Fourth Estate Business System Investment in Fiscal 2020
Published: January 22, 2020
Business systems continue to attract funding.
Fourth Estate agencies have been the subject of a massive modernization effort recently called the 4th Estate Network Optimization (4ENO). Business systems investment has so far shown no decline across these Defense Agencies despite 4ENO, but there is a chance that this may change if the optimization of commodity IT delivery is extended to business systems. A part of the challenge for DOD appears to be the disarray in its Chief Management Office, which was touted as being able to bring efficiencies to the department when it was being stood up. A full business reform plan, including mandated cost estimates, was due to be released on January 1, 2020, but so far it has not appeared. In the meantime, here are the budgets requested for business systems by 4th Estate agencies for FY 2020.
As discussed last week, the DOD now limits its reporting on IT spending to investments it categorizes as Non-National Security Systems (NSS). The numbers shown below, therefore, reflect the budgets that 4th Estate agencies requested for non-NSS investments from fiscal year 2018 through 2020.
Unlike Army’s investments in business systems covered last week, the budgets for the 4th Estate are showing year-to-year growth. Averaging $3.1B annually, the total budgets for 4th Estate business systems are up 7.4% from FY 2018 to FY 2020. Also unlike Army, 4th Estate agencies do a better job categorizing their business system investments to not include things like telecommunications investments. The result is a data set that is more uniformly definable as “business systems” than what Army reports. Lastly, please note that the total numbers shown come from the request that DOD released in early FY 2019, not the final funding legislation signed by the president in December 2019. That legislation did not provide sufficient detail to allow the development of a new budget summary for FY 2020’s business systems.
Top Programs, FY 2018-2020
Of the top 5 Fourth Estate business systems, in terms of annually requested budgets, two systems: the Defense Agencies Inititiative (DAI) at the Defense Logistics Agency and the Defense Enrollment Eligibility Reporting System (DEERS) at the Defense Human Resources Agency are attracting higher funding. The DAI’s budget, in fact, is up almost 33% from FY 2018 to FY 2020 while the budget for DEERS is up 26% over the same period. Meanwhile, the budgets for the EBS and AHLTA are down 35% and 38%, respectively. The decline in AHLTA’s budget in particular makes sense given that it is being replaced by the Defense Health Agency’s DHMSM effort, the budget of which shows more fluctuation than the other programs, bring up 20% from FY 2018 to FY 2020, but down 26% from FY 2019 to FY 2020.
Top 5 Fourth Estate Agencies by Business System Budgets
Of the top 5 Fourth Estate agencies in terms of requested business system budgets, three agencies will see their business system budgets rise in FY 2020: the Defense Health Agency (+$92M vs. FY 2018), the Defense Logistics Agency (+$38M vs. FY 2018), the Defense Human Resources Agency (+$28M vs. FY 2018). DFAS and the DeCA, meanwhile, will see their budgets decline by $12M and $14M, respectively.
Increased investment at the DHA in FY 2020 is distributed across several programs, including Department of Defense Healthcare Management System Modernization (+$105M vs. 2018); the Military Health System Virtual Health Program (+$66M vs. FY 2018); and the Legacy Data Repository (+$11M vs. FY 2018).
At the DLA, growth can be found in the budgets for the Defense Agencies Initiative (+$25M vs. FY 2018); the Electronic Point of Sale effort (+$23M vs. FY 2018); and Data Mining/Risk Assessment work (+$3M
vs. FY 2018).
Defense Human Resources Agency efforts seeing higher budgets include DEERS (+$21M vs. FY 2018) and the Joint Duty Assignment Management Information System (+$6M vs. FY 2018).
It’s business system budgets declining, there are programs at DFAS seeing some increases, including the Standard Accounting Budgeting and Reporting System (+$5M vs. FY 2018) and Business Management Redesign (+$1.3M vs. FY 2018).
As for the DeCA, its Enterprise Business Solution will receive an additional $3M in FY 2020 vs. FY 2018.
Business system invetsment at 4th Estate agencies is curious in light of the fact that the DOD CIO has ordered Defense Agencies to migrate their workloads to the milCloud 2.0 run by DISA. According to David Bennett, Director, Operations Directorate at DISA, these migrations have been dissected into 3 groups, with those agencies prepared to migrate the fastest leading the way. Two other waves of migration will follow into FY 2021 and 2022. The extent to which business systems will be part of that migration is not clear. If business systems are included, however, then their requested budgets could drop off significantly in the next 5 years as they move to a new cloud platform.