Orientation Briefing Activity-Based Cost Management The Department of the Interior March 3, 2005

1. Orientation Briefing Activity-Based Cost Management The Department of the InteriorMarch 3, 2005

2. Agenda • Introductory remarks • Project objectives, results and impacts • Project roles/responsibilities • Project timeline and Key milestones • Summary of analysis to date • Project mechanics • Next steps 2

3. Why are we doing this? • To align outputs and activities among the Bureaus and the Department • To better understand what the work really costs and entails, thus enabling resourcing for targeted levels of performance • To assist in Department-wide budget and performance integration (the President and OMB are keeping score) • To provide the Department with sound, fact-based information upon which to make management decisions 3

4. What does this mean for the Bureaus? • Will result in useful program management tool • Will provide information to assist in better justification of funding requests to Congress • Allows flexibility over Bureau-level detail while maintaining consistency at the Department level (note: Dept will work with Bureaus to ensure consistency in defining similar activities and linkage to DOI activities is maintained) 4

5. "Getting to Green" in Budget & Performance Integration Executive Branch Management Scorecard Current Status as of December 31, 2004 Human Capital Competitive Sourcing Financial Perf. E-Gov Budget/Perf. Integration INTERIOR • What it takes to "get to green…." • Annual budget and performance documents incorporate measures identified in PART • Report the full cost of achieving performance goals accurately in budget and performance documents and can accurately estimate the marginal cost (+/- 10%) of changing performance goals • PART ratings and performance information are used consistently to justify funding requests, management actions, and legislative proposals 5

6. "Getting to Green" in Improved Financial Performance Executive Branch Management Scorecard Current Status as of December 31, 2004 Human Capital Competitive Sourcing Financial Perf. E-Gov Budget/Perf. Integration INTERIOR • What it takes to "get to green…." • Accurate and timely financial information that is used by management to inform decision-making and drive results in key areas of operations • Implementing a plan to continuously expand the scope of its routine data use to inform management decision-making in additional areas of operations 6

7. What constitutes success? • Having cost information that is timely and reliable for managing programs • Having a repeatableprocess to better understand Department-wide costs, realign resources, or manage operations • Having a clear, consistentlinkage of Bureau activities and outputs to Dept activities and outputs 7

8. Project objectives, results, and impacts Objectives • Impacts • Understanding the full cost of providing goods and services to customers • Cost information for efficient and effective program management • Cause-and-effect relationships to aid in budget justifications • Meet PMA requirements for BPI Results • Standard, stable hierarchical structure linked to FBMS • Consistent, repeatable ABC/M structure • Visibility into enterprise-wide cost & performance across all Bureaus and Dept • Ability to calculate marginal costing of outputs • Consistency with the BRM Develop DOI IDEF model Analyze model for consistency Resolve issues & revise model Reconcile activity mappings w/ BRM Align Bureau and Dept goals & measures 8

9. Aligning Bureau and DOI activities and outputs with end-outcome goals and mission components DOI Output: Trails constructed Trails constructed, e.g. Trails constructed, e.g. Trails constructed, e.g. Trails constructed, e.g. Bureau Outputs 9

10. Alignment of Bureau outputs to DOI outputs Scenario 1 Scenario 2 Scenario 3 Scenario 4 10

11. Consistency in mapping DOI Activity A DOI Activity B BLM Activity A BOR Activity A OSM Activity B BIA Activity B FWS Activity A FWS Activity A1 NPS Activity A Consistent Consistent Inconsistent • Validate mapping • Verify Bureau-unique • Realign • Acknowledge inconsistency 11

12. Project roles and responsibilities Project Sponsor Nina Rose Hatfield • Communicate benefits of project to Department and Bureaus • Have visible presence as sponsor Project Champions Dorothy Sugiyama Richard Beck • Resolve issues • Neutralize barriers • Invite workshop participants ABC Steering Committee /AOT GT Project Team • Develop IDEF model • Evaluate consistencies/Draft report • Facilitate workshops • Participate in workshops (AOT) • Reach consensus on mapping (AOT) • Resolve issues (Steering Cmte) 12

13. Project governance Can champion resolve? Unresolved issues brought to Champion Champion resolves Yes No Can AOT resolve? AOT resolves Yes No Can Strng Committee resolve? Steering Committee resolves Yes Sponsor resolves No 13

14. Project timelines/Key milestones Standard cross-walk from Bureaus to DOI by August 15th • Feb – Apr: Develop IDEF model; assess consistency; draft report • Apr – July: Conduct workshops • Aug 15th Standard cross-walk from Bureaus to DOI • Aug – Sep: Reconcile mappings to BRM 14

15. Summary of analysis as of Feb 25: 315 activities analyzed (<10% of 4300 total) • Of 315 activities, 179 (57%) are undefined • Of the 136 (43%) activities that are defined: • 67 (49%) are consistent • 44 (32%) are inconsistent • 89 (65%) have no outputs identified • 102 (32%) duplicates * Activities deemed insufficient may also be marked consistent 15

16. Issue resolution format: Recommendations to date can be grouped into six basic categories of issues 16

17. Initial findings • A DOI activity with only one subordinate Bureau activity is not sufficient to stand alone (unless deemed necessary to track at the Department level) • Minimum children required to stand alone should be three (materiality) • DOI activity should be subsumed under another DOI activity • Child activity should be reassigned in accordance with the DOI activity • Most frequent trend so far is insufficient information (definitions) • Second most frequent trend is outputs that require more work, but resolution should be quick 17

18. Issue resolution mechanics • Workshops (where required) • Structure • Driven by results of initial cross-walk assessment • Adhere to schedule • Reserve non-scheduled discussions for "parking lot" • Reach consensus on mapping, if not unanimity Consensus:n. "an opinion or position reached by a group as a whole; general agreement or accord" • Participants • Applicable Bureau AOT member(s) • Applicable program managers and staff • "Strawman" Bureau-to-DOI activity crosswalk • Ground rules and expectations • Open-mindedness • Consistent participation when required • Components • Workshops • Meetings • Collaborative tools 18

19. Next steps • Build the as-is activity model (IDEF) • Assess consistency and trends across Department • Draft report • Meet with Bureau Deputies and ABC Staff • Identify and schedule workshops 19

20. Questions 20