benefits of using a shared service provider
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Larry Neff from the Department of Transportation highlights the benefits of using a shared services providerTRANSCRIPT
SSPS 2008 Conference on Shared Services for the Public Sector
Benefits of Using a Shared Service Provider
Larry NeffDeputy Chief Financial Officer
U.S. Department of TransportationMay 7, 2008 – Alexandria, Virginia
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Agenda
Background on DOT & our Shared Services CenterPartnershipsBenefits of a standard integrated application
Low cost, low risk, best practicesLessons learnedOutlook for the future
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Background on DOT and our Enterprise Services Center (ESC)
DOT has 55,000 employees & a $66 billion annual budgetHighly decentralized organization (Operating Administrations)OST, WCF, OIG, FAA, FHWA, FTA, FRA, FMCSA, NHTSA, MARAD, PHMSA, RITA/BTS/Volpe, STB, SLSDC
ESC has 1,000 employees & is in the FAA Franchise FundIT Services/Data Center, Applications Support, Accounting Services, Customer Services/Help DeskLocated at the Mike Monroney Aeronautical Center in beautiful Oklahoma City
1,100 acre secure campus5,500 total employeesProfessional, knowledgeable, dedicated career staff
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DOT & ESC Accomplishments
2000-2003: DOT implemented all 14 bureaus on a COTS-based, FSIO-certified financial system with no customizations running on a cost-effective single production instance
Produce financial statements overnight from the core accounting system
DOT has consolidated all accounting operations to ESCSaving $5+ million per yearBureaus more willing to streamline & standardize processes
Clean financial audit opinions 6 of last 7 yearsDOT raised to “yellow” on PMA goal for Financial Management
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Enterprise Services Center (ESC)Feb. 2005: OMB designated DOT/ESC 1 of 4 Federal Shared Service Providers (FSSPs)
Standard integrated financial systemExpert accounting services
ESC currently cross-servicesGovernment Accountability Office (GAO)Commodity Futures Trading Commission (CFTC)Institute of Museum and Library Services (IMLS)National Endowment for the Arts (NEA)
ESC using Service Oriented Architecture (SOA) technology to integrate PRISM with Oracle Financials
Eliminates duplicate manual data entry & reconciliationSupports commitment accounting
6Simplify your work
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Delphi Financial Systems Architecture
ProcurementManagement
System
Prism withCost Accounting andCommitment Acct’g
Delphi – Oracle Federal FinancialsGeneral Ledger, Accounts Receivable, Accounts Payable,Purchase Orders, Project Accounting, Human Resources,Fixed Assets, Asset Management, Logistics and Inventory
–––––––––––HR/Payroll Interface Repository and Reporting
–––––––––––Discoverer and Web Reports, Data Warehouse, DashBoard:
Business Intelligence, Balanced Scorecard, Web Portal
E-TravelIntegrated with
Northrop Grumman GovTripand
Travel Manager
Payment CollectionInternet Web site
Pay.gov
Credit CardProcessingTravel – Citibank
Purchase – US Bank
E-PayrollIntegrated with
National Business Center and
National Finance Center
Interfaced Feeder SystemsObligation InterfaceGrants Management SystemsGSA Supplies and Motor Pool
Central ContractorRegistration (CCR)Interface being completed to
automatically update the Delphi Supplier Table
Electronic Data Interchange
(EDI)with vendors
(pilot: Xerox)
CASTLEConsolidated
Automated Systemfor Time and Labor Entry
Web-based, single-screenTandA and Labor Distribution
Reporting system
Interfaced to Delphifor Cost Accounting
InvoiceImaging and
WorkflowSystem
(170 Systems)
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Partnerships for Shared Services
ESC recognized need for an on-going private sector partner to help market to & implement new external customers
Implementation workload goes up & downContinuity to ensure expert & experienced staff
Competed a Task Order on NIH’s CIO-SP2i contractWon by SRA with IBM
Mutually beneficial relationshipGained new customersMarketing expertiseImplementation resources
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Partnerships for Shared Services
ESC also has a contract with L-3 for on-going operational support
Data Center supportApplication supportOperational accounting support
Exploring a Blanket Purchase AgreementConsolidate supportCompete Task Orders among vendorsFaster to use & easier to administer
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Partnerships for Shared Services
Initially, some agencies thought the FM LoB was focused on shared hosting of financial systems
This view-point was too narrowNo economy of scale is realized by just moving from 1 large data center to anotherHosting costs are a small part of any IT system’s costs
The biggest potential economy of scale is in shared application support
Professional staff with expertise in running the systemBiggest cost of system operationsOnly way to drive down cost of application support is by using standard systemsFSIO standards make this even easier
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Partnerships for Shared Services
Alternatives for ensuring high quality services through competition
4 Federal SSPs & __# Private SSPs all competing against each other
vs.
Teams of Private & Federal staff working together as SSPscompeting against other Private-Federal SSP Teams
Offers customers all the strengths both sides bring to the tableFederal accounting expertiseIT hosting & database administration
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Benefits of Shared Services
Low Cost
Customers get all the advantages of DOT’s financial system & accounting services without contributing to DOT’s $125 million capital investment
ESC already provides 90% or more of most required solutions; most additional needs can be met through configuration & set-up and interfacesCustomers only pay 1-time implementation costs and their fair share of annual operating & maintenance costs, plus future upgrade costs
Low Risk
Much lower risk to migrate to a system that’s stable & has been in production for 8 years than to migrate to a new custom-developed system
Delphi has 4,000 users and been successfully upgraded 7 timesDelphi has passed numerous CFO and SAS-70 audits
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Benefits of Shared Services
Experienced Team
DOT has successfully implemented Oracle Financials for 20 customersWe know how to do this
SRA/IBM business partner also has extensive experienceHelped with GAO’s successful implementation
DOT follows Oracle’s Application Implementation Methodology (AIM)
Change Management & User Support
Experienced, effective support for Change ManagementExtensive training library & trainers who work with the systemExperienced Accounting & Help Desk staff know the Oracle application & Federal accounting inside & outProvide 4 to 6 weeks of “desk-side” user support after go-live, including the 1st month-end closeAll system & user documentation available on-line
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Benefits of Shared Services
We Handle the IT Requirements
Professionally run data centerMeet all IT planning (Exhibit 300), IT security, Disaster Recovery,SPII & Privacy Act requirements
DOT Strategy
Don’t customize the COTS softwareModify business processes to take advantages of best business practices inherent in the Oracle softwareDon’t recreate the legacy accounting systemConsolidate & standardize accounting operations
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Lessons Learned
Executive support is essentialClean up your data!
Streamline business processes in advanceClean up your data!
Consolidate accounting operationsClean up your data!
Talk to your customer’s customersClean up your data!
Change management is criticalCommunicate, communicate, communicateTrain, train, train (don’t use “train the trainer”)Support, support, support
Clean up your data at the detail level!
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Looking to the Future
Long-term Business Transformation effort
Business driversOracle release 12i.FSIO – complete system re-architectingCommon Government-wide Accounting Code (CGAC)OMB/FSIO standardization of financial business processesBetter link costs to program mission performance metricsAutomate Dept.-wide roll-up of performance dataSupport cost accounting
Governance structure & workgroups established
Integrated procurement solutionAutomate commitment accountingEliminate duplicate manual data entry & reconciliationProvide more useful information to program managersEliminate the need for “cuff records” systems & sunset them
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Looking to the Future
Horizontal vs. vertical integrationTeaming among Shared Service Providers for different Lines of Business
Future for the FM LoB & FSIOContinue developing business process standardsPromote/mandate set-ups & configuration developed for FSIO testing Coordinate with Treasury’s FIRST initiative
Updated OMB Circular A-127
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Planning for Transition
New strategies & initiatives“Good government” projects will continueNames of initiatives may changeResource constraints will continueIncreasing demands for immediate access to information
DashboardsBusiness Intelligence / analysis tools
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For more information: www.esc.gov
Larry Neff Marshal GimpelDeputy Chief Financial Officer DirectorU.S. Department of Transportation Enterprise Services Center(202) 366-2335 (405) [email protected] [email protected]
Mike Upton Bob StevensDeputy Director Manager, Customer ServiceEnterprise Services Center Enterprise Services Center(405) 954-8980 (405) [email protected] [email protected]