced by half, and even that
money will be available only on a matching-fund basis, said.


"The concept is that if they're really serious about BPR, then they will pay for
half of it," she said.


Kendall, who said last week that she will quit her job next month, said the new funding
approach does not represent a retreat from the goals of the CIM initiative. It is strictly
a consequence of broad cuts ordered by DOD budget planners, she said.


"DOD has some very major constraints on our budget programming," she said,
"and what is spent on programs is very difficult to justify everywhere. Last summer
there were some strong looks at the Defense Information Systems Agency budget and where
DOD had their resources, and some trade-offs and adjustments were made."


Kendall said her office and DISA have separate central funds "tagged as CIM,"
although she did not disclose the size of the DISA fund or how it had been affected by the
cuts. Industry and government sources close to the budget negotiations have speculated
that the DISA cuts could amount to $200 million or more over five years
['MDUL'GCN'MDNM', Jan. 8, Page 3].


DISA officials said that as a matter of policy, they do not answer questions about
internal budget issues.


Kendall said her office's CIM Central Fund, which amounted to $108.8 million in fiscal
1995, also took a cut in fiscal 1996, to $83 million. Although she declined to disclose
the requested 1997 amount, it presumably would be half of this year's fund, or roughly $40
million, available on a matching basis only.


Both Kendall and her boss, Emmett Paige Jr., the assistant secretary of Defense for
C3I, acknowledged in an interview that officials in the Programs Analysis & Evaluation
(PA&E) division of the Pentagon comptroller's office, which gives budget planning
guidance to the secretary of Defense, do not support the CIM initiative.


But they stressed that CIM always has had vociferous opponents and said that the
initiative's goals in BPR, data standardization and migration system selection will
continue.


"I'm not going to put all the blame on PA&E," Paige said. "There are
red teams in PA&E that fight motherhood. That's their job, and they do it well. It
just happens that I don't agree [with them] on the best way to accomplish the mission and
the goals that are necessary."


Kendall said the new matching fund program could mean that some BPR efforts will be
canceled. "You have a problem in that some people may not have funds to begin
with," she said. "So what we're saying is that we won't do re-engineering in
those areas, because they won't be able to pay for half."


Cross-functional BPR efforts, which attempt to find efficiencies across programs for
interconnected areas like finance and logistics, probably will suffer, she predicted.
Organizations will tend to tend to use scarce funds for internal BPR first, she said.


"Our job will be to convince [managers] that BPR is something they are going to
have to do to save money," Paige said. "If it's important enough, they will fund
it out of their mission funds. I've always maintained that if you go and look at the
services and agencies, you'll find that they've spent more of their mission dollars on BPR
and other development and maintenance [efforts] than what they were given out of CIM
central funds or other IT budget funds."


Kendall and Paige also said that their office will continue to push for the adoption of
standard systems where appropriate. "We're still working on migration systems,"
Kendall said, adding that "our goal is to eliminate duplication and find the best way
to move forward."


On the other hand, Kendall said that some organizations "may demonstrate through
an economic analysis that duplication, for other reasons, is still more cost-effective. So
we're not advocating that you do it for the sake of doing it, but that you do what's best
for the department."


Kendall pointed to the 1996 Defense authorization bill as evidence that Congress still
is interested in the goals of the CIM initiative. Under Section 366, "Strategy and
Report on Automated Information Systems of the Department of Defense," Congress has
asked for a report by April 15 that "assesses the implementation of migration systems
and applications."


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