NSF Business & Operations Advisory Committee Meeting NSF Business Analysis Project Status

1. NSF Business & Operations Advisory Committee MeetingNSF Business Analysis Project Status Arlington, VA October 22, 2003 This document is confidential and has been developed by Booz Allen Hamilton solely for the use and information of the client to whom it is addressed

2. Table of Contents • Project Overview • Organizational Context and Case for Change • Key Findings and Recommendations • Business Processes • Tools and Technologies • Human Capital • Business Framework Assessment • Next Steps

3. The Business Analysis project is designed to enhance NSF’s position in leading the advancement of U.S. science and engineering research and education • The Business Analysis project is driving improvements in key areas* • Business Processes – effective, efficient, strategically aligned business processes that integrate and capitalize on the agency’s human capital and technology resources • Tools and Technologies – flexible, reliable, state-of-the-art tools and technologies designed to support the agency’s mission, business processes, staff and customers • Human Capital – a diverse, agile, results-oriented team of NSF knowledge workers committed to enabling the agency’s mission and to expanding their capabilities • The Business Analysis project is addressing NSF’s growing requirements and is determining if NSF should … • Maintain status quo • Make incremental improvements • Fundamentally change its core and supporting business processes * Identified in the NSF Administration and Management (A&M) Strategic Plan, April, 2002

4. The approach will result in an integrated “roadmap” for NSF’s future success Completed Ongoing Task 2: Business Framework Assessment Task 4: NSF Business Process Analysis/ Plan Gap Analysis • Business Context • Stakeholder Analysis • Visioning Sessions • Evaluation Criteria Recommended Actions • - Outputs: >>10,000 • grants managed • ($10B +) • Outcomes: results • of research • Inputs: • FTE’s • Funding • Strategic Direction Reviewing/ awarding increasingly complex, multi-disciplinary grants (against Process Scenarios) Task 3: NSF Current Environment Assessment Overall Performance Review/Award Grants, Manage Awards, Oversee Large Infrastructure Projects • Inputs: • 1,300 FTEs • $4.8B Funding • Strategic Direction • - Outputs: 10,000 • grants managed • Outcomes: results • of research Business Process Scenarios Task 5: Human Capital Management Plan • Business Process Human Capital Technologies and Tools Task 6: Technologies and Tools Enterprise Architecture & Plan Task 1: Project Plan

5. Quality Assurance Quality Assurance Review Board Review Board Jack Mayer Abe Zwany Kathleen Dyer Herbert MacArthur Cheryl Thorpe The Business Analysis project is providing findings and recommendations to NSF senior leadership NSF Senior Leadership: • Director/Deputy Director • Assistant Directors • NSB Committee on Strategy and Budget • Business & Operations Advisory Committee (BOAC) • Senior Management Integration Group (SMIG) • Advisory Committee for GPRA Performance Assessment (ACGPRA) • Management Control Committee NSF Senior Leadership Business Analysis Steering Committee (BASC) Tom Miller (PM) Joe Burt (COTR) • Business Analysis Steering Committee (BASC): • Machi Dilworth (BIO/DBI) • Andrea Norris (IRM/DIS) • Altie Metcalf (OPP/OD) • Craig Robinson (BFA/BD) • Martha Rubenstein (BFA/BD) • Debbie Crawford (CISE/OAD) • George Strawn (IRM/DIS) • Marilyn Dickman (IRM/HRM) • John Yellen (SBE/BCS) • Deborah Young (ENG) NSF Business Process Team Altie Metcalf NSF Human Capital Team Marilyn Dickman NSF Tools and Technology Team Andrea Norris Business Processes Business Processes Technologies Information Human Capital Team Human Capital Team Team Team Technology Team & Tools Team Booz Allen Project Team Includes: • Technical Team • Project Management • Quality Assurance Review Board Dr. Lori Zukin Dr. Lori Zukin David Beaupre Tim Koch Matt Newman Bill DeSalvo Team Lead Team Lead Team Lead Team Lead Team Lead Team Lead Human Capital Human Capital Business Processes Business Processes Information Technology Technologies & Tools Subject Matter Experts Subject Matter Experts Subject Matter Experts Subject Matter Experts Subject Matter Experts Subject Matter Experts

6. Projected Task Deliverables through September 2003 Deliverables Sep 03 • Project Plan • Communications Plan • Business Framework Assessment • Current (Baseline) Environment • Business Process and Plan • Human Capital Mgt Plan • IT Implementation Plan & Enterprise Architecture • Initial and Final Report Sep 03 Sep 03 Delivered Early Delivered Early

7. 1. Project Plan (Quarterly or as needed updates) 1. Project Plan 2. Business Framework NSF Business Analysis is transitioning from documenting the current environment to developing future scenarios based on findings and recommendations contained in this report 09/30/03 Start Date: 6/26/02 Monthly Status Reports, Interim Analysis, and Business Integration Monthly Status Reports and Project Management Controls 3. Current Environment 4. Business Process Analysis and Plan 4. Business Analysis 5. Human Capital Management Plan 5. Human Capital Management Plan 6. IT Implementation & Enterprise Architecture 6. IT Implementation & Enterprise Architecture Final Report 7. Final Report End Date: 9/30/05 FY2002 FY2003 FY2004 FY2005

8. Table of Contents • Project Background • Organizational Context and Case for Change • Key Findings and Recommendations • Business Processes • Tools and Technologies • Human Capital • Business Framework Assessment • Next Steps

9. NSF interacts within a complex environment consisting of public, private and non-profit sector partners NSF’s STAKEHOLDERS Societal Partners Broader Society Award Recipients & Program Beneficiaries Oversight Federal Government Congress Researchers & Educators Private Funding Groups OMB Academic Institutions Science Interest Groups OIG Research&Education Centers GAO Research&Education Fellows School Districts Policy and Advisory Nonprofit Organizations NSB State & Local Agents OSTP Collaborators Federal Research Agencies Small Businesses NSF Advisory Committees International Researchers Review Panels State & Local Agents International Science Organizations Source: Booz Allen Hamilton and Business Framework working group analysis

10. NSF faces several key administration and management challenges Summary of Key Challenges Increased Federal Oversight Shifts in Strategic Direction Towards More Collaboration Demands for Funds Continue to Increase Expanded Use of Technology Changes in Workforce Composition Source: Booz Allen Hamilton analysis. See appendices for additional detail.

11. Several attributes of the organization distinguish NSF from other agencies Source: Booz Allen Hamilton Analysis. See appendices for additional analysis

12. Based on NSF’s key challenges, some of NSF’s organizational attributes will require attention as the agency continues to grow Source: Booz Allen Hamilton Analysis. See appendices for additional analysis

13. NSF is effective in managing its business; however, the baseline analysis identified significant opportunities for improvement to help manage future growth Source: Booz Allen Hamilton Analysis. See appendices for additional analysis

14. Table of Contents • Project Background • Organizational Context and Case for Change • Key Findings and Recommendations • Business Processes • Tools and Technologies • Human Capital • Business Framework Assessment • Next Steps

15. Integrated Process Teams examined (5) of NSF’s core processes NSF Value Chain Strategic Planning Program Development Resource Allocation Merit Review Award Management & Oversight Performance Assessment Processes Examined Knowledge Management : Business Analysis Processes Examined Data Collection Activities Initial Interviews Internal Doc Reviews External Reports Data Mining Focus Groups 1-on-1 Interviews Stakeholder Interviews Applicant Survey Team Exercises Process Baseline Community Requirements Analysis “Quick” Wins Long-Term Opportunities • Can the opportunity area be addressed in the short-term? • Will the opportunity positively impact the scientific community or internal business operations? • Can the opportunity be addressed in the long-term? • Does the opportunity have strategic value? • Will the opportunity positively impact the scientific community or internal business operations? Areas for Improvement

16. With an understanding of NSF’s current environment, several opportunity areas emerged in the analysis of the core processes Future Scenario Drivers Increase in Demand for Funds Increase in Multidisciplinary Research Further Automation of Processes Increased Federal Oversight and Emphasis on Performance Management Merit Review Award Management & Oversight Performance Assessment & Accountability Resource Allocation Knowledge Management Processes Examined Process Improvements to Reduce Workload Improving Reviewer Community Management Developing a Capability for NSF-Level Coordination & Collaboration Greater Internal Performance Management Required for Growth Addressing the Timing of Commitments and Obligations Facilitating Achieving Organizational Excellence Goals Areas of Opportunity

17. In merit review, the increasing volume and complexity of proposals requires NSF to re-think how it conducts this core process Merit Review Award Management & Oversight Performance Assessment & Accountability Resource Allocation Knowledge Management

18. In the future, NSF must formalize the criteria for how awards are managed and decide how best to leverage the project reporting system Merit Review Award Management & Oversight Performance Assessment & Accountability Resource Allocation Knowledge Management

19. In order to effectively grow, NSF must more pro-actively manage its administration and management Merit Review Award Management & Oversight Performance Assessment & Accountability Resource Allocation Knowledge Management

20. The resource allocation process can be improved by formalizing the priority setting process, exploring alternative technologies for budget formulation, and better managing the timing of its commitments Merit Review Award Management & Oversight Performance Assessment & Accountability Resource Allocation Knowledge Management

21. Table of Contents • Project Background • Organizational Context and Case for Change • Key Findings and Recommendations • Business Processes • Tools and Technologies • Human Capital • Business Framework Assessment • Next Steps

22. Enterprise Architecture (EA) practices take a holistic view of an organization’s business processes, human capital and technology The mission, vision, goals & objectives. Identification of all business processes, information flows, and data required to support the business requirements Strategy & Business Processes The internal and external people and institutions that interact with the organization through the business functions and the applications, data and infrastructure that support them Human Capital Technology Infrastructure The applications, data and technical infrastructure that support the Agency’s business areas through the creation and manipulation of information or data A common misconception is that EAs just describe an organization’s technology

23. An Enterprise Architecture typically consists of a baseline architecture, a target architecture and an implementation plan • Baseline: a snapshot of an organization’s current business processes, human capital and technology • Target: a vision and description of the organization at some future point (in NSF’s case, 2 to 5 years) based on: • Business Analysis scenario design • Human Capital Management Plan • IT Target Architecture • Implementation Plan: the probable path from the baseline to the target that can include any number of “convergence architectures” • Convergence architecture: points in the implementation plan at which significant baseline features are converted/transitioned to target features

24. Analysis of NSF’s baseline and target architecture has revealed several possible improvements in the areas of computing environment, strategic information assets and IT Operations Computing Environment Strategic Information Assets IT Operations and Staff IT Infrastructure Applications & Technology

25. Analysis of NSF’s baseline and target architecture has revealed several possible improvements in the area of IT Infrastructure and Applications & Technology Computing Environment NSF Progress Strategic Information Assets IT Operations and Staff NSF Progress IT Infrastructure NSF Progress Applications & Technology

26. Table of Contents • Project Background • Organizational Context and Case for Change • Key Findings and Recommendations • Business Processes • Tools and Technologies • Human Capital • Business Framework Assessment • Next Steps

27. The Human Capital baseline included four work streams Description NSF’s Human Capital Baseline • What are the characteristics of NSF’s workforce? • What types of work is NSF doing? • How is this work distributed? • What types of competencies are required to do this work? • How are we selecting, developing, evaluating, compensating, and rewarding those people who do the work? • Assessment of current workforce size, composition, and characteristics • Identification of historical trends to help project future workforce characteristics Workforce Supply Workload Analysis • Assessment of volume and distribution of workload based on organization-wide workload survey • Identification and definition of the general and technical competencies required for NSF positions/job families Competency Modeling • Evaluation of NSF human capital management at both the organizational and HRM levels. Uses the Human Capital (HC) Lifecycle as a guide Human Capital Management Review

28. The information from the baseline served as input into an additional human capital work stream, NSF’s Human Capital Management Plan (HCMP) • The NSF Human Capital Management Plan is a strategic plan for NSF that provides an actionable “roadmap” and direction for improving human capital management within NSF and within the HRM Division • The Draft HCMP, Version 1.0 was informed by the most recent available data on NSF’s baseline • A working group with broad NSF representation developed the HCMP between May and September 2003 • The working group was composed of Administrative Officers, Division Directors, Program Managers, a Deputy Assistant Director, representatives of the Division of Human Resource Management, the union, and multiple Directorates/Offices including: CISE, BFA, IRM, EHR, BIO, MPS, and OD • Booz Allen developed the HCMP concurrently with the Baseline HC Review in order to complete an initial draft by September 30, 2003 (originally the HCMP was scheduled to be developed after the Baseline HC Review) • As available, findings from the HC review were presented during relevant HCMP team meetings to inform the team on the “current state” of human capital • Findings were validated and refined as necessary, and were used to guide the development of corresponding action strategies

29. NSF should explore using the workforce supply analysis to informthe development of future target workforce objectives, and to identify gaps between current supply and future workforce requirements Workforce Supply Competency Modeling HR Practices: Foundational Issues HR Practices: Operational Issues

30. NSF is working to improve the strategic and operational management of its human capital by developing a competency-based HR system that links business strategy to individual performance Workforce Supply Competency Modeling HR Practices: Foundational Issues HR Practices: Operational Issues

31. NSF should continue to align its business strategies with human capital improvements and clarify and communicate HC management strategy and responsibilities Workforce Supply NSF Progress NSF Progress Competency Modeling HCMP Action HR Practices: Foundational Issues NSF Progress HR Practices: Operational Issues

32. NSF should explore creating a workforce plan / blueprint to determine future workforce size, composition, and mix Workforce Supply HCMP Action Competency Modeling HCMP Action HR Practices: Foundational Issues HCMP Action HR Practices: Operational Issues

33. Table of Contents • Project Background • Organizational Context and Case for Change • Key Findings and Recommendations • Business Processes • Tools and Technologies • Human Capital • Business Framework Assessment • Next Steps

34. By developing evaluation criteria and ranking NSF against these criteria, the Business Framework Assessment working group found areas for improvement in future business models Evaluation Criteria Current Position Weak Strong Evaluation Criteria Description Provide effective and responsible stewardship of the public trust Increase responsiveness 1 2 3 4 5 Foster excellence and innovation in S&ER&E Drive excellence 1 2 3 4 5 Explore and promote high risk forefront S&ER&E Promote agility 1 2 3 4 5 Attract, develop, retain and maximize the impact of a talented workforce Build workforce 1 2 3 4 5 Meet changing needs and requirements through agility and innovation Foster innovation 1 2 3 4 5 Instill and continually reinforce NSF core values ? Reinforce core values NA 2 3 4 5 Source: Generated by Business Framework Assessment working group, September 9, 2003

35. NSF highlighted key areas where current business processes do not meet future needs – linking planning to resource allocation and performance was listed as critical Holding Co. Strat. Oversight Active Mgmt Op. Involved Implications for Design N/A Findings Lacking critical linkage between planning, RA and PA&A processes With greater oversight and accountability NSF will have the difficult task of justifying how it has chosen to spend its budget based upon its strategic goals, performance and budget allocation targets. NSF should have a core business process which links RA, PA&A and strategic goals. Strategic Leadership NSF does not have a core values statement (NSF has mission statement) As NSF grows it will have in place a set of guiding principles in the form of its core values that will allow NSF to never loose sight of its most important attributes. It will also provide a vehicle for ensuring organizational integrity . NSF should have a core values statement shared across organization Identity and Values Performance Management The currently PA&A process is retrospective and is not linked to RA process With increased oversight and accountability NSF needs to have a system by which PA&A will feedback directly into the strategic planning, program planning and RA decision making process Critical Focus Required Critical Capabilities NSF currently has training through academy but no developmental planning As NSF continues to grow it will become increasing more dependent upon optimizing human capital potential and given this need NSF should have a developmental plan for each employee and employee category Budget Allocation Lack critical linkage between RA, PA&A and planning processes Without a well defined linkage between RA,PA&A and strategic goals how will NSF decide how to best direct limited resources in the face of greater monetary demands by the S&ER&E community. NSF should have a strategic planning and program planning core business process that links all of the above factors to RA. Processes & Systems NSF does not have a unified IT standard In an environment of increased demand and complexity there will be a need to exploit opportunities to improve organizational efficiency in terms of devising better strategies for shared services in particular NSF should have a unified IT platform Source: Generated by Business Framework Assessment working group, September 23, 2003 and Booz Allen Analysis

36. New Core Processes Strategic Planning Performance Assessment and Accountability Program Planning Award Management and Oversight Resource Allocation Merit Review Strategic and program planning should be the core business processes that link RA, MR, AM&O and PA&A into a robust performance management cycle “Mission Direct” (Core) Processes “Mission Support” Processes* Administrative Mgmt Legislative Creation Financial Mgmt Public Affairs Human Resource Mgmt Regulatory Creation Internal Risk Mgmt Supply Chain Mgmt Knowledge Mgmt Technology Mgmt Source: Business Framework Assessment (e.g., Visioning Sessions and Stakeholder Analysis) Booz Allen analysis and Administration & Management Strategic Plan * These processes are in compliance with OMB Business Reference Model

37. Table of Contents • Project Background • Organizational Context and Case for Change • Key Findings and Recommendations • Business Processes • Tools and Technologies • Human Capital • Business Framework Assessment • Next Steps

38. Where are we going from here? • Preparation for Director/AD briefing on October 28 • Business Process Best practice research, scenario development, and preliminary business case development • Merit Review (MR) • Award Management & Oversight (AMO) • Resource Allocation (RA) • Performance Assessment and Accountability (PA&A) • Human Capital • Workload Survey • Prioritized Human Capital Management Plan (HCMP) • “As Is” Competencies • Finalize HCMP v1 • Task 4 integration • Human Resource Management (HRM) Business Process Reengineering (BPR) • Tools and Technologies • Develop initial “Integrated IT Implementation Plan” • Update Enterprise Architecture • Develop IT Business Cases • Task 4 Integration