WASHINGTON — The first two months of 2018 will see two major shifts on the business side of the Pentagon, with the creation of three new offices that will report directly to the secretary of defense.

The goal, deputy secretary of defense Patrick Shanahan told reporters on Dec. 21, is to make the changes as irreversible as possible in a system notoriously impervious to substantive changes.

“We want to make sure that with the stroke of a pen or a few clicks of the keyboard, we can’t undo progress,” Shanahan said. “When you think about enduring change, you have to wire or alter the work so that you don’t regress. That’s the hard part about big bureaucracy — is making enduring change.”

The deputy acknowledged that the changes will lead to plenty of complaints from people whose offices are being moved around —“you’ll probably hear screaming and yelling because ‘change is bad,’ ” he predicted for reporters — but he said that “if you’re going to have a more performance-driven operation, you have to unwind the bureaucracy and reorganize.”

The first big step in that transformation comes Jan. 2, when John Gibson II becomes the department’s first chief management officer, elevating from his current role as deputy CMO.

The DCMO position itself is fairly new, with the first DCMO, Elizabeth McGrath, taking office in July 2010. But under a series of reforms pushed by Congress in recent years, it was decided the DCMO spot needed to be raised in profile in order to push forward best business practices for the department.

Gibson hasn’t been in the building long — he was nominated on June 19 and confirmed Nov. 17 — but he previously served as deputy undersecretary of defense for management reform as well as assistant secretary of the Air Force for financial management and comptroller. And he’ll likely have his hands full off the bat.

Under a reorganization plan laid out in August, the CMO will have six ”reform leaders” who will oversee changes to logistics and supply chain; real property; community services; human resources; health care; and a broader performance management reform leader, who will be responsible to work with the CMO and deputy secretary to establish “a process for routinely managing the progress of the functional reforms and IT business system deployments against the plan using those goals and other measures.”

It also creates a program executive for IT business systems, with the express goal of bringing down the number of individual IT systems across the department and streamlining them. And Gibson will also be in charge of leading a major cloud-computing initiative, Shanahan said.

Shanahan noted that each service has its own way of handling HR or finances, something that Gibson will try to change. As a result, Gibson will be leading “a more full integration of the fourth estate [defense civilians] into the department of defense,” as well as “shifting from service-led functions into more enterprise-led functions. This is in the areas of IT, HR, finance.”

‘Like Batman and Robin’

The transformation of the Pentagon continues in February, when the Office of the Under Secretary of Defense for Acquisition, Technology and Logistics officially devolves into two new offices: the undersecretaries of defense for research and engineering and for acquisition and sustainment, the latter of which will be led by Ellen Lord, the undersecretary of AT&L. That will start a two-year process of slowly moving people and offices around between the two organizations.

The Pentagon recently announced that Ben FitzGerald, a military technology expert and current Senate Armed Services Committee staffer, will be standing up a new office to help guide the AT&L split. But Shanahan expects to play a big role in modernization questions going forward.

“Ellen and I are like Batman and Robin,” the deputy said, adding that he expected the two to work closely on the biggest modernization programs for the Pentagon, including the F-35 Joint Strike Fighter, the Columbia- and Virginia-class submarines, military space launch, and the V-22 Osprey.

Shortly after the AT&L split occurs, the department expects to deliver its fiscal 2019 budget request to Congress — on time, according to Shanahan.

However, while FY19 will include a “step up” in the defense budget, FY20 will be the “masterpiece,” Shanahan pledged, in part because of the logistics surrounding the recently released National Security Strategy and its follow-ons, the National Defense Strategy, Ballistic Missile Defense Review and Nuclear Posture Review.

Aaron Mehta was deputy editor and senior Pentagon correspondent for Defense News, covering policy, strategy and acquisition at the highest levels of the Defense Department and its international partners.

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