Breakout Session # 203 Michael Mann, ERP Service Line, American Management Systems, Inc.

1. Closing the Electronic Gap Between Government and Industry Breakout Session # 203 Michael Mann, ERP Service Line, American Management Systems, Inc. Al Gough, Strategic Architect, American Management Systems April 26, 2004 2:45-3:45 PM NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

2. Acquisition Interdependence • Government is dependent upon contractors to achieve agency missions • Most of the interaction is controlled through the acquisition process • An open, seamless exchange of information is important to both but has been difficult to achieve • Recent advances in technology and functional applications are closing the gap NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

3. Joint Planning Joint Accountability Meet Program Needs at a Best Value Price Faster Delivery Reduce Cost Acquisition: A Government Mission Enabler Achieve Mission Objectives NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

4. NASA Acquisition VisionThe Mission Drives System Attributes JOINT PLANNING • E-enabled planning and purchasing systems • Rapid replenishment via vendor partnerships • Improved business process system performance JOINT ACCOUNTABILITY • Seamless business processes • Common view of performance data • Contract rewards tied to program performance Supplier Supplier • Spend driven enhancements • Single data entry • Timely, consistent information across functional stovepipes DFRC GRC Logistics Infrastructure JSC SSC MSFC KSC GSFC LARC ARC HQ Life Cycle Management Design PROCUREMENT SAVINGS • Strategic sourcing • Reduced transaction costs • Increased competition through e-commerce Projects FASTER DELIVERY • Increased information velocity • Reduced inventories with shortened supply chain • Close coordination of contract milestones with project plans Supplier Supplier NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

5. Purchase Requisition Sourcing Requirement Definition Structured process, referral process, complex Budget Check / Approval Budget officer approval, annual appropriations Workload – emphasis on automated Commitments PPRS RFQ / Offer Invoice receipt Structured Bid Opening Disbursements Amendments Fed Biz Ops Receipt vs. Acceptance Source Acceptance Socio-economic policies FAR Clauses Goods receipt Vendor eligibility Obligations Cost Accrual Purchase Order/ Award Contract Administration Modifications The Government Acquisition Process Highly regulated and rule-driven process motivated by public accountability NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

6. Private Sector Public Sector Public Trust and Accountability Achieving the Agency Mission Short Term Profit, Longer Term Loyalty • Service and performance-based focus • Complex and inefficient data flow • Lack of enterprise visibility • Lack of integration with program, financial and asset solutions • Delivery focus • Extensive data needs • Cost-benefit criteria • Interactive contract admin. • Packaged solutions • Multiple sources • Multiple customers Understanding the Gap NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

7. A Structured Approach to Bridging the Gap • Present a single face to industry for opportunities • Get your internal house in order • Understand “spend” to prioritize investments • Automate internal processes (contract management, bank card, e-procurement) • Align internal procurement, financial and program information • Enable strategic sourcing • Expand standardization across individual agencies • Facilitate the flow of contractual information • Contract administration • Collaborative environments for planning and sourcing NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

8. Presenting a Single Face to IndustryCase Study: Integrated Acquisition Environment • The government has evolved from the manual, paper, Commerce Business Daily • First stage reflected individual Agency portals and web postings • Currently, the Integrated Acquisition Environment (IAE) is simplifying and standardizing government-wide interfaces NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

9. Prioritizing Based on Spend Analysis Case Study: NASA • $11.8B procurement spend is 82% of the total budget • Complex delivery and services contracts are mission critical • Complex contract tools and Strategic Sourcing are the top priority NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

10. Business Problem • Serve a decentralized government enterprise (170 state agencies and all VA gov’ts) • Connect large supplier community to state buyers via single portal • Make sure there are the “right goods on the shelves” eVA Portal Purchasing Transactions Warehouse Vendor Data Warehouse E-Mall Orders, Solicitations Bids Submitted EDI Invoices Vendor Data Vendor Registration Push/Public Posting Bids, Vendor Data Order Received Real-time Catalogs Requisitioning & Ordering Bidding/ Contracting Auctions Receiving & Invoicing Agency Procurement System Vendors Authentication Integrity Efficiency Completeness Foundation Automating Internal Processes Case Study: eVA Results • e-Mall live in 120 days • Fully benefits funded, 1% fee to suppliers • Largest number of suppliers on a single state system in the country (17,550) • Largest single online marketplace for any state (5 million line items, $2.3B throughput) • Largest number of voluntary local governments agencies on single statewide system (374) NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

11. Aligning End-to-End Information Integrated Process and Environment Model NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

12. Goals • Enables enhanced strategic and operational decision-making by giving visibility into enterprise-wide spend analysis • Provides negotiation support for strategic sourcing decisions and knowledge transfer to California • Plan to rationalize supply base across multiple California agencies • Projected $200M+ savings to the State • Benefit funding through shared savings Enabling Strategic SourcingCase Study: California DGS Business Problem • California has a significant budget shortfall • Procurement operations are decentralized • Spend data is not centrally stored • No available funding to undertake the project NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

13. BEFORE AFTER Business Problem • 43,000 users-1,100 sites (4 Services, 13 Agencies) • 75+ legacy systems • Unreconciled disbursements / unliquidated obligations • Sporadic data integration LEGACY PROCUREMENT SYSTEMS DFAS - Finance Standard Systems PROCUREMENT SYSTEM (42,000 Users at 1000+ Sites) BCAS DAS DPACS APADE DSDS S P S ACPS ITIMP LOG Systems MOCAS Finance Systems LOG Systems SACONS SAACONS Finance Systems BOSS USMC BCAS AM IS PADDS Acquisition Systems Acquisition Systems Results • Single, standard, joint procurement system • Single touch-point with finance and logistics systems. • Central repository of all procurement data • First ever end-to-end DoD Enterprise Business Solution for Procurement • 23,000 operational users at 777 sites • Projected $395M annual savings Standardizing Across Agencies Case Study: DoD Standard Procurement System NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

14. Facilitating the Flow of Information Case Study: Boeing-PDI • Business Problem • Minimal collaborative capability or common electronic environment to seamlessly interact with Government and Industry counterparts • Lack of data integrity causes rework and delays the payment process • Too many manual/paper intensive processes • Results • Implementing a bid response and contract • management system for government • contracts • Increased bid competitiveness • Reduced time to payment • Shorter cycle times • Reduced contract management costs • Single contract management face • Automated workflow • Streamlined file management • Enhanced workforce flexibility NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

15. SOW RFQ Quote Government and Industry Procurement Maturity Model Level Four: Complex Integration • Incremental funding • Contract administration • Task order negotiation • Subcontractor flow down • Delivery management • Collaborative environment Level Three: Complex Transactions • Solicitation • Amendment • Offer evaluation • Concurrent mods • Major contracts • Novations Maturity Level Two: Federal Compliance • FAR • Excluded parties • BPN • FedBizOpps • eTransactions • Past performance Level One: Simple Transactions • Receipt • Invoice/Payment • Catalogue • Bid comparison • Order • Contract terms NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

16. No Standard formats forexchange of Governmentcontracting informationwith Industry Complex and Inefficient Data Flows Paper & Snail Mail Custom Interfaces,EDI & VAN’s Telephones & e-Mail Technology’s Role in Facilitating the Data Flow:Moving up in the Maturity Model Current state: low on the maturity ladder Different schemas, syntax, and semantics Government Industry (The Gap) NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

17. Commercial XML DTD/schema- based documents (e.g., OAGIS BODs**) Enabled by and Transported Over: ebXML BizTalk RosettaNet Commercial Efforts on Closing the Gap The commercial world is attacking the Digital Gap for B2B eCommerce through such efforts as the OAG’s OAGIS, ebXML, BizTalk and Industry-specific endeavors like RosettaNet Business Business **Business Object Documents NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

18. Legal, regulatory (FAR/DFARs) and complex business needs drive a requirement for much more information to be carriedin Federal & DoD documentsand transactions Commercial standards define business document and transaction content needed to carry out business collaborations defined and transported by e.g. ebXML, BizTalk or RosettaNet Federal and DoD XML specification extensions Commercial XML DTD/schema- based documents (e.g., OAGIS BODs**) Transported Over: ebXML BizTalk RosettaNet Government Needs Require Extensions: We Should Build On Existing Commercial Standards Government Industry **Business Object Documents NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

19. Standard formats forexchange of Governmentcontracting informationwith Industry ebXML BizTalk RosettaNet This Moves Us Up the Maturity Model,But We Need To Do More … Standards and Transports Let Us Exchange Information More Efficiently Government Industry (The Gap) We’ve narrowed the gap, but we are still shipping things over the gap NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

20. Web Technologies Give Us a Foundation: Web Services for Standards-based Architectures The standard exchange formats are put into the envelopes Government or Business SOAP Envelope Request XML Payloads Plain WebProtocols Transported Over: HTTP/HTTPSInternet/Intranet Response Supported by Increasingly Comprehensive Open Standards WS-Security WSDL WS-Transaction UDDI SOAP BPEL etc. Security, Manageability, Control and Choreography are key NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

21. Presentation Application Logic Service 1 Service 2 Service 3 Service n Business Logic Decomposed in Services Various Persistent Data Sources Web Services Let Us Build SOA’s (Service-Oriented Architectures) Applications are Composed Rapidly from Business Services Services also may be exposed to other apps and partners to enable seamless collaboration and integration NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

22. Government Application Industry Application Service 1 Service 2 Service n Service 1 Service 2 Service m Government Business Logic Industry Business Logic Government Data Sources Industry Data Sources SOA’s Let Us Build Cooperative Apps: Right Time Collaboration With No Gap Partner Apps Use Each Other’s Services in Their Respective Applications to Achieve the Top Level of the Maturity Model Access is Secured and Controlled to Achieve Joint Partner Goals NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

23. Secure Right-time CollaborationTools and Processes Enabled by: Federal and DoD XML specification extensions Government Commercial XML DTD/schema- based documents (e.g., OAGIS BODs**) Orchestrated by: ebXML BizTalk RosettaNet Transported Over: Web Technology: Web Services The Ultimate Goal: Right-time Collaboration Seamless, Secure, Integrated, Interoperable, Right-time Business Processes Industry **Business Object Documents NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

24. The Gap is Closing • There is steady progress to speed the flow of information between Government and Industry • As software applications mature, they enable • More timely and consistent processes • Standardization of touch points • An evolution from transactions processing to strategic decision making • As commercial technology evolves, it enables • Streamlined connectivity • Access to common information across organizational boundaries • The ability to build real-time collaborative applications to enable that strategic decision making NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

25. NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”