Noneman.steven

OCFO/Strategic Investments Division

ANALYSIS FOR AGENCY
MANAGEMENT

1 PM Challenge, Long Beach, CA
February 10, 2011
Steven R. Noneman
Katherine A. Gallagher

PRESENTATION ROADMAP

 Background
 Illustrations of Analyses
 Performance Analyses
 Analysis for Key Decision Points
 Budget Decision Analyses
 Strategic Investment Analysis

 Considerations for Robust Analyses
 Summary

Note: The data in the illustrations are notional.

2

BACKGROUND

 With an annual budget of ~$19 billion per year,
NASA's senior leadership must decide how to
budget for missions in aeronautics, exploration,
space operations, science, and technology and for
the Agency mission support functions, such as
safety, Center facilities and support capabilities,
infrastructure, civil service labor, and information
technology.
 Effective and timely analyses provide decision-
makers with the insights to manage the Agency.
 This presentation will discuss, at a high level,
illustrations of analyses associated with
performance assessment, key decisions points
analysis, and budgeting.
3

PERFORMANCE ANALYSES

 Performance information is gathered from a variety
of sources.
 Projects’ performance are monitored and analyzed
monthly and reported at many forums, including the
Baseline Performance Review (BPR).
 Monthly status review reports provide essential
data that enables an analyst’s examination of
issues and risks associated with technical, cost,
schedule, and programmatic performance.
 The quality and completeness of monthly
reports are CRITICAL to these analyses!
4

THERE ARE MANY PROJECT PERFORMANCE
INFORMATION SOURCES…

5


MISSION DIRECTORATE SUMMARY

6

ANALYSIS FOR KEY DECISION POINTS

 At Key Decision Points (KDPs) in a project’s
development, Senior Management reviews
progress and various analyses, for example…
 Standing Review Board assessments, Joint Confidence
Level (JCL) analysis, portfolio analyses, etc.
 KDP-C is a critical gate to authorize a project to
move from formulation to implementation.
 Analyses confirm the project’s requirements,
schedules, budgets (including reserves), and risk
position have been integrated sufficiently to justify
the continued investment of Agency resources.
 An example of an analysis to support a KDP
decision follows: 7

KEY DECISION POINT (KDP) OPTIONS
EXAMPLE

8

SAMPLE ANALYSIS OPTIONS EVALUATION

9

BUDGET DECISION ANALYSES

 Budget analyses inform NASA senior managers
decisions on issues and alternatives throughout the
Planning, Programming, Budgeting, and Execution
(PPBE) process.
 Agency-level analyses feed decisions on budget
controls and issue resolutions.
 An example analysis report for a hypothetical
budget reduction exercise follows.

10

BUDGET REDUCTION EXERCISE EXAMPLE

11


EXAMPLE EVALUATION OF AN OPTION

12


SAMPLE COMPARISON OF OPTIONS

13

STRATEGIC INVESTMENT ANALYSIS

 The Agency Strategic plan sets Agency
goals/objectives and guides programmatic direction
and investments.
 The Agency has a diverse portfolio of programs and
many take years to accomplish.
 The roll-up of budgets as far as a decade into the
future is necessary to examine how well it is
positioned to accomplish its strategic goals and
objectives.
 “Sand Chart” analyses are useful for examining
when opportunities will exist to begin new programs
14
and projects (see next chart).

SAND CHART ANALYSIS EXAMPLE

1.4% inflation

A lower inflation
rate will require
delay of some
project starts.

15

CONSIDERATIONS FOR ROBUST ANALYSES

 Objectivity and lack of bias. Avoid advocacy.
 Completeness1:
(a) description: Complete, clear definition of the situation
and the factors affecting it.
(b) explanation: How did the situation occur?
(c) prediction: What will happen in the future?
(d) evaluation: What are the options? What are their
consequences?
(e) recommendation: What decision is best?
 Vetting: Consult the experts and those affected.
Seek out diverse views.
16

1Graham T. Allison, The American Political Science Review, September 1969

ANALYSIS PERSPECTIVES

 Examine different perspectives:
 A rational view – e.g., what is the economic perspective?
 Organizational view – What are the organizational
capabilities, capacities, operating procedures, tendencies,
and preferences, etc?
 Key participants – what are the interests and negotiating
positions of stakeholders and decision-makers?
 Utilize all available information.
 Document assumptions and validate them.

17

TYPICAL ORGANIZATIONAL PERSPECTIVES
CONSIDERED

 External:
 White House/Executive Office of the President/OMB
 Senate/House/Staffers/GAO
 Industry
 Academia
 International Partners
 Other Government Agencies
 Etc.
 Internal
 NASA Administrator, Deputy Administrator, Associate Administrator
 Mission Directorates
 CFO, Mission Support organizations, Human Capital, IT, procurement
 Centers
 Unions
 Chief Counsel
 Etc. 18

SUMMARY

 Effective and timely analyses are used to provide
decision-makers with the insights manage Agency
risk through effective distribution of funding.
 High quality, complete monthly project reports are
CRITICAL to meaningful analyses.
 Agency analyses examine performance, key
decisions, and strategic investment of Agency
resources.
 Robust analyses use different perspectives to
clearly describe and explain the nature of issues
and risks, predict outcomes, and provide decision-
makers with options and recommendations for
action. 19


20
BACKUP CHARTS

AUTHORS

 Steven R. Noneman is a Senior
Program Analyst in the Strategic
Investments Division in the Officer of
the Chief Financial Officer.
 Kathleen A. Gallagher, PhD, is an
Operations Research Analyst in the
Strategic Investments Division in the
Officer of the Chief Financial Officer.
21

SYNOPSIS:

 NASA's senior leadership make decisions on how
to budget aeronautics and space missions and
Agency mission support functions, such as safety,
Center facilities and support capabilities, and
information technology. Effective and timely
analyses are necessary to provide decision-makers
with insights to manage Agency risk through
effective budgeting.

22

ABSTRACT

 With an annual budget exceeding $19 billion per year, NASA's senior leadership must make
decisions on how to budget the funding of missions in aeronautics, exploration, space
operations, science, and technology and the Agency mission support functions, such as safety,
Center facilities and support capabilities, information technology, civil service labor, utilities
expenses for energy and water. Effective and timely analyses are used to provide decision-
makers with the insights manage Agency risk through effective distribution of funding.
 There are a wide range of analyses performed both on a synchronous basis and as needed to
address questions and issues that may arise. This presentation focuses on examples of
analyses performed in the Office of the Chief Financial Officer in support of NASA’s senior
managers.
 On an execution level, Agency missions are assessed to identify performance variances from
plans. Each month, independent assessments are reported. Monthly analyses of funds
obligations, commitments, costing are examined by center and Mission Directorate. The cost
performance of specific programs and projects are also analyzed and reported. A varied set of
sources are used.
 At least annually, in support of the budget formulation process, issues are identified and
decision alternatives prepared with supporting analyses. Analyses to identify and characterize
of budget reduction alternatives also may be accomplished.
 Agency strategic goals and objectives also require analyses to determine the alternatives 23
available for starting new initiatives. “Sand charts” are an examples of graphical
representations of analyses that inform management on mission portfolio options.

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