Business Transformation Agency leverages DoD Acquisition Decision making: testing the Enterprise Risk Assessment Model.

Envision gaining deeper insight into the risks associated with major automated information systems within the business mission area without asking program managers to create new artifacts. Imagine program managers and senior Department of Defense leadership working together to create usable, actionable risk mitigation plans that identify ownership and accountability from the program level up to the Office of the Secretary of Defense. Finally, picture an assessment model that looks across seven distinct risk areas (including people, processes, and external impacts) at a reduced cost and shortened schedule--again, without any additional oversight. That is the vision of the future for major business systems acquisition proposed by the developers of the Enterprise Risk Assessment Model (ERAM).

In January 2006, the Defense Business Systems Management Committee approved test cases for a concept that modernizes the way DoD manages the acquisition of major business information systems. Part of the 2007 National Defense Authorization Act, ERAM represents a major opportunity for the Business Transformation Agency to enhance the effectiveness of DoD business systems. As the BTA pursues its mission to transform defense business operations by rapidly delivering not just systems, but also capabilities, to the warfighter (for example, the ability to track personnel skill sets and match them to appropriate assignments, or the ability to efficiently value and track DoD property), ERAM can help identify risks and potential pitfalls early in the business system development process to better ensure success.

Ken Krieg, under secretary of defense (acquisition, technology and logistics), laid out a plan in April 2006 for "gaming" the ERAM concept through a set of initial test case systems: the Defense Integrated Military Human Resources System; the General Fund Enterprise Business System; and the Integrated Data Environment/Global Transportation Network Convergence. According to Krieg, "ERAM test cases provide unique opportunities to institutionalize change by applying recently proposed bold ideas and concepts that can establish credible models and set the stage for real change, in real time." The BTA charged the Investment Management (IM) directorate with testing the ERAM concept. At the conclusion of each successive test case, the BTA will reassess the effectiveness of the process. (Test cases were implemented May-September 2006)

The question we have been asked is, "What is the genesis of ERAM, and how is it different from past recommendations?"

In January 2006, the Defense Acquisition Performance Assessment Project, an external assessment, provided an independent review of and recommendations for the acquisition process. Similar recommendations in the past hadn't really been able to produce lasting change. The ERAM initial test cases present an opportunity to create solutions and set examples for credible and enduring change management. ERAM is a model that helps program managers determine the root cause of problems and issues within their programs and to define a process that helps in gaining a deeper understanding of issues and risks.

Krieg has talked about our need to "distinguish between 'Big A' and 'little a' acquisition." ERAM ties into his vision of a capabilities-focused acquisition decision-making process. The differences between what we decide to buy at the strategic level (Big A) and how we develop, test, produce, and sustain the programs (little a) allow us to deliver capabilities to the warfighter. The ERAM concept gives decision makers increased visibility into their programs by providing insight without creating another layer of oversight, and it gives us situational awareness of both the Big A and little a in acquisition. The BTA has a strategic approach to investment management and to developing and testing ERAM. The overarching goal of the BTA is the rapid delivery of capabilities and informed decision making.

Within that framework, the IM team is focused on a variety of issues, including integrated and aligned requirements definition, integrated DoD decision support systems, and efficient investment review--all of which allow us to keep our eye on that overarching goal. Tom Modly and Paul Brinkley (co-directors of the BTA) agreed that IM, among other strategic activities, should spend the next 12 months developing, testing, and institutionalizing proven concepts to improve acquisition management process outcomes. ERAM ties directly into that strategy.

It is important to note that conceptually, ERAM is no different from the Department of Defense Directive (DoDD) 5000 process. However, the assessment itself is a content-rich, energy-focused approach. It uses existing artifacts and documents that allow us to leverage current acquisition decision-making processes. ERAM adheres to the principles in DoDD 5000.1 and satisfies the critical requirements in DoDI 5000.2. ERAM is designed to be fast and flexible, enabling business systems to take advantage of emerging technology to deliver business capabilities faster. We expect the initial test cases to give us enough information to continue developing the model.

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What is entailed in a typical ERAM assessment? Once a program is selected for assessment, a risk assessment team (composed of executive-level leadership and matrixed resources across the DoD enterprise) spends time carefully reviewing existing program documents to determine the specific context of the one-on-one interviews that serve as the basis for the assessment. The assessment team then spends several days onsite conducting thorough interviews with primary and secondary program personnel. In conjunction with appropriate program staff, the assessment team reviews materials, asks questions, develops conclusions, and develops an actionable risk mitigation plan for the program. A draft of the assessment is reviewed with the program manager, and a final risk mitigation plan is released. In the initial test phase, the ERAM process is set up to be executed in 60-90 days, from start to finish.

Senior DoD leadership does not have visibility into critical risk across business systems. ERAM is designed to help us identify systemic issues, gaps in policy, and concerns within internal and external communities. With this model, the goal is to respond to emerging technology, make better decisions about how we manage our investments, and deliver business capabilities faster.

For more information about ERAM, visit <http://www.dod.mil/bta/ERAM/index.html>.

Ketrick is director. Investment Management Directorate, Business Transformation Agency.