# Presentation: 259500

## Orientation Briefing Activity-Based Cost Management The Department of the InteriorMarch 3, 2005

## Agenda

**2**

- Introductory remarks
- Project objectives, results and impacts
- Project roles/responsibilities
- Project timeline and Key milestones
- Summary of analysis to date
- Project mechanics
- Next steps

## Why are we doing this?

- To align outputs and activities among the Bureaus and the Department
- To better understand what the work really costs and entails, thus enabling resourcing for targeted levels of performance
- To assist in Department-wide budget and performance integration
*(the President and OMB are keeping score) *
- To provide the Department with sound, fact-based information upon which to make management decisions

**3**

## What does this mean for the Bureaus?

- Will result in useful program management tool
- Will provide information to assist in better justification of funding requests to Congress
- Allows flexibility over Bureau-level detail while maintaining consistency at the Department level (note:  Dept will work with Bureaus to ensure consistency in defining similar activities and linkage to DOI activities is maintained)

**4**

## "Getting to Green" in Budget & Performance Integration

- What it takes to "get to green...."
-  Annual ***budget and performance documents*** incorporate measures identified in PART
-  Report the ***full cost of achieving performance goals*** accurately in budget and performance documents and can accurately estimate the marginal cost (+/- 10%) of changing performance goals
- PART ratings and performance information are used consistently to ***justify funding requests***, management actions, and legislative proposals

**Executive Branch Management Scorecard**

- Current Status as of December 31, 2004

**Human**
**Capital**

- INTERIOR

**Competitive**
**Sourcing**

**Financial**
**Perf.**

**E-Gov**

**Budget/Perf.**
**Integration**

**5**

## "Getting to Green" in Improved Financial Performance

- What it takes to "get to green...."
-  Accurate and timely financial information that is ***used by management*** to inform decision-making and ***drive results*** in key areas of operations
-  Implementing a plan to continuously ***expand the scope of its routine data use*** to inform management decision-making in additional areas of operations

**Executive Branch Management Scorecard**

- Current Status as of December 31, 2004

**Human**
**Capital**

- INTERIOR

**Competitive**
**Sourcing**

**Financial**
**Perf.**

**E-Gov**

**Budget/Perf.**
**Integration**

**6**

## What constitutes success? 

- Having cost information that is ***timely and reliable*** for managing programs
- Having a ***repeatable*** ***process*** to better understand Department-wide costs, realign resources, or manage operations
- Having a clear, ***consistent*** ***linkage*** of Bureau activities and outputs to Dept activities and outputs

**7**

## Project objectives, results, and impacts

_**Results**_
**Standard, stable hierarchical structure linked to FBMS**
**Consistent, repeatable ABC/M structure**
**Visibility into enterprise-wide cost & performance across all Bureaus and Dept**
**Ability to calculate marginal costing of outputs**
**Consistency with the BRM**

_**Impacts**_
**Understanding the full cost of providing goods and services to customers **
**Cost information for efficient and effective program management**
**Cause-and-effect relationships to aid in budget justifications**
**Meet PMA requirements for BPI**

**Develop DOI IDEF model**

**Analyze model for consistency**

**Resolve issues & revise model**

**Reconcile activity mappings w/ BRM**

**Align Bureau and Dept goals & measures**

**8**

## Aligning Bureau and DOI activities and outputs with end-outcome goals and mission components

- Trails constructed, e.g.

- Trails constructed, e.g.

- Trails constructed, e.g.

- Trails constructed, e.g.

- Bureau Outputs

**DOI Output**:
- Trails constructed

**9**

## Alignment of Bureau outputs to DOI outputs

_**Scenario 1**_

_**Scenario 2**_

_**Scenario 3**_

_**Scenario 4**_

**10**

## Consistency in mapping

- _DOI Activity A_

- _DOI Activity B_

- BLM Activity A

- BOR Activity A

- FWS Activity A
- FWS Activity A1

- NPS Activity A

- OSM Activity B

- BIA Activity B

**Inconsistent**

-  Validate mapping
-  Verify Bureau-unique
-  Realign
-  Acknowledge inconsistency

**Consistent**

**Consistent**

**11**

## Project roles and responsibilities

**Project Sponsor**
***Nina Rose Hatfield***

**Project Champions**
***Dorothy Sugiyama***
***Richard Beck***

***ABC Steering ***
***Committee***
***/AOT***

***GT Project Team***

-  Communicate benefits of project to Department and Bureaus
-  Have visible presence as sponsor

-  Resolve issues
-  Neutralize barriers
-  Invite workshop participants

-  Participate in workshops (AOT)
-  Reach consensus on mapping (AOT)
-  Resolve issues (Steering Cmte)

-  Develop IDEF model
-  Evaluate consistencies/Draft report
-  Facilitate workshops

**12**

## Project governance

**Unresolved issues**
**brought**
** ****to Champion**

**Can champion **
**resolve?**

**Champion**
**resolves**

**Sponsor **
**resolves**

**Can Strng **
**Committee**
**resolve?**

**Steering **
**Committee **
**resolves**

**Can AOT **
**resolve?**

**AOT **
**resolves**

**Yes**

**Yes**

**Yes**

**No**

**No**

**No**

**13**

## Project timelines/Key milestones

- Standard cross-walk from Bureaus to DOI by August 15th

- Feb – Apr:	Develop IDEF model; assess consistency; draft report
- Apr – July:	Conduct workshops
- Aug 15th	Standard cross-walk from Bureaus to DOI
- Aug – Sep:	Reconcile mappings to BRM

**14**

## Summary of analysis as of Feb 25: 315 activities analyzed (<10% of 4300 total)

- * Activities deemed insufficient may also be marked consistent

- Of 315 activities, 179 (57%) are undefined
- Of the 136 (43%) activities that are defined:
- 67 (49%) are consistent
- 44 (32%) are inconsistent
- 89 (65%) have no outputs identified
- 102 (32%) duplicates

**15**

## Issue resolution format: Recommendations to date can be grouped into six basic categories of issues

| ISSUE | POSSIBLE FORMAT |
| --- | --- |
| 1. Define activity and output | On-line followed reassessment |
| 2. Define/redefine output | Discuss & vote on suggestion on-line |
| 3. Reassign activity | On-line followed by conference call |
| 4. Expand definition | On-line followed reassessment |
| 5. Split the activity into 2 or more | Workshop |
| 6. Redefine, combine, and/or split activity | Workshop |

**16**

## Initial findings

- A DOI activity with only one subordinate Bureau activity is not sufficient to stand alone (unless deemed necessary to track at the Department level)
- Minimum children required to stand alone should be three (materiality)
- DOI activity should be subsumed under another DOI activity
- Child activity should be reassigned in accordance with the DOI activity
- Most frequent trend so far is insufficient information (definitions)
- Second most frequent trend is outputs that require more work, but resolution should be quick

**17**

## Issue resolution mechanics

- Workshops (where required)
- Structure
- Driven by results of initial cross-walk assessment
- Adhere to schedule
- Reserve non-scheduled discussions for "parking lot"
- Reach consensus on mapping, if not unanimity
***Consensus:**** ***n***. "an opinion or position reached by a group as a whole; general agreement or accord"*
- Participants
- Applicable Bureau AOT member(s)
- Applicable program managers and staff
- "Strawman" Bureau-to-DOI activity crosswalk
- Ground rules and expectations
- Open-mindedness
- Consistent participation when required
- Components
- Workshops
- Meetings
- Collaborative tools

**18**

## Next steps

- Build the as-is activity model (IDEF)
- Assess consistency and trends across Department
- Draft report
- Meet with Bureau Deputies and ABC Staff
- Identify and schedule workshops

**19**

## Questions

**20**