{"id":13336,"date":"2015-10-05T19:11:54","date_gmt":"2015-10-05T19:11:54","guid":{"rendered":"https:\/\/one.sightlinemg.com\/federaltimes\/uncategorized\/2015\/10\/05\/dod-s-long-road-to-performance-management\/"},"modified":"2026-08-08T04:37:30","modified_gmt":"2026-08-08T04:37:30","slug":"dod-s-long-road-to-performance-management","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/federaltimes\/opinions\/2015\/10\/05\/dod-s-long-road-to-performance-management\/","title":{"rendered":"DoD&#8217;s long road to performance management"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Every year, the GAO conducts a review of the Department of Defense&#8217;s major weapons programs. <a href=\"http:\/\/www.gao.gov\/products\/GAO-15-466\">This year, GAO assessed 78 programs<\/a> that will cost a combined $1.4 trillion. On the plus side, the costs for these programs decreased by $7.6 billion over last year. However, the programs collectively lost $2.2 billion in buying power with no change in quantity, meaning that it will now cost more to buy the same capability.<br\/><br\/>\u00a0<br\/><br\/>According to the GAO, the major culprit here is the absence of portfolio management. <a href=\"http:\/\/www.gao.gov\/products\/GAO-07-388\">In 2007, the GAO recommended<\/a> that the DOD implement a department-wide portfolio management approach for its weapons system investments. The GAO assessment included a comparison of the DOD&#8217;s processes to the best practices used in industry, including those used by Caterpillar, Eli Lilly, IBM, Motorola, and Procter &#038; Gamble.<br\/><br\/>\u00a0<br\/><br\/>According to the GAO, these companies assess investments collectively at the enterprise level, rather than as independent and unrelated tasks. Whether their major initiatives are built around producing a bulldozer, a computer or a consumer packaged good, all of these industry leaders tackle major and costly initiatives the same way. They consider cost, benefit and risk using established criteria and methods, revisit investment decisions frequently, and make difficult go\/no-go decisions when it becomes clear that initiatives are unlikely to meet agreed-upon goals.<br\/><br\/>\u00a0<br\/><br\/>GAO found that the DOD, conversely, approves programs with far less consideration of its overall portfolio, commits to them earlier and makes decisions with less knowledge about cost and feasibility than its peers in industry.<br\/><br\/>\u00a0<br\/><br\/>Eight years later, portfolio management is still seen by the GAO as the best path forward for reducing risk around the DOD weapons program. \u00a0The report concluded that the DOD is not effectively using portfolio management to optimize its investments, citing as evidence, &#8220;affordability challenges in areas such as shipbuilding&#8221; and potential duplication among programs.<br\/><br\/>\u00a0<br\/><br\/>There is no doubt that the DOD is already practicing project management successfully in many singular instances.\u00a0 For example, the Defense Contract Management Agency enforces an <a href=\"http:\/\/www.acq.osd.mil\/asda\/initiatives\/factsheets\/enabling_effective_project_mgmt\/index.shtml\">Earned Value Management System<\/a> which is a project management best practice.\u00a0 Also, PMI has specifically highlighted <a href=\"http:\/\/www.pmi.org\/Business-Solutions\/~\/media\/PDF\/Case%20Study\/DOEHRS_Case_Study_New.ashx\">a project management success in the DOD&#8217;s Military Health System and their effective process to track exposures to hazardous materials<\/a>.<br\/><br\/>.<br\/><br\/>But in such a large organization, one that is managing a complex portfolio valued in the trillions of dollars, project management alone is not enough. These projects must be managed as a portfolio rather than standalone initiatives.\u00a0 There is too much risk of duplicated effort and inefficient spending.<br\/><br\/>\u00a0<br\/><br\/>Portfolio management provides a centralized system for monitoring and refining the processes, methods, and technologies used by project managers and project management offices (PMOs) to analyze and collectively manage current or proposed projects to determine the optimal resource mix for delivery.<br\/><br\/>\u00a0<br\/><br\/>It drives increased ROI and reduces risks. In PMI&#8217;s 2015 <em>Pulse of the Profession<\/em> study, one in three (35%) high-performing organizations reported high portfolio management maturity, compared to the 8% of the study&#8217;s low performers.<br\/><br\/>\u00a0<br\/><br\/>In other words, portfolio management maturity is four times more likely to occur among high performers. What impact does this have? High-performing organizations meet original goals and business intent <em>two-and-a-half times more often<\/em> than low performers do.<br\/><br\/>\u00a0<br\/><br\/>Portfolio management is a meta-view of projects that starts and ends with the strategic goals of the enterprise. It keeps projects in alignment with the fundamental goals and metrics of success that drive the organization. That is why professionals who hold the Portfolio Management Professional certification represent an advanced competency in the coordinated management of portfolios to achieve strategic objectives. Alignment with these goals &#8211; and even more importantly, the ability to constantly adjust to strategic change &#8211; distinguishes the organizations that go successfully from strategy to implementation.<br\/><br\/>\u00a0<br\/><br\/>The series of documented risks in the DOD&#8217;s weapons system acquisition have kept it on the GAO High-Risk List for 23 years. Holding to strong project management practices provides a good foundation, but adopting a portfolio management approach holds tremendous potential to increase efficiencies and savings.\u00a0 Any organization must see their strategy reflected in their portfolio of projects and programs if it desires to actually deliver on it. With a <a href=\"http:\/\/www.jcs.mil\/Portals\/36\/Documents\/Publications\/2015_National_Military_Strategy.pdf\">2015 National Military Strategy<\/a> maintaining the &#8220;\u2026call for greater agility, innovation, and integration,&#8221; portfolio management provides the means to execute that strategy.\u00a0\u00a0<br\/><br\/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>GAO sees portfolio management as the best path forward for reducing risk, but DOD is not effectively using PM to optimize its investments.<\/p>\n","protected":false},"author":7,"featured_media":27406,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_canonical":"","_acf":"","_yoast_wpseo_primary_category":26,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","_smg_distribution_targets":[]},"categories":[15,26],"tags":[],"coauthors":[1805],"class_list":["post-13336","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-management","category-opinions"],"acf":{"subheadline":"","legacy_arc_id":"67UOUOXY7RAYNHJ4T6NLRRB4OA","arc_canonical_url":"\/opinions\/2015\/10\/05\/dod-s-long-road-to-performance-management\/","remove_feature_photo":false,"is_sponsored":false,"subtype":"","redirect_url":"","disable_inline_ads":false,"native_logo_pretext":"Presented 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