# Presentation: 370002

## Project Management Information Improvement (PMI2) Business Impact Briefing

- September 2005

## Purpose

- Communicate expected PMI2 impacts on NASA, including:
- Significant changes (process or otherwise)
- Definition of new roles and evaluation of impact to existing Agency Standard Core Financial roles
- Organizational gaps (e.g., policy changes, impacts to existing and developing Agency systems)
- Business benefits and challenges
- Promote an understanding of the organizational challenges NASA faces

## Business Impact Briefing Background

- Findings in this report are based on:
- PMI2 Process IPT’s effort to define new and/or update Agency processes
- Gap Assessment Workshops conducted by PMI2 Change Management IPT with Process IPT and NASA Process Teams
- PMI2 Process Whitepapers and Project milestone documentation
- Primary audience is the major PMI2 stakeholder groups:
- ASIPO Leadership
- HQ Leadership
- Mission Directorates
- Institutional Offices
- NASA Centers
- IEM Competency Center (e.g., Business Process Support teams)

## Business Impact Overview

- From a *process *perspective, PMI2 is expected to have minimal impact to end users in all process areas except Funds Distribution
- From a *data value* perspective, PMI2 changes are expected to affect users across the Agency, including anyone:
- Involved with Budget Planning, Budget Execution, Procurement, or Cost Management
- Inputting time on a time card, traveling, or reporting expenses
- Using government-issued purchase cards
- Accessing or running reports:
- IEM Competency Center
- Reporting Points of Contact and Teams at Centers
- Users of WebTADs, Travel Manager and SAP systems
- Working within the IEM Competency Center (e.g., Full Cost Management team)

## Significant Changes

- To implement the NSM in NASA’s Core Financial system, and satisfy requirements set forth by the OCFO and OCE, the following key changes are required:
- Transition to a Project Technical WBS Concept
- Re-engineering of Funds Distribution to be aligned with the NSM
- Enhancement of Cost Collection capabilities
- Development of a new way to execute Agency reports
- Development of an SAP interface to OCFO’s Metadata Manager (MdM) System
- These changes and their business impact are outlined on subsequent slides

## Transition to a Project Technical WBS Concept

- PMI2 is replacing the Financial Coding Structure WBS with a product-oriented, or technical, WBS structure in the Core Financial system
- New NSM structure consists of:
- A level one, randomly generated, six-digit Project number created by MdM
- Up to six additional levels of two-digit numbers reflecting a Project’s technical WBS
- Important changes between PY05 and PY06 structures include:
- Project number no longer reflects the UPN concept
- Performing Center no longer includes the smart-coded prefix
- Reimbursable indicator "R" no longer included in the new Project level nomenclature for Reimbursable Projects

**Notes:**
Important: Current Reimbursable structure designation of 4-digit Customer Number plus 2-digit incremental order number will remain at the lowest WBS level

## ...Business Impact

- All Core Financial end users need to:
- Understand the new coding structure
- Be given the correct codes to use
- Many SAP roles need to learn to identify:
- “Center” by drilling-down on WBS Master Data
- Reimbursable projects by referencing various Attributes on the Project Master Data
- Existing Projects have two budget structures to manage, execute, and report until PY05 and prior funds are expended
- PY05 and prior AWCS structure
- PY06 and forward NSM structure

## Re-engineering of Funds Distribution

- PMI2 is re-engineering the funds distribution process to implement the new budget structure
- PY06 funds distribution process involves activities at three levels:
- Agency Budget Maintainers in the Mission Directorates are a new user group responsible for funds distribution

**NEW USER **
**GROUP!**

## ...Business Impact

- Impact to the business includes altered budget distribution steps at the Agency (OCFO) and Program (Mission Directorate) levels
- Center Budget Maintainers will distribute funds to the same level as today
- Nature of steps change for Agency Budget Maintainers on OCFO but not actual number of steps
- New Agency Budget Maintainers within the Mission Directorates become responsible for funds distribution down to Project by Center
- To mitigate potential data entry errors, the system is being enhanced to:
- Automatically derive certain fields once basic information is entered
- Validate that correct information is entered via new validation logic

## Enhancement of Cost Collection capabilities

- PMI2 improves cost collection capabilities by enabling:
- Obligations and cost to be collected at the lowest levels
- Obligations and cost to occur at the same level
- Cost collection to occur anywhere from WBS Level 2 to 7
- Not every Project will utilize all 7 levels
- Project Managers will determine how their technical WBS structure is built
- New Institutional Hierarchy is represented by a WBS structure instead of Cost Centers
- Use of account assignment "K" (which is used for Cost Pools today) is being phased out for PY06 funding

## ...Business Impact

- Procurement/Requisitioning
- Procurement community will manage existing contracts with two budget structures until prior year funds are expended
- Requisitioners will select account assignment code “P” (Project) when citing Project funds or Cost Pools, instead of “K” (Cost Pool), eliminating the need to create separate Procurement Line Items (PLIs) on purchase requisitions
- Expansion of WBS levels may increase PLIs and Accounting Line Items (ALIs) on existing contracts* impacting:
- Requisitioners - because they initiate purchase requests citing the account code information
- Procurement - because they “adopt” purchase requisitions to create awards or obligations

- *dependent on how Project Managers structure their projects

## ...Business Impact (con’t)

- Cost Management
- Shift to WBS elements for the Institutional structure changes assessment cycle maintenance
- Centers will need to run separate cost assessment cycles for old and new structures; impact limited as many Centers run separate assessments for each Program Year to achieve better run times and improve control today
- Accounts Payable
- Potential increase to PLIs and ALIs on existing support contracts creates more invoices because of the existing 99 accounting line limitation
- Accounts Receivable
- Due to “R” indicator going away in the new Project-level nomenclature, end users will need to identify Reimbursable projects by referencing various attributes on the Project Master Data (e.g., Project Type, Benefiting Project)

## Development of a New Way to Execute Agency Reports 

- PMI2 is changing the way Agency reports are executed:
- Rebuilding many custom reports/queries
- Rebuilding many BW reports
- Changes to variable entry screens of many reports to include Business Area as a selection criteria
- Changes to some financial statements (e.g., Statement of Net Cost)
- Modification of Center-specific reports
- Changes to variants created for R/3 reports
- PMI2 is changing the way Institutional costs are viewed by implementing WBS elements as the primary cost object for Institutional Projects

## ...Business Impact

- Allows Project Management to view total Organizational activity from the Cost Center object
- Attributes and Project definitions must be maintained on both the new and existing Fund Centers and WBS elements
- All Inception-to-Date (ITD) reporting will be done in BW, impacting Project Managers and their “Resources Community”
- Reporting POCs and Center Reporting Teams will see changes in several screens due to the increased number of Attributes and will need to be able to identify Attributes from both Funds Management and Project Systems views
- Most end users will be need to re-establish their bookmarks in BW
- Centers or Projects utilizing SAP codes extracted from either R/3 or BW to populate another system may require configuration changes

## Development of an Interface to OCFO’s Metadata Manager (MdM)

- NASA Headquarters (OCFO) is developing the Metadata Manager (MdM) system
- New, web-based tool which will serve as the centralized repository of the new NSM coding structure
- System of record to manage, create, maintain, control and archive NSM data elements and associated codes
- PMI2 is developing an interface between MdM and SAP that will extract approved execution codes from MdM and automatically create/update Master Data in SAP:
- Project/WBS elements and associated Attributes
- Fund Centers and associated Attributes
- Derivation Rules

## ...Business Impact

- With the MdM/SAP interface:
- Maintenance of budget structures (Fund Centers) will no longer be a function of the Budget Administrator
- Maintenance of Project Structures (Project/WBS) and Derivation Rules will no longer be a function of the Project Administrator
- Centers will go to the Agency for code approval instead of the Competency Center (processes defined by MdM)

## New Roles

- PMI2 created one new role: MdM Interface Processor
- Responsible for functionally managing the interface between SAP and MdM, including:
- Daily maintenance
- Error assessment
- Coordination of corrections to budget derivation rules, budget validation rules, COCD derivation rules, Project Master Data, and Funds Center Master Data incorrectly created by the interface
- Skills needed for this role include:
- Knowledge of MdM system and approval process
- Knowledge of NSM
- Knowledge of Core Financial and SAP
- Knowledge of NPR 7120.5C NASA Program and Project Management Processes and Requirements

## Impact to Existing Agency Standard Core Financial Roles

| Functional Area | Role | Magnitude of Change  |
| --- | --- | --- |
| Budget Execution | Agency Budget Maintainer | High |
|  | Budget Administrator | High |
|  | Project Administrator | High |
| Procurement | Agency Buyer | Medium |
|  | Center Buyer | Medium |
|  | Outside Buyer | Medium |
|  | Requisition Approver | Medium |
|  | Requisitioner | Medium |
| Cost Management | Assessment Cycle Administrator | Medium |
|  | Assessment Cycle Maintainer | Medium |
|  | Contractor Cost Report (CCR) Administrator | Medium |
|  | Contractor Cost Report (CCR) Analyst | Medium |
|  | Cost Center Maintainer | Medium |
| AR | Reimbursable Manager | Medium |
| AP | Vendor Invoice Processor | Medium |

- Note: All role impacts are further described in the Appendix of the Business Impact Report.

## Organizational Gaps

- Organizational gaps may be realized in the following key areas:
- Training
- Workload
- Work Responsibilities
- Interim Processes
- Integration with Existing (and Developing) Agency Systems and Processes
- Policy/Regulations
- These key areas are addressed on subsequent slides

## Organizational Gaps: Training

- An effective Change Management effort is needed to facilitate development of knowledge, skills and understanding, particularly in area of data value changes
- Key training topics:
- Technical WBS Structure/Nomenclature
- End-to-End Funds Distribution Process
- Information Delivery
- Procurement/Requisition Processes
- Cost Assessment Cycle Process
- Development of/updates to relevant performance support materials must be coordinated to ensure they reflect applicable business process and system changes

## Organizational Gaps: Workload

- Understanding where workload changes may be recognized is a key element to success
- Despite the fact that most Core Financial processes will remain the same as a result of PMI2, workload changes are likely in the following areas:
- Procurement community - because of the potential increase in PLIs to support the multi-level WBS structure and the more frequent use of the current workaround
- Accounts Payable community - because of the 99 accounting line item limitation and the potential need to split invoices
- OCFO Agency and Center Funds Distribution Groups - because of the increased level of detail in the budget structure. However, the new Agency Budget Maintainers at the Mission Directorates are expected to offset this potential workload increase

## Organizational Gaps: Work Responsibilities

- To avoid overburdening existing Agency/Center Budget Maintainers, HQ OCFO is creating a new user group
- Approximately 30-40 end users from Mission Directorates at HQ
- Requires training Funds Distribution and Core Financial
- With any implementation, there is an expected dip in performance until the change is effectively implemented...
- ...A new user group may cause a deeper or more prolonged dip in performance

## Organizational Gaps: Interim Processes

- Release schedules vary between the MdM system and PMI2
- PMI2 functionality release - October 12, 2005
- MdM system release - October 2005 (after the PMI2 enhancements)
- MdM/SAP interface - December 2005
- Temporary interim processes are being developed for the following periods:
- Prior to PMI2 go-live
- After PMI2 go-live and prior to MdM go-live
- After PMI2 and MdM go-live and prior to the MdM/SAP Interface go-live
- Interim processes need to be communicated, trained and coordinated from both projects
- Details of the interim processes and responsible parties are being documented by the PMI2 Process IPT and will be distributed to PMI2 Points of Contacts in early September

## Organizational Gaps: Integration with Existing/Developing Agency Systems

- Close integration is needed between all IEMP projects being released in and around the FY05 to FY06 transition to ensure:
- Systems and interfaces are ready to accept the new codes
- Codes are communicated clearly, accurately, and in a timely manner to reduce impact to the Agency’s business processing and reporting
- Any Project and/or Center utilizing SAP codes to populate another system is impacted by PMI2, including:
- Interfaces to several systems are being modified and/or developed to support both coding structures, reducing/eliminating the need for system crosswalks

- Prism (Contract Management Module)
- NASA Supply Management System (NSMS)
- Advanced Material Management System (Goddard)
- Funds Availability System (Stennis)
- Cost Data Warehouse (Stennis)

- SAP (Release 6.1)
- Central Resources Control System
- Travel Manager System
- Agency Labor Distribution System
- WebTADs
- Purchase Card System
- Metadata Manager
- IEM Portal (i-View)

## Organizational Gaps: Policy/Regulations

- During process design, the need for Agency policy changes was highlighted including:
- Standardization of Assessment processes - Currently Centers use a variety of methods to assess costs from the Pools to the Projects (e.g., standard rates, assessment of actual costs)
- Agency policy regarding MdM - What content gets approved for MdM (and subsequently for SAP) and the approval process. There is an expected shift to Centers going to the Agency for approval, rather than to the IEM Competency Center
- Decisions on the policy changes are pending; Subsequent business impacts can be determined once these decisions are made

## Business Benefits

- There are six key benefits to NASA as a result of PMI2:
- Timely and relevant information for management decisions
- Better accountability and full cost management
- Improved budget management process that strengthens financial integrity
- Support for NASA compliance with revised policy NPR 7120.5C NASA Program and Project Management Processes and Requirements
- Improved Project management reporting
- Greater obligation and cost details with the implementation of the technical/product oriented structure

## Business Challenges

- There are two key challenges anticipated as a result of PMI2:
- Use of Dual Budget Structures
- Dual budget structures will be operational until budget under the former structure is expended
- Adds complexity to Inception-To-Date Reporting
- Addition of the FY06 Project structure is no different than a Budget structure change in any other year, with the exception being the shift toward one WBS for future Projects
- Introduction of a New Coding Structure
- Center is no longer embedded as the first two digits on the WBS
- Practice of searching for Center-specific information is changing - Center-level reporting will still be possible using the Business Area field
- Reimbursable indicator is no longer a part of the new WBS nomenclature
- PMI2 training is addressing these challenges

## Organization Alignment Recommendations

- To realize the full benefits of PMI2, NASA must:
- Develop the knowledge, skills, and abilities of its workforce
- Align its organization to operate most effectively in the new environment
- Immediate next steps for NASA Centers should focus on:
- Review and dissemination of the Business Impact Report briefing, which is being developed in conjunction with this report
- Identification of Center-specific process and organizational gaps
- Creation of Center process and organization alignment plan to close organizational gaps
- End user participation in PMI2 training opportunities
- Preparation for and participation in Center Readiness Reviews (late September)
- Response to change is predictable; therefore, it is possible to optimize an organization’s performance during change by effectively managing the change process