Cost Management
Certificate Course (CMCC)
Naval Postgraduate School
CMCC 12-5 Week 3
Cost Management and U.S. Army
Section II: General Fund
Enterprise Business System
Frank A. DiStasio
19-20 March 2012
© DISTASIO ASSOCIATES, LTD
Course Outline
• Section I: Cost Management
–
–
–
–
–
Why cost management?
Focus
Concept of Operation
Analysis
Exercise
• Section II: Cost Management and GFEBS
– Development
– Implementation
• Section III: Using Cost Management
– Cost culture
– Cost controlling
3/12/2016
© DISTASIO ASSOCIATES, LTD
2
General Fund
Enterprise Business System (GFEBS)
Goals:
OSD approved
in May 2005
• Provide decision support information to sustain
Army warfighting capability
• Provide analytic data and tools to support the
Army enterprise
• Reduce the cost of business operations
• Improve accountability and stewardship
Enable decision-makers across the Army to –
• Better capitalize on the resources we have
• Better determine and justify the resources we need
3/12/2016
As of 5 Jan 2010
3
Secretary And Chief Of Staff Of The Army
Testimony
2011
“… we must give our people the essential tools that will enable
them to carry out their cost management responsibilities. Toward
this end, we have fielded the General Fund Enterprise Business
System (GFEBS) to more than 11,000 users at 14 major
installations. As reported by the Government Accountability
Office, GFEBS development is on schedule and on budget.
Much more than an accounting system, GFEBS is the Army’s
new business system. It gives managers a greatly improved
capability to manage the cost, schedule and performance of their
programs and, at the same time, is the centerpiece in our
progress toward full auditability of our financial statements.”
The Honorable John M. McHugh, Secretary Of The Army and
General Martin E. Dempsey, Chief Of Staff United States Army,
March 2011, Army Posture Statement
3/12/2016
4
Why Continuing Leadership Emphasis?
Well-Informed Decisions Begin With Good Data
• Situation:
– Army leaders and managers need to make well-informed and timely
decisions
– Most decisions impact across many functions and organizations
– Well-informed decisions require relevant, accurate and timely analyses
that integrate data from many functional areas
• Requirement:
– Move to modern systems that include open, horizontally integrated data
to enable better informed decisions; including:
 General Fund Enterprise Business System (GFEBS)
 Logistics Modernization Program (LMP)
 Global Combat Support System-Army (GCSS-A)
 Integrated Personnel & Pay System (IPPS-A)
GFEBS integrates data from across the Army
3/12/2016
5
Where We Are and …
Where We Are Going
GFEBS Solution
Current Situation
 Involves maintaining many systems
 Requires many costly interfaces
 Requires entering data in several systems
 Inhibits efficient sharing of data
 Impedes producing comprehensive and
accurate decision data
 Hinders responding timely to questions
 Requires time-consuming and costly
reconciliations
 Implements a single web-based system
 Standardizes processes Armywide
 Implements standard data structures
 Records transactions in real-time and
provides real-time access to data
 Integrates financial and non-financial/
performance data from functional areas
 Applies commercial-off-the-shelf (COTS)
Enterprise Resource Planning (ERP)
 Complies with DoD’s Business Enterprise
Architecture (BEA)
DEBX
DCW
MEPRS
CHCS
TPOCS
GSA
system
DT RS
DL A Lo g
BSM...
DNCS/D
AAS
CCSS
EFR
WAWF
Po w er Tr
ack
WinS
Italian
Lo ca...
Ko rea
Pay...
DCPS
(T &A)
Other
For ei...
AMCISS
ETOS
RATS
PADDS
De fens e
Militar ...
DCD
EDA
DIFS
PBASOC
CISIL
MOCAS
DCAS
CEFT
DPAS
PBASFD
SCTIMS
ADS
UL NAPS
I
UL NAT I
S
UL NTAP
EDM
CCR
MDM S
URL
DT RS-A
LMP
SRD1 (or
ST ANFINS-R)
AFMIS
ATLAS
DML SS
TAMMIS
SARSS
SABS
EAS
PPBE
Ente r...
IFS
TDY
Tr ave...
I2S
GOALS
II
SDS
DCPDS
ODC Pay
System
DIMHRS
DDS
Pr edator
HAS
ARCS
On-Base
CRP
SCRT
ODS
MS
Acce ...
GTS
DJAS
ST ANFINS
FMIS
MED...
ACQUILIN
E/ PRW eb
CAMS-ME
PARSS
CAPS
AVPRAT
SOMARDS
RSBUX
IPAC
Wizar d
OLRV
ST ARS
One Pay
Fadto ol
Db CAS/
Web CAS
ISB
VPIS
SLAD
SAP
AORS
DARS
ASK-FM
TROUPE
RS
HQARS
DDRS
ABIF
CEEM IS
TBS
CBS
DUBOS
PRIDE
DT S
CMS2
AFCOS
BRIX
APCS
NASK
RL AS
BRIM S
RM
Onlin...
TSIM S
SL AMIS
(G8)
218DBR
WSM IS
FADS
IMA
ONLINE
AWPS
TBG
DCPS
PROBE
ARMS
ATAAPS
CAB
FPSI
AMDBE
S
FAS
ACCPAC
CEFM S
FMSS
DJMS
FPU
DSOM
OA
Datab ...
SPS
ATTCMI
S
AVKINP
UT
RMS
BBDB
IATS
BIS
BRAC
FM
FC/SSF
CFRS
COST DI
S
SOFIMS
EACOBS
/EABA...
ST ARPBA
Web TAS
ASARS
RM Online...
FEDS
CDS
RINO
FFMA
WARS
OH
OFD
FIRST
EAS IV
IDSS
FMT P
FMTP
FPBG
CT 1081
AMEDD
PAS
CARE
IMET/FM
IME T/FMS
BS
S SSBS
CMOS
JUS TIS
JUST
IS
CIMS
LNPAYI
NT -IT
LNP AY INT -IT
DARTS
MSN DB
OPA2DB
OPA2SOM...
DASIS
OTDA
eSTADIS
PACIOL
AN
JR
PAOb lig
GCSS-A
PBMS
PYF DB
RM Online...
CDS (2)
RM Online...
IPAC
RM Online...
DEPS
fo r...
DEAMS
TWEL S
IBO
RM Online...
ST ARPBA
UFRDB
WIMS
DOPS
APVM
COPS
FAS (2)
System View (SV) 1
3/12/2016
As of 31 Dec 2009
6
Technical Characteristics
Of The Army’s GFEBS Solution
• Commercial Off-the-Shelf (COTS)
– Configure and not custom-building software
– Provides ‘best practices’ inherent in software
– Enables system updates and enhancements without re-writing code
• Enterprise Resource Planning (ERP) Systems
– Integrates and optimizes business processes across the enterprise
– Includes most business processes for an optimized solution
– Enables sharing of common data among all business processes
• SAP product
– The most widely used ERP solution in the world
– Customers include DLA, Navy, NASA, IRS, Wal-Mart and Daimler AG
• Benefits Include -– Complies with over 1,100 accounting and real property requirements
– Enables transformation to a cost culture
Capitalizing on COTS and ERP benefits requires
accepting business process changes
3/12/2016
As of 31 Dec 2009
7
General Fund Enterprise Business System
Objectives
Financial
Accounting system:
• Records financial
transactions in single
system Army-wide
• Complies with
statutory & regularity
requirements for
funds control and
accounting
• Includes real
property and other
asset data for
accountability
Cost accounting
system:
• Allocates or assigns
cost data and provides
full cost
• Relates costs to
outcomes/outputs/
services and
performance
• Enables cost-benefit,
comparative, and other
cost analyses
• Enables cost
planning & control
Management support
system:
• Provides visibility of
transactions in real
time across the Army
• Provides access to
continuing data
• Enables analyses
• Supports wellinformed decisions to:
 Leverage available
resources
 Improve program &
budget decisions
Estimate of progress:
3/12/2016
As of 28 April 2011
8
Transaction Illustration
Simultaneously Updates Related Records
Transactions Entered
FI – Financial Acct. & Mgmt.
FM – Funds Acct. & Mgmt.
Simultaneous Updates
• FI - None
• FM - Commitment
• CO - None
Purchase
Request
• FI - None
• FM - Obligation
• CO - None
Purchase
Order
CO – Cost Acct. & Mgmt.
MM – Materials Mgmt.
and Procurement
Payment
PPE – Property, Plant &
Goods
Receipt
Equipment [PM, PS, RE, AA]
SD – Sales & Reimbursables
3/12/2016
• FI - AP/Cash
• FM - Disbursement
• CO - None
• FI - Expense/AP
• FM - Expenditure
• CO - Expense
9
Financial Accounting Compliance
Statistics
Federal Financial
Management Improvement
Act (FFMIA)
5%
Standard Financial Information
Structure (SFIS)
(BEA 8.0)
9%
95%
95% “Substantially Compliant”
Designation from AAA
91%
91% SFIS Compliant
Determined by DCMO Audit
Business Enterprise
Architecture (BEA 8.0)
2%
98%
3/12/2016
98% Full Compliance
Self-Assertion
RPIR Compliant
with BEA 8.0
RIPM Compliance
OSD Evaluation Pending
10
Cost Accounting Capability
Includes
• Implements a standard cost structure for collecting
full and comparable data from across the Army
• Includes cost planning, cost analysis and cost control
capabilities for use as cost data become available
• Enables cost reporting, reviews and analysis across
the Army
• Supports cost management training to develop skilled
analysts and to capitalize on cost management
capability
• Provides data and tools to enable the Army to
institutionalize a “Cost Culture”
Cost Management applies across the organization
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11
Cost Accounting Capability
Enables Cost Management
Brigade data may be for:
• specific brigade
• average Bde in commandX
• average Bde across
the Army
X
X
X
Heavy
X
Light
Bde
SUST
SUST
Functional data may be for:
• total cost for school
• total cost for course
• specific costs of
interest
Force Generation
$ for Reset
$ for Ready/Train
$ for Available
Training (Ind)
$ / Student Tng Day
$ / Course Day
3/12/2016
Stryker
X
ARFORGEN data may be for:
SUST
• SUST
specific pool, e.g., Ready
• specific function in pool
• average Bde in pool
Training (Unit)
$ / Mile
$ / Flying Hour
$ / Weapon System
Base Support
Personnel
$ / Service
$ / Brigade
$ / Installation
Military - $ / Soldier
Civilian - $ / FTE
Contractor - $ / FTE
Flexible and responsive
to Army information needs
Equipment
$ / Brigade - New
$ / Brigade - Conversion
Ratio: Spt $ / Brigade $
As of 7 Jan 2010
12
Management Reports
Cost Management Report
Unit Cost Report
Cost By Budget and Plan Report
Cost By Cum
Cost by Non-Cum
Cost By Partners Cum
Cost By Partners Non-Cum
Cost By Actual
Cost By Real Property
3/12/2016
PP&E Reporter
Real Property Inventory Report
Usage of My Objects
Usage of My Objects (%)
Vacancy by Usage Type
Portfolio by Regional Location
Lease-In by Regional Location
Owned Real Estate by Regional Location
Occupancy Report
13
Deployment Schedule
By Command And Wave
Wave 1
1 Apr 2009
Wave 2
1 Apr 2010
FORSCOM
5%
20%
TRADOC
5%
20%
HQDA/OA22
USAAC
Wave 3
1 Oct 2010
Wave 4
1 Jan 2011
10%
100%
80%
90%
80%
90%
0.5%
1%
Wave 5
1 Apr 2011
Wave 6
1 Jul 2011
95%
Wave 7
1 Oct 2011
Wave 8a
1 Apr 2012
Wave 8b
1 Jul 2012
20%
100%
98%
100%
30%
100%
50%
100%
100%
100%
100%
AMC
2%
10%
100%
EUSA
2%
SMDC
USARNO
100%
USARSO
100%
USARCENT
USARPAC
90%
USAREUR
5%
USARAF
100%
100%
100%
USAASC
10%
ARCYBER
5%
10%
20%
100%
ATEC
100%
USMA
1%
USARC
MDW
100%
2%
50%
90%
100%
100%
CIDC
100%
MEDCOM
1%
10%
40%
60%
80%
90%
98%
100%
NETCOM
1%
10%
40%
45%
78%
90%
98%
100%
IMCOM
5%
10%
30%
40%
80%
85%
92%
100%
1%
5%
7%
AFRICOM
10%
100%
EUCOM
100%
ARNG
SOUTHCOM
JIEDDO
100%
We are at 86%
of all users
100%
14
100%
Wave 7 Go-Live
And Cumulative Deployment Data
• 4,200 additional end users
– 39,050 end users cumulative
• 10,280 additional civilian employees for payroll
– 168,232 cumulative civilian employees for payroll
• 343 additional Funds Centers – cumulative: 1,506
• 12,120 additional Cost Centers – cumulative: 51,152
• 22 additional locations
– 180 total locations
• 6 additional commands went fully operational
– FORSCOM, TRADOC, USARPAC, USARC, CIDC and
USSOUTHCOM
– 13 commands were fully operational: OA22, Accession Command,
EUSA, USARNO, USARSO, USAREUR, USARAF, ARCYBER,
USMA, MDW ARNG AFRICOM and EUCOM
• $ 24.5 billion allotted (as of 2nd Quarter FY12)
3/12/2016
15
End Users -- Most Are NOT
From Resource Management Office
End Users
Most common positions of nearly 40,000
•
•
•
•
•
•
•
•
Accountant
Budget Analyst
Engineer & Scientist
Health Specialist
IT Specialists
Legal Admin
Logistics Supervisor
Operations Analyst
• Program Manager
• Property Manager
• Purchasing Agent
• Quality Assurance
Specialist
• Resource Manager
• Staff Assistant
• Supply
• Technician
NOTE: As of Wave 7 October 2011
GFEBS is a transaction based system and
the preponderance of transactions begin in operational organizations
3/12/2016
16
Implementation
Is Not The End Of Development
• O&S examples
– Establishing internal “help desk” capability at commands
• E.g.,OA-22, ARNG, MEDCOM, FORSCOM and DFAS
– Redesigning Purchase Request workflow and MIPR process
• Refining and enhancing initial functionality
– Public works: Day-in-the-life ‘end-to-end’ cases
– Project systems: developing for acquisition processes
– Business Intelligence:
• Improving current reports
– Splitting cumulative and non-cumulative
• Adding new reporting capability, e.g., “Cost By” reports
• Future new capabilities
– Procure to Pay (P2P)
– Sensitive Activities
3/12/2016
17
General Fund
Enterprise Business System Is Transforming the Army
• New system with analytic tools and capabilities
• New business processes
– Capitalizes on “best practices” embedded in ERP
• New management structures and data concepts
– Single Instance of entering and then sharing data
• New roles, skills and knowledge for end users
– Opportunity for individuals to develop skills with state-ofthe-art ERP system and cost management techniques
• Complies with statutory and regularity financial
accounting requirements
GFEBS is transforming financial management and
management practices in most functions with
the new cost management capability
3/12/2016
18
GFEBS And Army Audit Readiness
Secretary of Defense Panetta:
“… I've directed the department to cut in half the time
it will take to achieve audit readiness for the
Statement of Budgetary Resources so that by 2014
we will have the ability to conduct a full-budget
audit.
We owe it to the taxpayers to be transparent and
accountable for how we spend their dollars.”
Audit readiness
re-enforces the case for the GFEBS solution
3/12/2016
19
Achieve Audit Readiness By 2014
Assertion And ERP Deployment Timeline
We are here
Notes:  GFEBS waves correspond to deployment at specific sites.
 “Assert” means Army is ready to be audited in that area.
 Exams are evaluations by independent public accounting firms.
3/12/2016
20
GFEBS And Army Cost Management
Concept of Operations
Capture and Valuate Data in GFEBS (CO module)
The cost accounting features of GFEBS
3/12/2016
captures cost and related performance data,
and supports cost management
21
General Fund Enterprise Business System
Leadership
LTG Joseph E. Martz
Military Deputy for Budget,
Assistant Secretary of the Army
(Financial Management & Comptroller)
Robert M. Speer
Principal Deputy
Assistant Secretary of the Army
(Financial Management & Comptroller)
A collaborative team of ASA (FM&C) and PEO-EIS
Ms. Kristyn E. Jones
Director,
Financial Information Management
Mr. Roger A. Pillar
Director, Functional Program
LTC Stephen Lockridge
Director, Deployment & Transformation
Mr. Doug Wiltsie
Program Executive Officer for
Enterprise Information Systems
COL Patrick W. Burden
GFEBS Project Manager
https://wiki.kc.us.army.mil/wiki/Portal:GFEBS
3/12/2016
As of 12 September 2011 22