unmasking transparency gaining greater operational insight through financial metrics n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
Unmasking Transparency: Gaining Greater Operational Insight Through Financial Metrics PowerPoint Presentation
Download Presentation
Unmasking Transparency: Gaining Greater Operational Insight Through Financial Metrics

Loading in 2 Seconds...

play fullscreen
1 / 29

Unmasking Transparency: Gaining Greater Operational Insight Through Financial Metrics - PowerPoint PPT Presentation


  • 121 Views
  • Uploaded on

Unmasking Transparency: Gaining Greater Operational Insight Through Financial Metrics. Presenting Organizations: Navy Reserve Force Defense Information Systems Agency (DISA) Deloitte Consulting LLP. June 4, 2010. Introductions. Paul Branum Comptroller, Navy Reserve Forces

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Unmasking Transparency: Gaining Greater Operational Insight Through Financial Metrics' - selah


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
unmasking transparency gaining greater operational insight through financial metrics

Unmasking Transparency: Gaining Greater Operational Insight Through Financial Metrics

Presenting Organizations:

Navy Reserve Force

Defense Information Systems Agency (DISA)

Deloitte Consulting LLP

June 4, 2010

introductions
Introductions

Paul Branum

Comptroller, Navy Reserve Forces

Paul leads the finance organization for the $1.7B Navy Reserve Operations and Personnel Budget.

Christopher Rose

Principal

Chris is a lead Principal in the delivery of Finance Transformation and Service Delivery Transformation engagements for DoD clients.

  • Fifteen years of federal financial management experience at HQ level activities
  • 24 years as a Navy Surface Warfare Officer
  • Master’s Degrees in Business Administration and Public Policy
  • 17 years of financial management experience spanning all dimensions – people, process, systems, & technology
  • Former Presidential Management Intern (PMI) for the Department of the Army

Nathan Maenle

Business Systems Executive, Defense Information Systems Agency

Nathan leads the integration and evolution of Agency business systems.

  • Works directly with the CIO to shape business policy and manage business information and data
  • Supported integration of worldwide DISA Directorate’s processes and systems driving $13M capital investment
  • Twenty years as Information Systems Specialist
session overview
Objectives

Introduce the foundational concepts of performance management

Define and explain common performance management terms providing relevant examples

Explain the four critical components of performance management

Explain how management can align people’s behavior with their corporate strategy through operational goals

Present case studies that illustrate the concepts in action

Session Overview
slide4
DoD future years budget projections present a concerning situation for every organization in the Department
slide5

Performance Challenges

  • How can I manage my responsibilities to focus on the activities that create real valuefor the organization and make a quick, noticeable impact?
  • How do I ensure that the data the organization relies on provides the most useful information?

Execution Challenges

  • How do I create a common language that empowers management to see itself the way outside stakeholders do?
  • How should I organize my team and interact with business leaders to embed financial disciplines and support value-creation activities?

Efficiency Challenges

  • How do I attract, develop, and retain the talentrequired to execute our mission efficiently?
  • How do I drive innovation and improved performance inmy operation?

Risk/Control Challenges

  • How do I ensure that the reporting data the organization relies on is accurate so that the organization delivers a reliable dial tone (information)?
  • How do I remain compliant without increasing the workload burdenon my organization?
In addition to fiscal concerns, DoD financial management organizations are experiencing competing challenges across various areas
slide6
In response to these challenges, DoD financial management needs to accelerate evolution from value preservation to value creation
  • A “Moment of Truth” for DoD Financial Management…

The Shift From Value Preservation...

  • Value preservation has been achieved primarily through Finance’s focus on stewardship and budget development capabilities.
  • Financial management office responsibilities were to ensure that the people, processes, controls and technology existed to ensure accurate documentation of all transactions and support budget justification.
  • Financial management personnel collected, consolidated, and verified data.

...to Value Creation

  • Today, financial management offices can take advantage of new technologies to shift their focus to becoming a more valued business partner.
  • Providing deeper and more consistent analytical insight into the operations of the business and how to improve them.
  • Financial management organizations are expanding their responsibilities to contribute to determination of strategic business direction and stimulate the right behaviors across the organizationin pursuit of corporate objectives through performance management.
slide7
Business Performance Management

Corporate Performance Management

Performance Management

Value Based Management

Strategic Enterprise Planning

Business Intelligence

Balanced Scorecard

Business Enterprise Planning

Scorecarding and dashboards

Strategic Cost Management

One such method to accelerate “value creation” is to improve the effectiveness of performance management in our organizations

Performance management is characterized by many names in the Federal marketplace and several slightly different definitions

Performance management consists of a set of management and analytic processes, supported by technology, that enable organizations to define strategic goals and then measure and manage performance against those goals.

slide8
Effective performance management translate strategic objectives into operational results through a lens focused on “value creation”

What is the objective?

The objective of any performance management process is to bridge strategy and execution by linking corporate strategy with people’s behavior through operational goals and rewards

What is the value?

  • Improved decision making
  • Improved performance
  • Aligned organizational behaviors
  • Enabling the organization mission

How is it done?

Combining the power of information, people, process and technology through all stages of the management cycle

a foundational step is to understand an organization s information and its hierarchical nature
A foundational step is to understand an organization’s information and its hierarchical nature

The types of information required for decision making depends on:

  • The level of the organization it is generated for (Employee, Management, or Executive),
  • The type of decision it is intended for (Operational, Tactical, or Strategic)
  • The end user (External Customer or Internal Consumer)

Integrated, Relevant Information

Internal Consumers

InformationHierarchy

External Consumers

External Stakeholders – OMB, Congress,

Component

Leadership

Decision Types

Organization

Levels

Level 1 Executive Committees

Strategic Decisions

Strategic Information

ExecutiveLevel

The Regulators –

OSD

Level 2 Senior Managers

Partners

Level 3 Middle Managers

TacticalDecisions

Management Information

ManagementLevel

Customers

Suppliers

Other Middle Managers and Supervisors

OperationalDecisions

Transactional Information

EmployeeLevel

Partners

Customers

Suppliers

Individual Contributors

slide10
Information is evaluated using measures, metrics, or indicators, each of which has a different implication on decision making

High

Low

Value of information to decision making

slide11
Measures, Metrics, and Indicators can be of different types - financial or operational, and leading or lagging
  • There could be a plethora of measures, metrics, and indicators in an organization
  • The measures, metrics, and indicators to be considered are the ones that quantify the impact of decisions or actions in alignment with value creation and corporate strategy.
slide12

A more balanced performance measurement model uses measures, metrics, and indicators defined from different perspectives in the organization

  • Most strategies focus first on stakeholder value (using financial metrics for performance measurement) and then on the value to other stakeholders such as customers, suppliers, and employees
  • A robust performance measurement approach balances these views

Financial

Employee

Lagging metrics

Leading metrics

Absenteeism

Morale

Growth

Learning

Turnover

  • Fulfillment cost
  • Customer service cost
    • Number of travel
    • orders issued

Cost per Voucher

Total Cost of Voucher

Processing

Operational

Customer

Satisfaction

Retention

Total Customer Experience (TCE)

Vouchers Processed

Per Month

Line of Accounting

Per Voucher

*The Balanced Score Card: Measures that drive performance HBR, July 2005

performance measures rules of the road
Performance Measures: Rules of the Road
  • All performance measures should meet a number of key criteria:
  • Relevant: Directly linked to critical objectives and strategies
  • Reliable: Verifiable and free from subjective judgment or bias
  • Valuable: Able to help management make decisions and take actions
  • Timely: Available before it loses its capacity to influence decisions
  • Cost Effective: Benefits of using measure outweigh the costs of collecting and reporting the information
  • Availability: Data to support the performance measure is available
slide14
Successful performance models consist of four components: Information, Processes, People and Organization, and Tools and Technology

Information

Process

Performance

Management

Strategic Objectives

Tools and

Technology

People

slide15
A developed performance management landscape follows the guiding principles of focus, alignment, integration, and behavior

Focus

Alignment

Integration

Behavior

“Doing what matters”

“Pulling in the same direction”

“Talking the same language”

“With everybody on board”

  • Shared understanding of value creation across the organization
  • Identified key value drivers linked to strategic directive
  • Planning, execution, and measurement of what matters
  • Clear management control and accountability
  • Project portfolio and initiatives linked to value drivers
  • Targets cascaded throughout the organization
  • Planning, measuring, and intervention processes interlinked
  • Incentives and rewards for organizations and people embedded in the performance management system
  • Comprehensive information strategy and supporting technology architecture
  • Raise awareness of targets
  • Establish performance incentives
  • Deploy and develop talent
a maturity matrix for performance management can help guide further development
A maturity matrix for performance management can help guide further development

Advanced

Developing

Defined

  • Performance data is regularly communicated/
  • provided to all
  • Performance data is kept among management team, not communicated/provided
  • Performance data is only sporadically communicated/provided to stakeholders

Process

  • Bullet points
  • Bullet points
  • Bullet points
  • Statutory and multi-dimensional management reports; Comparisons of actual cost to standard cost actual, budget, and forecast results
  • Reports focused on statutory requirements and basic actual to budget comparisons
  • Statutory reports complemented with multi-dimensional management Reports provide actual, budget, and forecast results

Info

  • Managers are held accountable for those measures for which they have control
  • Executives are held accountable for financial results only
  • Measure owners are identified but not accountability below the Executive level

People

  • Data warehouse as the foundation for single version of the truth
  • Reports developed through export to spreadsheet application
  • Reports are developed and produced directly from the ERP system

Tools and Tech

financial metric maturity within the navy reserve

Department of the Navy

Commander, Navy Reserve Force (CNRF)

Financial Metric Maturity Within the Navy Reserve

slide18
As a multi-echelon, geographically-dispersed organization, the Navy Reserve provides a unique and challenging environment for driving change
slide19
Similar to many DoD organizations, CNRF was confronted with a number of environmental factors driving a need for change in the way we do business
  • Relocation of CNRF HQ operations have created challenges for obtaining visibility into organization operations and retaining key resources

BRAC

Relocation

of HQ

Leadership/

Staff Turnover

Changing

Support for Wars

Case for Change

Defense against Budget Marks

Leadership Focus

Greater Scrutiny of Training Funds

Support of Active Fleet

Strategic Performance Measurement

  • Wars in Iraq and Afghanistan have increased scrutiny on resource allocation and utilization
  • Demands for improved financial performance have been driven by regulatory and organizational oversight
slide20
ASN(FM&C) established financial performance metrics were cascaded throughout the Department. Elements of the Financial Efficiency Index (FEI) were included in the Office of Chief of Naval Reserve (OCNR) Strategic Plan.

CNRF developed a Field Level FEI Scorecard to institute a more aggressive focus on financial performance.

Changing requirements, added demands, and fiscal constraints directly impacted the Military Personnel budget - estimates have declined by $300 million between FY 2007 - 11. This trend holds true forReserve Personnel Navy (RPN) with budget estimates declining by $45.1M.

FY07-10 Unexpended Congressional Marks to the RPN account were $54M.

Source: Pres. Bud. Book

Evolving demands began to require overall organizational focus to shift from routine reporting to evaluation of funds management performance

Military Personnel Budget Estimate Reductions

ASN(FM&C)

FEI

OCNR 2010 Strategic Plan

OCNR Strategic Plan

ASN (FM&C) FEI

slide21
The prospect of losing additional budgetary resources in future years drove the need for a more in-depth look into the execution trends within the major Navy Reserve programs.

Analysis of preliminary enterprise-level metrics led to the identification of key focus areas for improving the financial performance of the overall organization.

CNRF began to align with these changing priorities by making strategic decisions about evaluating critical programs and measuring performance

Funds Management

Financial Accountability

Identified Focus Areas

  • Inputs: Obligations
  • Expenditure/
  • Disbursements
  • Lapsing Appropriation Balance
  • 1517 Violations

CNRF FEI

Legacy Financial Systems

Workforce

Skill Sets

34.1%

Leadership Dashboard

slide22

Benefits

Actions Taken

Improvement Objectives

Further evaluation of enterprise-level financial metrics led to the identification of specific improvement objectives within the identified focus areas

  • Developed semi-automated tools to support process specific financial management activities
  • Drive accountability for managing activities affecting funds execution to the process-level
  • Improve efficiency with which legacy system financial data can be analyzed and reported
  • Improved field-level visibility into measurements of financial management performance
  • More efficient use of Funds
  • Increased timeliness in identifying and resolving required actions

RPN Travel Tool

Aviation Fuel Tool

  • Improve alignment of job requirements with identified skills sets
  • Increase workforce’s ability to analyze and manage financial data and associated funds
  • Advanced ability to effectively reduce ineffective use and management of organization funds
  • Greater reliance on workforce to affect the activities driving organizational performance metrics
  • Began preliminary steps to initiate workforce competency assessment

Workforce Competency Development

slide23
As visibility into CNRF processes and performance continues to mature, the organization is taking a more integrated approach to performance measurement

Next Steps: -Continue to integrate and automate performance measurement tools into CNRF operations - Initiate workforce competency assessment to identify key financial management skill set requirements

Timeliness

Depth of Analysis

Developing

Defined

Advanced

  • Manually developed enterprise-level metric set
  • Limited ability to identify underlying metric drivers
  • Financial data obtained from multiple supporting systems for analysis
  • Web-based process specific management dashboards
  • Visibility into process specific data
  • Semi-automated data integration and analysis from disparate systems
  • Comprehensive, multi-dimensional measurement of financial data
  • Customizable, near-real time display of performance metrics
  • Dynamic integration of financial data from multiple sources
slide24

DISA BI Evolution

Mr. Nathan Maenle

Business Systems ExecutiveOffice of the CIO

June 2010

defense information systems agency
Defense Information Systems Agency

ACQUIRE

DELIVER

OPERATE

Planning

Resources

Spectrum

  • Enterprise Infrastructure
  • C2 & Information Sharing
  • Operate and Assure

Testing

People

Acquisition

Contracting

Engineering

Info & Knowledge Mgmt

Leaders enabling information dominance

slide26

Evolution of Capability

EnterpriseCapability

Manual

Multiple Dashboards

Manually developed data

Limited to Excel & PowerPoint

Data obtained from multiple supporting systems with no defined business rules

  • Portal access; improved integration with operational data and multiple end users
  • Leadership
  • Managers/Action Officers
  • Customers/Partners

Web-based capabilities

Time shifted from data gathering to data analysis

Improved consistency, access, and timeliness

Limited interoperability

DISA’s capabilities have matured over time. Advances in technology, evolution in thought, and external drivers fuel the need & ability for continuous improvement.

25

3

3

slide27

Future DISA Business Systems Environment

Customers

Directory Services

Order Entry/Order Mgt Service Catalog

ePortal Services

Budget to Report

Budget

Formulation

Mission Partners

Data Integration

Employees

Communication Services

i Workplace

Order to Fulfill

DISA OSS

Cost Accounting

DAI

Security Services

Collaboration

Time and Labor

Procure to Pay

Business Intelligence

Grants

Acquire to Retire

DISA Enterprise Procurement System

Suppliers

26

26