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  • 1. Federal Financial Management Conference Shared Services: Progress through Partnerships Larry Neff Deputy Chief Financial Officer U.S. Department of Transportation March 11, 2008
  • 2. Background on DOT and our Enterprise 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
  • 3. 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
  • 4. 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
  • 5.  
  • 6. 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 NIH’s CIO-SP2 i contract
      • Won by SRA with IBM
    • Mutually beneficial relationship
      • Gained new customers
      • Marketing expertise
      • Implementation resources
  • 7. 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
  • 8. 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 system’s 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
  • 9. 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
  • 10. Benefits of Shared Services
    • Low Cost
    • Customers get all the advantages of DOT’s financial system & accounting services without contributing to DOT’s $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 that’s 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
  • 11. 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 GAO’s successful implementation
    • DOT follows Oracle’s 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 1 st month-end close
    • Experienced Accounting & Help Desk staff know the Oracle application & Federal accounting inside & out
    • All system & user documentation available on-line
  • 12. 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
    • Don’t customize the COTS software
    • Modify business processes to take advantages of best business practices inherent in the Oracle software
    • Don’t recreate the legacy accounting system
    • Consolidate & standardize accounting operations
  • 13. 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 customer’s 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!
  • 14. Looking to the Future
    • Long-term Business Transformation effort
    • Business drivers
      • Plan for Oracle release 12 i .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
  • 15. For more information: www.esc.gov
    • Larry Neff Marshal Gimpel
    • Deputy Chief Financial Officer Director
    • U.S. Department of Transportation Enterprise Services Center
    • (202) 366-2335 (405) 954-8980
    • [email_address] [email_address]
    • Mike Upton Bob Stevens
    • Deputy Director Manager, Customer Service
    • Enterprise Services Center Enterprise Services Center
    • (405) 954-8980 (405) 954-7143
    • [email_address] [email_address]