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  1. 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. 2. Background on DOT and our Enterprise Services Center (ESC) <ul><li>DOT has 55,000 employees & a $66 billion annual budget </li></ul><ul><ul><li>Highly decentralized organization (Operating Administrations) </li></ul></ul><ul><ul><li>OST, WCF, OIG, FAA, FHWA, FTA, FRA, FMCSA, NHTSA, MARAD, PHMSA, RITA/BTS/Volpe, STB, SLSDC </li></ul></ul><ul><li>ESC has 1,000 employees & is in a Franchise Fund </li></ul><ul><ul><li>IT Services/Data Center, Applications Support, Accounting Services, Customer Services/Help Desk </li></ul></ul><ul><ul><li>Located at the Mike Monroney Aeronautical Center in beautiful Oklahoma City </li></ul></ul><ul><ul><ul><li>1,100 acre secure campus </li></ul></ul></ul><ul><ul><ul><li>5,500 total employees </li></ul></ul></ul><ul><ul><ul><li>Professional, knowledgeable, dedicated career staff </li></ul></ul></ul>
  3. 3. DOT & ESC Accomplishments <ul><li>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 </li></ul><ul><ul><li>Produce financial statements overnight from the core accounting system </li></ul></ul><ul><li>DOT has consolidated all accounting operations to ESC </li></ul><ul><ul><li>Saving $5+ million per year </li></ul></ul><ul><ul><li>Bureaus more willing to streamline & standardize processes </li></ul></ul><ul><li>Clean financial audit opinions 6 of last 7 years </li></ul><ul><ul><li>DOT raised to “yellow” on PMA goal for Financial Management </li></ul></ul>
  4. 4. Enterprise Services Center (ESC) <ul><li>Feb. 2005: OMB designated DOT/ESC 1 of 4 Federal Shared Service Providers (FSSPs) </li></ul><ul><li>ESC currently cross-services </li></ul><ul><ul><li>Government Accountability Office (GAO) </li></ul></ul><ul><ul><li>Commodity Futures Trading Commission (CFTC) </li></ul></ul><ul><ul><li>Institute of Museum and Library Services (IMLS) </li></ul></ul><ul><ul><li>National Endowment for the Arts (NEA) </li></ul></ul><ul><li>ESC using Service Oriented Architecture (SOA) technology to integrate PRISM with Oracle Financials </li></ul><ul><ul><li>Eliminates duplicate manual data entry & reconciliation </li></ul></ul><ul><ul><li>Supports commitment accounting </li></ul></ul>
  5. 6. Partnerships for Shared Services <ul><li>ESC recognized the need for an on-going private sector partner for help marketing to & implementing new external customers </li></ul><ul><ul><li>Implementation workload goes up & down </li></ul></ul><ul><ul><li>Continuity to ensure expert & experienced staff </li></ul></ul><ul><li>Competed a Task Order on NIH’s CIO-SP2 i contract </li></ul><ul><ul><li>Won by SRA with IBM </li></ul></ul><ul><li>Mutually beneficial relationship </li></ul><ul><ul><li>Gained new customers </li></ul></ul><ul><ul><li>Marketing expertise </li></ul></ul><ul><ul><li>Implementation resources </li></ul></ul>
  6. 7. Partnerships for Shared Services <ul><li>ESC also has a contract with L-3 for on-going operational support </li></ul><ul><ul><li>Data Center support </li></ul></ul><ul><ul><li>Application support </li></ul></ul><ul><ul><li>Operational accounting support </li></ul></ul><ul><li>Exploring a Blanket Purchase Agreement </li></ul><ul><ul><li>Consolidate support </li></ul></ul><ul><ul><li>Compete Task Orders among vendors </li></ul></ul>
  7. 8. Partnerships for Shared Services <ul><li>Initially, some agencies thought the FM LoB was focused on shared hosting of financial systems </li></ul><ul><ul><li>This view-point was too narrow </li></ul></ul><ul><ul><li>No economy of scale realized just by moving from 1 large data center to another </li></ul></ul><ul><ul><li>Hosting costs are a small part of any IT system’s costs </li></ul></ul><ul><li>The biggest potential economy of scale is in shared application support </li></ul><ul><ul><li>Professional staff with expertise in running the system </li></ul></ul><ul><ul><li>Biggest cost of system operations </li></ul></ul><ul><ul><li>Only way to drive down cost of application support is by using standard systems </li></ul></ul><ul><ul><li>FSIO standards make this even easier </li></ul></ul>
  8. 9. Partnerships for Shared Services <ul><li>Alternatives for ensuring high quality services through competition </li></ul><ul><ul><li>4 Federal SSPs & __# Private SSPs all competing against each other </li></ul></ul><ul><ul><li> vs. </li></ul></ul><ul><ul><li>Teams of Private & Federal staff working together as SSPs competing against other Private-Federal SSP Teams </li></ul></ul>
  9. 10. Benefits of Shared Services <ul><li>Low Cost </li></ul><ul><li>Customers get all the advantages of DOT’s financial system & accounting services without contributing to DOT’s $125 million capital investment </li></ul><ul><ul><li>ESC already provides 90% or more of most required solutions; most additional needs can be met through configuration & set-up and interfaces </li></ul></ul><ul><ul><li>Customers only pay 1-time implementation costs and their fair share of annual operating & maintenance costs, plus future upgrade costs </li></ul></ul><ul><li>Low Risk </li></ul><ul><li>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 </li></ul><ul><ul><li>Delphi has 4,000 users and been successfully upgraded 7 times </li></ul></ul><ul><ul><li>Delphi has passed multiple CFO and SAS-70 audits </li></ul></ul>
  10. 11. Benefits of Shared Services <ul><li>Experienced Team </li></ul><ul><li>DOT has successfully implemented Oracle Financials for 20 customers </li></ul><ul><ul><li>We know how to do this </li></ul></ul><ul><li>SRA/IBM business partner also has extensive experience </li></ul><ul><ul><li>Helped with GAO’s successful implementation </li></ul></ul><ul><li>DOT follows Oracle’s Application Implementation Methodology (AIM) </li></ul><ul><li>Change Management & User Support </li></ul><ul><li>Effective support for Change Management </li></ul><ul><li>Provide 4 to 6 weeks of “desk-side” user support after go-live, including the 1 st month-end close </li></ul><ul><li>Experienced Accounting & Help Desk staff know the Oracle application & Federal accounting inside & out </li></ul><ul><li>All system & user documentation available on-line </li></ul>
  11. 12. Benefits of Shared Services <ul><li>We Handle the IT Requirements </li></ul><ul><li>Professionally run data center </li></ul><ul><li>Meet all IT planning, IT security, Disaster Recovery, SPII & Privacy Act requirements </li></ul><ul><li>DOT Strategy </li></ul><ul><li>Don’t customize the COTS software </li></ul><ul><li>Modify business processes to take advantages of best business practices inherent in the Oracle software </li></ul><ul><li>Don’t recreate the legacy accounting system </li></ul><ul><li>Consolidate & standardize accounting operations </li></ul>
  12. 13. Lessons Learned <ul><li>Executive support is essential </li></ul><ul><li>Clean up your data! </li></ul><ul><li>Streamline business processes </li></ul><ul><li>Clean up your data! </li></ul><ul><li>Consolidate accounting operations </li></ul><ul><li>Clean up your data! </li></ul><ul><li>Talk to your customer’s customers </li></ul><ul><li>Clean up your data! </li></ul><ul><li>Change management is critical </li></ul><ul><ul><li>Communicate, communicate, communicate </li></ul></ul><ul><ul><li>Train, train, train </li></ul></ul><ul><ul><li>Support, support, support </li></ul></ul><ul><li>Clean up your data at the detail level! </li></ul>
  13. 14. Looking to the Future <ul><li>Long-term Business Transformation effort </li></ul><ul><li>Business drivers </li></ul><ul><ul><li>Plan for Oracle release 12 i .FSIO – complete system re-architecting </li></ul></ul><ul><ul><li>Plan for Common Government-wide Accounting Code (CGAC) </li></ul></ul><ul><ul><li>Better link costs to program mission performance metrics </li></ul></ul><ul><ul><li>Automate Dept.-wide roll-up of performance data </li></ul></ul><ul><ul><li>Support cost accounting & Earned Value Management (EVM) </li></ul></ul><ul><li>Started summer 2007 </li></ul><ul><ul><li>Workgroups & governance structure established </li></ul></ul><ul><li>Integrated procurement solution </li></ul><ul><ul><li>Automate commitment accounting </li></ul></ul><ul><ul><li>Eliminate duplicate manual data entry & reconciliation </li></ul></ul><ul><ul><li>Provide more useful information to program managers </li></ul></ul><ul><ul><li>Eliminate the need for “cuff records” systems </li></ul></ul>
  14. 15. For more information: <ul><li>Larry Neff Marshal Gimpel </li></ul><ul><li>Deputy Chief Financial Officer Director </li></ul><ul><li>U.S. Department of Transportation Enterprise Services Center </li></ul><ul><li>(202) 366-2335 (405) 954-8980 </li></ul><ul><li>[email_address] [email_address] </li></ul><ul><li>Mike Upton Bob Stevens </li></ul><ul><li>Deputy Director Manager, Customer Service </li></ul><ul><li>Enterprise Services Center Enterprise Services Center </li></ul><ul><li>(405) 954-8980 (405) 954-7143 </li></ul><ul><li>[email_address] [email_address] </li></ul>