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In Tune with Army Financial ManagementIn Tune with Army Financial Management
Cost Awareness of Financial Operations in Theater
Cost Awareness of Financial Operations in Theater
Army Day 2010Army Day 2010
June 2, 2010June 2, 2010
Steve Bagby - MG Phil McGhee – COL SawyersSteve Bagby - MG Phil McGhee – COL Sawyers
In Tune with Army Financial ManagementIn Tune with Army Financial Management
AgendaAgendaAgendaAgenda
Operationalizing Cost Management Cost Education and Training Cost Management - Policy / Guidance / GFEBS
Support Resource Informed Requirement Processes
USARCENT Financial Management Operations
Financial Management School GFBES Sustainment Training Products Cost Management and Cost Accounting Courses
2
In Tune with Army Financial ManagementIn Tune with Army Financial Management
Cost Culture - Cost ManagementCost Culture - Cost Management
Single Use
EstimatedFuture Cost
Cost InformedDecision Making
Cost-BenefitAnalysis
Persistent Use
Expected & Actual Cost
Continuous Improvement
Cost Managed Enterprise
Universal Use
Planned & Actual Cost
Role Based, Org Based,
Output Based Control
Cost Culture
Cost War Cost War High Cost War Full Spectrum
Insurgency Intensity Conflict Operations
Starting here TARGET (some work is being done)
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In Tune with Army Financial ManagementIn Tune with Army Financial Management
Cost Management
Cost Planning
Cost Controlling
Cost Analysis
Cost Accounting
Cost Management
Process
Full Cost Measurement– Accurate, timely and relevant data– Connecting operational output/performance
data to financial data– Allocate Overhead, Unfunded Costs,
Indirect Support
Cost Analysis– Variances– Trends and forecasting– Product, service or activity
cost by expense (labor, material, contracts, etc…)
– Understanding full costs of organizations, operations, products and services
– Comparison Analysis & Benchmarking
Cost Planning– Operational managers
set cost targets and efficiency goals
– Plan cost based on outputs produced
Resource Informed
Decisions– Take action based on
analysis and external demands
– Change targets– Change resources– Change quantity / quality
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In Tune with Army Financial ManagementIn Tune with Army Financial Management
Cost Management EnablersCost Management Enablers
Cost Management 101- Cost Management Overview- Cost Object (ERP) Definitions- Cost Flow Methods- Cost Analysis and Reporting
GFEBS – Cost Management TrainingThese courses are either computer-based or instructor-led training classes to learn how to operate within the GFEBS cost module.
Cost Management Certificate CourseThe program of instruction (POI) is designed to teach the fundamentals of cost management with a view to developing a cadre of Army personnel who are professionally knowledgeable, analytically competent, and personally motivated to serve as proactive change agents within their respective Enterprise line and staff organizations.
Self Study-Cost Management Community of Practice https://www.us.army.mil/suite/page/593701
Cost Management Courses in all Professional Development Programs
0.0
1.0
2.0
3.0
4.0
5.0
Integration with Quality / ProductivityImprovement
Knowledge Sharing/ Best Practices
LeadershipCommitment
WorkforceCompetencies
Acceptance & AttitudeAccountability/ Performance Mgmt
ProcessIntegration
DataQuality
EnterprisePerspective
ARMY COST MANAGEMENTMATURITY MODEL
Version 10: 4 June 2008
Actual Target
Policy & GuidanceTraining (Operational & Resource Mgrs)
Tools
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In Tune with Army Financial ManagementIn Tune with Army Financial Management
Costs Benefits
Cost Informed Decisions
Cost Benefit Analysis
POM / BES
Manning
Equipping
Training
Sustaining
Organizing
Installation
The Value of Cost Benefit Analysis: Supplements professional experience and judgment
with sound analytical techniques Ability to make better resourced-informed decisions Results in a strong “value proposition”
Doctrine
Organization
Training
Materiel
Leadership
Personnel
Facilities
6
DoD Resources
Materiel Enterprise
Strategic Partners
FM/Contract Systems
Lean Six Sigma Team
Cost Analyst Team
Banking Team
Mgmt/System Accts
USARCENT Financial Management Operations
Theater FM Initiatives• FM/Contracting systems• Cost culture• Cost of war• FM doctrine
Imperatives• Visibility• Accountability• Transparency• Oversight• Controls
Theater Army Financial Management Report
Link end-to-end processes
Effect major cost drivers
Model and analysis
Lean out inefficiencies
Maximize e-commerce
FY10
Monthly Disbursements$396M
$714M Cost Avoidance $434M Cost Savings $1,148M
91% EFT Payments
Credibility Confidence Trust
9% Cash Payments
Exceptional Stewardship• Performance metrics• Resource informed• Cost savings • Cost avoidance• Process efficiencies• Near cashless Theater
1 % Goal
v2 as of 18 APR10 7
In Tune with Army Financial ManagementIn Tune with Army Financial Management
Principles Cost Act/Mgmt (120 hrs)
Intermediate Cost Act/Mgmt (120 hrs)
Education
Technical Training
Non FM Roles
GFEBS Sustainment Training Products
The US Army Financial Management School will implement GFEBS financial management training products no later than 1 OCT 2011 in order to sustain FM Community knowledge and skills
Reimbursables (20 hrs)
Funds Management (24 hrs)
Spending Chain (50.5 hrs)
Project Systems (8 hrs)
Cost Management (80 hrs)
Financials (80 hrs)
Instructor Led Training Distributed Learning (dL)
GFEBS Essentials (20 hrs)
Training Support Packages
dL Products
GFEBS Material w/in Legacy Courseware
(AIT, NCOES, OES, Functional Courses)
GFEBSPM
Training(53
Courses)
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In Tune with Army Financial ManagementIn Tune with Army Financial Management
Cost Management (CM) Cost Management (CM) within Professional Military Educationwithin Professional Military Education
Course: FM BOLC FMCCCPurpose: • Provide CM foundation.
• Introduce cost concepts and terms. • Describe the Army’s cost culture.• Relate CM to GFEBS capabilities.
• Introduce advanced Cost Accounting and CM concepts. • Cost Benefit Analysis (CBA) case study.• Develop communications skills to influence leaders decisions.
Audience: 2nd Lieutenants Captains
Length: 8 Hours 16 Hours
Content:
• Cost Management (CM)• Cost Culture within the Army• Cost Terms and Concepts • Cost Benefit Analysis (CBA)• Practical Exercise
• Cost Management (CM)• Cost Accounting (CA)• Cost Benefit Analysis (CBA)• Practical Exercise • Cost Decision Briefings• Intensive Group CBA Exercise
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In Tune with Army Financial ManagementIn Tune with Army Financial Management
Cost Management (CM) Cost Management (CM) Functional CoursesFunctional Courses
Course:Principles of
Cost Accounting & Management (PCAM)Intermediate
Cost Accounting & Management(ICAM)
Purpose: • Offer a basic cost management and cost accounting functional course• Provide underlying cost accounting (CA) and CM principles, theories, and application. • Prepare military and DA civilians to leverage CM tools within GFEBS
• Build on the PCAM course and provide more advanced CA and CM concepts.• Provide an increased focus on analysis, reporting, and communication skills.• Provide the knowledge necessary to fully leverage the CM and analytic tools within GFEBS.
Target Audience: SGT, LT, CPT, entry level CP 11 Personnel
SSG, SFC, CPT, mid level CP 11 Personnel
Course Length: 3 Weeks 3 Weeks
Prerequisites: Math dL Prep Course Math dL Prep Course, PCAM
Course Content:
• Cost Management Principles• Cost Term/Concepts• Cost Accounting• Cost Benefit Analysis• Variance Analysis • Practical Exercises
• Cost Management• Cost Accounting • Cost Management Paper• Cost Management Briefings• Cost Benefit Analysis• Intensive Case Studies/Exercises
10
In Tune with Army Financial ManagementIn Tune with Army Financial Management
ICAM
• Cost Flow Methods• Analysis and Reporting• Practical Exercises• Complex Case Studies
End State: FM Community possesses the knowledge and skills necessary
to leverage cost management and cost accounting
Cost Management and Cost AccountingCost Management and Cost Accounting“Achieving Readiness at Best Value”
PCAM
• Cost Terms• Cost Concepts• Fundamentals of Cost Acct. and Cost Mgmt• Practical Exercises
CMCC
• Managerial Costing• Operations Management• Cost Control• Organizational Development
Soldier Support Institute Naval Postgraduate School
LT CPT MAJ LTC / COL
Principles of Cost Accounting and Management
IntermediateCost Accounting and Management
Cost Management Certificate Course
SGT SSG SFC MSG / SGM
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