# Presentation: 063387

## Federal Financial Management ConferenceShared Services: Progress through Partnerships

**Larry Neff**
**Deputy Chief Financial Officer**
- U.S. Department of Transportation
- March 11, 2008

## Background on DOT and ourEnterprise Services Center (ESC)

- DOT has 55,000 employees & a $66 billion annual budget
- Highly decentralized organization (Operating Administrations)
- OST, WCF, OIG, FAA, FHWA, FTA, FRA, FMCSA, NHTSA, MARAD, PHMSA, RITA/BTS/Volpe, STB, SLSDC
- ESC has 1,000 employees & is in a Franchise Fund
- IT Services/Data Center, Applications Support, Accounting Services, Customer Services/Help Desk
- Located at the Mike Monroney Aeronautical Center in beautiful Oklahoma City
- 1,100 acre secure campus
- 5,500 total employees
- Professional, knowledgeable, dedicated career staff

## DOT & ESC Accomplishments

- 2000-2003:  DOT implemented all 14 bureaus on a COTS-based, FSIO-certified financial system with _no_ customizations running on a cost-effective single production instance
- Produce financial statements overnight from the core accounting system
- DOT has consolidated all accounting operations to ESC
- Saving $5+ million per year
- Bureaus more willing to streamline & standardize processes
- Clean financial audit opinions 6 of last 7 years
- DOT raised to “yellow” on PMA goal for Financial Management

## Enterprise Services Center (ESC)

- Feb. 2005:  OMB designated DOT/ESC 1 of 4  Federal Shared Service Providers (FSSPs)
- ESC currently cross-services
- Government Accountability Office (GAO)
- Commodity Futures Trading Commission (CFTC)
- Institute of Museum and Library Services (IMLS)
- National Endowment for the Arts (NEA)
- ESC using Service Oriented Architecture (SOA) technology to integrate PRISM with Oracle Financials
- Eliminates duplicate manual data entry & reconciliation
- Supports commitment accounting

## Slide 5

## Partnerships for Shared Services

- ESC recognized the need for an on-going private sector partner for help marketing to & implementing new external customers
- Implementation workload goes up & down
- Continuity to ensure expert & experienced staff
- Competed a Task Order on NIH’s CIO-SP2***i ***contract
- Won by SRA with IBM
- Mutually beneficial relationship
- Gained new customers
- Marketing expertise
- Implementation resources

## Partnerships for Shared Services

- ESC also has a contract with L-3 for on-going operational support
- Data Center support
- Application support
- Operational accounting support
- Exploring a Blanket Purchase Agreement
- Consolidate support
- Compete Task Orders among vendors

## Partnerships for Shared Services

- Initially, some agencies thought the FM LoB was focused on shared hosting of financial systems
- This view-point was too narrow
- No economy of scale realized just by moving from 1 large data center to another
- Hosting costs are a small part of any IT system’s costs
- The biggest potential economy of scale is in **shared ****application support**
- Professional staff with expertise in running the system
- Biggest cost of system operations
- Only way to drive down cost of application support is by using standard systems
- FSIO standards make this even easier

## Partnerships for Shared Services

- Alternatives for ensuring high quality services through competition
- 4 Federal SSPs & __# Private SSPs all competing against each other
- 				      ***vs.***
- Teams of Private & Federal staff working together as SSPs competing against other Private-Federal SSP Teams

## Benefits of Shared Services

_**Low Cost**_
- Customers get all the advantages of DOT’s financial system & accounting services without contributing to DOT’s $125 million capital investment
- ESC already provides 90% or more of most required solutions; most additional needs can be met through configuration & set-up and interfaces
- Customers only pay 1-time implementation costs and their fair share of annual operating & maintenance costs, plus future upgrade costs
_**Low Risk**_
- Much lower risk to migrate to a system that’s stable and has been in production for 8 years than to migrate to a new custom-developed system
- Delphi has 4,000 users and been successfully upgraded 7 times
- Delphi has passed multiple CFO and SAS-70 audits

## Benefits of Shared Services

_**Experienced Team**_
- DOT has successfully implemented Oracle Financials for 20 customers
- We _***know***_ how to do this
- SRA/IBM business partner also has extensive experience
- Helped with GAO’s successful implementation
- DOT follows Oracle’s Application Implementation Methodology (AIM)
_**Change Management & User Support**_
- Effective support for Change Management
- Provide 4 to 6 weeks of “desk-side” user support after go-live,  including the 1st month-end close
- Experienced Accounting & Help Desk staff know the Oracle application & Federal accounting inside & out
- All system & user documentation available on-line

## Benefits of Shared Services

_**We Handle the IT Requirements**_
- Professionally run data center
- Meet all IT planning, IT security, Disaster Recovery,SPII & Privacy Act requirements
_**DOT Strategy**_
- Don’t customize the COTS software
- Modify business processes to take advantages of best business practices inherent in the Oracle software
- Don’t recreate the legacy accounting system
- Consolidate & standardize accounting operations

## Lessons Learned

- Executive support is essential
*Clean up your data!*
- Streamline business processes
*Clean up your data!*
- Consolidate accounting operations
*Clean up your data!*
- Talk to your customer’s customers
*Clean up your data!*
- Change management is critical
- Communicate, communicate, communicate
- Train, train, train
- Support, support, support
*Clean up your data ****at the detail level!***

## Looking to the Future

_**Long-term Business Transformation effort**_
**Business drivers**
- Plan for Oracle release 12***i***.FSIO – complete system re-architecting
- Plan for Common Government-wide Accounting Code (CGAC)
- Better link costs to program mission performance metrics
- Automate Dept.-wide roll-up of performance data
- Support cost accounting & Earned Value Management (EVM)
**Started summer 2007**
- Workgroups & governance structure established
**Integrated procurement solution**
- Automate commitment accounting
- Eliminate duplicate manual data entry & reconciliation
- Provide more useful information to program managers
- Eliminate the need for “cuff records” systems

## For more information:  www.esc.gov

**Larry Neff****	****	****	****Marshal Gimpel**
- Deputy Chief Financial Officer		Director
- U.S. Department of Transportation	Enterprise Services Center
- (202) 366-2335			(405) 954-8980
- _[Larry.Neff@dot.gov](mailto:Larry.Neff@dot.gov)_			_[Marshal.Gimpel@faa.gov](mailto:Marshal.Gimpel@faa.gov)_
**Mike Upton****	****	****	****Bob Stevens**
- Deputy Director			Manager, Customer Service
- Enterprise Services Center		Enterprise Services Center
- (405) 954-8980			(405) 954-7143
- _[Mike.Upton@faa.gov](mailto:Mike.Upton@faa.gov)_ 		_[Robert.Stevens@faa.gov](mailto:Robert.Stevens@faa.gov)_