Standardize, Consolidate, and Optimize Financial Management

Presented by David M. FisherDirector, Business Transformation AgencyDepartment of DefenseMarch, 2009

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BTA Established to Advance Defense Business

TransformationOn October 7, 2005 the Deputy Secretary of Defense signed a memorandum establishing the Defense Business Transformation Agency (BTA).

The Agency is specifically responsible as a corporate- level service organization for the DoD, accountable for successful definition and execution of DoD-wide business improvement initiatives and system investments.

The BTA Mission is to guide transformation of business operations throughout the Department of Defense and to deliver Enterprise-level capabilities that align to Warfighter needs.

BTA’s Six S’s of Success

Standardize essential operational data, processes, and business rules in order to significantly improve the ability to process and share information throughout the enterprise

Simplify overly complex business rules that unnecessarily complicate operations and lead to expensive and risk-filled solutions

Streamline core end-to-end business processes to eliminate non-value added activities

Stovepipe operations must be eliminated from solution design and deployment, so that the historically narrow-focused approach to business gives way to an approach that seeks to optimize end-to-end processes

Systems and Services must be deployed in a timely and cost effective manner with a conscious focus on sound requirements management and comprehensive risk mitigation

Strategic Alignment of DoD’s approach to optimizing its business mission area by ensuring a common approach and set of principles that will be consistently

governed and evaluated.

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Definition: DoD’s common business language that facilitates the consistent collection and reporting of financial information.

Benefits: Standardizes financial reporting data across DoD. Enables decision-makers to efficiently compare similar programs and

activities across DoD. Provides decision-makers the level of detail they require for information

retrieval and auditability. Improves the efficiency of maintaining business systems, thereby

reducing costly maintenance and translation of non-standard data.Accomplishments:

Established and maintained SFIS Governance Board that has successfully defined 71 data elements that are engrained in the BEA and IRB process.

Developed SFIS computer-based training application that supports standard implementation and configuration.

Integrated SFIS requirements into the OMB Federal Common Government-wide Accounting Classification (CGAC) requirement.

Next Steps: Focus on standard implementation and configuration in target business

systems.

Standard Financial Information Structure

(SFIS)

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USSGL SFIS Transaction Library

Definition: The U.S. Standard General Ledger (USSGL) SFIS Transaction Library maintains an DoD enterprise-wide standard set of detailed general ledger transaction requirements that incorporate budgetary, proprietary, and memorandum accounts that link to specific business events.

Benefits: Standardizes account transaction postings across DoD. Removes interpretation from Treasury’s USSGL high-level guidance. Decomposes 559 high-level business events and generalized posting guidance from the

Treasury Financial Manual into 4,363 detailed business events and specific debit/credit pairings.

Compliant with Treasury, FASAB, OMB and DoD Financial Management Guidance. Along with SFIS and the BEA, provides an enterprise-wide standard for updating DoD

existing and deploying new business systems. Accomplishments:

Included SFIS element requirements in the USSGL SFIS Library to provide standard implementation guidance.

Updated Library to include all of Treasury’s FY 08 USSGL updates. Performed Lean Six Sigma analysis to streamline USSGL Library update process.

Next Steps: Work with Treasury to incorporate these detailed USSGL requirements at the Federal

level.

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DoD Defense AgenciesCurrent Systems

Environment

DAU

DARPA

DeCA(Non-Resales)

DCAA DCMA

DFASDISA

(CS & TSEAS)

DLSAAFIS BTA

DTIC

DTSA

DTRA

DoDEA DoDIG

JCSMDA

OEA TMA

DPMO DSCA

DSSPFPA

USUHS

WHS

CAFRMSCAFRMS

WAASWAAS

eBizeBizDBMSDBMS FAMISFAMIS

GAFSGAFS SOMARDSSOMARDS

CUFSCUFS

STANFINSSTANFINS

DeCA(Resales)

DISA (HQ)

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Target Environment: Organizations and

Scope

DAU DARPA DeCA DCAA DCMA DFAS DISA DLSA

AFIS

BTA

DTIC

DTSA

DTRA DODEA DODIG JCS MDA OEA TMA

DPMO

DSCA

DSS

PFPA

USUHS

WHSOrder-to-Fulfill

Acquire-to-Retire

Budget-to-Report

Procure-to-Pay CostAccounting

Time& Labor

BudgetFormulationManagement Reporting

DAIDAI

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Defense Agencies Initiative (DAI)

Program Description• Oracle implementation for Defense

Agencies and Field Activities• Pilot site for initial Go-Live: BTA

• $400M business annually

• ~350 users at 4 locations

• Contract award to pilot Go-Live in 12 months (October 2008) for ~ $20M

• Cost included foundation for the DAI Global Model for all other Agencies

• Process-focused teams and scope: Procure-to-Pay; Acquire-to-Retire; Budget-to-Report; Time & Labor; Cost Accounting; Order-to-Fulfill

• Approved pilot for all-ERP based Procure-to-Pay including contracts, sourcing, and electronic submission of vendor receipts/invoices

• Next round of deployments underway

Success Factors• Program built around horizontal end-to-end

processes vice individual functions• Adopt the COTS for scope and approach

(only required 7 interfaces for pilot site)• Focus: minimally sufficient solution; can add

more complexity later if necessary• Strong, visible, consistent leadership

• PM had direct access to Agency Director, who played a hands-on role both during the design and deployment phases

• Priority of the program was clear to all agency employees via consistent top-down communications

• Strong participation from several Agencies and DFAS for functional expertise, testing, training, data management, and operations

• Government ERP experts from BTA assumed leadership for most implementation responsibilities with prime contractor supporting them

Biggest Challenges• Quality of legacy data for conversion• Workforce change management

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It’s All About

Change

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Referential Integrity in an Exclusively ERP World

Purchase Requisition

Purchase Order

Goods Receipt

Invoice Receipt

Expenditure

P U R C H A S E T O P A Y P R O C E S S

Contract / Sourcing

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Purchase Requisition

Purchase Order

Goods Receipt

Invoice Receipt

Expenditure

PR

PR LineNumber

PR LineFunding ID

ERP Purchase to Pay Process

Contract Writing System

The VendorThe Vendor

PR

PR LineNumber

PR LineFunding ID

PIIN

CLIN

SLIN

Cross Reference TablePR/PR Line Number/PR Line Funding IDPO/PO Line Number/PO Line Funding ID

PIIN/CLIN/SLIN

MOCAS System Entitlement

APVM(Prevalidation)

PPVM(Prevalidation)

MATCHFrom X-Ref

ReadyToPayFile

ObligationValidation

Confirmation

Receiving

Activity

MaterialPIIN-CLIN-SLIN

ReceiptReport

PIINCLINSLIN

Receipt Validation By PIIN CLIN SLIN

InvoicePIIN-CLIN-SLIN

InvoicePIIN-CLIN-SLIN

Contract InfoPIIN-CLIN-SLIN

InvoicePIIN-CLIN-SLIN

InvoicePIIN-CLIN-SLIN

WAWF

WAWF

Disbursing System

ReceiptValidation From X-Ref

UnblockInvoice

PIIN-CLIN-SLIN

BlockedInvoice

Use x-Ref

DisbursementPIIN-CLIN-SLIN

DisbursementWith Contract

Info Only

Treasury

EDA

MOCAS System Contract Admin

Manual

Contract InfoPIIN-CLIN-SLINContract Info

PIIN-CLIN-SLIN

Contracting Outside the

ERP

Goods Receipt and Invoice

Receipt Outside the ERP

Disbursing Outside the

ERP