Project Imperative

1. Project Imperative

2. Opening Remarks

3. Background • NFC operates as one of five Federal Human Resources Line of Business (HR LOB) providers • NFC services USDA and 172 other Federal organizations in all three Federal branches of the Government • Legacy Payroll/Personnel System (PPS) implemented in 1983 • Based on mainframe technology (COBOL, IDMS/DC, and ADS/O programming) • 25 million-plus lines of code resulting from continuously modifying complex source code to accommodate USDA and other agency-unique payroll and personnel resource requirements • Approaching the end of its lifecycle The United States Department of Agriculture (USDA) National Finance Center (NFC), located in New Orleans, Louisiana, provides reliable, cost-effective, employee-centric, systems and services to Federal organizations thus allowing its customers to focus on serving this great Nation through their mission delivery.

4. HR Component T & A Component EmpowHR or Customer’s HR System (includes History Correction) System for Time & Attendance Reporting (STAR) NFC EPP Time Manager (Employee daily entry) Front-end System Interface (FESI) Customer’s T&A System Entry, Processing, Inquiry and Correction (EPIC) (includes History Correction) Nightly Batch Edits (PINE, PEPL) T&A Batch Edits (TIME) T&A Suspense Correction at NFC • Employee Self Service Sources • (NFC’s EPP and Employee • Express) • OPM Benefits Portal • Third Party vendors (SHPS) Position Management System Online (PMSO) Real Time Leave Update Process (TINQ) Inquiry (IRIS/PINQ) Reporting Component • NFC Reporting • Reporting Center (Pre-defined • and user customized reports) • CULPRPT (Standard pre • formatted reports) • FOCUS (Adhoc reports) • RFQS (Standard form and • tickler report/forms) End of Pay Period Processes (BEAR) Standard Reports Interfaces of HR/payroll & employee data to agencies Employee Personal Page (EPP) Payroll/Personnel System Payroll/Personnel Corporate Database Payroll Component Pay Computation (PAYE) Retirement Processing (RETM) Statement of Earnings & Leave (EARN) Payroll Accounting (PACS) Adjustment Processing (ADJP) • Special Payments Processing System • Garnishments • Back Pay • FERCCA • Other Special • Payments W2 • Interface/Reporting • Federal, State, and • Local Tax Authorities • Third Party Vendors • OPM • Treasury • Unions • Other entities Accounting Interfaces to Agencies Employee Billings & Collections (ABCO) Treasury Offset Program (TOPS) (Uncollected employee debts)

5. Drivers for Change • NFC is proceeding with the Pay Engine Project in order to achieve multiple strategic drivers: • Address legacy system risks: NFC’s existing payroll system is more than 27 years old and is facing technological obsolescence, process inefficiencies, and a diminishing skill-base with the requisite skills to maintain the system • Support the mission of NFC: NFC plans to leverage current industry best practices and new technologies to realize many organizational and customer benefit opportunities • Support the mission of NFC’s customers: NFC intends to procure and implement a solution enhancing its ability to continue to service its more than 172 Federal customers in a timely, efficient, and effective manner • Meet Legislative, OPM, OMB, Departmental, and Management Mandates: Pay Engine will result in a cost-effective, functionally rich platform for NFC and its customers to fulfill the vision for the HR LOB, the migration to cloud computing platforms, and a foundation which can be leveraged by other approved payroll providers. NFC is committed to providing its customers with the highest quality services and continually strives to improve and enhance its service offerings. The Pay Engine Project allows NFC to address challenges of the current system and position itself to provide unique operational and functional benefits to its customers.

6. Vision • NFC completed a thorough current state feasibility study, market research, and alternatives analysis to determine the best modernization approach • NFC proposes Alternative 1: Single, Integrated Solution (a commercial-off-the-shelf (COTS) solution with integrated HR, Payroll, and T&A applications providing real-time updates)

7. Vision • The Single, Integrated Solution most effectively addresses NFC’s Federal Payroll Modernization Drivers:

8. Conceptual Approach • Conceptual approach in terms of product can be outlined as follows: • Replace basic HR recordkeeping, Gross Pay, Net Pay, and Employee Debt Management, and Reporting capabilities • Continue to allow customers to use alternative front-end applications, assuming capability exists • For example, Treasury’s HR Connect • Existing COTS applications have multiple modules that collectively accomplish targeted functionality • Goal is to have a contract vehicle to acquire modules for each customer based on their concept of operations (with or without own front-end applications) • Key decision criteria includes: • Security/Access Administration • Federalization • Functionality • Rules-Based Approach • Cloud Capability

9. HR Component T & A Component EmpowHR or Customer’s HR System (includes History Correction) System for Time & Attendance Reporting (STAR) NFC EPP Time Manager (Employee daily entry) Front-end System Interface (FESI) Customer’s T&A System Entry, Processing, Inquiry and Correction (EPIC) (includes History Correction) Nightly Batch Edits (PINE, PEPL) T&A Batch Edits (TIME) T&A Suspense Correction at NFC • Employee Self Service Sources • (NFC’s EPP and Employee • Express) • OPM Benefits Portal • Third Party vendors (SHPS) Position Management System Online (PMSO) Real Time Leave Update Process (TINQ) Inquiry (IRIS/PINQ) Reporting Component • NFC Reporting • Reporting Center (Pre-defined • and user customized reports) • CULPRPT (Standard pre • formatted reports) • FOCUS (Adhoc reports) • RFQS (Standard form and • tickler report/forms) End of Pay Period Processes (BEAR) Standard Reports Interfaces of HR/payroll & employee data to agencies Employee Personal Page (EPP) Pay Engine System • HR Component • EmpowHR or compatible HRIS • Organization/Position Management • PAR Processing • Staff Acquisition/On-Boarding • Performance Management • Benefits Management/Benefits Processing • Human Resource Development • Employee Relations • Labor Relations • Separation Management/Off-Boarding • Self Service • OPM Portal • Third Party Provider • T & A Component • webTA or Integrated Component • Time and Attendance • Leave Management • Payroll/Project Accounting • Resource Scheduling Pay Engine Payroll/Personnel Corporate Database • Reporting Component • Data Warehouse and Reporting Systems • HR Data Reporting • Payroll Reporting • Digital Asset Services • Accounting Reporting • Interface/Reporting • Business Analytics/Ad-Hoc Reporting • Manager Dashboard • Employee Dashboard • Payroll Component • Pay Engine & Debt Management Systems • Compensation Management • Pay Computation • Historical Pay Adjustments • Manual Pay • Special Employee Payments • Garnishments • Third Party Debts • Payroll Disbursing Files • Tax Reporting • Payroll Inquiry • Employee Billings and Collections • Federal/Treasury Offsets Payroll Component Pay Computation (PAYE) Retirement Processing (RETM) Statement of Earnings & Leave (EARN) Payroll Accounting (PACS) Adjustment Processing (ADJP) • Special Payments Processing System • Garnishments • Back Pay • FERCCA • Other Special • Payments W2 • Interface/Reporting • Federal, State, and • Local Tax Authorities • Third Party Vendors • OPM • Treasury • Unions • Other entities Accounting Interfaces to Agencies Employee Billings & Collections (ABCO) Treasury Offset Program (TOPS) (Uncollected employee debts)

10. Voice of the Customer

11. Initiative Criticality • NFC faces a growing possibility of failure associated with maintaining the aging legacy systems over the long-term • Increases costs and effort required to maintain current systems portfolio • Augments difficulties in maintaining compliance with changes in personnel and payroll management regulations • Relies heavily on a diminishing skill-base • Increases risk of operational failure, which directly impacts NFC and its stakeholders, representing 35% of the Federal Civilian Workforce Maintaining status-quo is not a viable option.

12. Time Sensitivity • Project based on an aggressive but achievable timeline starting sooner rather than later and requiring proper risk management • Adherence to timeline is contingent upon business case and funding approval • The anticipated timeframe is depicted below: Customer Go-Live

13. Long-term Focus • A Single, Integrated Solution has the highest return-on-investment • NFC increases potential to achieve significant long-term benefits • Supports OMB’s Government-wide vision of the HR LOB • Creates a platform for streamlining and expanding Federal HR capabilities • Provides the flexibility to meet changing Federal and customer requirements • Reduces long-term Government costs related to upgrades, changes, and O&M by utilizing a single programming language • Provides technology for Cloud Computing and cross-cutting Federal Government business platforms • Success of Pay Engine Project requires ongoing investment • Change management and training • Continuous quality improvement • Business process re-engineering

14. Customer Support • Majority of NFC customers fully support the Pay Engine concept • Customers do not have the money to fund the initiatives • Specific appropriated funding is the only viable path forward • Customers require ongoing communications, project updates, and risk mitigation activities to support timely and successful implementation

15. Summary • NFC and its customers have prioritized the Pay Engine Project based on multiple factors: • Initiative Criticality: Pay Engine represents a critical initiative for addressing legacy system risks and challenges • Time Sensitivity: NFC proposes an aggressive but achievable timeline requiring proper risk management • Long-term Focus: Successful implementation will allow NFC and its customers to realize many long-term organizational and functional benefits • Customer Support: Majority of NFC’s customers fully support the Pay Engine Project The Pay Engine Project is not an option. It is a necessity in order for NFC to address existing challenges and enhance its ability to serve customers.