Department of Transportation Where We Are and Where We Want to Be

1 A Decade of Standardization and Consolidation n 1997 – DOT Agencies collaboratively chose Oracle Federal Financials as the single core financial management system (Delphi) n 1998– DOT chose Federal Aviation Administration’s Enterprise Service Center (ESC) in Oklahoma City to implement and support all DOT agencies on Delphi (single instance with no customizations) n 2004 – DOT implemented final agency on Delphi n DOT/ESC designated as a Shared Service Center by OMB in 2005 n ESC services 4 external agencies including the Government Accountability Office (GAO) in 2007 n 2000 to 2008 – Gradually consolidated all accounting operations to ESC including 9 FAA’s regions and all DOT agencies. n 2009 – ESC implementing two new agencies AMAZING PROGRESS!

2 DOT Agencies Office of the Secretary Federal Aviation Administration Federal Highway Administration Federal Motor Carrier Safety Administration Federal Railroad Administration Federal Transit Administration Maritime Administration National Highway Traffic Safety Administration Pipeline & Hazardous Materials Safety Administration Research & Innovation Technology Administration St Lawrence Seaway Development Corporation

3 If that’s not enough….

4 DOT/ESC Focus on Optimization with Innovation and Improvement n 7 unqualified opinions in the last eight years with no material weaknesses in 2008 n Monthly close occurs overnight for all agencies n Year-end close process dramatically decreased from a three week process to agencies closing in a few hours n Developed an innovative Financial Statement Solution which produces individual agency statements and DOT’s Consolidated Statements directly from the core system with no topside adjustments or external reporting tool n Implemented a standardized A-123 Internal Control Program which fully documents all of our processes n Implemented FAB 14 Reconciliation Metrics to measure and report agency progress in key reconciliations

5 We are still faced with many challenges n Lack of standardization in Delphi configuration across agencies n Disparate business processes cause excessive administrative work, re-work, reconciliation, and reporting resulting in higher costs n OMB’s FMLoB directives moving Agencies to a Common Government-wide Accounting Code (CGAC) and standard business processes n Inability to roll up data department-wide because of system configuration n Requirements to support Earned Value Management, Cost Accounting, Performance Measures, CGAC, Treasury’s Government– wide Accounting (GWA) changes n Need to improve data integrity, accuracy and consistency n Technology Platform and Reporting Tools are inadequate to support future business operations n Need for integrated Procurement Solution n Challenges of TRANSPARENCY!

6 What’s Next for DOT/ESC?

7 Opportunities for Optimization of Systems and Processes Oracle Release 12 n Transaction flow defined by process n Transaction code entry eliminated n Individual agency “set of books” structure gone n Intercompany billing capability n Operations can manage payment sweeps, month end close processes centrally n Move to OMB’s CGAC n Incorporate Treasury’s GWA changes

8 DOT Leadership Strategic Planning August 2007 –DOT financial management, budget, CIO, and procurement community participated in a strategic planning session to determine the Department’s financial management strategy for the next decade – the major outcome of this meeting was the “vision” for the Financial Management Business Transformation (FMBT) effort “To be the government leader in Financial Management utilizing quality people, processes, and technology in delivering a single integrated solution to support DOT’s mission by using streamlined business processes while ensuring financial integrity.”

9 Goals of DOT FMBT Vision n Re-engineer all financial management business processes to eliminate redundancies and inefficient processes amongst the agencies n Ensure consistency, consolidation and coordination of DOT Enterprise-level business systems including a single integrated procurement solution and modernized reporting solution n Improve collaboration and communication between the Office of the Secretary, ESC, and the Agencies n Alignment of resources conducting business process reengineering and system modernization into a unified, focused strategy

10 Five Commandments of the FMBT n Standardization: We will standardize business processes and Account Code Structure n Integrity: We will ensure data integrity n Communication: We will communicate effectively across DOT n Replication: We will not replicate the old system n Integration: We will integrate before we interface (We still will not customize)

11 Governance Structure

12 Business Transformation Team Leadership Executive Leadership Committee Project Manager Financial Management Business Council FMBT Project Management Office Business Process Transformation Team Information Management Team Current Systems Team Future Systems Team Change and Learning Team

13 Project Team Organization Business Process Transformation Identify and reengineer critical business processes and develop policy around identified processes. The development of business requirements will be driven by this team. Develop and implement a Department-wide Accounting Code Structure and define data & reporting requirements for the future transformation. Information Management Identify, map, and communicate current technical and process related requirements around the current system. Development of cutover and conversion plans will be driven by this team. Current Systems Future Systems Develop an inventory of the future functional and technical system requirements. Responsible for translating business requirements into technical solutions as well as leading development, configuration, and testing efforts. Change & Learning Provide a structured and uniform approach for stakeholders, decision makers and users to manage change and learning related activities. Provides a standard approach for change management across all threads and phases. PMO Provide program management tools and documents; coordinate, consolidate and monitor project activity; provide strategic advice and industry leading practices, and facilitate the development and management of the plan and schedule. Project-Wide Support

14 Achieving a Fully Integrated Budget and Financial Management Environment Develop a standard set of reports by role to be adopted by both budget and finance practitioners across the Department Information Sharing and Reporting Develop a standard set of business processes for core financial management functions to be adopted by both budget and finance practitioners across the Department Business Process Standardization Develop a common accounting code structure, including an applicable set of definitions, adopted by both budget and finance practitioners across the Department Data Management

15 Business Transformation Planning Vision To develop and document an understanding of the value of the project direction and goals PlanDesignBuild Deliver Operate To initiate the project and identify the team and expected results in a detailed project plan To create a design using the results of the requirements collection, design confirmation workshops and prototyping efforts To configure and test the business and technical requirements established in the previous design phase To prepare for go- live by performing final system testing, user training, cut-over activities and enhancing an internal help desk To transition from a project environment to a day-to-day business operation PHASES: Business Process Transformation Current System Information Management Future System Change & Learning PMO Definition & Purpose Task TEAMS:

16 Summary of FMBT Approach Potential Sub- Processes Process Description  Formulation  Allocation  Execution  Funds Management  Project Management  Budget Accounting Users Guide  Reporting (e.g., SF-133, Budget Variance) Budget to Report Encompasses all business functions necessary to plan, formulate, create, execute against, and report on the budget and business activities of the entity.  PP & E  Asset Management  Inventory Acquire to Retire Processes, procedures, tasks and activities in the area of asset management.  Costing  Billing  Project Management Cost Accounting Processes, procedures, tasks and activities in the area of a cost accounting methodology (i.e., Standard vs. ABC).  Maintain COA  Consolidations  Financial Statements Generation  Close Financial Mgmt. & Reporting Processes, procedures, tasks and activities in the areas of financial reporting, maintenance of COA design and generation of financial statements.  RA (AR & AP)  Grants (Grantee & Grantor)  Travel & Credit Card  Commitments, Obligations, and Expenditures  Vendor Management Procure to Pay Processes, procedures, tasks and activities in the areas of procurement, vendor management, contract management, grants management, and reimbursements.

17 Key to our Success n Management support n Analyzing and understanding the weaknesses of the current approach n Involvement of key stakeholders across DOT n Understanding and using the new technology and functionality n Re-implementation of every Agency with next upgrade of Oracle n Designing the system to meet the information needs of management and program managers.