Federal Financial Management Conference Shared Services: Progress through Partnerships

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Federal Financial Management ConferenceShared
Services Progress through Partnerships

• Larry Neff
• Deputy Chief Financial Officer
• U.S. Department of Transportation
• March 11, 2008

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Background on DOT and ourEnterprise Services
Center (ESC)

• DOT has 55,000 employees a 66 billion annual
  budget
• Highly decentralized organization (Operating
  Administrations)
• OST, WCF, OIG, FAA, FHWA, FTA, FRA, FMCSA, NHTSA,
  MARAD, PHMSA, RITA/BTS/Volpe, STB, SLSDC
• ESC has 1,000 employees is in a Franchise Fund
• IT Services/Data Center, Applications Support,
  Accounting Services, Customer Services/Help Desk
• Located at the Mike Monroney Aeronautical Center
  in beautiful Oklahoma City
• 1,100 acre secure campus
• 5,500 total employees
• Professional, knowledgeable, dedicated career
  staff

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DOT ESC Accomplishments

• 2000-2003 DOT implemented all 14 bureaus on a
  COTS-based, FSIO-certified financial system with
  no customizations running on a cost-effective
  single production instance
• Produce financial statements overnight from the
  core accounting system
• DOT has consolidated all accounting operations to
  ESC
• Saving 5 million per year
• Bureaus more willing to streamline standardize
  processes
• Clean financial audit opinions 6 of last 7 years
• DOT raised to yellow on PMA goal for Financial
  Management

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Enterprise Services Center (ESC)

• Feb. 2005 OMB designated DOT/ESC 1 of 4
  Federal Shared Service Providers (FSSPs)
• ESC currently cross-services
• Government Accountability Office (GAO)
• Commodity Futures Trading Commission (CFTC)
• Institute of Museum and Library Services (IMLS)
• National Endowment for the Arts (NEA)
• ESC using Service Oriented Architecture (SOA)
  technology to integrate PRISM with Oracle
  Financials
• Eliminates duplicate manual data entry
  reconciliation
• Supports commitment accounting

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Partnerships for Shared Services

• ESC recognized the need for an on-going private
  sector partner for help marketing to
  implementing new external customers
• Implementation workload goes up down
• Continuity to ensure expert experienced staff
• Competed a Task Order on NIHs CIO-SP2i contract
• Won by SRA with IBM
• Mutually beneficial relationship
• Gained new customers
• Marketing expertise
• Implementation resources

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Partnerships for Shared Services

• ESC also has a contract with L-3 for on-going
  operational support
• Data Center support
• Application support
• Operational accounting support
• Exploring a Blanket Purchase Agreement
• Consolidate support
• Compete Task Orders among vendors

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Partnerships for Shared Services

• Initially, some agencies thought the FM LoB was
  focused on shared hosting of financial systems
• This view-point was too narrow
• No economy of scale realized just by moving from
  1 large data center to another
• Hosting costs are a small part of any IT systems
  costs
• The biggest potential economy of scale is in
  shared application support
• Professional staff with expertise in running the
  system
• Biggest cost of system operations
• Only way to drive down cost of application
  support is by using standard systems
• FSIO standards make this even easier

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Partnerships for Shared Services

• Alternatives for ensuring high quality services
  through competition
• 4 Federal SSPs __ Private SSPs all competing
  against each other
• vs.
• Teams of Private Federal staff working together
  as SSPs competing against other Private-Federal
  SSP Teams

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Benefits of Shared Services

• Low Cost
• Customers get all the advantages of DOTs
  financial system accounting services without
  contributing to DOTs 125 million capital
  investment
• ESC already provides 90 or more of most required
  solutions most additional needs can be met
  through configuration set-up and interfaces
• Customers only pay 1-time implementation costs
  and their fair share of annual operating
  maintenance costs, plus future upgrade costs
• Low Risk
• Much lower risk to migrate to a system thats
  stable and has been in production for 8 years
  than to migrate to a new custom-developed system
• Delphi has 4,000 users and been successfully
  upgraded 7 times
• Delphi has passed multiple CFO and SAS-70 audits

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Benefits of Shared Services

• Experienced Team
• DOT has successfully implemented Oracle
  Financials for 20 customers
• We know how to do this
• SRA/IBM business partner also has extensive
  experience
• Helped with GAOs successful implementation
• DOT follows Oracles Application Implementation
  Methodology (AIM)
• Change Management User Support
• Effective support for Change Management
• Provide 4 to 6 weeks of desk-side user support
  after go-live, including the 1st month-end
  close
• Experienced Accounting Help Desk staff know the
  Oracle application Federal accounting inside
  out
• All system user documentation available on-line

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Benefits of Shared Services

• We Handle the IT Requirements
• Professionally run data center
• Meet all IT planning, IT security, Disaster
  Recovery,SPII Privacy Act requirements
• DOT Strategy
• Dont customize the COTS software
• Modify business processes to take advantages of
  best business practices inherent in the Oracle
  software
• Dont recreate the legacy accounting system
• Consolidate standardize accounting operations

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Lessons Learned

• Executive support is essential
• Clean up your data!
• Streamline business processes
• Clean up your data!
• Consolidate accounting operations
• Clean up your data!
• Talk to your customers customers
• Clean up your data!
• Change management is critical
• Communicate, communicate, communicate
• Train, train, train
• Support, support, support
• Clean up your data at the detail level!

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Looking to the Future

• Long-term Business Transformation effort
• Business drivers
• Plan for Oracle release 12i.FSIO complete
  system re-architecting
• Plan for Common Government-wide Accounting Code
  (CGAC)
• Better link costs to program mission performance
  metrics
• Automate Dept.-wide roll-up of performance data
• Support cost accounting Earned Value Management
  (EVM)
• Started summer 2007
• Workgroups governance structure established
• Integrated procurement solution
• Automate commitment accounting
• Eliminate duplicate manual data entry
  reconciliation
• Provide more useful information to program
  managers
• Eliminate the need for cuff records systems

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For more information www.esc.gov

• Larry Neff Marshal Gimpel
• Deputy Chief Financial Officer Director
• U.S. Department of Transportation Enterprise
  Services Center
• [phone] [phone]
• Larry.Neff_at_dot.gov Marshal.Gimpel_at_faa.gov
• Mike Upton Bob Stevens
• Deputy Director Manager, Customer Service
• Enterprise Services Center Enterprise Services
  Center
• [phone] [phone]
• Mike.Upton_at_faa.gov Robert.Stevens_at_faa.gov