One way for DOD to minimize the cost and time needed to modify weapon systems is by using an open systems approach for system design and development. An open system allows system components to be added, removed, modified, replaced, or sustained by consumers or different manufacturers in addition to the manufacturer that developed the system. It also allows independent suppliers to build components that can plug into the existing system through the open connections. Fundamental elements of an open systems approach include: designing a system with modular components that isolate functionality. This makes the system easier to develop, maintain, and modify because components can be changed without majorly impacting the remainder of the system. developing and using open, publicly-available standards for the key interfaces, or connections, between the components. Interface standards specify the physical, power, data, and/or other connections between components. All interfaces in a system do not need to use open standards for a system to be considered “open,” and it can be costly and impractical to manage hundreds or thousands of interfaces within a system. Rather, open standards should be identified at key interfaces between the modules that are likely to change, may frequently fail or need to be replaced, or are needed for interoperability. obtaining data rights to interfaces when open standards are not available. DOD describes the acquisition of technical data, such as design drawings, specifications, and standards, as critical to enabling the department opportunities for competition for modification and sustainment of weapon systems throughout their life cycles. Many consumer products, including U.S. appliances and smartphones, are considered to be open systems because they use widely-available hardware and software standards at key interfaces. For example, U.S. appliances are designed to use a particular wall socket standard, so that they can plug into any power outlet without consumers needing to worry about which brand product is compatible in their homes. Similarly, headphone jacks use a common, open standard, which enables consumers to purchase headphones made by different manufacturers, and plug them into many types of devices, including their MP3 players, cell phones, and stereos, which may be built by other manufacturers. In addition, the AndroidTM operating system, used on smartphones, allows individual software applications introduced by third-party developers to connect to the Android operating system through an open software interface. This allows customers to have a lot of choices and helps keep prices low. Incorporating an open systems approach prior to the start of development increases the likelihood that open systems considerations are included in program requirements and inform a program’s future competitive strategy, which can significantly reduce upgrade and maintenance costs later. Introducing this approach later in a program’s life cycle, such as a planned modification or upgrade, is more difficult, complex, and costly to do as it may require significant modifications to an already-developed system. Legacy DOD programs that we have reported on in the past did not implement an open systems approach early and are now facing difficult and costly system modifications later in their respective service lives. The B-2 bomber and the C-130 aircraft are two examples: The Air Force is spending over $2 billion to upgrade the B-2 bomber’s communications, networking, and defensive management capabilities. Because the B-2 program’s prime contractor is the sole system integrator in possession of proprietary technical data and software, there is no opportunity for competition—a critical tool for achieving the best return on investment and driving down costs. The Air Force planned to replace the aging avionics systems on its C-130 aircraft with open architecture avionics systems. However, the individual cockpits had been modified throughout years of maintenance and differed from one another to such an extent that the upgrades required custom-built hardware and software; less expensive commercial off-the-shelf hardware and software could not be used. Because of the various configurations, C-130 modernization cost estimates increased from $4 billion to over $6 billion and the Air Force significantly reduced the number of planes it planned to modernize from 519 to 221 between fiscal years 2001 and 2011. The Air Force terminated the program in its fiscal year 2013 budget submission because of its escalating costs. DOD understands the efficiencies of open systems and has taken steps to incorporate an open systems approach into its policy over the past two decades. As far back as 1994, the Under Secretary of Defense for Acquisition and Technology directed the use of an open systems approach in the acquisition of weapon system electronics. That same year, DOD established an Open Systems Joint Task Force to oversee the military services’ transition to open systems and coordinate open systems-related efforts, such as training and standards development. The task force developed several tools to aid program managers with this approach, but was later disbanded. In 1998, the Defense Science Board cited pockets of success in leveraging open systems, but noted that DOD lacked a unifying concept and required a reconfiguration of management processes and aggressive leadership to facilitate open systems implementation. This concern was addressed in DOD’s 2000 acquisition directive and in its most recent update in 2003, which states that “a modular, open systems approach shall be employed, where feasible.”DOD’s 2008 acquisition instruction also provides that “program managers shall employ a modular open systems approach to design for affordable change, enable evolutionary acquisition, and rapidly field affordable systems that are interoperable.” Recently, the Under Secretary of Defense for Acquisition, Technology and Logistics has placed renewed emphasis on an open systems approach as part of the 2010 and 2012 Better Buying Power initiatives to increase efficiency in defense spending through effective competition. Specifically, the initiatives aim to improve the department’s early planning for open architectures, including making open systems considerations part of the design process. An open systems approach has great potential to generate efficiencies for product manufacturers, lower total ownership costs for consumers, and transform industries because it spurs industry growth, competition, and innovation. To get the most from open systems, the approach is best implemented at the start of product design because this is where initial modularity, key interface, and data ownership decisions are made and would result in costly redesign if implemented later. Open systems have been successfully used by commercial companies, such as those in the personal computer and software markets, and has helped customers avoid sole source prices and manufacturers address obsolescence and diminishing resource issues. DOD has also used open systems to some extent and reports that open systems have resulted in cost and schedule efficiencies in the development and upgrade of some of its acquisition programs. Office of the Under Secretary of Defense, Acquisition, Technology and Logistics Memorandum: “Better Buying Power: Guidance for Obtaining Greater Efficiency and Productivity in Defense Spending” (Sept. 14, 2010). Office of the Under Secretary of Defense, Acquisition, Technology and Logistics Memorandum: “Better Buying Power 2.0: Continuing the Pursuit for Greater Efficiency and Productivity in Defense Spending” (Nov. 13, 2012). technologically advanced products. In addition, the capability to accept plug-in components results in reduced development time and costs for manufacturers because parts are easier to integrate. Furthermore, upgrades and repairs take less time and are less costly for consumers. Finally, when different products adhere to the same standards, an open system design enhances interoperability among products. An open systems approach can also spur industry growth and entrepreneurial creativity, transforming an industry and offering benefits to manufacturers, suppliers, and consumers. A prime example where this has occurred is in the personal computer industry. In 1981, International Business Machines (IBM) Corporation introduced its personal computer, which was designed as an open system. IBM used already existing components, including the monitor from another IBM computer, and commercially-available off-the-shelf parts such as software, floppy drives, and an Intel processor. Upon releasing the personal computer, IBM openly published its hardware and software specifications, allowing other manufacturers to develop compatible software and peripheral hardware, such as the monitor, keyboard, and mouse. Figure 2 illustrates the personal computer as an open system, made up of compatible components that can be produced and integrated by different manufacturers. Since the time IBM publicly released the specifications of its personal computer, the market has grown exponentially in terms of manufacturers developing computers and related devices such as printers and scanners, third-party suppliers developing software applications that can be used on the computers, and consumers purchasing computers, software, and peripherals. Increased competition and technological innovation brought on by the use of an open systems approach, among other things, has helped make computers affordable to consumers. For example, according to IBM, one of its predecessors to the personal computer sold for $90,000; its first personal computer was sold in retail stores for $1,565.In the present marketplace, multiple computer manufacturers are developing computers that have 500 times the processing power of IBM’s early personal computer and sell for as little as $400. The personal computer industry has evolved over the past three decades to meet consumer demand and to leverage new technologies developed by the large number of manufacturers and suppliers competing in the marketplace. For example, in the mid-1990s, a group of companies, including Intel, Microsoft, and Hewlett-Packard, developed the Universal Serial Bus (USB) interface standard to reduce the number of different connectors, such as parallel and serial ports, that were required to allow various components to work together. The USB standard is now widely used in various devices beyond computer peripherals, including cell phone chargers and music players. Other standards, such as the High- Definition Multimedia Interface have been developed to address the need for standards for high-definition televisions and computer monitors. Perhaps the biggest transformation in the computer industry has been the Internet, with an estimated 2.7 billion users worldwide. communications technology is supported by open, non-proprietary standards which allow consumers to have easy access to information on a wide variety of topics, music, shopping opportunities, online banking, friends, their workplace, and more.