In Tune with Army Financial ManagementIn Tune with Army Financial Management

Cost Awareness of Financial Operations in Theater

Cost Awareness of Financial Operations in Theater

Army Day 2010Army Day 2010

June 2, 2010June 2, 2010

Steve Bagby - MG Phil McGhee – COL SawyersSteve Bagby - MG Phil McGhee – COL Sawyers

In Tune with Army Financial ManagementIn Tune with Army Financial Management

AgendaAgendaAgendaAgenda

Operationalizing Cost Management Cost Education and Training Cost Management - Policy / Guidance / GFEBS

Support Resource Informed Requirement Processes

USARCENT Financial Management Operations

Financial Management School GFBES Sustainment Training Products Cost Management and Cost Accounting Courses

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In Tune with Army Financial ManagementIn Tune with Army Financial Management

Cost Culture - Cost ManagementCost Culture - Cost Management

Single Use

EstimatedFuture Cost

Cost InformedDecision Making

Cost-BenefitAnalysis

Persistent Use

Expected & Actual Cost

Continuous Improvement

Cost Managed Enterprise

Universal Use

Planned & Actual Cost

Role Based, Org Based,

Output Based Control

Cost Culture

Cost War Cost War High Cost War Full Spectrum

Insurgency Intensity Conflict Operations

Starting here TARGET (some work is being done)

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In Tune with Army Financial ManagementIn Tune with Army Financial Management

Cost Management

Cost Planning

Cost Controlling

Cost Analysis

Cost Accounting

Cost Management

Process

Full Cost Measurement– Accurate, timely and relevant data– Connecting operational output/performance

data to financial data– Allocate Overhead, Unfunded Costs,

Indirect Support

Cost Analysis– Variances– Trends and forecasting– Product, service or activity

cost by expense (labor, material, contracts, etc…)

– Understanding full costs of organizations, operations, products and services

– Comparison Analysis & Benchmarking

Cost Planning– Operational managers

set cost targets and efficiency goals

– Plan cost based on outputs produced

Resource Informed

Decisions– Take action based on

analysis and external demands

– Change targets– Change resources– Change quantity / quality

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In Tune with Army Financial ManagementIn Tune with Army Financial Management

Cost Management EnablersCost Management Enablers

Cost Management 101- Cost Management Overview- Cost Object (ERP) Definitions- Cost Flow Methods- Cost Analysis and Reporting

GFEBS – Cost Management TrainingThese courses are either computer-based or instructor-led training classes to learn how to operate within the GFEBS cost module.

Cost Management Certificate CourseThe program of instruction (POI) is designed to teach the fundamentals of cost management with a view to developing a cadre of Army personnel who are professionally knowledgeable, analytically competent, and personally motivated to serve as proactive change agents within their respective Enterprise line and staff organizations.

Self Study-Cost Management Community of Practice https://www.us.army.mil/suite/page/593701

Cost Management Courses in all Professional Development Programs

0.0

1.0

2.0

3.0

4.0

5.0

Integration with Quality / ProductivityImprovement

Knowledge Sharing/ Best Practices

LeadershipCommitment

WorkforceCompetencies

Acceptance & AttitudeAccountability/ Performance Mgmt

ProcessIntegration

DataQuality

EnterprisePerspective

ARMY COST MANAGEMENTMATURITY MODEL

Version 10: 4 June 2008

Actual Target

Policy & GuidanceTraining (Operational & Resource Mgrs)

Tools

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In Tune with Army Financial ManagementIn Tune with Army Financial Management

Costs Benefits

Cost Informed Decisions

Cost Benefit Analysis

POM / BES

Manning

Equipping

Training

Sustaining

Organizing

Installation

The Value of Cost Benefit Analysis: Supplements professional experience and judgment

with sound analytical techniques Ability to make better resourced-informed decisions Results in a strong “value proposition”

Doctrine

Organization

Training

Materiel

Leadership

Personnel

Facilities

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DoD Resources

Materiel Enterprise

Strategic Partners

FM/Contract Systems

Lean Six Sigma Team

Cost Analyst Team

Banking Team

Mgmt/System Accts

USARCENT Financial Management Operations

Theater FM Initiatives• FM/Contracting systems• Cost culture• Cost of war• FM doctrine

Imperatives• Visibility• Accountability• Transparency• Oversight• Controls

Theater Army Financial Management Report

Link end-to-end processes

Effect major cost drivers

Model and analysis

Lean out inefficiencies

Maximize e-commerce

FY10

Monthly Disbursements$396M

$714M Cost Avoidance $434M Cost Savings $1,148M

91% EFT Payments

Credibility Confidence Trust

9% Cash Payments

Exceptional Stewardship• Performance metrics• Resource informed• Cost savings • Cost avoidance• Process efficiencies• Near cashless Theater

1 % Goal

v2 as of 18 APR10 7

In Tune with Army Financial ManagementIn Tune with Army Financial Management

Principles Cost Act/Mgmt (120 hrs)

Intermediate Cost Act/Mgmt (120 hrs)

Education

Technical Training

Non FM Roles

GFEBS Sustainment Training Products

The US Army Financial Management School will implement GFEBS financial management training products no later than 1 OCT 2011 in order to sustain FM Community knowledge and skills

Reimbursables (20 hrs)

Funds Management (24 hrs)

Spending Chain (50.5 hrs)

Project Systems (8 hrs)

Cost Management (80 hrs)

Financials (80 hrs)

Instructor Led Training Distributed Learning (dL)

GFEBS Essentials (20 hrs)

Training Support Packages

dL Products

GFEBS Material w/in Legacy Courseware

(AIT, NCOES, OES, Functional Courses)

GFEBSPM

Training(53

Courses)

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In Tune with Army Financial ManagementIn Tune with Army Financial Management

Cost Management (CM) Cost Management (CM) within Professional Military Educationwithin Professional Military Education

Course: FM BOLC FMCCCPurpose: • Provide CM foundation.

• Introduce cost concepts and terms. • Describe the Army’s cost culture.• Relate CM to GFEBS capabilities.

• Introduce advanced Cost Accounting and CM concepts. • Cost Benefit Analysis (CBA) case study.• Develop communications skills to influence leaders decisions.

Audience: 2nd Lieutenants Captains

Length: 8 Hours 16 Hours

Content:

• Cost Management (CM)• Cost Culture within the Army• Cost Terms and Concepts • Cost Benefit Analysis (CBA)• Practical Exercise

• Cost Management (CM)• Cost Accounting (CA)• Cost Benefit Analysis (CBA)• Practical Exercise • Cost Decision Briefings• Intensive Group CBA Exercise

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In Tune with Army Financial ManagementIn Tune with Army Financial Management

Cost Management (CM) Cost Management (CM) Functional CoursesFunctional Courses

Course:Principles of

Cost Accounting & Management (PCAM)Intermediate

Cost Accounting & Management(ICAM)

Purpose: • Offer a basic cost management and cost accounting functional course• Provide underlying cost accounting (CA) and CM principles, theories, and application. • Prepare military and DA civilians to leverage CM tools within GFEBS

• Build on the PCAM course and provide more advanced CA and CM concepts.• Provide an increased focus on analysis, reporting, and communication skills.• Provide the knowledge necessary to fully leverage the CM and analytic tools within GFEBS.

Target Audience: SGT, LT, CPT, entry level CP 11 Personnel

SSG, SFC, CPT, mid level CP 11 Personnel

Course Length: 3 Weeks 3 Weeks

Prerequisites: Math dL Prep Course Math dL Prep Course, PCAM

Course Content:

• Cost Management Principles• Cost Term/Concepts• Cost Accounting• Cost Benefit Analysis• Variance Analysis • Practical Exercises

• Cost Management• Cost Accounting • Cost Management Paper• Cost Management Briefings• Cost Benefit Analysis• Intensive Case Studies/Exercises

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In Tune with Army Financial ManagementIn Tune with Army Financial Management

ICAM

• Cost Flow Methods• Analysis and Reporting• Practical Exercises• Complex Case Studies

End State: FM Community possesses the knowledge and skills necessary

to leverage cost management and cost accounting

Cost Management and Cost AccountingCost Management and Cost Accounting“Achieving Readiness at Best Value”

PCAM

• Cost Terms• Cost Concepts• Fundamentals of Cost Acct. and Cost Mgmt• Practical Exercises

CMCC

• Managerial Costing• Operations Management• Cost Control• Organizational Development

Soldier Support Institute Naval Postgraduate School

LT CPT MAJ LTC / COL

Principles of Cost Accounting and Management

IntermediateCost Accounting and Management

Cost Management Certificate Course

SGT SSG SFC MSG / SGM

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