Cost ManagementCertificate Course (CMCC)Naval Postgraduate School
CMCC 12-5 Week 3
Cost Management and U.S. Army
Section II: General FundEnterprise Business System
Frank A. DiStasio
19-20 March 2012
© DISTASIO ASSOCIATES, LTD
Course Outline
• Section I: Cost Management– Why cost management?– Focus– Concept of Operation– Analysis– Exercise
• Section II: Cost Management and GFEBS– Development– Implementation
• Section III: Using Cost Management– Cost culture– Cost controlling
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General Fund Enterprise Business System (GFEBS)
Goals:
•Provide decision support information to sustain Army warfighting capability
•Provide analytic data and tools to support the Army enterprise
•Reduce the cost of business operations
•Improve accountability and stewardship
Enable decision-makers across the Army to – • Better capitalize on the resources we have• Better determine and justify the resources we need
As of 5 Jan 2010
OSD approved in May 2005
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Secretary And Chief Of Staff Of The Army Testimony
“… we must give our people the essential tools that will enable them to carry out their cost management responsibilities. Toward this end, we have fielded the General Fund Enterprise Business System (GFEBS) to more than 11,000 users at 14 major installations. As reported by the Government Accountability Office, GFEBS development is on schedule and on budget. Much more than an accounting system, GFEBS is the Army’s new business system. It gives managers a greatly improved capability to manage the cost, schedule and performance of their programs and, at the same time, is the centerpiece in our progress toward full auditability of our financial statements.”
The Honorable John M. McHugh, Secretary Of The Army andGeneral Martin E. Dempsey, Chief Of Staff United States Army,
March 2011, Army Posture Statement
The Honorable John M. McHugh, Secretary Of The Army andGeneral Martin E. Dempsey, Chief Of Staff United States Army,
March 2011, Army Posture Statement
2011
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Why Continuing Leadership Emphasis? Well-Informed Decisions Begin With Good Data
• Situation:– Army leaders and managers need to make well-informed and timely
decisions – Most decisions impact across many functions and organizations– Well-informed decisions require relevant, accurate and timely analyses
that integrate data from many functional areas
• Requirement: – Move to modern systems that include open, horizontally integrated data
to enable better informed decisions; including: General Fund Enterprise Business System (GFEBS) Logistics Modernization Program (LMP) Global Combat Support System-Army (GCSS-A) Integrated Personnel & Pay System (IPPS-A)
GFEBS integrates data from across the Army
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Where We Are and … Where We Are Going
As of 31 Dec 2009
GFEBS Solution
Involves maintaining many systems Requires many costly interfaces Requires entering data in several systems Inhibits efficient sharing of data Impedes producing comprehensive and accurate decision data Hinders responding timely to questions Requires time-consuming and costly reconciliations
Current Situation
CCSS AMCISS ETOS RATS
MDMS
MEPRS DTRS EFR WAWF WinS
DTRS-A
DefenseMilitar...
EDM
EDA
DCWCHCS GSA
systemDLA LogBSM...
DNCS/DAAS
ItalianLoca...
KoreaPay...
DCPS(T&A)
OtherForei...
DIFS CISIL CEFTDCAS
DCD
LMP
ADS ULNTAP CCR
PADDS
URL
MOCAS
TPOCS EFR
DEBX
PowerTrack
PBAS-OC
DPAS SCTIMSPBAS-
FDULNAPS
IULNATI
S
TDYTrave...
TAMMIS SARSS
SRD1 (orSTANFINS-R)
SDS HAS
SABSIFS
PPBEEnter...
EAS
DMLSS TDYTrave...
I2S GOALSII
DCPDSODC PaySystem
DIMHRS DDS AFMIS
Predator
ATLAS
STANFINSDJAS
STARSOne Pay
Fadtool
MSAcce...GTS
DbCAS/WebCAS
DARSISBFMIS
MED...IPAC
Wizard
SOMARDS
ODS CRP SCRT
OLRV
SLAD
ARCS
ASK-FM
PARSS
On-BaseACQUI LI NE/ PRWeb
AVPRATCAMS-ME
RSBUX VPIS AORS
CAPS
AFCOS 218DBR FADSIMA
ONLINE
ARMS
AMDBES
WSMISRM
Onlin...ABIF CEEMIS TBS CBS DUBOSDCPS CAB
HQARS
TROUPERS
PRIDE RLAS
PROBE
TBG
CMS2SLAMIS
(G8)
ATAAPS FPSIBRIMSBRIX
TSIMS
APCSNASKDDRS DTS
AWPS
FC/SSF
DSOM
SOFIMS RINO OH OFD CMOS CIMS DARTS DASIS eSTADIS JR
OADatab...
GCSS-A CDS (2) IPAC DEPSfor... DEAMS
DJMS
IATS TWELS IBO DOPS
FMSS FPU
RM On-line... IDSS
FAS ACCPAC
SPS RMS CARE
CEFMS FMSS FPU
FAS (2)
AVKINPUT
CFRS FEDS FPBG PBMS PYF DB RM On-line...
RM On-line...
RM On-line...
ATTCMIS
BISCOSTDI
SEACOBS/EABA...
FFMA FIRST OPA2DBOPA2-SOM...
PAOblig UFRDB WIMSI M ET/ FM SSBS
JUSTI S LNPAYI NT- I TPACIOL
AN
ASARS
BBDBBRAC
FMFM TP MSN DB OTDA
RM On-line...
STAR-PBA
STAR-PBA
CDS WARSAMEDD
PASCOPS
WebTAS
EAS IV
APVM
CT 1081
IMET/FMS SBS
JUSTISLNPAYINT-IT
FMTP
System View (SV) 1System View (SV) 1
SAP
Implements a single web-based system Standardizes processes Armywide Implements standard data structures Records transactions in real-time and provides real-time access to data Integrates financial and non-financial/ performance data from functional areas Applies commercial-off-the-shelf (COTS) Enterprise Resource Planning (ERP) Complies with DoD’s Business Enterprise Architecture (BEA)
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Technical CharacteristicsOf The Army’s GFEBS Solution
• Commercial Off-the-Shelf (COTS)– Configure and not custom-building software– Provides ‘best practices’ inherent in software– Enables system updates and enhancements without re-writing code
• Enterprise Resource Planning (ERP) Systems– Integrates and optimizes business processes across the enterprise– Includes most business processes for an optimized solution– Enables sharing of common data among all business processes
• SAP product– The most widely used ERP solution in the world– Customers include DLA, Navy, NASA, IRS, Wal-Mart and Daimler AG
• Benefits Include --– Complies with over 1,100 accounting and real property requirements– Enables transformation to a cost culture
Capitalizing on COTS and ERP benefits requires
accepting business process changes As of 31 Dec 2009
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General Fund Enterprise Business SystemObjectives
Financial Accounting system:
•Records financial transactions in single system Army-wide
•Complies with statutory & regularity requirements for funds control and accounting
•Includes real property and other asset data for accountability
Cost accounting system:
• Allocates or assigns cost data and provides full cost
• Relates costs to outcomes/outputs/ services and performance
• Enables cost-benefit, comparative, and other cost analyses
• Enables cost planning & control
Management support system:
• Provides visibility of transactions in real time across the Army
• Provides access to continuing data
• Enables analyses
• Supports well-informed decisions to:
Leverage available resources
Improve program & budget decisions
As of 28 April 2011
Estimate of progress:Estimate of progress:
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Transaction IllustrationSimultaneously Updates Related Records
FI – Financial Acct. & Mgmt.
FM – Funds Acct. & Mgmt.
CO – Cost Acct. & Mgmt.
MM – Materials Mgmt. and Procurement
PPE – Property, Plant & Equipment [PM, PS, RE, AA]
SD – Sales & Reimbursables
Transactions Entered
Purchase Request
• FI - None• FM - Commitment• CO - None
Purchase Order
• FI - None• FM - Obligation• CO - None
Goods Receipt
• FI - Expense/AP• FM - Expenditure• CO - Expense
Payment
• FI - AP/Cash• FM - Disbursement• CO - None
Simultaneous Updates
Financial Accounting Compliance Statistics
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98% Full Compliance Self-Assertion
95% “Substantially Compliant” Designation from AAA
91% SFIS CompliantDetermined by DCMO Audit
RPIR Compliantwith BEA 8.0
RIPM ComplianceOSD Evaluation Pending
Cost Accounting CapabilityIncludes
• Implements a standard cost structure for collecting full and comparable data from across the Army
• Includes cost planning, cost analysis and cost control capabilities for use as cost data become available
• Enables cost reporting, reviews and analysis across the Army
• Supports cost management training to develop skilled analysts and to capitalize on cost management capability
• Provides data and tools to enable the Army to institutionalize a “Cost Culture”
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Cost Management applies across the organization
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Cost Accounting Capability Enables Cost Management
PersonnelMilitary -$ / SoldierCivilian -$ / FTEContractor -$ / FTE
Base Support$ / Service$ / Brigade$ / Installation
Training (Ind)$ / Student Tng Day$ / Course Day
Training (Unit)$ / Mile$ / Flying Hour$ / Weapon System
Equipment$ / Brigade -New$ / Brigade -ConversionRatio: Spt $ / Brigade $
Force Generation $ for Reset $ for Ready/Train $ for Available
Heavy
X X
Light Stryker
X
Heavy
Light StrykerXSUSTSUSTSUST
XSUSTSUSTSUST
XBde
Flexible and responsive to Army information needs
Brigade data may be for: • specific brigade • average Bde in command • average Bde across the Army
Functional data may be for: • total cost for school • total cost for course • specific costs of
interest
ARFORGEN data may be for: • specific pool, e.g., Ready • specific function in pool • average Bde in pool
As of 7 Jan 2010
Management Reports
Cost Management ReportUnit Cost ReportCost By Budget and Plan ReportCost By Cum Cost by Non-CumCost By Partners CumCost By Partners Non-CumCost By ActualCost By Real Property
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PP&E ReporterReal Property Inventory ReportUsage of My ObjectsUsage of My Objects (%)Vacancy by Usage TypePortfolio by Regional LocationLease-In by Regional LocationOwned Real Estate by Regional LocationOccupancy Report
HQDA/OA22 FORSCOM
TRADOC USAAC
AMC EUSA SMDC
USARNO
USARSO USARCENT
USARPAC USAREUR
USARAF USAASC
ARCYBER
ATEC USMA
USARC MDW CIDC
MEDCOM NETCOM
IMCOM ARNG
AFRICOM EUCOM
SOUTHCOM JIEDDO
Deployment Schedule By Command And Wave
5% 20% 80% 90% 100%
5% 20% 80% 90% 95% 100%
100%
0.5% 1% 2% 100%
100%
2%
100%
100%
90%
100%
5% 100%
100%
10% 20% 100%
10% 100%
100%
90% 100%
1% 2% 50% 100%
100%
100%
1% 10% 40% 60% 80% 90% 100%
1% 10% 40% 45% 78% 90% 100%
5% 10% 30% 40% 80% 85% 100%
5% 10% 100%
100%
100%
100%
100%
1% 5% 7% 10% 100%
100%
10%
92%
20%
50%
98%
98%
30%
100%98%
We are at 86% of all users
We are at 86% of all users
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Wave 7 Go-Live And Cumulative Deployment Data
• 4,200 additional end users– 39,050 end users cumulative
• 10,280 additional civilian employees for payroll– 168,232 cumulative civilian employees for payroll
• 343 additional Funds Centers – cumulative: 1,506• 12,120 additional Cost Centers – cumulative: 51,152• 22 additional locations
– 180 total locations
• 6 additional commands went fully operational– FORSCOM, TRADOC, USARPAC, USARC, CIDC and
USSOUTHCOM
– 13 commands were fully operational: OA22, Accession Command, EUSA, USARNO, USARSO, USAREUR, USARAF, ARCYBER, USMA, MDW ARNG AFRICOM and EUCOM
• $ 24.5 billion allotted (as of 2nd Quarter FY12)
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End Users -- Most Are NOT From Resource Management Office
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GFEBS is a transaction based system andthe preponderance of transactions begin in operational organizations
End Users
Most common positions of nearly 40,000
• Accountant • Budget Analyst• Engineer & Scientist• Health Specialist• IT Specialists• Legal Admin• Logistics Supervisor• Operations Analyst
• Technician
• Program Manager • Property Manager• Purchasing Agent• Quality Assurance
Specialist • Resource Manager• Staff Assistant• Supply
NOTE: As of Wave 7 October 2011
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ImplementationIs Not The End Of Development
• O&S examples– Establishing internal “help desk” capability at commands
• E.g.,OA-22, ARNG, MEDCOM, FORSCOM and DFAS
– Redesigning Purchase Request workflow and MIPR process
• Refining and enhancing initial functionality– Public works: Day-in-the-life ‘end-to-end’ cases– Project systems: developing for acquisition processes– Business Intelligence:
• Improving current reports– Splitting cumulative and non-cumulative
• Adding new reporting capability, e.g., “Cost By” reports
• Future new capabilities– Procure to Pay (P2P) – Sensitive Activities
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General Fund Enterprise Business System Is Transforming the Army
• New system with analytic tools and capabilities
• New business processes– Capitalizes on “best practices” embedded in ERP
• New management structures and data concepts– Single Instance of entering and then sharing data
• New roles, skills and knowledge for end users– Opportunity for individuals to develop skills with state-of-
the-art ERP system and cost management techniques
• Complies with statutory and regularity financial accounting requirements
GFEBS is transforming financial management and management practices in most functions with
the new cost management capability
GFEBS And Army Audit Readiness
“… I've directed the department to cut in half the time it will take to achieve audit readiness for the Statement of Budgetary Resources so that by 2014 we will have the ability to conduct a full-budget audit.
We owe it to the taxpayers to be transparent and accountable for how we spend their dollars.”
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Secretary of Defense Panetta:
Audit readinessre-enforces the case for the GFEBS solution
Achieve Audit Readiness By 2014Assertion And ERP Deployment Timeline
GFEBS waves correspond to deployment at specific sites. “Assert” means Army is ready to be audited in that area. Exams are evaluations by independent public accounting firms.
Notes:
We are here
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The cost accounting features of GFEBS captures cost and related performance data,
and supports cost management
GFEBS And Army Cost Management Concept of Operations
Capture and Valuate Data in GFEBS (CO module)
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General Fund Enterprise Business System Leadership
Mr. Doug Wiltsie Program Executive Officer for Enterprise Information Systems
COL Patrick W. BurdenGFEBS Project Manager
Ms. Kristyn E. JonesDirector, Financial Information Management
Mr. Roger A. PillarDirector, Functional Program
LTC Stephen LockridgeDirector, Deployment & Transformation
As of 12 September 2011
https://wiki.kc.us.army.mil/wiki/Portal:GFEBS
A collaborative team of ASA (FM&C) and PEO-EIS
LTG Joseph E. MartzMilitary Deputy for Budget, Assistant Secretary of the Army (Financial Management & Comptroller)
Robert M. SpeerPrincipal Deputy
Assistant Secretary of the Army (Financial Management & Comptroller)