DFAS Transformation

1
DFAS Transformation

• American Society of Military Comptrollers
• Regional Mini-PDI, NCR
• March 2006

2
Agenda

• DFAS What We Do
• DFAS Transformation Vision
• Transformation Blueprint
• People
• Structure
• Process
• Technology
• Information
• Summary

3
DFAS What We Do
Mission Provide accounting and finance services
for the Military Departments and Defense
Agencies.
Sales Service - 1.62B
Scope of Business

• Processed 104 million pay transactions
  (5.9 million people)
• Made 6.9 million travel payments
• Paid 12.6 million commercial invoices
• Posted 127.3 million general ledger transactions
• Managed military retirement and health benefits
  funds (234 billion)
• Made an average of 455 billion in disbursements
  to pay recipients
• Managed 13.5 billion in foreign military sales
  (reimbursed by foreign governments)
• Account for 282 active DoD appropriations

• Military Pay 190.8M
• Civilian Pay 63.8M
• Retiree Pay 52.8M
• Travel Pay 66.3M
• Commercial Pay 178.7M
• Accounting Services 786.6M
• Others 280.9M

People

• 13,830 employees (Civilian and Military)
• Located in
• 30 sites
• 17 states
• 3 countries
• Source HR Flash Report December 2005

4
Transformation Vision
VISION Transforming Today To Be The Trusted
Financial Partner For Tomorrows Warfighter
5
Transformation Vision

• Human Capital Strategy

• BRAC
• Centers of Excellence

• Business Intelligence
• Benchmarking
• Information Security

• Enterprise
• Transition
• Plans
• eCommerce

• High-Performing Organizations
• Lean 6

6
People - Human Capital Strategy

• Succession Planning
• Skills Inventory
• National Security Personnel System (NSPS)
• Implementation is event driven
• Labor relations portions of NSPS delayed due to
  court ruling
• DOD proceeding with Implementation for 11,000
  non-bargaining unit employees in spiral 1.1 in
  April 06.
• DOD intends to appeal decision and is currently
  reviewing options for further deployment in
  spiral 1.2 and 1.3.

7
Structure - 2005 BRAC Law

• Grow the DFAS site at Cleveland, OH, to not less
  than 1,500 Full Time Equivalents (FTEs)
• Grow the DFAS site at Limestone, ME, to not less
  than 600 FTEs
• Grow the DFAS site at Rome, NY, to not less than
  1,000 FTEs
• Maintain not less than the current FTEs1 at the
  DFAS sites at Columbus, OH (2,064 FTEs), and
  Indianapolis, IN (2,632 FTEs)

1 FTEs effective EOM August 2005 (Geographic
Location Report, Military Personnel Report)
8
Structure - Current DFAS Organization
Functional Model
As of Feb. 28, 2005
9
Organizational Structure - January 2006
Client Executives Information Technology Corporate
Resources Internal Review Acquisition Management
Organization Office of General Counsel Chief of
Staff
Director Deputy Director
Office of Strategic Management
Deputy for Strategic Business Management
Deputy for Operations
Sites included Charleston Pensacola Norfolk Japan
Oakland San Diego Pacific
Director Cleveland Site
Director Standards Compliance
Director Policy Performance
Director Transformation
Director Columbus Site
Corporate Accounting Mission Area Director
Sites included Dayton San Bernardino Omaha Limest
one
Director Denver Site
Accounting Operations Mission Area Director
Director Business Requirements Integration
Director Indianapolis Site
Finance Mission Area Director
Sites included Lawton Lexington Orlando Rome Rock
Island Europe San Antonio Seaside Texarkana St
Louis
Disbursing Mission Area Director
Director Kansas City
10
Organizational Structure - FY 2009
Client Executives Information Technology Corporat
e Resources Internal Review Acquisition
Management Organization Office of General
Counsel Chief of Staff
Director Deputy Director
Deputy for Operations
Deputy for Strategic Business Management
Office of Strategic Management
Director Cleveland Site
Director Standards Compliance
Director Policy Performance
Director Transformation
Japan
Corporate Accounting Mission Area Director
Oversight
Director Columbus Site
Accounting Operations Mission Area Director
Limestone
Director Business Requirements Integration
Director Indianapolis Site
Finance Mission Area Director
Rome
Disbursing Mission Area Director
Europe
Texarkana
11
Process - FY2009 End State - Operations Highlights
Center of Excellence Limestone
Center of Excellence Columbus
Transportation Working Capital Fund Accounting
Acquisition Accounting including Contract Pay
Centers of Excellence Cleveland

• Retired and Annuitant Pay
• Garnishments

Center of Excellence Indianapolis
Security Assistance Accounting
Centers of Excellence Rome

• Medical Accounting
• Special Ops Accounting

NOTES 1. Redundant capability for Travel Pay
will reside in Columbus until DTS is fully
implemented 2. Arlington Liaison, Bratenahl,
Texarkana and OCONUS locations also continue
mission operations
12
Technology

• Enterprise Transition Plan
• Enterprise Priorities
• Defense Travel System
• Defense Integrated Military Human Resources
  System
• Service Enterprise Resource Planning Systems
• General Fund Enterprise Business System
• Defense Enterprise Accounting Management System
• eCommerce

13
Information

• Business Intelligence (BI)
• Benchmarking
• Information Security

14
Information - Business Intelligence
15
Information - Benchmarking
Accounting -
16
DFAS Summary
FY 2005

• Fewer locations 101
• 9,9152 employees
• 18 systems
• 1,368M operating costs3
• 70 professional / 30 technicians
• Right employees with right skills
• Optimum number and mix of civilians/contractors
• Pay for performance under NSPS

• 30 locations1
• 13,8792 employees
• 92 systems
• 1,615M operating costs3
• 70 technicians / 30 professional
• Aging workforce
• General Schedule Pay System

1 Includes Europe Japan 2 Source HR Flash
Report September 2005 (civilian military) 3
Current
1 Includes Europe Japan 2 Projected Civilian
Military 3 Current