Post on 21-Dec-2015
transcript
AMERICA’S ARMYTHE STRENGTH OF THE NATION
A
rmy
Cost
Man
agem
ent &
Fin
anci
al T
rans
pare
ncy
M
. Anv
ari
Army Cost Management & Financial Transparency
Predictive AnalyticsSymposium
Washington, DC November 18-19, 2014
Mort Anvari
Director, Programs and Strategy
US Army, ASA(FM&C)
AMERICA’S ARMYTHE STRENGTH OF THE NATION
A
rmy
Cost
Man
agem
ent &
Fin
anci
al T
rans
pare
ncy
M
. Anv
ari
Army Financial Transparency
Challenges
• DOD Audit Readiness
• Visibility into Cost and Spending
• Meaningful Business Analytics for Decision Making
• Financial System Interface Errors and Rework
Progress
• Cost Culture and Cost Management (CM) Initiatives
• Army General Fund Enterprise Business System (GFEBS)
• Addressing Financial Material Weaknesses - LSS
• Army Financial Management Optimization (AFMO)
• Army Financial Benefits Reporting and Tracking (AFBRT)
• Army CM Steering Group
2
Opportunity
• Army Cost Data Capture Strategy and CM
AMERICA’S ARMYTHE STRENGTH OF THE NATION
A
rmy
Cost
Man
agem
ent &
Fin
anci
al T
rans
pare
ncy
M
. Anv
ari
Army Cost Management (CM) is working
Technology4. Data Quality (ERP Cost Data, Performance Metrics)5. Tools & Models (Analytics, BI)
Process6. Cost Planning (Cost Estimates, …...)7. Cost Analysis (CBA, AoA, ….)8. Cost Integration to Requirement, Acquisition & Resource 9. Cost Control (LSS, AFBRT, …..)
CM Goal: Better Value for Lower Cost• Stewardship of nation’s resources • Cost informed decision making• Continuous improvement• Accountability for costs• Tracking progress
Data Quality
Cost Analysis
Training
3
People1. Leadership Commitment2. Training3. FM Workforce (AFMO)
CM Maturity Model
CM Process Model
AMERICA’S ARMYTHE STRENGTH OF THE NATION
A
rmy
Cost
Man
agem
ent &
Fin
anci
al T
rans
pare
ncy
M
. Anv
ari
Perform Cost
Analysis
Perform Cost
Controlling
Perform Cost
Planning
Perform Cost
Accounting
Develop & Maintain Cost
Model
Compare Results to Plan
Process Improvement
Adjust TargetsSelect Method of Control
Implement (changes to) Policies & Procedures
Manage Tradeoffs
Capture Actual Costs
Perform Cost Assignment
Perform Period End Close
Capture Actual Outputs
Capture Actual Costs
Perform Cost Assignment
Perform Period End Close
Capture Actual Outputs
Establish Planned Output
Establish Planned Costs
(inputs)
Develop Cost and Performance
Targets
Develop Metrics
Determine Cost
Objectives
Maintain Cost Model
4
Army Cost Management End-to-End Process
CM Process Activities Level One
CM Process Activities Level
Two
AMERICA’S ARMYTHE STRENGTH OF THE NATION
A
rmy
Cost
Man
agem
ent &
Fin
anci
al T
rans
pare
ncy
M
. Anv
ari
Army Cost Management and PPBE
5
Integrating Cost Management with
PPBE Process
AMERICA’S ARMYTHE STRENGTH OF THE NATION
A
rmy
Cost
Man
agem
ent &
Fin
anci
al T
rans
pare
ncy
M
. Anv
ari
6
Aligned CM to PPBE
AMERICA’S ARMYTHE STRENGTH OF THE NATION
A
rmy
Cost
Man
agem
ent &
Fin
anci
al T
rans
pare
ncy
M
. Anv
ari
7
CM Activities and PPBE Phases
Planning Programming Budgeting Execution(6 - 10 Years) (6 Years) (1-2 Years) (Current Year)
HQDA
Strategic Decision-Making:
- Cost Benefit Analysis
- Analysis of Alternatives
- Army Cost Position (LCCE)
- Cost Models / Tools * FORCES Costing Model * Capability Costing Tool
- Cost of Army - Workforce Analysis
Outyear Forecasting: - Cost Factors & Models * TRM/OSMIS * FORCES Costing Model * AMCOS / Civ Pay Rates - Army Cost Position (LCCE) - Contingency Cost Model - CBA's, LSS - Incorporate AFBRT Benefits
Formulation / Justification: - Cost Factors * OPTEMPO Cost Factors
* Mil Pay Rates * Civ Pay Rates - Cost & Spend Plans - Include AFBRT Initiatives - Historical Trend Analysis - Establish Should Cost Goals
Allocation/Funds Distribution: - Cost Analysis to Support * Cash Management * Reprogramming * Rate of Executution - Budget vs Actual (Variance) - Monitor Will /Should Cost - Track Cost Savings (ARFIT) - Mid-Year Reviews
Command / DRU
Strategic Planning:
- Cost Benefit Analysis
- Cocept Plans
- Workforce Mgmt - Submit Initiatives to AFBRT
- Trend Analysis
- Cost Models / Tools - Investment Decisions - Identify Efficiency Initiatives
Outyear Plans / Controls: - Cost Targets/ - Annual Efficiency Goals - Assess Cost & Spend Plans - Plan Output (Capacity Mgmt) - Cost Benefit Analysis - Trade Space Analysis - Establish AFBRT Milestones
- TRAPS
Measure & Control:
- Variance Analysis (Cost & Output) - Benchmarking Best Practices - Adjust Cost Targets - Mid-Year Reviews - Measure Reduction Initiatives - Adjust Allocation Rules
Operational Activity
Operational Planning:
- Establish Annual Cost Plans - Set Output Goals / Objectives - Optimize Capacity - Adjust to Directives (e.g. TRAPS) - Establish Activity Rates (Labor / Equip) - Estimate OH Allocations
Continuous Improvement: - Qtrly Cost Mgmt Reviews - Variance Analysis * Resources (Inputs) * Labor Rates * Output (Unit Cost, Qty) - Budget vs Actual (Variance) - OH Allocations
- Product/Service $, Customer $
AMERICA’S ARMYTHE STRENGTH OF THE NATION
A
rmy
Cost
Man
agem
ent &
Fin
anci
al T
rans
pare
ncy
M
. Anv
ari
4. Funding
2. Contracts
8
Full Visibility - Big Cost Data
2.Co
ntra
cts
3.Se
rvic
es
1. Customers
4.Fu
ndin
g5.
Cost
Ce
nter
s
Multi-dimensional Polygon Cost Visibility
1- Customers by Contracts2- Customers by Services 3- Customers by Funding4- Customers by Cost Centers5- Contracts by Service6- Contracts by Funding7- Contracts by Cost Centers8- Services by Funding9- Service by Cost Centers10 –Funding by Cost Centers
for 10 views 45 cost visibility table is needed
Views
# Tables = N * (N-1) / 2
Org, Year, Supplier, Type . . ?
. . .. . . .
3. Services
3
2 5
4
6
7
8
9 10
1
Enterprise CM Data Need
AMERICA’S ARMYTHE STRENGTH OF THE NATION
A
rmy
Cost
Man
agem
ent &
Fin
anci
al T
rans
pare
ncy
M
. Anv
ari
Prioritized, Aligned, and Optimized Cost Data Capture
Improve data quality and cost data visualization tools for decision making. Incorporate rigorous Cost Management in funding decision to reduce future cost risk. Plan for capture of execution data in support of CM and PPBE processes.
Integrate Cost Management into PPBE and Core End-to-End processes
9
Cost Management Data Capture Strategy
AMERICA’S ARMYTHE STRENGTH OF THE NATION
A
rmy
Cost
Man
agem
ent &
Fin
anci
al T
rans
pare
ncy
M
. Anv
ari
Cost Management Data Architecture
Presentation Layer
DataWarehouse & Information ManagementLayer
Data IntegrationLayer
Data SourcesLayer
Data Marts
Dash BoardsReports Analysis
Data Warehouse(AESIP)
OLAP
ERPsFile Systems
SOA, ESB,Web
ETLUnstructured Data
Databases Unstructured DataSources
BI Engine
A
B
GCSS-AIPPS-A
GFEBS
GFM-DI
Co
mm
on
Dat
a V
alu
e
Co
mm
on
Exc
han
ge
Mec
han
ism
Co
mm
on
En
tity
Mo
del
Data Standardization
10High Cost of Data Standardization at Data Source Layer ?
AMERICA’S ARMYTHE STRENGTH OF THE NATION
A
rmy
Cost
Man
agem
ent &
Fin
anci
al T
rans
pare
ncy
M
. Anv
ari
Cost Attribution Models
11
Data Views
AMERICA’S ARMYTHE STRENGTH OF THE NATION
A
rmy
Cost
Man
agem
ent &
Fin
anci
al T
rans
pare
ncy
M
. Anv
ari
12
Army Cost Management Steering Group
Cost and Performance Knowledge
enables Resource Informed
Decision Making
1st meeting on18 November 2014
AMERICA’S ARMYTHE STRENGTH OF THE NATION
A
rmy
Cost
Man
agem
ent &
Fin
anci
al T
rans
pare
ncy
M
. Anv
ari
Army Cost Management Architecture
13
CM E2E ProcessCM Technology Tools
CM Training & Workshops
AFBRT
CM Model
Big Data Analytics
& BIPM
Dashboards
ERP Data
PPBE Enterprise
Cost Models
BIG DATA
COST & PERFORMANCE MANAGEMENT
PPBE
FORCE 2025 PPBE
TAA
APS
AMERICA’S ARMYTHE STRENGTH OF THE NATION
A
rmy
Cost
Man
agem
ent &
Fin
anci
al T
rans
pare
ncy
M
. Anv
ari
Army Cost Management Architecture
Cost Performance knowledge will improve with subsequent iterations
14
Army Enterprise Cost Management Needs & FM Transparency
Data Capture Strategy (Big Data)
Advanced Analytics
Advanced Capabilities
AMERICA’S ARMYTHE STRENGTH OF THE NATION
A
rmy
Cost
Man
agem
ent &
Fin
anci
al T
rans
pare
ncy
M
. Anv
ari
External
• To aid in building budget materials.
• Justify budget decisions to OSD and congressional staff.
Internal (Army Senior Leader questions)
• What is the readiness impact if we assume more risk in funding?
• How much funding can be reduced and still maintain minimum required deployable units?
• Where is the knee in the curve between cost and readiness?
• Major funding reductions put readiness at risk.
• If we don’t know what readiness cost how can we say it’s not enough.
Why Readiness Costing is Needed?
15
Cost of Readiness Example
AMERICA’S ARMYTHE STRENGTH OF THE NATION
A
rmy
Cost
Man
agem
ent &
Fin
anci
al T
rans
pare
ncy
M
. Anv
ari
Read
ines
s/Re
quire
men
ts
Capacity/Cost
As-
Is R
equi
rem
ents
Target Readiness Level
TargetCapacityMinimum Readiness Level
Under Capacity
MarginalCapacity
Over Capacity
ABCD
Fut
ure
Req
uire
men
ts
Cumulative Distribution/Density Function (CDF)16
Readiness & Requirements Capacity & Cost
A Conceptual Model
AMERICA’S ARMYTHE STRENGTH OF THE NATION
A
rmy
Cost
Man
agem
ent &
Fin
anci
al T
rans
pare
ncy
M
. Anv
ari
FY14 FY15 FY16 FY17 FY18 FY19 FY20
A B C D
Notional Example:Cost of Readiness for Personnel
Readiness Component Capacity BaselineCapacity’s Impact on Readiness
Cost
Illustrative Data
Illustrative Data
Zone Capacity/Cost Readiness
A No Change
B
C
D Under Capacity Below Minimum
Readiness Component
A B C D
Personnel P
Supply-on hand P
Readiness-Equipment P
Training P
Readiness/Requirements vs. Capacity/Cost
Requirement
17
Illustrative Data
Cost of Readiness Example
AMERICA’S ARMYTHE STRENGTH OF THE NATION
A
rmy
Cost
Man
agem
ent &
Fin
anci
al T
rans
pare
ncy
M
. Anv
ari
Big Data !
18
AMERICA’S ARMYTHE STRENGTH OF THE NATION
A
rmy
Cost
Man
agem
ent &
Fin
anci
al T
rans
pare
ncy
M
. Anv
ari
Questions?
19
AMERICA’S ARMYTHE STRENGTH OF THE NATION
A
rmy
Cost
Man
agem
ent &
Fin
anci
al T
rans
pare
ncy
M
. Anv
ari
20
AESIP - Army Enterprise Systems Integration Program
AFBRT - Army Financial Benefits Reporting and Tracking
AFMO - Army Financial Management Optimization
AoA - Analysis of Alternatives
BI - Business Intelligence
CBA - Cost benefit Analysis
CM - Cost Management
ERP - Enterprise Resource Planning
ESB - Enterprise Service Bus
ETL - Extraction Transformation and Load
GCSS-A - Global Combat Support System-Army
GFEBS - General Fund Enterprise Business System
GFM-DI - Global Force Management Data Initiative
IPPS-A - Integrated Personnel and Pay System-Army
OLAP - Online Analytical Processing
PPBE - Planning, Programing, Budgeting, and Execution Process
SOA - Service Oriented Architecture
Table of Acronyms