Army Cost Culture Initiative

Report
Army Cost Culture Initiative
May 2013
DASA(CE)
Army Cost Culture
Brief to the
Honorable Dr. Westphal
 Changing Processes

Resource Informed Decisions (CBA)
 Changing Technology
 Enterprise Resource Planning (GFEBS, LMP, GCSS-A, IPPS-A)

Changing People
 Training
Cost Management Changes the Army Culture
Ad-hoc
Army today
Cost Managed Organization
1
Army Cost Culture
Cost Management End-to-End Process
Cost Management Changes the Cost Culture
People
1. Leadership Commitment
2. Training
3. RM Workforce
Technology
4. Data Quality (ERP)
5. Tools & Models
Process
6. Cost Planning
7. Cost Analysis (CBA,)
8. Cost Integration to Requirement, Acquisition, & Resource
9. Cost Control (LSS)
Cost Management E2E Process
its Current Maturity
May 2013
People
1. Leadership Commitment
2. Training
3. FM Workforce (AFMO)
Army Cost Culture
Technology
4. Data Quality (GFEBS)
5. Tools & Models
Process
6. Cost Planning
7. Cost Analysis (CBA, AoA)
8. Cost Integration to Requirement, Acquisition, & Resource
9. Cost Control (LSS & AFBRT)
Cost Management
Professionals
Goal: Better Value for Lower Cost
•
Stewardship of nation’s resources
•
Cost informed decision making
•
Continuous improvement
•
Accountability for costs
•
Tracking progress
as of May 2013
3
Army Resource Informed Decisions
(as of 09 May 13)
May 2013
Decision Forum
Cumulative CBAs Submitted into CBA Workflow Tool
900
715
800
857
Q2
Q3
528
600
453
500
Army Cost Culture
825
640
700
361
400
278
300
160
200
100
775
7
20
33
57
Q2
Q3
Q4
Q1
0
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
FY10 FY10 FY10 FY11 FY11 FY11 FY11 FY12 FY12 FY12 FY12 FY13 FY13 FY13
Totals
193
AROC
10
Army Campaign Plan (ACP)
12
Budget Review Program
224
Concept Plan
2
Congress
10
EE PEG
31
FDU
28
II-PEG
41
Insourcing
59
Legislative Proposal
5
MM-PEG
3
OO-PEG
3
Office of the Secretary of Defense (OSD)
4
PBAT
5
Planning Programming Budget C (PPBC)
29
SLI
12
SS PEG
18
TT-PEG
3
UU PEG
13
Unknown
47
Other
752
report total:
* Not included are CBAs that have been withdrawn
and those that did not include a decision forum
4
GFEBS Technology
Enables Cost Management
May 2013
DASA(CE)
Army Cost Culture
Army Cost Management Framework
GFEBS will provide
Multiple Cost Views for
Decision Making at
Every Level
… provide essential data
to transform the Army
to a cost culture
5
GFEBS Provides
Total Cost Visibility
May 2013
DASA(CE)
Total Cost Visibility Example:
1- Customers by Contracts
2- Customers by Services
3- Customers by Funding
4- Customers by Cost Centers
5- Contracts by Service
6- Contracts by Funding
7- Contracts by Cost Centers
8- Services by Funding
9- Service by Cost Centers
10 –Funding by Cost Centers
3.Services
2. Contracts
3. Services
4.Funding
N * (N-1) / 2
for each FY
4. Funding
PE
5.Cost
Centers
Army Cost Culture
2.Contracts
1. Customers
10 views (table) cost visibility for five dimension Polygon
6
Army Cost Management Training
May 2013
DASA(CE)
Army Cost Culture
Cost Management Education
Principles of Cost Analysis
and Management
Intermediate Cost Analysis
and Management
PCAM
Cost Terms
Cost Concepts
Fundamentals of Cost
Accounting and Cost
Management
Practical Exercises
Cost-Benefit Analysis
ICAM
Cost Flow Methods
Analysis and Reporting
Practical Exercises
Complex Case Studies
Cost-Benefit Analysis
•
•
•
•
•
•
•
•
•
•
3 Weeks
3 Weeks
GFEBS Online Training
GFEBS General
• GFEBS Overview
• Integrated Process
Overview
• Navigation and
Reports
• Business Intelligence
Reporting
• Fundamentals
GFEBS:
GFEBS Other
Other Training
Training
•
•
•
•
•
•
•
•
•
Cost Management
Equipment and Assets
Financials
Funds Management
Plant Maintenance
Project Systems
Real Property
Reimbursable
Spending Chain
Cost Management
Executive Course
Army Cost Management
Certificate Course
•
•
•
•
CMCC
Managerial Cost Accounting
Operations Management
Cost Control and Cost-Benefit
Analysis
Organizational Development for
Cost Managers
CMEX
• Cost
• Leadership-Driven Cost
Management
• Cost-Benefit Analysis
• Value Proposition
4 Weeks
TBD
Cost Benefit Analysis (CBA) Training
4-Hour CBA Training
• What is CBA?
• Why do we need CBA?
• Who are the key
players?
• What Army processes
call for CBA
• What are the
processes and
methodologies used
4-Day CBA Training
• Policies,
Regulations,
Methodology, and
Roles
• Workflow
Automation Tools
• Other Tools
• Case Studies and
Exercises
Other Training
• Online
• Defense
Acquisition
University (DAU)
• Force
Management
(FA50)
Slide 7
CM Community of Practice
May 2013
Cost Warrior Roundtable
Cost Warrior Newsletter
Cost Warrior milSuite web site
CBA Field Trainers
AKO Cost Management Community
Army Cost Culture
Cost Warrior Listserv
1
8
Senior Leadership Commitment
May 2013
DASA(CE)
Army Cost Culture
SECDEF Leon Panetta, 5 Jan 12: New DoD Strategic
Guidance—Impact of fiscal constraints
We are shaping a Joint Force for the future that will be
smaller and leaner, but will be agile, flexible, ready, and
technologically advanced.
SECDEF Robert Gates 24 May 11:
…not repeat the mistakes of the past
…salami-slicing” approach results in a
hollowing-out of the force
USD (AT&L) Dr. Ashton Carter, June 28, 2010: Better
Buying Power: Mandate …
…we can't support our troops with the capability they need
unless we achieve greater efficiency (doing “more without
more”)
DEPSEC William Lynn, 11 May 11:
America’s cut forces after every war: WW II, Korea,
Vietnam, Iraq
…the Army had to reverse course, rebuild
…we’re 0-for-4 in managing drawdowns
Army
•
USA/VCSA memo (30 Dec 2009) Directed CBA's are to
be prepared (For APGM and TGM, Force Design
Updates, Concept Plans, Part of VCSA portfolio
analyses, ACP, BRP, AR2B, etc..)
•
SECARMY McHugh at AUSA, 10 October 2011
•
USA Efficiency Memo, 2 September 2010
•
ASA-FM&C Cost Management Memo, 7 January 2011
•
Army Campaign Plan Object 9.4 and 9.8
OSD
•
SECDEF Memo, 16 August 2010
•
SECDEF Robert Gates 24 May 11
•
SECDEF Leon Panetta, 5 Jan 12
•
USD (AT&L) Dr. Ashton Carter, June 28, 2010 Better
Buying Power
•
DEPSEC William Lynn, 11 May 11
SECARMY McHugh at AUSA Oct. 10, 2011: Army Bracing for More Budget Cuts
No matter what happens, we are not going to have a hollow force
We have been analyzing the best ways to meet these challenges, …and do it in a
way that truly makes sense.
9
Army Campaign Plan Objective 9
Army Cost Culture
May 2013
DASA(CE)
OBJECTIVE: Increase
the number of
Generating Force
(Infrastructure)
organizations
executing quarterly
cost management
reviews, increase
the use of cost
benefit analysis and
improve the Cost
Management
Maturity Model
index score.
Slide 10 10
Army Campaign Plan Objective 9
May 2013
Army Cost Culture
Measure
1
Baseline & Target
Output: The number of
- Organizations will be defined by Fund Centers
generating force
within a Command (ACOM, DRU, and select
organizations (operating on
ASCC).
GFEBS) that are executing
- The baseline for number of organizations
quarterly Cost Management
executing quarterly reviews will be assessed
process reviews.
by Command at the beginning of year (assume
start point is zero)
- Target Set to Achieve 90% of Army
Organizations executing Quarterly Reviews by
2013.
Initiatives
Frequency
- Cost Management Training (Cost Management
Certification Course, Cost Mgmt 101, GFEBS
Modeling and Deployment)
- Issue Survey by Command to Establish Baseline.
- Develop requirement linked to GFEBS
deployment for conducting Quarterly Cost
Management Reviews
- Define CP-11 Manpower Requirements to Adapt
Workforce for more Analytical Skills
Measured Quarterly:
Output: The number of
organizations utilizing Cost
Benefit Analysis (CBAs) in
making resource-Informed
decisions
- Organizations will be defined by Fund Centers - USA/VCSA memo (30 Dec 2009) Directed CBA's
(for those on GFEBS) or Allotment Serial
are to be prepared (For APGM and TGM, Force
Number (for those on Legacy Financial
Design Updates, Concept Plans, Part of VCSA
Systems) within a Command (ACOM, DRU,
portfolio analyses, ACP, BRP, AR2B, etc..)
and select ASCC).
- Prepare additional ASA(FM&C) guidance
- The baseline for number of organizations
requiring use of CBA practices to support
utilizing CBAs will be assessed by Command at
Resource-Informed Decision-Making throughout
the beginning of year (assume start point is
Army
zero)
- Continue CBA Training, CMCC and Cost
- Target Set to Achieve 90% of Army
Management Training Across Army
Organizations making resource-informed
decisions using CBAs by 2012
Measured Quarterly:
Output: The percent
improvement in Cost
Management Maturity
Model (CM3) score index.
- Establish Baseline Index Score by organization
- Initial Target Set as % Increase from Baseline
by Command (Measure Twice per Yr) than %
Increase from Previous Period
Calculated as “ Number of
organizations executing
quarterly CM reviews /
Total number of
organizations within
command"
Calculated as "Number of
organizations utilizing
CBA's / Total number of
organizations within
command"
- Direct Initial Army-wide Assessment using Cost
Measured Bi-Annually:
Management Maturity Model Survey to Establish
Baseline
Calculated as “Percent
- Reassess at Mid-Year and Year-End (Annually)
change In index score from
previous period by
organization"
Slide 11 11
Cost Management
Policy and Guidance
Army Cost Culture
May 2013
1
12
Cost Culture Activities
Mapped to Process, Technology, and People
May 2013
Process
1
2
5
6
8
Army Cost Culture
9
11
12
14
15
16
17
19
20
24
25
30
31
35
36
39
42
43
44
46
49
51
53
55
57
58
62
64
66
72
73
75
78
81
AAR
ABC
ACP
ACP-O9
AFBRT
AFMO
AoA
AR2B
AROC
ARRG
ASARC
BCA
CARB
CBA
CBA-RB
CBA-WM
CKB
CM
CP-TDA
CRB
CW-NL
EA
EA-M
EC
EVM
G-CC & CE
G-CMM
GFEBS
IATC
ICE
IGCE
JCIDS
LCCE
MDUR
PEG
PPBES
RA
SBC
TCVF
6
7
8
9
1
Cost Planning
Cost Anal1sis
Cost
Integration
Cost Control
Leadership
Commitment
1
2
1
9
1
1
1
1
1
1
12
Technology
1
1
1
1
1
1
1
1
1
1
4
1
1
1
1
1
1
1
1
1
1
27
37
1
47
1
1
1
1
1
1
1
1
1
49
50
52
53
1
1
1
54
60
1
63
1
1
1
1
1
1
1
10
30
1
1
7
25
1
1
1
1
3
1
70
74
78
81
ACDB
ACEIT
ACT
AMCOS
CBA-WM
CCDR
CKB
CSDR
FORCES
G-CC
G-CE
G-CO
GFEBS
G-WBS
ISR
JIAT
OSMIS
R2C2
SBC
TCVF
14
4
5
Data QualitY
Tools & Models
1
1
1
1
1
1
1
1
1
1
1
1
1
1
15
16
18
19
1
1
1
1
21
22
23
24
26
29
32
1
33
34
36
1
38
40
43
45
48
55
56
59
1
1
1
1
62
65
66
69
71
72
1
76
1
79
ABC
AFMO
AR2B
AROC
ARRG
ASARC
CAM
CARB
CBA 4D
CBA 4H
CBA-G
CBA-RB
CC
CE-CMC
CMC
CMCC
CMEX
CRB
CW
CW-RT
EA-M
EE
FP
IATC
ICAM
II
JCIDS
LSS
MDUR
OSD-CMI
PCAM
PEG
RM-J
SS
People
2
Training
3
WF
Development
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
13
Cost Management Acronyms
May 2013
1
2
3
4
5
6
7
Army Cost Culture
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
AAR
ABC
ACDB
ACEIT
ACP
ACP-O9
ACT
AFBRT
AFMO
AMCOS
AoA
AR2B
ARFORGEN
AROC
ARRG
ASARC
BCA
CAM
CARB
CBA
CBA 4D
CBA 4H
CBA-G
CBA-RB
CBA-WM
CC
CCDR
CE
CE-CMC
CKB
CM
CMC
CMCC
CMEX
CP-TDA
CRB
CSDR
CW
CW-NL
After Action Report
Army Business Council
Automated Cost Database
Automated Cost Estimating Integrated Tools
Army Cost Position
Army Campaign Plan Objective 9.4 and 9.8
ARFORGEN Costing Tool
Army Financial Benefits Reporting and Tracking
Army Financial Management Optimization
Army Military-Civilian Cost System
Analysis of Alternative
Army Requirements and Resourcing Board
Army Force Generation
Army Requirements Oversight Council
Army Working Capital Fund) Requirements Review Group
Army Systems Acquisition Review Council
Business Case Analysis
Army Cost Analysis Manual
Coalition Acquisition Review Board
Cost Benefit Analysis
CBA training 4 Days
CBA training 4 Hours
CBA Guide
Cost Benefit Analysis Review Board
CBA Workflow Management
Cost Culture
Contractor Cost Data Reporting
Cost and Economics
DASA-CE Cost Management Certification
Capability Knowledge Base
Cost Management
Financial Management Certification
Army Cost Management Certificate Course
Cost Management Executive Course
Concept Plan (TDA Updates)
Cost Review Board
Cost and Software Data Reporting
Cost Warier
Cost Warier Newsletter
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
78
79
81
82
CW-RT
DASA-CE
EA
EA-M
EC
EE
EVM
FORCES
FP
G-CC
G-CE
G-CMM
G-CO
GFEBS
G-WBS
IATC
ICAM
ICE
IGCE
II
ISR
ITA
JCIDS
JIAT
LCCE
LSS
MDUR
MM
OO
OSD-CMI
OSMIS
PCAM
PEG
PPBES
R2C2
RA
RM-J
SBC
SS
TCVF
USASOC
Cost Warier Roundtable
Deputy Assistant Secretary of the Army for Cost and Economics
Economic Analysis
EA Manual
Early Costing Pre-Milestone-A
Equipping PEG
Earned Value Management
Force and Organizational Cost Estimating System
Fellowship Program
GFEBS Cost Center
GFEBS Cost Element
GFEBS Cost Management Module
GFEBS Cost Objects
General Fund Enterprise Business System
GFEBS Work Breakdown Structure
Institutional Army Transformation Commission
Intermediate Cost Analysis and Management
Independent Cost Estimate
Independent Government Cost Estimate
Installation PEG
Installation Status Report
Army Information Technology Agency
Joint Capabilities Integration and Development System
Joint Integrated Analysis Tools
Life Cycle Cost Estimates
Lean Six Sigma
More Disciplined Use of Resources - campaign
Manning PEG
Organizing PEG
OSD Cost Management Initiative
Operating and Support Management Information System
Principles of Cost Analysis and Management
Program Evaluation Groups
Planning, Programming, and Budgeting, and Execution System
Requirement Readiness Capacity Cost Analysis
Redundancy Analysis
Resource Management Journal
Service Based Costing
Sustaining PEG
Total Cost Visibility Framework, GFEBS CM design (ITA, USASOC, .. )
United States Army Special Operations Command
14

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