1. Shared Services – Changing for the Better
Zack Gaddy
Director
Defense Finance and Accounting Service
March 6, 2008
Integrity - Service - Innovation

2. Integrity - Service - Innovation
Agenda
DFAS Mission/Vision
DFAS Profile
Strategic Alignment
Transformation Blueprint
Managing DFAS Transformation
People
Structure
Process
Technology
Information
DFAS Future Support
2/17/2019
Integrity - Service - Innovation

3. Integrity - Service - Innovation
DFAS Mission/Vision
Mission: Direct, approve, and perform finance and accounting activities for DoD
Our
Customers
Services
Goals
Army Air Force Navy Marine Corps Defense Agencies
Military & Civilian Pay Commercial Pay Accounting Services
Vision: Transforming with the Warfighter to remain the trusted financial partner for DoD
Support DoD in Winning the Global War on Terror
Lead transformation of finance and accounting functions throughout DoD
Perform the DFAS Mission at Best Value for DoD
Attain operational excellence in finance and accounting services
Attract, develop, and retain a highly capable workforce with relevant skills and competencies
2/17/2019
Integrity - Service - Innovation

4. Integrity - Service - Innovation
DFAS Profile
Mission: Direct, approve, and perform finance and accounting activities for DoD
OUR ORGANIZATION
Japan
United States
Europe
12.5K employees
18 sites
$1.63B in Costs
OUR BUSINESS
57M general ledger accounts maintained
13.8M commercial invoices paid
5.9M people paid
2/17/2019
Integrity - Service - Innovation

5. Strategic Alignment with External Requirements
President’s Management Agenda
Improved Financial Performance
Budget and Performance Integration
Competitive Sourcing
Expanding Electronic Government
Strategic Management of Human Capital
Quadrennial Defense Review / Department of Defense
Win the Global War on Terror
Continue Transforming Enterprise Management
Improve Effectiveness and Efficiency Across the Board
Focus on People – Military and Civilian
DoD Comptroller’s Strategic Goals
Drive DoD-wide business transformation through leadership of financial management process and systems improvements
Provide DoD leadership with authoritative and timely financial information and analysis
Ensure proper stewardship of DoD funds
Build and ensure the proper execution of budgets to execute DoD’s mission
DFAS Strategic Goals
Support DoD in winning the Global War on Terror
Lead transformation of finance and accounting functions throughout DoD
Perform the DFAS mission at best value for DoD
Attain operational excellence in finance and accounting services
Attract, develop, and retain a highly capable workforce with relevant skills and competencies
2/17/2019
Integrity - Service - Innovation

6. DFAS Transformation Blueprint
Vision: Transforming with the Warfighter to remain the trusted financial partner for DoD
People
Human Capital Strategy
NSPS
Information
Business Intelligence
Benchmarking
Information Security
Vision
and
Leadership
Structure
BRAC
Centers of Excellence
Technology
ERP
Systems
Process
HPO
Lean 6
ERMP/BAM
2/17/2019
Integrity - Service - Innovation

7. People - Human Capital Strategy
Transformation
Transformation
2011
14K People
<10K People
1:8 Supervisory Ratio
1:15+ Supervisory Ratio
<
>
30% Analytical Skill Sets
70% Technical Skill Sets
70% Analytical Skill Sets
30% Technical Skill Sets
General Schedule
Pay System
Reactive
Pro-Active
Process-Oriented
Results-Oriented
2/17/2019
Integrity - Service - Innovation

8. Integrity - Service - Innovation
Structure - Present
12.5K People -
18 Sites -
$1.63B Costs -
Limestone
Closed Sites Personnel Data:
23% DFAS Placement
23% PPP Placement
37% Retirement
13% Voluntary Separation
4% Reduction-in-Force
Rome
Cleveland & Bratenahl
Rock Island
Indianapolis
Columbus
Omaha
Arlington
Patuxent River
Kansas City
Denver
San Diego
Texarkana
Japan
Europe
Pensacola NAS
& Saufley Field
2/17/2019
Integrity - Service - Innovation

9. Integrity - Service - Innovation
Structure
<10K People -
10 Sites -
$1.31B Costs -
Transportation Working Capital Fund Accounting
≥ 600 people
Limestone
Medical Accounting
Special Ops Accounting
≥ 1,000 people
Rome
Cleveland & Bratenahl
Retired and Annuitant Pay
Garnishments
≥ 1,500 people
Indianapolis
Columbus
Arlington
Acquisition Accounting including Contract Pay
≥ 2,064 people
Transformation/
BRAC Net Savings
FY 2006 – 2011
$620 Million
Texarkana
Japan
Security Assistance Accounting
Debt and Claims
≥ 2,632 people
Europe
2/17/2019
Integrity - Service - Innovation

10. Process - High Performing Organization
Study Plan Implement Yield
Strengthened customer support
Increased efficiency
Reduced costs
Operations across numerous sites
Related functions spanning multiple organizations
Disparate, network-specific procedures
Like processes spanning multiple authorities
Consolidated operations across central sites
Related functions under standard organization structure
Standardized, streamlined procedures
Repeatable end-to-end processes under single authority
Accounting HPO currently under implementation (impacts ~7,000 personnel)
Limestone Accounting Pilot HPO implementation (2nd Qtr FY08)
Contract Pay Study completed (impacts ~500 personnel)
2/17/2019
Integrity - Service - Innovation

11. Process – Integrated Transformation of Processes
Enterprise Risk Management Program
Internal Controls
Lean6
“Improve it!”
(the process)
Internal Controls
“Check it & Fix it!”
(the solution)
Lean6
Process Excellence
Continuous Risk Management
Project
Management
Center of Excellence
“Manage it!”
(the initiative)
Business Activity
Monitoring
“Check it!”
(the transaction)
BAM
PMCoE
2/17/2019
Integrity - Service - Innovation

12. Process - Lean6 $5M ROI 5 Projects $17M ROI 14 Projects $22M ROI
Executive Council establishes Lean
First-wave of Black Belts trained
Green Belt piloted
$5M ROI
5 Projects
Established Lean6 Program Management Office
Black Belts = Corporate Assets
Pilot: Financial Statement Improvements
$17M ROI
14 Projects
Conducted First EVSMA/ELD - Columbus Operations
Second-wave of Black Belts trained
Benchmarked training with industry
$22M ROI
143 Projects
Lean6 integrated with Enterprise Risk Management Program
Corporate Governance established
Corporate Project Plan established – links to Transformation Initiatives
2/17/2019
Integrity - Service - Innovation

13. Technology – ERP and System Initiatives
Fiscal Year
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
BEIS – Business Enterprise Information Service
DTS – Defense Travel Service
SFIS – Standard Financial Information Structure
CAMS ME – Capital Asset Management System Military Equipment
EBS – Enterprise Business System
LMP – Logistics Modernization Program
SDI – Standard Disbursing Initiative
GFEBS – General Fund Enterprise Business System
Navy ERP – Navy Enterprise Resource Planning
DIMHRS – Defense Integrated Military Human Resource System
EFD – Enterprise Funds Distribution
DAI – Defense Agencies Initiative
DEAMS – Defense Enterprise Architecture Management System
DCPDS – Defense Civilian Personnel Data System
IGT – Intra-Governmental Transactions
ECSS – Expeditionary Combat Support System
Enterprise Resource Plan System Upgrade Planning
2/17/2019
Integrity - Service - Innovation

14. Integrity - Service - Innovation
Information
Business Intelligence
Benchmarking
Information Security
2/17/2019
Integrity - Service - Innovation

15. What Does the Future DFAS Look Like?
2006
2011
Workforce
Staffing
13,475 People
<10,000 People
Workforce
Composition
70% Technical
30 % Professional
1:8 Supervisory Ratio
30% Technical
70% Professional
1:15+ Supervisory Ratio
Workforce
Productivity
9,300 Transactions per person
13,600 Transactions per person
Business
Environment
Manual Processes
Large-scale rework
Workforce with minimal analysis skills
Legacy systems
Overhead staffing and costs exceed industry benchmark
Currently, 52 percent productivity increase and 317 millions in savings.
Automation of business processes
Less rework
Workforce with mature financial analysis skills
Migratory systems on-line
Overhead staffing and costs match or exceed industry benchmark
Providing Better Service, Faster and at Less Cost
2/17/2019
Integrity - Service - Innovation