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Financial management modernization at the usda positively impacts mission
Financial management modernization at the usda positively impacts mission
Financial management modernization at the usda positively impacts mission
Financial management modernization at the usda positively impacts mission
Financial management modernization at the usda positively impacts mission
Financial management modernization at the usda positively impacts mission
Financial management modernization at the usda positively impacts mission
Financial management modernization at the usda positively impacts mission
Financial management modernization at the usda positively impacts mission
Financial management modernization at the usda positively impacts mission
Financial management modernization at the usda positively impacts mission
Financial management modernization at the usda positively impacts mission
Financial management modernization at the usda positively impacts mission
Financial management modernization at the usda positively impacts mission
Financial management modernization at the usda positively impacts mission
Financial management modernization at the usda positively impacts mission
Financial management modernization at the usda positively impacts mission
Financial management modernization at the usda positively impacts mission
Financial management modernization at the usda positively impacts mission
Financial management modernization at the usda positively impacts mission
Financial management modernization at the usda positively impacts mission
Financial management modernization at the usda positively impacts mission
Financial management modernization at the usda positively impacts mission
Financial management modernization at the usda positively impacts mission
Financial management modernization at the usda positively impacts mission
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Financial management modernization at the usda positively impacts mission

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This ProveIT case study highlights the modernization of the financial, …

This ProveIT case study highlights the modernization of the financial,
administrative payment, and program and general ledger systems of
the United States Department of Agriculture and the USDA Office of
the Chief Financial Officer.

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  • 1. October 2010, IDC Government Insights #GI225090IDC Government Insights: United States Government Services Delivery: Best PracticesBest Practices: A ProveIT Case Study —Financial Management Modernization atthe USDA Positively Impacts MissionI D C G o v e r n m e n t I n s i g h t s : U n i t e d S t a t e s G o v e r n m e n t S e r v i c e sD e l i v e r yBEST PRACTICES #GI225090Adelaide OBrienI D C G O V E R N M E N T I N S I G H T S O P I N I O NProveIT case studies provide government end users with assessmentsof IT solutions. This ProveIT case study focuses on the United StatesDepartment of Agriculture (USDA). Faced with nine different generalledger systems designed specifically to conform to accounting rulesand not capable of releasing information on agency spending, theUSDA is modernizing its financial systems, integrating purchasing andfinancial management processes, budget, and programs. IDCGovernment Insights believes that:● The need today is greater than ever for improved governmentfinancial management and systems performance. Governmentsmanage significant assets including large loan portfolios, grants,building portfolios, land, airplanes, linear assets, and citizenbenefits.● Financial managers are the cornerstone of accountability andtransparency, relying on systems to provide timely and reliablefinancial information, and yet today suffer from the effects of poordata quality because data is often managed in multiple locationsand multiple systems within agencies.● Based on recent audit estimates, federal agencies make more than$100 billion in improper payments annually despite an estimated$3 billion a year in federal spending for financial systems andcomplex development projects that typically take 8–10 years tocomplete.● Improving the cost, quality, and performance of financialmanagement operations and systems is a management priority ofthe current administration, and must be a priority of all federalagencies.WorldwideHeadquarters:7600LeesburgPike,EastBuilding,Suite310,FallsChurch,VA22043,USAP.703.485.8300F.703.485.8301www.government-insights.com
  • 2. #GI225090 ©2010 IDC Government InsightsT A B L E O F C O N T E N T SPIn This Study 1Methodology ............................................................................................................................................. 1Situation Overview 1Business Needs........................................................................................................................................ 1Management Challenges.......................................................................................................................... 2The Solution ............................................................................................................................................. 2The Best Practices 7Business Value and Lessons Learned...................................................................................................... 7Future Outlook 16Essential Guidance 17Actions to Consider................................................................................................................................... 17Learn More 19Related Research..................................................................................................................................... 19Appendix: USDA Agencies and Departmental Management.................................................................... 20
  • 3. ©2010 IDC Government Insights #GI225090L I S T O F T A B L E SP1 USDA Financial System Transformation Features ...................................................................... 122 USDA Training Scorecard ........................................................................................................... 15
  • 4. #GI225090 ©2010 IDC Government InsightsL I S T O F F I G U R E SP1 FMMI Core Financials in SAP ...................................................................................................... 32 USDA FMMI Deployment Timeline .............................................................................................. 63 USDA ProveIT ROI Impact........................................................................................................... 94 USDA ProveIT Risk Management Impact .................................................................................... 115 USDA ProveIT Transformation Impact......................................................................................... 126 USDA Training Approach............................................................................................................. 147 USDA ProveIT Innovation Impact ................................................................................................ 16
  • 5. ©2010 IDC Government Insights #GI225090 Page 1I N T H I S S T U D YThis ProveIT case study highlights the modernization of the financial,administrative payment, and program and general ledger systems ofthe United States Department of Agriculture and the USDA Office ofthe Chief Financial Officer.M e t h o d o l o g yOur methodology enables impact assessments to be comparable,consistent, and independent. Working with government and vendorpersonnel directly involved in the project, IDC Government Insightsanalysts gather relevant information on the project, examine a statedbusiness issue in a government organization and the IT approach that ittook to address it, and then provide our analysis of the approach — thesolutions success in meeting the organizations stated goals; theprojects impact on return on investment (ROI); the operational costsand business value of the solution; risk, or situational complexity;innovation, leveraging best practices for scalability, repeatability, andreplicability; and the impact on delivery of an agencys mission,business processes, security implications, lessons learned — and alook back at how to do it better.This ProveIT case study is based on a series of interviews with USDAexecutives — including John Brewer, associate CFO, and MichaelClanton, associate CFO — and SAP executives — including ChuckChristopherson, senior vice president, Industry Solution Management(Public Sector).S I T U A T I O N O V E R V I E WB u s i n e s s N e e d sThe United States Department of Agriculture mission is to provideleadership on food, agriculture, natural resources, rural development,and related issues based on sound public policy, the best availablescience, and efficient management. The USDA Chief Financial Officeris responsible for the financial leadership of more than 100,000employees in 14,000 offices and field locations, with accountabilityfor $170 billion in assets and $115 billion in net outlays. The USDAalso provides over $100 billion of loans as well as significantguarantees and insurance in support of Americas farmers andranchers. In 2009, the USDA also made $4.3 billion in improperpayments.The USDA Office of the Chief Financial Officer (OCFO) is pursuingsignificant modernization of aging departmental and agency financial,
  • 6. Page 2 #GI225090 ©2010 IDC Government Insightsadministrative payment, and program and general ledger systems toaddress challenges and opportunities in the rapidly changing federalfinancial management environment. The OCFO mission is to supportan agency in which USDA officials have and use high-qualityfinancial and performance information to make and implementeffective policy, management, stewardship, and program decisions.M a n a g e m e n t C h a l l e n g e sThis case study details the Financial Management ModernizationInitiative (FMMI), led by USDA Acting CFO Jon Holladay. The goalof the FMMI initiative is to modernize outdated technology underlyingthe departmental and agency financial and administrative payment andprogram general ledger systems. FMMI is migrating the USDA fromthe agencys distributed multi-instance mainframe system to afederally compliant, consolidated single-instance Web-based system.FMMI is replacing the Corporate Financial Management System(CFMS) investment of which the core financial system is themainframe-based Foundation Financial Information System (FFIS).Through technology consolidation and modernization, FMMI willeliminate the need to operate and maintain certain USDA legacyfeeder systems and the data warehouse that FFIS requires to producetimely external financial statements.Additionally, Federal Systems Integration Office (FSIO) compliance isno longer supported by the FFIS vendor, putting a strain on USDAresources to maintain the FSIO compliance. As a result, in addition tothe process efficiencies resulting from technology consolidation andthe cost savings associated with shifting the burden to the vendor forcompliance maintenance, FMMI will also close performance gapsexisting in the previous system. FMMI provides on-demand search andreporting capabilities, a system that aligns with business processes andprovides improved user efficiency. This functionality was unavailablein the previous mainframe environment but is critical to the 14,000USDA system users, including agency CFOs and procurement andfinancial management personnel.T h e S o l u t i o nThe USDA is implementing an enterprise resource planning (ERP)solution to replace the legacy mainframe systems with an advanced,Web-based financial management system. The FMMI solutioncomplies with federal accounting and system standards and providesgeneral accounting funds management and financial reports. Thetechnology behind the FMMI financial management system is the U.S.federal version of SAPs ERP Central Component (ECC6.0). Thispublic sector ERP solution is configured especially for the specializedrequirements of public sector administration and U.S. federal
  • 7. ©2010 IDC Government Insights #GI225090 Page 3regulations, and provides general accounting, funds management, andfinancial reports. Core financials as shown in Figure 1 include:● General ledger management/fund balance with treasurymanagement● Funds management● Purchasing● Accounts payable● Accounts receivable● Cost management/project systems● Periodic processingF I G U R E 1F M M I C o r e F i n a n c i a l s i n S A PSource: USDA, 2010The FMMI implementation involves standardizing all financialmanagement and accounting functions across the USDA. The software
  • 8. Page 4 #GI225090 ©2010 IDC Government Insightsdeployed in FMMI brings with it recommended leading businesspractices from successful implementations in over 12,000 publicentities. This network of government SAP customers providesvaluable resources as entities are willing to share information and bestpractices with other government agencies. As a result, USDA financialprofessionals have access to more timely, reliable, and accurateinformation — improving cost management and control, and allowingmore time to perform financial analysis. FMMI is improving theUSDAs organizational performance in the following ways:● An enterprise view of data. Instead of having different parts ofthe organization using different systems that have to be aggregated,all users operate in the same system. This eliminates therequirement for multiple interfaces that are expensive to manageand can slow the ability of the user in implementing enhancements.An aggregated system allows senior management to accessinformation for the entire enterprise quickly and easily, resulting inbetter decision making. Additionally, data can be used consistentlyacross the enterprise, rather than having inconsistent data acrossmultiple systems. Finally, data entry frequently is reduced, sinceusers in one part of the organization easily can see and use datathat is captured in another part of the organization.● Real-time data processing. Instead of requiring data to movethrough multiple systems and interfaces that may include time lags,data in FMMI systems is processed instantly. For example, thefinancial impacts of purchasing or receiving actions areimmediately reflected in the general ledger, rather than waiting foran interface to run. Since the USDA is a first responder to nationalemergencies, real-time data processing is important at the mostcritical times. Budgeting to actual information is key in a nationalemergency such as a Hurricane Katrina type of event, and is alsoimportant at quarter-end and year-end.● Standardize business processes. Because all users in the USDAuse the same system, this forces organizations to streamline andstandardize their business processes producing significant costsavings, and helps to eliminate errors (audit issues). In addition,standardization allows employees to have additional opportunitiesfor advancement, since their knowledge can be used across allagencies in the USDA.FMMI is providing a comprehensive system for all of the USDAsfinancial and accounting functions including:● General ledger: Classification of debit/credit values for accountingtransactions — forms the basis for creating financial statements andother regulatory reporting requirements, and includes:○ Accrual process
  • 9. ©2010 IDC Government Insights #GI225090 Page 5○ Adjustment○ Financial reports○ Statement of transactions○ Financial, accounting, and claims targeted solutions (FACTS)reporting● Accounts receivable: Recording, managing, and collectingreceivables (revenue, reimbursement, and expenditures refund) duefrom customers● Purchasing: Managing all phases of materials management:purchasing of materials and services, goods received, monitoringof deliverables from and payments to vendors, and logisticsinvoice verification● Accounts Payable: Maintaining, updating, and processing vendorinvoices including receiving goods and services, entering andverifying vendor invoices, and processing and recording payments● Funds Management: Supporting activities associated withcontrolling internal funds, establishing rules for budget operations,distributing funds internally, and monitoring the USDAs resourcesand available funds; the funds management function consists of sixmajor subcategories:○ Budget planning○ Budget preparation○ Budget authority○ Funds distribution○ Funds control○ Funds status● Cost management: Recording, tracking, and measuring the flowof costs and revenue, including:○ Monitor and control expenditures and revenue○ Distribute expenses collected in cost objects to other costobjects in designated organizational structures that areresponsible for these costs○ Support billing of customers for all costs incurred on workbreakdown structure elements○ Monitor cost against billing rates
  • 10. Page 6 #GI225090 ©2010 IDC Government InsightsSolution DeploymentFMMI implementation is expected to be complete at the end of FY12replacing obsolete legacy systems, including replacing 22 grantsmanagement systems with three new core systems that will standardizegrants management across the department. The timeline shown inFigure 2 illustrates the scheduled rollout of FMMI. It is important tonote that in early 2008, the USDA planned and scheduled this projectas smaller segments for specific USDA agencies, each with multipleclear deliverables every month, well before and consistent with OMBMemorandum 10-26 issued on June 28, 2010. Citing the fact thatfinancial system modernization projects have become too complex, theOMB is requiring that these projects now be split into smaller, simplersegments with clear deliverables. The OMB also is advising thatproject segment milestones should not take longer than 90–120 days toachieve.F I G U R E 2U S D A F M M I D e p l o y m e n t T i m e l i n eNote: See Appendix for an explanation of acronyms.Source: USDA, 2010The USDAs deployment approach has four major deployment phasesdivided into shorter segments, starting with USDA agencies that requirethe least amount of customization and are therefore the least risky todeploy. The agencies with the most complex program systems andnumber of general ledgers, such as Food and Nutrition Services, which
  • 11. ©2010 IDC Government Insights #GI225090 Page 7administers the Supplemental Nutrition Assistance Program (SNAP),and Rural Development, which processes over $150 million in loansannually, are scheduled last. Each of the four deployment phases hastask-based deliverables versus a percentage of completion contract. Thisforces the system integrator to complete a task prior to being paid.The first phase of SAP ECC was completed in October 2009, withbusiness intelligence (BI) completed in February 2010, and includesdeployment into staff offices such as Inspector General, GeneralCounsel, and Chief Financial Officer, as well as Foreign AgriculturalServices. The second phase includes agencies involved in research,education, and economics and was deployed in March 2010. FoodSafety and Inspection Services was deployed June 1, 2010.The third phase has three deployments, the first, scheduled forNovember 2010, is for administration and accounting for RuralDevelopment and the Risk Management Agency. The seconddeployment in phase three is scheduled for December 2010 andincludes administrative accounting for Farm Service Agency, andFood and Nutrition Service. The final deployment in this phase isscheduled for April 2011 and includes agencies involved in marketingand regulatory programs such as Agricultural Marketing Services;Animal and Plant Health Inspection Services; and Grain, Inspection,Packers, and Stockyards Administration.Phase four is scheduled for deployment throughout 2011 and includesNatural Resources Conservation Services in November 2011 and ForestService in December 2011. Program accounting for complex financialtransactions such as agencies involved with credit, loans, and assistanceprograms such as Food and Nutrition Services, Farm Service Agency,and Rural Development will be scheduled for later in the year. It shouldbe noted that this financial management project timeline meets OMBsrequirement that project span — including planning and development,as well as implementation — should not take longer than 24 months.FMMI completed the "build" of the system within 18 months ofplanning. Each "conversion and deployment" phase after the initialdeployment has been less than 12 months.T H E B E S T P R A C T I C E SB u s i n e s s V a l u e a n d L e s s o n s L e a r n e dIn assessing this IT deployment document, IDC Government Insightsexamines and evaluates the IT deployment impact on return oninvestment, risk, transformation, and innovation. IDC GovernmentInsights analysts assess the technology solution impact on each ofthese critical areas and provide an analysis to assist other governmentorganizations as they pursue similar goals.
  • 12. Page 8 #GI225090 ©2010 IDC Government InsightsReturn on InvestmentIDC Government Insights maps this measure to business objectivesand considers cost effectiveness, IT value to the enterprise, and/or ITvalue to government missions.USDA ProveIT ROI ImpactThe USDA has spent $89 million to date and will spend a planned$143 million for implementation of FMMI. Within the first couple ofweeks, the USDA realized over $18 million in savings fromconsolidating/eliminating many legacy systems and modernizing thefinancial systems with a commercial off-the-shelf (COTS) system.FMMI saves time across the USDA by eliminating redundant dataentry by reworking the same data among multiple systems, and thenreconciling data differences. As a result of standardizing all financialmanagement and accounting functions across the USDA, financialprofessionals have access to more timely, reliable, and accurateinformation — improving cost management and control, and allowingmore time to perform financial analysis. Late payments are avoided,and the USDA is collecting resources on a timelier basis.The USDA has asked the staff of every mission area of the departmentto focus on reducing spending. As a result, the USDA is reviewingeach contract — procurement and consulting — to determine whetherthe contracts that have been entered into are unnecessary or improper,and canceled those that were deemed not critical to the agencysmission. The USDA is deploying the Lean Six Sigma TransactionProcessing (LSTP) initiative to automate invoice processing toimprove efficiency, shorten the time required for payment, reducepaper records, and reduce the use of mail service.A continued partnership to process USDA bills through the ElectronicData Interchange (EDI) process will help accomplish the goals of thisprogram. This new process will allow for the invoices to be receivedelectronically rather than in paper form. More than 250,000 bills willbe processed annually through EDI. Previously under the USDAsIntra-Governmental Payment and Collection (IPAC) System activity,approximately half of all payments were sent to the Treasury forprocessing and payment. This process not only tied up USDA andTreasury staff, as one USDA agency sent money to the Treasury andanother agency requisitioned these same funds, but also took up to aweek to process through the Treasury. Today, agencies can processpayments within the USDA with a one-day turnaround, eliminating theTreasurys processing of an estimated 125,000 invoices.In addition to the process efficiencies resulting from technologyconsolidation and the cost savings associated with shifting the burdento the vendor for FSIO compliance maintenance, FMMI is also closingperformance gaps by providing a system that aligns with business
  • 13. ©2010 IDC Government Insights #GI225090 Page 9processes, resulting in improved user efficiency and on-demand searchand reporting capabilities. As the USDA completes this systemdeployment, IDC Government Insights expects continued savings fromelimination of legacy systems requiring extensive maintenance,standardizing all financial management and accounting functionsacross the USDA, and electronically processing invoices andpayments. The impact of the successful deployment of FMMI on theUSDAs ROI is illustrated in Figure 3.F I G U R E 3U S D A P r o v e I T R O I I m p a c tSource: IDC Government Insights, 2010RiskIT solution deployment risk includes the situational complexity of thetechnology (such as implementation scale and legacy environment)and the executional complexity (cross-organizational governance,organizational culture, and program planning and management). Theimplementation of FMMI at the USDA faced numerous risks:● The USDA decided to deploy a virtual system with SAP, andalthough virtual systems are not risky per se, a virtual system ofthis scale had never been deployed before. If the USDA wascategorized as a bank, it would be the eighth largest bank in theUnited States and the fifth largest business in terms of assetsmanaged.● Given the historically long implementation timetable fordeployment of financial systems, often by the time complex ERP-driven systems are up and running they are using obsoletetechnology. To ensure that technology was current, the USDAneeded to design, test, build, and deploy systems across each of thethree segments of the agency in a year or less. The USDA alsobenefits from enhancement packages that are easy to consume byusers, allowing the agency to stay up to date during itsimplementation and add functionality that will improve processesand reduce implementation time.
  • 14. Page 10 #GI225090 ©2010 IDC Government InsightsThe USDA needed access to timely data and the use of financialinformation in day-to-day decision making and budget formulation,yet many of the financial accounting systems ran on legacy systemsthat were unable to process improved financial procedures, and theUSDA legacy accounting system for administrative funds was nolonger supported by the vendor, preventing system upgrades forimproved decision making. The legacy system was also not FSIOcompliant, causing issues with financial accountability.USDA ProveIT Risk ImpactThe OCFO at the USDA managed these risk factors by using the LeanSix Sigma process. The Lean process originated in manufacturingindustries during a time of great demand for quality and speed andbecame a way to optimize automotive manufacturing. Six Sigma hasevolved as a quality initiative to eliminate defects by reducingvariation in processes in the semiconductor industry. Thus, Lean SixSigma recognizes that an organization needs to balance quality andspeed to help it focus on improving service quality, as defined by thecustomer, within a set time limit. Using this process, the USDAreduced the cost of complexity, moved the department to a single corefinancial system from nine obsolete core financial systems, improvedfinancial reporting processes and procedures, provided transparencyand accountability to administrative costs, and increased the use offinancial information in day-to-day decision making and budgetformulation. The USDA had full capability on day one of the phaseone deployment, including payroll, procurement, payments, travel, andTreasury credits — in short, all core financial systems.An unplanned risk that this project successfully managed through isOMB Memorandum 10-26. On June 28, 2010, OMB issued thisguidance, requiring all Chief Financial Officers (CFO) Act agencies toimmediately halt the issuance of new task orders or new procurementsfor all financial system projects pending review and approval fromOMB. This memorandum affected approximately 30 federal financialsystem projects that were forecast to spend $20 billion over the life oftheir projects. Citing the fact that financial system modernizationprojects have become too complex, OMB is requiring that theseprojects now be split into smaller, simpler segments with cleardeliverables. Project segment milestones should not take longer than90–120 days to achieve. Project span — including planning anddevelopment, as well as implementation — should not take longer than24 months. Agencies must focus on the most critical business needsfirst, versus a broad scope that can cause lengthy delays. The projectsmust support the agency mission/strategic business plan, and agenciesmust provide ongoing, transparent project oversight and performancemanagement. By reviewing these projects and having agencies adhereto its guiding principles for the acquisition and project management ofnew financial systems, OMB expects significant cost reductions andincreased program successes. The USDA completed its review in
  • 15. ©2010 IDC Government Insights #GI225090 Page 11August 2010, and OMB indicated that the USDA is complaint withMemorandum 10-26 (see Figure 4).F I G U R E 4U S D A P r o v e I T R i s k M a n a g e m e n t I m p a c tSource: IDC Government Insights, 2010TransformationTransformation covers the impact on the delivery of an agencysmission, business processes, and lessons learned. The USDAtransformed from an agency with material weaknesses in agency-specific general ledger systems to an agency that produces high-quality financial and performance information to make and implementeffective policy, management, stewardship, and program decisions.The FMMI system improves functional integration, accountability, andinternal controls through workflow scheduling, such as approvals.FMMI also provides the USDA the ability to audit transactions — allfeatures assisting the agency in meeting its fiduciary responsibilities.Prior to implementing FMMI, the USDA did not have integrationacross its financial systems or among other domains. FMMI integratesa majority of the financial capabilities of the USDA. For example, theUSDA has over 2,000 field service centers in the United States. Fieldservice workers will be able to complete paperless transactions bysimply filling out online transaction forms, eliminating the processingand rekeying of data demanded by using paper forms. This reducesprocessing time as well as improves data accuracy. This integrationallows for a single data entry into the system — significantlydecreasing the number of manual reconciliations currently beingperformed throughout the USDA. Integration also improves planning,programming, budgeting, and execution through the use of integratedoutput data from financial and non-financial sources. Thisfunctionality was unavailable in the previous mainframe environmentbut is critical to the 14,000 USDA system users, including agencyCFOs, and procurement and financial management personnel. Table 1shows some of the features available from the USDAs financialsystem transformation. The USDA in on a fast track to transform thefinancial processes of this agency, resulting in significant business
  • 16. Page 12 #GI225090 ©2010 IDC Government Insightsimprovements, and IDC Government Insights expects the impact ofthis transformation to increase as this modernization project deploys.T A B L E 1U S D A F i n a n c i a l S y s t e m T r a n s f o r m a t i o n F e a t u r e sSystem FeaturesPrevious system FMMIMainframe computer used for large-scale computing Web-based system with single entry via portalUpdates reported nightly Real-time reporting and drill down capabilityMultiple log-on Single point log-onTable-driven system for processing and review Functional system that allows transaction-specific processingMultiple applications owned by many USDA agencies All agencies across the USDA operate in the same applicationJob codes associated with specific projects Systems are designed to track projects at multiple levelsSource: IDC Government Insights, 2010USDA ProveIT Transformation ImpactThe FMMI system feeds vital, up-to-the-minute information to seniorleadership. As FMMI is deployed throughout the USDA agencies, itputs in place financial management systems that will provide agencyleadership with timely, accurate data that enables sound businessdecisions, as well as provide oversight entities the level of financialaccountability they need from the department (see Figure 5).F I G U R E 5U S D A P r o v e I T T r a n s f o r m a t i o n I m p a c tSource: IDC Government Insights, 2010
  • 17. ©2010 IDC Government Insights #GI225090 Page 13InnovationInnovation covers the solutions leveragability to gain value, includingscalability, repeatability, and replicability. IDC Government Insightsbelieves that the USDA illustrates innovation through its integratedNational Finance Center operating in New Orleans. This centerprovides shared services to all of the USDAs agencies. The USDAalso excels in its approach to training, as its process was led by achange management team and set up to be very responsive toemployee feedback and evaluation.The "Tell Me, Show Me, Let Me Try, I Can Do It"Training ApproachLed by the Change Management Integrated Product Team, the FMMItraining program enables USDA personnel to receive a generaloverview of the business process changes, develop hands-onproficiency to meet the needs of their role(s), and build anunderstanding and appreciation of the new solution and its importanceto the USDA.Training begins with instructor-led presentations (the 100-levelcourses) and provides an introduction and overview of the FMMIprogram and develops further awareness of the impact of FMMI onUSDA financial management. These courses explain the purpose ofthe FMMI program and reasons for change, the changes to the high-level processes, the roles in the FMMI system, the benefits of the newprocesses and systems, and impacts to the business. Instructors alsoexplain further training appropriate to ones role in the USDA.The second and third levels (200- and 300-level courses) are self-studyclasses involving elearning materials, demonstrations, simulations,Web-based training via the USDAs AgLearn, FMMI Online Helpprocedures, and learning management systems. The 200-level coursesprovide a process overview, describing the new organization and howit executes the core "to be" processes, and providing a high-levelunderstanding of the core financial processes for each functional area.The 300-level courses include hands-on practice navigating the FMMIPortal and SAP, log-on procedures, use of icons, key navigationconcepts, menu selections and paths, tool bars, reports, and FMMIOnline Help.The final training (400-level courses) is instructor led and covers theprocesses in the core functional areas — general ledger, fundsmanagement, accounts payable, purchasing, accounts receivable, andcost management. These courses can last a day and a half, and includehands-on training and detailed instructions on how to use the FMMIsystem to execute system transactions and manual procedures,business concepts, definitions, roles, changes, learning how to performdetailed transactions, data entry, using application functionality, andperforming manual procedural steps.
  • 18. Page 14 #GI225090 ©2010 IDC Government InsightsUsers must complete all training courses in their designatedcurriculum prior to being granted system access to FMMI. Figure 6illustrates the USDA training approach.F I G U R E 6U S D A T r a i n i n g A p p r o a c hSource: USDA, 2010Another key objective of the training is for Performance SupportEvaluation to enhance the FMMI learning experience for futurestudents. Feedback is encouraged from all stakeholders and resultsshow that feedback scores improved with the level of the course,corresponding to specificity of the course to job responsibilities. Table2 shows a snapshot of a training scorecard for a 400-level course.
  • 19. ©2010 IDC Government Insights #GI225090 Page 15T A B L E 2U S D A T r a i n i n g S c o r e c a r d ( % o f R e s p o n d e n t s )Q. Please select the answer which most closely reflects your opinion of the course in general. (Required)400-LevelCoursesThis TrainingCourse WasDelivered Usingan EffectiveLearningMethodI Found theTraining to Be anEasy Way toLearn NewInformationMy Time WasWell SpentCompleting theCourseAs a Result ofThis Course,I Am MoreInformed Aboutthe SubjectI Know Where toGo for AdditionalSupport(e.g., FMMIWeb Site/FMMIOnline Help) n =401 83.8 79.1 72.3 83.8 91.6 191402 87.5 85.9 80.1 86.9 92.3 312411 100.0 100.0 69.2 84.6 100.0 13412 83.1 72.9 67.8 81.4 91.5 59413 100.0 100.0 100.0 100.0 100.0 4414 91.7 83.3 100.0 83.3 91.7 12421 89.6 90.2 83.5 89.6 92.1 164422 85.7 81.0 76.2 90.5 100.0 21431 83.3 78.7 73.6 80.5 85.6 174441 89.0 84.4 79.2 89.0 88.4 173442 89.0 87.1 83.2 86.5 87.7 155443 87.5 85.8 73.3 85.0 85.0 120451 90.3 88.1 87.6 90.8 93.0 185452 92.1 88.4 83.1 88.9 88.4 189453 72.7 72.7 63.6 81.8 90.9 22461 92.5 79.2 84.9 86.8 90.6 53471 92.9 92.9 92.9 100.0 92.9 14IFCRS 73.6 67.1 54.3 70.7 87.1 140Mean 86.9 83.5 77.7 85.6 89.9n = 2001IFCRS = International Funds Control Reporting SystemSource: USDA, 2010
  • 20. Page 16 #GI225090 ©2010 IDC Government InsightsUSDA ProveIT Innovation ImpactBased on the feedback provided from these evaluations, key lessonswere learned that provided the change management team withsuggestions on improving the courses for future sessions, as well asindicators of what worked well. One example of change based onfeedback is that 300-level courses were initially instructor led, butbased on trainee feedback, they were changed to be self-study classes,allowing students to proceed at their own pace. A key element of thetraining classes is that a representative from the Office of the CFO ispresent at all training classes to not only show management supportbut also answer any questions regarding strategy and direction. By thetime all training is finished in the USDA, 7,000 employees will havecompleted these courses (see Figure 7).F I G U R E 7U S D A P r o v e I T I n n o v a t i o n I m p a c tSource: IDC Government Insights, 2010F U T U R E O U T L O O KThe USDA concluded its financial management modernization reviewwith OMB in August 2010 and received support to continue the FMMIinitiative. Preliminary feedback from OMB to the USDA indicates thatthe USDA is compliant with the guidance in OMB Memorandum 10-26.The USDA is committed to leverage this technology to improveprogram delivery as well as internal and external communication tobetter serve the USDA constituents. Modernizing the USDAs financialmanagement systems — to eliminate duplication in processes anddisparate systems, standardize practices, and provide the agencybusiness agility for better decision making and program delivery — isno small feat as several of the USDA agencies are individually largerthan other departments in the federal government. IDC GovernmentInsights believes the success of FMMI is due to hands-on involvementby USDA senior management, leveraging a best-in-class ERP softwaresolution, and requiring each of the four deployment phases to have task-based deliverables versus a percentage of completion contract, thusforcing the system integrator to complete a task prior to being paid.
  • 21. ©2010 IDC Government Insights #GI225090 Page 17The USDAs financial management modernization is 66% complete,with 13 departmental staff offices, and all corporate interfaces,including payroll, procurement, travel, and property deployed.Additionally, Foreign Agricultural Services, National Institute of Foodand Agriculture, Agricultural Research Services, Economic ResearchService, and Food Safety and Inspection Services have been deployed.The USDA is currently processing 20% of the total volume ofaccounting transactions in the FMMI system, with over 1,500 usersconducting business in this system on a daily basis. The completion ofthis modernization plan is on schedule with the data warehouse inproduction, providing standard and ad hoc reporting as well asfinancial statements.E S S E N T I A L G U I D A N C EA c t i o n s t o C o n s i d e rSchedulingThe USDA discovered that although financial management reform wasa key priority across the leadership of the agency, the project schedulewas often impacted by competing priorities. Recommended actions toavoid schedule conflicts include:● Target conversions for midyear to avoid operational conflicts withyear-end closings.● Require full-time project staff in key project roles, work in adedicated project location whenever possible, and involve subjectmatter experts early and maintain their involvement in all projectsthroughout the project life cycle.● Communicate schedule and responsibilities early and often toidentify conflicts with the schedule, and establish gate reviewswith clear objectives and success criteria. Hold review dates anddont begin the next phase until the review is successfullycompleted.● Implement phased deployment, adding additional functionality andnew users in each deployment phase.● Require early and continuous involvement of key agencyresources, particularly senior management.CommunicationCommunication regarding any financial management project isessential not only to avoid scheduling conflicts but also to educatestakeholders and achieve buy-in from financial staff and business
  • 22. Page 18 #GI225090 ©2010 IDC Government Insightsowners. Knowing the importance of communication to programsuccess, the USDA assigned a dedicated team to support sponsorshipof this initiative and communicate to all stakeholders. This teamidentified and leveraged existing forums with senior leadership tomaintain regular meetings with sponsor groups and introduced changediscussions early in the process, assigning change champions in keydepartments and groups. The USDA learned that communications toand from stakeholders must be managed on a daily basis and utilizedthe following to keep agency personnel informed:● Project mailbox● Web site● Scheduled meetings with stakeholder groups● Newsletters and email communicationsAs the new financial management system deployed, communication tousers regarding the new system and processes became critical. As anexample, the USDA defined and communicated common workstationrequirements and settings, knowing that performance variances weresubject to individual user workstations and settings. And, perhaps asimportant as communication during the financial management process,the USDA implemented a post go-live communication process,educating shareholders on results and what to expect next, ensuringstakeholder and staff acceptance of the improved system.The USDA also requires communication with, and the activeinvolvement of, FMMI solution providers. This involvement wascritical not only during the deployment phases but also presently andthroughout the remainder of the life cycle of this system.TrainingThe design and implementation of training has already been noted inthe Innovation section of this case study. The USDA learned thatsystem users do not always take advantage of available training, and toalleviate this, the training team scheduled training early to allowmaximum time for users to plan for their training and provide earlyidentification of qualified trainers. The USDA also involvedgovernment staff as subject matter experts in training, which allowedfor customization of training modules to fit real-life circumstances. Asnoted, the USDA also leveraged multiple training distribution methodsand locations, maximizing the availability and thus the ability of staffto be trained. A key requirement that staff complete key training priorto production system credentials assisted in pervasive use of training.
  • 23. ©2010 IDC Government Insights #GI225090 Page 19DataThe USDA learned that data cleansing is essential to successful testingand production conversion, and it recommends that any agencyplanning financial modernization develop and track measurable goalsfor data cleansing and develop a mitigation strategy for loading datanot cleansed in scheduled time frames. Also, time should be allowedfor complete and full mock conversions of data prior to any tests toallow testing of "production like" data for smooth productionconversion. The USDA recommends that all agencies requireconformance to standard master data and require a strong businesscase for any deviations from this standard. The USDA assigned aproject representative to each key group or department to facilitateinformed decisions about master data so that the impact of thesedecisions is understood by users and confirmed early in the project lifecycle.Additional Project Life-Cycle Lessons LearnedThe impact of a sound technical architecture plan cannot beminimized, and as the USDA deployed this project, additional lessonslearned surfaced. Capacity planning should occur periodicallythroughout the project life cycle to include any changes in user needsand programs. Enhancement packs require time for evaluation andimpact assessment. Developing enhancement packs over the projectlife cycle can minimize project disruptions while keeping softwaresufficiently up to date. All key infrastructure components (i.e., loadbalancing and availability) must be available for testing to minimizeissues discovered in production. Last, security is highly interdependentwith functional activities, and establishment of formal and frequentcollaboration between security and financial management groups mustbe established at the initial planning stages.L E A R N M O R ER e l a t e d R e s e a r c h● Business Strategy: Government Agencies Need ImprovedPerformance Management to Successfully Implement FinancialManagement (IDC Government Insights #GI224326, July 2010)● Best Practices: A ProveIT Case Study — Government AgenciesWant Effective Outreach and Results: H1N1 Information on FluGoes Viral (IDC Government Insights #GI222659, April 2010)● Best Practices: A ProveIT Case Study — Comprehensive CRMSolution Improves Beneficiary Services at Medicare Services (IDCGovernment Insights #GI221384, December 2009)
  • 24. Page 20 #GI225090 ©2010 IDC Government InsightsA p p e n d i x : U S D A A g e n c i e s a n dD e p a r t m e n t a l M a n a g e m e n t● Agricultural Marketing Services (AMS)● Agricultural Research Services (ARS)● Animal and Plant Health Inspection Services (APHIS)● Center for Nutrition Policy and Promotion (CNPP)● Economic Research Services (ERS)● Farm Service Agency (FSA)● Food and Nutrition Services (FNS)● Food Safety and Inspection Services (FSIS)● Foreign Agricultural Services (FAS)● Forest Service (FS)● Grain Inspection, Packers and Stockyards Administration (GIPSA)● National Agricultural Library (NAL)● National Agricultural Statistics Service (NASS)● National Institute of Food and Agriculture (NIFA)● Departmental Management (DM)● Departmental Administration (DA)● National Appeals Division (NAD)● Office of Budget and Program Analysis (OBPA)● Office of Communications (OC)● Office of the Secretary (OSEC)● Office of Assistant Secretary for Civil Rights (ASCR)● Office of the Chief Economist (OCE)● Office of the Chief Financial Officer (OCFO)● Office of the Chief Information Officer (OCIO)
  • 25. ©2010 IDC Government Insights #GI225090 Page 21● Office of the Executive Secretariat (OES)● Office of the General Counsel (OGC)● Office of Homeland Security (HL)● Office of the Inspector General (OIG)S y n o p s i sThis IDC Government Insights report highlights the modernization ofthe financial, administrative payment, and program and general ledgersystems of the United States Department of Agriculture (USDA) andthe USDA Office of the Chief Financial Officer."The need today is greater than ever for improved performance ofgovernment financial managers and systems. Financial managers arethe cornerstone of accountability and transparency, rely on IT systemsto provide timely and reliable financial information, and yet todaysuffer with poor data quality as data is often managed in multiplelocations and multiple legacy systems within agencies," says AdelaideOBrien, research manager, IDC Government Insights. "This ProveITcase study demonstrates that the USDA is on the right path to useonline real-time financial management information for sound decisionmaking."C o p y r i g h t N o t i c eCopyright 2010 IDC Government Insights. Reproduction withoutwritten permission is completely forbidden. External Publication ofIDC Government Insights Information and Data: Any IDCGovernment Insights information that is to be used in advertising,press releases, or promotional materials requires prior written approvalfrom the appropriate IDC Government Insights Vice President. A draftof the proposed document should accompany any such request. IDCGovernment Insights reserves the right to deny approval of externalusage for any reason.

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