October 2000 Newsletter - Naval Postgraduate School

STUDENT RESEARCH
INTELLIGENT AGENTS FOR NAVY ACQUISITION INNOVATION
LCDR David N. Fowler, United State Navy
Master of Science in Management-December 1999
Advisor: Assistant Professor Mark E. Nissen, Department
of Systems Management
Information technology has advanced to the point at which
software agents can be developed to represent people in their
conduct of business processes. Enabled by a modicum of
artificial intelligence, such software artifacts are termed
intelligent agents, and recent thesis work by Naval Postgraduate
School (NPS) faculty and thesis students is applying this
advanced technology to the acquisition domain. The
students are building on research conducted by Assistant
Professor Mark Nissen, who has long been investigating
process innovation through knowledge technologies such as
intelligent agents. Their work is inspired, in part, by a proofof-concept
agent application called The Intelligent Mall,
which demonstrates the use of intelligent agents to automate
key aspects of the enterprise supply chain.
In his thesis effort, entitled Innovating the Standard
Procurement System Utilizing Intelligent Agent Technologies,
LCDR David Fowler, USN, examines opportunities for
agents to innovate the Navy acquisition process. Acquisition
activities—such as procurement, contracting and logistics—
are becoming increasingly important, as the Navy and other
services strive to shorten the cycle time required for weapon
system development and be more responsive to warfighter
needs in the field. At present, the acquisition process is timeconsuming,
expensive and labor-intensive, with a mixed
record of satisfying warfighter needs.
The current DoD approach to this problem is to pursue
development and implementation of what is referred to as
the Standard Procurement System (SPS), which is a large
software application used to enable workflow capabilities in
support of the procurement and contracting processes. SPS
provides some capability for paperless contracting and
possesses the necessary infrastructure to begin a transition to
electronic business. For instance, it replaces paper forms
(e.g., purchase requests, requests for quotation, purchase
orders) with electronic counterparts and automatically
routes such work products to various people in the organization
(e.g., requestors, managers, contract specialists).
However, as a relatively novel information system implementation,
SPS remains quite crude and has limited functionality.
And this information system is being implemented
worldwide without first redesigning the underlying procure-
ment and contracting processes.
The objective of this thesis is to identify avenues for
emerging agent technologies to innovate the acquisition
process, with the goal of enabling order-of-magnitude gains
in performance (esp. cost and cycle time).
LCDR Fowler acquired considerable acquisition expertise
as a student at NPS, where he was exposed to SPS. He
leveraged this knowledge and exposure to investigate the
potential role that intelligent agents could play in process
redesign. He also acquired familiarity with the capabilities of
the Intelligent Mall, in order to ground his analysis in agent
capabilities that are becoming available today. Using the
Davenport-Nissen framework for process analysis, he
conducted a detailed examination of the Federal Acquisition
Process and identified many serious pathologies, along with
numerous process activities the SPS fails to support. He then
employed a four-step method for evaluating agent potential,
which he used to identify and rank-order several acquisition
process activities with particularly-good potential for automation
and support through intelligent agent technology.
Each of these was in turn evaluated in the context of two
process redesign alternatives, both of which offer excellent
opportunity for the kinds of quantum performance gains
desired through innovation.
Several key results emerge from this thesis research. First,
the current DoD approach (i.e., SPS) is seriously flawed.
Although SPS represents a step in the right direction (e.g.,
moving toward paperless contracting), the underlying
acquisition process it supports remains inefficient, and laying
SPS on top of this existing process is expected to make cost
and cycle time increase. Second, agent technology that is
available today offers excellent potential to enable quantum
performance improvements in Navy acquisition processes.
And such agent technology can be developed to integrate
with SPS and other existing Navy systems, thereby leveraging
the investment already made in such systems. Third,
restructuring the underlying acquisition process—in addition
to developing systems for support—offers great potential
for performance improvement and lies within the
authority of Navy leaders to undertake. Fourth, because
agent technology continues to develop and mature, not all
acquisition process activities should necessarily be addressed
by agents at the present time. Rather, the thesis identifies
those near-term process activities (e.g., market research) that
offer the best potential for agent-based support today, along
--continued on page 24
NPS Research page 23
October 2000