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CHIPS Articles: DEPSECDEF says IT reform saved DoD over $200 million in FY18

DEPSECDEF says IT reform saved DoD over $200 million in FY18
Explains National Defense Strategy increases lethality, reforms the way DoD does business
By CHIPS Magazine - September 17, 2018
Deputy Secretary of Defense Patrick M. Shanahan, in his August Message to the DoD Team, discussed the implementation of the National Defense Strategy and DoD-wide information technology reform.

The National Defense Strategy enhances lethality, expands alliances and partnerships, and reforms the way the DoD does business, Shanahan wrote.

“Reform is not a goal unto itself, but the means by which we implement our strategy at the speed of relevance. If we cannot move fast and focus taxpayer dollars on lethality, we will not be prepared to win,” Shanahan wrote.

“In August, teams across the DoD implemented dozens of reforms to reduce costs and make it easier to do our jobs. In particular, healthcare, information technology (IT), and logistics reforms will dramatically enhance our lethality by virtue of their function and size. We spend roughly $50 billion on healthcare each year; over $35 billion on IT; and approximately $150 billion on logistics — and these systems affect everyone in the Department,” Shanahan explained.

The remainder of Deputy Secretary Shanahan’s memo is presented below.

To increase the quality of our healthcare and ensure warfighters are medically ready to deploy, we are consolidating healthcare within the Defense Health Agency (DHA). Centralization will raise standards, strengthen accountability, and lift the administrative burden off doctors, enabling them to spend their valuable time treating warfighters, instead of filing paperwork.

We are dramatically consolidating our IT networks to improve communication and fortify our systems. Everything from our nuclear arsenal to our command, control, and communication networks depends on the speed and security of our IT.

To ensure warfighters in the field have what they need when they need it, we are standardizing our logistics processes, reducing duplication, leveraging data, and raising the bar on performance. From sustaining weapons systems to airdropping rations to frontline troops, our lethality depends on the swiftness and fidelity of our logistics. Wars are not won solely by logistics, but many have been lost by a lack thereof.

In addition to directly supporting our lethality, these reforms generate savings that can be spent on modernization. This year, IT reform saved over $200 million, roughly equivalent to the cost of operating 2 F-16 squadrons for one year; logistics reform saved over $100 million, the price of purchasing over 100 JASSM-ERs; and DHA consolidation is slated to save over $2 billion dollars each year by 2023, equal to the cost of buying 20 Joint Strike Fighters.

Reform, alongside everything we do in this Department, is geared towards one goal: maximizing lethality. The best way to prevent a war is to prepare to win one. Success demands we adopt a culture of performance instead of measuring ourselves in terms of effort and improvement alone. At the end of the day, what matters is not whether we are better than we were last year, but whether we are better than our adversaries—stronger, faster, and more lethal.

The National Defense Strategy is our map to victory — and reform is the fuel driving its rapid implementation. Help us accelerate these reforms. How can we remove roadblocks instead of just point them out? We must overcome any hesitation to change—the benefits of reform are too great to ignore. If all three million of us can align, we will be unstoppable.

Thank you for your relentless efforts to defend our Nation. I am proud to serve alongside you.


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Patrick M. Shanahan, Deputy Secretary of Defense, poses for his official portrait in the Army portrait studio at the Pentagon in Arlington, Virginia, July 19, 2017. U.S. Army photo by Monica King/Released
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