Understanding Department of
Defense clients
Adam Younce
Sr. Solution Architect
Hitachi Solutions
Agenda Topics

Industry Trends

DOD
Requirements

Microsoft and how are we positioned
Industry Trends

DOD is looking
for 1 General
Contractor vs.
specialized one

Vendor
Consolidation

Spare, Repairs and Ret...
Requirements

DEPARTMENT OF DEFENSE
Major Pain Points

Complex
Departments
Structures

Departmental
Compliancy

Departmental
Accountability

ITAR –
Internatio...
Requirement - WBS

Support for
Complex WBS

Multi-Level
structures

Multiple Funding
sources

Accounting at all
WBS struct...
Requirements - Contract Types

Cost Plus

Percent
Complete

Time & Material

Fixed Price

Units Delivered

Milestones
Achi...
Requirements - Contract Inventory

Specific Cost
structures by
Contracts /
Customers

Inventory
Traceability
Free for next...
Requirements - Quality

Sampling and
batch testing

Documentations

First Article
Testing

Selective and
Criteria based
QA...
Requirement - Borrow/Payback

Complex
Accounting
Structures

Detail
transaction audit

Multiple Payees
and Funding
sources...
Requirements - Production Splits

Multi-Level
BOMs & routes

Order Splits

Outsourcing and
sub-contracting

Fixed fee
prod...
Requirements - Revenue Recognition

Invoicing and
billing rules

Cost Realization
= Billing

Management
open
commitments

...
HOW WE WIN
Why Microsoft
Industry Trends

Competitors

Cost Pressures

Vendor
Consolidations

Microsoft Dynamics AX capabilities

Pro...
Known Gaps, what’s missing
Awareness

Aggressive
message

Compelling
offers

Vertical
Solutions

Microsoft Dynamics - Gaps...
Thank you
Questions
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12 department of defense

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  • Key industry trendsUnderstanding of DOD key requirementsPosition with Dynamics AX and Microsoft
  • Vendor ConsolidationDOD is looking for 1 contractor to support all aspect of the business Cost pressuresSpare, Repair and retrofit (refurbish)53% of discretional funding is going to government contractors. Around 1.3 Trillions
  • Department of Defense Companies and their SubsITAR ComplianceInternational Traffic in Arms RegulationsATAAuditability, Traceability, Accountability
  • Work Breakdown StructureUnlimited LevelsBasic Building BlocksExampleContract (terms, conditions, billing)Project Sub ProjectsActivitiesCost CodesTransactionsAll Transactions need to be tracked by JTD, YTD, PTDProject #124121First ArticleSub Projects/ActivitiesCost CodesTransactionsFirst Year ProductionSub Projects/ActivitiesCost CodesTransactionsSecond Year ProductionSub Projects/ActivitiesCost CodesTransactions
  • Cost PlusT&MFixed PricePercent Complete% of budget consumedUnits Delivered (milestone)
  • Keep inventory and traceability of transactions by the projectUnique costs by contract inventory What is done with ‘extra’ inventoryFree for next job by customerShip to customerMove to Stock WH and give a costWith or enroute to customerIn Stock
  • An absolute must with DOD workSample testingSOP’sDocumentationsFirst Article TestingCustomer acceptance testing
  • UGLYWant to rob Peter to Pay PaulTracking of material only (costs shouldn’t move)Need a separate Sub Contract
  • Need to deliver a quantity quicker than the full production orderProduction has already started and needs to be splitOnly important for T&M type contractsFixed bid has minimal impact
  • DOD companies want to recognize revenue and bill ASAP. Open Commitments is the quickest path for revenue recognition.Companies vary on methods but the rub is how to realize cost quickly so billing can be processed.How to flag open commitments for billing purposes.Usually done outside systems
  • Industry TrendsRevenue RecognitionContract InventoryWBSQuotingQualityHub and Spoke MethodsGAPs:Open commitment / as revenueSimplified contract MRPITAR ComplianceIntegration to DOD e-services
  • Industry TrendsRevenue RecognitionContract InventoryWBSQuotingQualityHub and Spoke MethodsGAPs:Open commitment / as revenueSimplified contract MRPITAR ComplianceIntegration to DOD e-services
  • 12 department of defense

    1. 1. Understanding Department of Defense clients Adam Younce Sr. Solution Architect Hitachi Solutions
    2. 2. Agenda Topics Industry Trends DOD Requirements Microsoft and how are we positioned
    3. 3. Industry Trends DOD is looking for 1 General Contractor vs. specialized one Vendor Consolidation Spare, Repairs and Retrofit Vendors have to diversify products and services Cost Pressures
    4. 4. Requirements DEPARTMENT OF DEFENSE
    5. 5. Major Pain Points Complex Departments Structures Departmental Compliancy Departmental Accountability ITAR – International Traffic in Arms Regulations Departmental Auditability Departmental Traceability
    6. 6. Requirement - WBS Support for Complex WBS Multi-Level structures Multiple Funding sources Accounting at all WBS structure Contractors and Labor associations Earned Value – Revenue Recognition
    7. 7. Requirements - Contract Types Cost Plus Percent Complete Time & Material Fixed Price Units Delivered Milestones Achieved
    8. 8. Requirements - Contract Inventory Specific Cost structures by Contracts / Customers Inventory Traceability Free for next Job With or En-Route to Client Where is the inventory: @ Warehouse Inventory consumption tracking
    9. 9. Requirements - Quality Sampling and batch testing Documentations First Article Testing Selective and Criteria based QA Digital Signatures and workflow Multi Level QA and Inspection Checks
    10. 10. Requirement - Borrow/Payback Complex Accounting Structures Detail transaction audit Multiple Payees and Funding sources Multiple Procurement Sources Utilization of specialized subcontractors Inventory or Material transfers or on consignment
    11. 11. Requirements - Production Splits Multi-Level BOMs & routes Order Splits Outsourcing and sub-contracting Fixed fee production Billing and Invoicing based on Unit delivered Order Prioritizations
    12. 12. Requirements - Revenue Recognition Invoicing and billing rules Cost Realization = Billing Management open commitments Retainage Earned Value Management
    13. 13. HOW WE WIN
    14. 14. Why Microsoft Industry Trends Competitors Cost Pressures Vendor Consolidations Microsoft Dynamics AX capabilities Production Capabilities Quality Controls Procurement Capabilities Project Capabilities Technologies Support of Hub and Spoke
    15. 15. Known Gaps, what’s missing Awareness Aggressive message Compelling offers Vertical Solutions Microsoft Dynamics - Gaps Commitment Accounting Contract driven MRP ITAR Compliance DOD e-services integrations EVM Reporting
    16. 16. Thank you Questions

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