Department of Transportation Where We Are and Where We Want to Be

1. Department of TransportationWhere We Are andWhere We Want to Be

2. A Decade of Standardization and Consolidation • 1997 – DOT Agencies collaboratively chose Oracle Federal Financials as the single core financial management system (Delphi) • 1998– DOT chose Federal Aviation Administration’s Enterprise Service Center (ESC) in Oklahoma City to implement and support all DOT agencies on Delphi (single instance with no customizations) • 2004 – DOT implemented final agency on Delphi • 2005 - DOT/ESC designated as a Shared Service Center by OMB in 2005 • 2004-2007- ESC services 4 external agencies including the Government Accountability Office (GAO) in 2007 • 2000 to 2008 – Gradually consolidated all accounting operations to ESC including 9 FAA’s regions and all DOT agencies. • 2009 – ESC implementing two new agencies AMAZING PROGRESS!

3. DOT Agencies

4. If that’s not enough….

5. DOT/ESC Focus on Optimization with Innovation and Improvement • 7 unqualified opinions in the last eight years with no material weaknesses in 2008 • Monthly close occurs overnight for all agencies • Year-end close process dramatically decreased from a three week process to agencies closing in a few hours • Developed an innovative Financial Statement Solution which produces individual agency statements and DOT’s Consolidated Statements directly from the core system with no topside adjustments or external reporting tool • Implemented a standardized A-123 Internal Control Program which fully documents all of our processes • Implemented FAB 14 Reconciliation Metrics to measure and report agency progress in key reconciliations

6. We are still faced with many challenges • Lack of standardization in Delphi configuration across agencies • Disparate business processes cause excessive administrative work, re-work, reconciliation, and reporting resulting in higher costs • OMB’s FMLoB directives moving Agencies to a Common Government-wide Accounting Code (CGAC) and standard business processes • Inability to roll up data department-wide because of system configuration • Requirements to support Earned Value Management, Cost Accounting, Performance Measures, CGAC, Treasury’s Government–wide Accounting (GWA) changes • Need to improve data integrity, accuracy and consistency • Technology Platform and Reporting Tools are inadequate to support future business operations • Need for integrated Procurement Solution • Challenges of TRANSPARENCY!

7. What’s Next for DOT/ESC?

8. Opportunities for Optimization of Systems and Processes Oracle Release 12 • Transaction flow defined by process • Transaction code entry eliminated • Individual agency “set of books” structure gone • Intercompany billing capability • Operations can manage payment sweeps, month end close processes centrally • Move to OMB’s CGAC • Incorporate Treasury’s GWA changes

9. DOT Leadership Strategic Planning August 2007 –DOT financial management, budget, CIO, and procurement community participated in a strategic planning session to determine the Department’s financial management strategy for the next decade – the major outcome of this meeting was the “vision” for the Financial Management Business Transformation (FMBT) effort “To be the government leader in Financial Management utilizing quality people, processes, and technology in delivering a single integrated solution to support DOT’s mission by using streamlined business processes while ensuring financial integrity.”

10. Goals of DOT FMBT Vision • Re-engineer all financial management business processes to eliminate redundancies and inefficient processes amongst the agencies • Ensure consistency, consolidation and coordination of DOT Enterprise-level business systems including a single integrated procurement solution and modernized reporting solution • Improve collaboration and communication between the Office of the Secretary, ESC, and the Agencies • Alignment of resources conducting business process reengineering and system modernization into a unified, focused strategy

11. Five Commandments of the FMBT • Standardization: We will standardize business processes and Account Code Structure • Integrity: We will ensure data integrity • Communication: We will communicate effectively across DOT • Replication: We will not replicate the old system • Integration: We will integrate before we interface (We still will not customize)

12. Governance Structure

13. Business Transformation Team Leadership Business Process Transformation Team Information Management Team Current Systems Team Future Systems Team Change and Learning Team Executive Leadership Committee Project Manager Financial Management Business Council FMBT Project Management Office

14. Project Team Organization Project-Wide Support Business Process Transformation Identify and reengineer critical business processes and develop policy around identified processes. The development of business requirements will be driven by this team. Information Management Develop and implement a Department-wide Accounting Code Structure and define data & reporting requirements for the future transformation. Current Systems Identify, map, and communicate current technical and process related requirements around the current system. Development of cutover and conversion plans will be driven by this team. Future Systems Develop an inventory of the future functional and technical system requirements. Responsible for translating business requirements into technical solutions as well as leading development, configuration, and testing efforts. Change & Learning Provide a structured and uniform approach for stakeholders, decision makers and users to manage change and learning related activities. Provides a standard approach for change management across all threads and phases. Provide program management tools and documents; coordinate, consolidate and monitor project activity; provide strategic advice and industry leading practices, and facilitate the development and management of the plan and schedule. PMO

15. Achieving a Fully Integrated Budget and Financial Management Environment Develop a standard set of reports by role to be adopted by both budget and finance practitioners across the Department Develop a standard set of business processes for core financial management functions to be adopted by both budget and finance practitioners across the Department Develop a common accounting code structure, including an applicable set of definitions, adopted by both budget and finance practitioners across the Department Information Sharing and Reporting Data Management Business Process Standardization

16. Business Transformation Planning PHASES: Vision Operate Plan Design Build Deliver To create a design using the resultsof the requirements collection, design confirmation workshops and prototyping efforts To initiate the project and identify the team and expected results in a detailed project plan To prepare for go-live by performing final system testing, user training, cut-over activities and enhancing an internal help desk To configure and test the business and technical requirements established in the previous design phase To develop and document an understanding of the value of the project direction and goals Definition & Purpose To transition from a project environment to a day-to-day business operation TEAMS: Business Process Transformation Task Task Task Task Task Task Information Management Task Task Task Task Task Task Current System Task Task Task Task Task Task Future System Task Task Task Task Task Task Change & Learning Task Task Task Task Task Task PMO Task Task Task Task Task Task

17. Potential Sub-Processes Process Description Summary of FMBT Approach • Formulation • Allocation • Execution • Funds Management • Project Management • Budget Accounting Users Guide • Reporting (e.g., SF-133, Budget Variance) Budget to Report Encompasses all business functions necessary to plan, formulate, create, execute against, and report on the budget and business activities of the entity. • RA (AR & AP) • Grants (Grantee & Grantor) • Travel & Credit Card • Commitments, Obligations, and Expenditures • Vendor Management Processes, procedures, tasks and activities in the areas of procurement, vendor management, contract management, grants management, and reimbursements. Procure to Pay • Maintain COA • Consolidations • Financial Statements Generation • Close Financial Mgmt. & Reporting Processes, procedures, tasks and activities in the areas of financial reporting, maintenance of COA design and generation of financial statements. Processes, procedures, tasks and activities in the area of a cost accounting methodology (i.e., Standard vs. ABC). • Costing • Billing • Project Management Cost Accounting • PP & E • Asset Management • Inventory Acquire to Retire Processes, procedures, tasks and activities in the area of asset management.

18. Key to our Success • Management support • Analyzing and understanding the weaknesses of the current approach • Involvement of key stakeholders across DOT • Understanding and using the new technology and functionality • Re-implementation of every Agency with next upgrade of Oracle • Designing the system to meet the information needs of management and program managers.