Defense IRM

The Defense Department (DOD), realizing that electronic data interchange technology could save it millions of dollars, began a program to standardize electronic business operations and provide a common approach for vendors to conduct business with DOD. With electronic data interchange, business information traditionally conveyed on paper is sent directly between computers without human intervention. DOD estimated that it could save $254 million by 1996 by automating routine business forms and standardizing them. These goals, although laudable, are not being achieved because of a lack of leadership and ineffective, splintered management.

GAO found that: (1) DOD has initiated EDI to create standard, paperless business processes for automated exchange between DOD activities and industry; (2) DOD has estimated that the conversion of 16 key business forms into all-digital EDI procedures could result in $254 million in savings by 1996 and based budget cuts and personnel reductions on these estimated savings; (3) disagreements regarding the most effective way to implement EDI have hindered the development of a standard approach for electronic business and allowed disjointed application of EDI across DOD components; (4) one operational pilot project has demonstrated the benefits of electronic contracting, but it has not provided a suitable approach for departmentwide use; (5) DOD components' independent development of EDI projects has resulted in a proliferation of nonstandard systems that achieve local benefits but move DOD further from its goals for a standard departmentwide approach; and (6) DOD has not provided management structure and technical support to ensure effective incorporation of EDI into new departmentwide business practices.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Team: Phone: