March, 2009

1. Standardize, Consolidate, and Optimize Financial ManagementPresented by David M. FisherDirector, Business Transformation AgencyDepartment of Defense March, 2009

2. BTA Established to Advance Defense Business Transformation On 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.

3. BTA’s Six S’s of Success 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. 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 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 Streamline core end-to-end business processes to eliminate non-value added activities 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

4. Standard Financial Information Structure (SFIS) • 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.

5. 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.

6. DoD Defense AgenciesCurrent Systems Environment DeCA (Non-Resales) DISA (CS & TSEAS) DTRA USUHS DFAS CAFRMS CUFS DBMS eBiz FAMIS DAU DTIC DCAA DCMA DISA (HQ) DARPA BTA DLSA AFIS WAAS GAFS SOMARDS STANFINS DoDEA DoDIG DPMO DSCA DeCA (Resales) DSS MDA DTSA JCS OEA TMA WHS PFPA

7. Target Environment: Organizations and Scope DPMO DAU DeCA DCAA DCMA DFAS DISA DLSA DARPA Budget-to-Report Cost Accounting Procure-to-Pay DSCA BTA DAI Acquire-to-Retire Time & Labor DSS AFIS Order-to-Fulfill Budget Formulation WHS DTIC Management Reporting DTSA USUHS JCS DTRA DODEA DODIG MDA OEA TMA PFPA

8. 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 Defense Agencies Initiative (DAI) • Biggest Challenges • Quality of legacy data for conversion • Workforce change management

9. It’s All About Change

10. Referential Integrity in an Exclusively ERP World P U R C H A S E T O P A Y P R O C E S S Contract / Sourcing Purchase Requisition Purchase Order Goods Receipt Invoice Receipt Expenditure

11. Cross Reference Table PR/PR Line Number/PR Line Funding ID PO/PO Line Number/PO Line Funding ID PIIN/CLIN/SLIN Disbursing System Unblock Invoice PIIN-CLIN-SLIN Treasury Receipt Validation From X-Ref Disbursement PIIN-CLIN-SLIN DisbursementWith ContractInfo Only ERP Purchase to Pay Process Purchase Requisition PR PR LineNumber PR LineFunding ID Purchase Order Goods Receipt Invoice Receipt Expenditure Blocked Invoice Use x-Ref Ready To Pay File MATCH From X-Ref Confirmation APVM(Prevalidation) PPVM(Prevalidation) Invoice PIIN-CLIN-SLIN PIIN CLIN SLIN PR PR LineNumber PR LineFunding ID Receipt Report PIIN CLIN SLIN Invoice PIIN-CLIN-SLIN Obligation Validation Contract Writing System MOCAS System Entitlement Receipt Validation By PIIN CLIN SLIN ReceivingActivity Manual MOCAS System Contract Admin Contract Info PIIN-CLIN-SLIN Invoice PIIN-CLIN-SLIN Material PIIN-CLIN-SLIN WAWF Contract Info PIIN-CLIN-SLIN Contract Info PIIN-CLIN-SLIN WAWF The Vendor EDA Invoice PIIN-CLIN-SLIN Disbursing Outside the ERP Contracting Outside the ERP Goods Receipt and Invoice Receipt Outside the ERP