DoD Organizational Challenges and Industry Drivers

The United States Department of Defense (DoD) is an executive branch department of the federal government charged with coordinating and supervising all agencies and functions of the government directly related to national security and the United States Armed Forces.

What are the DoD Budgetary Segmentation?

• Persistent growth of military budgets for Global War on Terrorism (GWOT) and sustainment.
• Efforts to contain costs have resulted in cancelled programs and realignment of funds.
• Need to create economies of scale.

What are the DoD Budgetary Segmentation

What are the DoD Organizational Challenges?

The Internal Challenges in the DoD organization include Functional Stovepipes, Worldwide Theatre of Operations, and Competing Priorities. These challenges are leading to Difficulties in managing force structure, serving multi-national coalition, operating an integrated supply chain, achieving purchasing efficiency, avoiding duplication of back-office shared services and determination of IT architectural standards

• Functional Stovepipes
• Worldwide Theatre of Operations
• Competing Priorities
• Managing force structure
• Serving multi-national coalition
• Operating an integrated supply chain
• Achieving purchasing efficiency
• Avoiding duplication of back-office shared services
• Determination of IT architectural standards

What are the DoD Organizational Challenges

What are the DoD Industry Drivers & Implications?

DoD Industry Drivers are influenced by Constrained Budget Growth, Pressure to contain costs, Operating Tempo Increases and Desire to adapt best commercial business practices.

The DoD Industry Drivers can be classified as Macro-Economic Environment, Increased influence of transformation ideas, Intense DoD Competition, and Increasing Government Regulations.

What are the DoD Industry Drivers & Implications

1. Macro-Economic Environment Industry Drivers

• Global War on Terrorism (GWOT).
• Increased Operations & Maintenance (O & M) requirements coupled with need to control costs.
• IT spending restricted and reduced.
• Global War on Terrorism (GWOT) increases pressure on all aspects of DoD.
• Budget is shrinking.
• IT Spending impacted by diversion of funds to Global War on Terrorism (GWOT) operations.

2. Increased influence of transformation ideas Industry Drivers

• Growing list of demands such as UID & RFID.
• Net Centricity and Sense & Respond Logistics.
• Increase in use of COTS products.
• DoD and Services want to exploit technology and transform business practices such as ERP, RFID, UID, LEAN, Six Sigma and Base Realignment and Closure (BRAC).
• The efforts are complicated by: Cultural resistance to change, Varying perceptions among the Services and DoD as to nature and extent of transformation required, Congressional Oversight and concerns (e.g., BRAC) ,
• Acquisition policies impact choice of transformation product vendors and implementers and Need to continue “business as usual” while implementing transformation initiatives.

3. Intense DoD Competition Industry Drivers

• Increase in length of contracts.
• Weapons platforms life cycles lengthened.
• Consolidation of Defense Industry.
• DoD favors longer contract terms; Congressional concerns in light of recent acquisition scandal within the USAF
• Weapon systems life cycles are extending. Services are keeping weapon systems longer. Example: USAF B-52s will be over 60 years old when they are retired.
• Increased cost of new weapon systems will continue this trend due to need to achieve “return on investment”.
• Mergers and acquisitions among OEMs could mean less competition and more oversight.
• Can also lead to OEMs and systems integrators looking for new sources of revenue.
• Potential impact on diminished product vendor PS sales opportunities.
• Longer weapon system life cycles increase probability of ever-increasing reduction in sources of supply for older weapon systems.

4. Increasing Government Regulations Industry Drivers

• Acquisition regulations changed.
• Architecture Framework implemented.
• Global Information Grid & Security rules increase.
• Increasing cost of new weapon systems.
• Concern of Members of Congress about outsourcing of jobs and increase in Chinese high tech manufacturing and production capabilities.
• Growing Federal budget deficit: “guns versus butter”.
• Increased oversight leads to lengthening of already very long acquisition and production pipelines.
• Increased concern among some DoD members about nature of their professional relationships with vendors.
• Reduction in dialogue could lead to unrealistic requirements which then lead to more oversight.