Transformation Update to DFAS Workforce

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Transformation Update to DFAS Workforce

• ltNAMEgt
• Site Director
• Defense Finance and Accounting Service
• December 2005

2
Agenda

• DFAS Transformation
• Strategic Goals/Balanced Scorecard
• Human Capital Strategy
• DFAS Strategic Organizational Alignment
• Base Realignment and Closure
• Summary

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Transformation Blueprint

• Human Capital Strategy

• High-Performing Organizations
• Lean6

• Business Intelligence
• Benchmarking
• Information Security

• DBSMC
• ERPs
• eCommerce

• BRAC
• Centers of Excellence

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Transformation Vision
VISION Transforming Today To Be The Trusted
Financial Partner For Tomorrows Warfighter
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Leadership Vision2006 Strategic Plan and
Balanced Scorecard

• Strategic Plan
• Involves senior leaders, external customers, and
  cross section of internal staff in defining
  strategic goals and key initiatives
• Strategy links to OUSD(C) plan, the BMMP, and PMA
• Cascades to mission areas and corporate
  organizations
• Balanced Scorecard
• BSC links directly to DFAS Strategy
• Cascades to mission areas and corporate
  organizations
• BSC Measures are
• More outcome oriented and focused on results
• Tied to benchmarked performance targets
• Measures track to OUSD(C) plan, the BMMP, and PMA

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Leadership Vision FY06 Strategic Goals
Strategic Goals
Strategic Objectives
Implement best business practices to increase
productivity and reduce costs
Attain operational excellence in finance and
accounting services
Integrate e-solutions through state-of-the-art
technology
Provide instant access to comprehensive financial
data
Deliver financial information on-demand for
decision-makers
Provide quality financial analysis and timely
advice
Establish dynamic partnerships to execute ERP
solutions
Fulfill BRAC requirements
Transform DFAS to become a Center of Excellence
Create Centers of Excellence and HPOs
Execute NSPS requirements
Attain a highly professional workforce with
indispensable skills and competencies
Reshape workforce to meet mission needs
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PeopleHuman Capital Strategy

• National Security Personnel System (NSPS) Status
• Employees will receive the approved pay raise
• Implementation is event driven
• Labor relations voluntarily postponed
• Implementing issuances are in process
• Proposed details can be found on NSPS website
• Continuing collaboration process occurring with
  the unions at the DoD level
• Implementation schedules will be provided once
  determined by DoD

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ProcessAccounting High Performing Organization
(HPO)

• HPO effort began in January 2005
• Objectives
• Reengineer accounting end to end processes
• Eliminate redundancy in organizations and
  operations
• Anticipate efficiencies through new system
  implementations
• Reduce footprint for accounting operations
• Conclusions
• Integrate and enhance end to end processes
• Develop accounts maintenance and control function
• Establish a corporate accounting organization
• Consolidate operations and support functions
• Outcomes
• Accounting operations performed at fewer sites
• Standardized organization for operations
• Significant savings realized through
  implementation
• Improved business processes

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Structure2005 BRAC Law

• Grow the DFAS site at Cleveland, OH, to not less
  than 1,500 Full Time Equivalents (FTEs)
• Grow the DFAS site at Limestone, ME, to not less
  than 600 FTEs
• Grow the DFAS site at Rome, NY, to not less than
  1,000 FTEs
• Maintain not less than the current FTEs1 at the
  DFAS sites at Columbus, OH (2,064 FTEs), and
  Indianapolis, IN (2,632 FTEs)

1 FTEs effective EOM August 2005 (Geographic
Location Report, Military Personnel Report)
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Business Model for Workload Realignment

• Create Centers of Excellence
• Incorporate customer requests
• Align accounting by network
• Ensure strategic redundancy
• Meet BRAC staffing floors
• Use existing excess capacity

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StructureBusiness Model under BRAC

• Risk Mitigation
• Obtain BRAC funding
• Parallel processing
• Performance metrics
• Tiger teams
• Incentive programs
• Staff augmentation
• Centralized hiring program
• Hiring 90 days in advance of defined needs
• Initiative Examples
• Site surveys
• BRAC implementation planning
• Customer Advisory Forum

• BRAC Risks
• Funding
• Impact on customer rates
• Date funds will be available
• Operational Impact
• Contracts
• Operational capability at gaining site
• People
• Hiring for the right skills
• Training
• Attrition of key personnel
• Security clearance processing
• Customer
• Synchronize with customer plans
• Consider BRAC impact on customers
• Systems
• Infrastructure
• New implementations

• Schedule Assumptions
• End of Fiscal Year requirements and holiday
  blackout periods were considered
• Accounting - September to October
• Accounts Payable (Vendor Pay) - September
• Payroll - January and February
• Holiday period - last 2 weeks of December and
  first week of January
• Sites with pending lease termination dates (i.e.,
  San Antonio, Oakland) prior to end of lease to
  avoid penalties/other costs
• Complex and comprehensive workload movement and
  reconstitution requirements - acquisition
  accounting - are scheduled in 6-month intervals
• Other events - such as travel pay transformation
  - may occur in advance of the site closure
• Implementation of HPOs
• ERPs and systems consolidation impact
• Smaller sites considered
• Early workforce migration potential from closing
  sites located near remaining sites (i.e., Dayton
  proximity to Columbus/Indianapolis)
• Redundancy of operations during closing process

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StructureCurrent DFAS Organization
Functional Model
As of Feb. 28, 2005
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Structure The Case for Change

• Customer perspective
• Better service for less
• Better information to support decision-making
• Clients want improved service and quality at
  lower cost
• Financial perspective
• DoD budget availability declining
• Internal perspective
• ERPs and technology radical changes in our
  business
• BRAC/fewer sites creating more efficient
  operations
• Align responsibility for operations at a single
  site
• Growth and learning perspective
• Changing environment creates human capital
  challenges
• New technology training skill gaps
• Location losing institutional knowledge
• NSPS performance based culture

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StructureProposed DFAS Organization
Business Intelligence Client Executives Informatio
n Technology Corporate Resources Internal
Review Acquisition Management Organization Office
of General Counsel Chief of Staff

• Key Points
• Retains focus on clients and customers
• Provides opportunity to organize along functional
  lines/Centers of Excellence and consider customer
  groups
• Aligns work along service mission lines
• Operational effectiveness must be sustained
  during transformation
• Final organizational structure and staffing to be
  driven by benchmark standards/HPOs
• Partnership between DFAS and client/customers
  must be maintained and enhanced during
  transformation

Director Deputy Director

• Strategic Management
• Transformation
• Business Requirements/Integration
• Policy/Procedures and Performance

• Accounting and Finance Operations
• Accounts Payable
• Accounts Receivable
• Corporate Accounting
• Account Maintenance
• Disbursing
• Travel Pay
• Civilian, Military, and Retired Payroll
• Standards and Compliance

Note January 2006 target date for command and
control
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Structure Roles and Responsibilities

• Provide client executive services for DFAS
  customers
• Provide business intelligence for internal and
  external customers
• Oversee HQ Support Organizations

Deputy Director

• Focus on the DFAS core mission
• Implement new systems and processes
• Standardize operations across product lines

Deputy for Operations

• Lead transformation/transition initiatives
• Standardize and integrate functional requirements
• Integrate and operationalize new systems,
  policies and procedures into agency business
  processes
• Lead business integration initiatives

Deputy for Strategic Business Management
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Organizational Structure - January 2006
Business Intelligence Client Executives Informatio
n Technology Corporate Resources Internal
Review Acquisition Management Organization Office
of General Counsel Chief of Staff
Director Deputy Director
Office of Strategic Management
Deputy for Strategic Business Management
Deputy for Operations
Sites included Charleston Pensacola Norfolk Japan
Oakland San Diego Pacific
Director Cleveland Site
Director Standards Compliance
Director Policy Performance
Director Transformation
Director Columbus Site
Corporate Accounting Mission Area Director
Sites included Dayton San Bernardino Omaha Limest
one
Director Denver Site
Accounting Operations Mission Area Director
Director Business Requirements Integration
Director Indianapolis Site
Finance Mission Area Director
Sites included Lawton Lexington Orlando Rome Rock
Island Europe San Antonio Seaside Texarkana St
Louis
Disbursing Mission Area Director
Director Kansas City
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Organizational Structure - FY 2009
Business Intelligence Client Executives Informatio
n Technology Corporate Resources Internal
Review Acquisition Management Organization Office
of General Counsel Chief of Staff
Director Deputy Director
Deputy for Operations
Deputy for Strategic Business Management
Office of Strategic Management
Director Cleveland Site
Director Standards Compliance
Director Policy Performance
Director Transformation
Japan
Corporate Accounting Mission Area Director
Oversight
Director Columbus Site
Accounting Operations Mission Area Director
Limestone
Director Business Requirements Integration
Director Indianapolis Site
Finance Mission Area Director
Rome
Disbursing Mission Area Director
Europe
Texarkana
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ProcessFY2009 End State - Operations Highlights
Center of Excellence Limestone
Center of Excellence Columbus
Transportation Working Capital Fund Accounting
Acquisition Accounting including Contract Pay
Centers of Excellence Cleveland
Retired and Annuitant Pay Garnishments
Center of Excellence Indianapolis
Security Assistance Accounting
Centers of Excellence Rome
Medical Accounting Special Ops Accounting
NOTES 1. Backup for Travel Pay will reside in
Columbus until DTS is fully implemented 2.
Arlington Liaison, Bratenahl, Texarkana and
OCONUS locations also continue mission operations
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Insert site specific workload realignment
chart(s)

• Closing sites will have one slide- Enduring
  sites will have multiple slides for outgoing and
  incoming workload Cleveland (3
  slides) Columbus (3 slides) Indianapolis (3
  slides) Limestone (3 slides) Rome (3 slides)

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PeopleMaximum Employee Assistance

• Employee transition options include
• DFAS will pay PCS costs for employees who move to
  an enduring site
• PPP registration
• Retirement seminars
• VERA/VSIP
• Severance pay
• Other federal agencies
• Resume and interviewing assistance
• Private sector employment
• Realignments outside of BRAC (to reduce footprint
  or other) may not provide the same comprehensive
  transition options

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DFAS Transformation
FY 2005

• Fewer locations 101
• 9,9152 employees
• 18 systems
• 1,368M operating costs3
• 70 professional / 30 technicians
• Right employees with right skills
• Optimum number and mix of civilians/contractors
• Pay for performance under NSPS

• 30 locations1
• 13,8792 employees
• 92 systems
• 1,615M operating costs3
• 70 technicians / 30 professional
• Aging workforce
• General Schedule Pay System

1 Includes Europe Japan 2 Source HR Flash
Report September 2005 (civilian military) 3
Current
1 Includes Europe Japan 2 Projected Civilian
Military 3 Current