Department of the Interior

Office of the Secretary

 

Enterprise Management Information System

Revised Gap Analysis and Alternatives

 

 

January 28, 2003

 

Submitted by:

G&B Solutions, Inc.

1501 Farm Credit Drive

Suite 4400

McLean, VA  22102

(703) 883-4045


 

Table of Contents

 

 

Section 1      Executive Summary. 1

Section 2      Background. 3

2.1       Introduction. 3

2.1.1        Need for an Integrated Management Information System.. 3

2.1.2        Activity Based Cost Management (ABCM) 4

2.1.3        Activity Based Costing (ABC) 4

2.1.4        Activity Based Management (ABM) 4

2.1.5        Performance Measurement:  A Theoretical Framework. 5

2.2       The Performance Measures Wiring Diagram.. 7

2.2.1        The Software Tool 8

Section 3      Department of the Interior ABC Initiative. 10

3.1       The Arizona Pilot 10

3.2       Cost System versus Performance Measurement System.. 11

Section 4      Gap Analysis. 12

4.1       DOI MIS Design Principles. 12

4.1.1        Gap Analysis and Mitigation Strategies. 12

4.2       Implementation Risks. 16

Section 5      Feasible Alternatives. 20

5.1       DOI MIS Alternatives. 20

5.1.1        Alternative 1: Status Quo. 20

5.1.2        Alternative 2: Build Warehouse. 20

5.1.3        Alternative 3: Implement a COTS Solution. 21

Section 6      Evaluation of Alternatives. 22

6.1       Selection Criteria. 22

6.2       Cost 22

6.2.1        Flexibility. 23

6.2.2        Ability to Meet Design Principles. 24

Section 7      Conclusion. 25

Appendix 1  Survey of Systems. 26

Appendix 2  Requirements. 28

 

List of Figures

 

Figure 2‑1:  Performance Measurement:  A Theoretical Framework. 6

Figure 2‑2:  Performance Measures – Wiring Diagram.. 7

Figure 3‑1:  A Sample Performance Plan. 11

Figure 4‑1:  Strategic Plan Structure. 17

Figure 4‑2:  Rollup Structure. 18

Figure 4‑3:  Cost Ladder. 19

Figure 7‑1:  Decision Framework. 25

 

 

List of Tables

 

Table 2‑1:  Benefits of Activity Based Cost Management. 5

Table 6‑1:  Cost Summary, Internal Data. 22

Table 6‑2:  Cost Comparison:  Build Warehouse versus COTS. 23

 


Section 1       Executive Summary

The U.S. Department of the Interior (DOI) commissioned a six week project to establish the capabilities of existing baseline financial, performance and workload, and time and attendance systems. The objective of this study was to establish gaps between the capabilities of the existing systems in the eight Bureaus and an enterprise wide management information system.

A survey drafted by DOI was circulated to the Bureaus. The results of the survey, personal interviews, the DOI website research, internet research, and data collected formed the basis of analysis and conclusions presented in this report.

DOI is aware that of the eight Bureaus, six Bureaus use the Federal Financial System (FFS) and two Bureaus use the Advanced Budget/Accounting Control and Information System (ABACIS). All Bureaus use the Federal Personnel/Payroll System (FPPS). There are three different Time and Attendance systems used and the content of the data entered into the FPPS varies by Bureau.

There are ten gaps identified primarily related to cost, data coverage, data accuracy, data dimension, data sources, data availability, reporting, user access, security, user interface, and user training. The mitigation strategies for these gaps are available through the deliverables of the Arizona Pilot and ensuring that in the design of the new DOI Management Information System (MIS) that these gaps are addressed.

In addition to the gaps, four implementation risks were also identified. These risks relate to the coding of outputs into the strategic plan, coding of activities into the financial system, employee input into the time and attendance system, and the level of detail that is required to be maintained in the data warehouse. The mitigation strategies for these risks primarily relate to policy decisions and process integrity.

The identification of feasible alternatives to close the gap leads to the evaluation of three alternatives:  1) Status Quo, 2) Build a Warehouse, and 3) Implement a Commercial off the Shelf (COTS) product. Cost, Flexibility and Ability to meet the Design Principles of the DOI MIS were used as the criteria. It was determined that Alternative 1, Status Quo, did not satisfy the department’s urgent need for an enterprise management information system and would risk compromising the mission goals without adequate information to track cost, performance and workload measures. Alternative 3, Implement a COTS Product, proved to be at a minimum 38 percent more expensive than Alternative 2, Build a Warehouse. Furthermore, Alternative 3 is not flexible and would not provide the functionality required. Therefore, Alternative 2 has been chosen as the most cost effective and efficient way to install an enterprise wide information system like the DOI MIS.

It is anticipated that the building of the new warehouse will follow the methodology used in building the Bureau of Labor Management (BLM) MIS. However, it is crucial to integrate the work of the Arizona Pilot into the design of the new DOI MIS, so that the gaps and risks identified can be mitigated.

The Department is also planning to replace the core financial system with a new Financial and Business Management System (FBMS). Since this would not be operational for another seven years, the DOI MIS will become a crucial information system that will feed the decision making levels in DOI. It is imperative that the integration of this system with the new FBMS is also considered for the future.


Section 2       Background

2.1      Introduction

The U.S. Department of the Interior manages Federal lands, water resources, and offshore areas to provide recreation, environmental protection, and access to resources. DOI seeks to fulfill requirements to deliver water and power; preserve America’s cultural heritage; honor the Nation’s responsibility to American Indians, Alaska Natives, and island communities; and generate scientific and other information.

DOI’s mission is achieved through hundreds of programs and activities carried out by its eight Bureaus and one principal office:

DOI employs approximately 68,000 employees who work at more than 2,400 sites across the country. Interior’s annual budget is about $13 Billion and receives $9 Billion in revenues.

2.1.1    Need for an Integrated Management Information System

The draft Government Performance and Result Act (GPRA) Performance Plan for DOI defines a mission that includes recreation, resource protection, resource use, and serving communities. The Office of Management and Budget (OMB) conducts annual reviews of programs that represent 20% of DOI’s annual budget. The President’s Management Agenda calls for transparency in measuring performance and costs across Government Programs.

The increasing demands for information on strategic goals, measures, cost and program implementation are unmet by existing systems. Appendix 1 lists the existing Departmental and Bureau systems. The current systems do not provide consistent, timely management information to measure cost and performance management of programs. An integrated management information system would provide information to DOI employees to measure progress against program delivery to measure cost and performance in meeting the GPRA plan.

The DOI has chosen to use many tools to close this major gap between demand and supply of management information. A major tool is Activity Based Cost Management (ABCM).

2.1.2    Activity Based Cost Management (ABCM)

Cost management is the practice of understanding what causes costs to occur and then using that information to achieve a more desirable outcome. Possible outcomes include:

  1. Cost reduction,
  2. Increased customer satisfaction, and
  3. Improved value received by customers.

2.1.3    Activity Based Costing (ABC)

ABC is a method of measuring the cost of activities and the products and services that consume those activities. ABC recognizes the causal relationships between cost and activities. ABC answers the following questions:

2.1.4    Activity Based Management (ABM)

ABM is a discipline that focuses on the management of activities as the route to continuously improving the value received by the customers. This discipline includes cost driver analysis, activity analysis, and performance measurement. ABM is the operational view of costs and seeks to answer the following questions:

ABC and ABM are similar in that they focus on activities, determine activity costs, determine process costs, and reveal non-value-added activities. Table 2‑1 lists some key informational benefits received from both ABC and ABM.

Activity-Based Costing

Activity-Based Management

Focus on what things cost

Focus on how to change and improve costs

More accurate product costs

Identification of redundant costs

Determination of customer costs

Quantification of cost of quality by element

Determination of contract costs

Identification of customer focused activities

Support of contract negotiations

Measurement of the impact of re-engineering efforts

Support of benchmarking

Better understanding of cost drivers

Determination of shared services charge-out amounts

Activity-based budgeting

Table 21:  Benefits of Activity Based Cost Management.

ABC and ABM provide more accurate and reliable cost information to government managers about products, services, and customers. This approach would give government managers the ability to move from managing costs to managing activities.

2.1.5    Performance Measurement:  A Theoretical Framework

In order to develop an integrated measurement system, it is first necessary to design a performance measurement framework (Figure 2‑1). The framework is an architectural approach, rather like preparing blueprints before bringing in the construction crew. This is in contrast to what we frequently see, where managers rush out to buy software in the belief that all they have to do is fill in the data to get results. A performance measurement framework:

The framework consists of the application of a series of analytical and measurement tools. These tools by themselves are interesting and provide useful outcomes, but in combination with each other, they can create a natural and powerful structure. The structure also involves a series of decision support software tools in order to facilitate development of the measures, track performance, and distribute performance results to managers whose job it is to manage performance. The analytical tools involve the following:

Figure 21:  Performance Measurement:  A Theoretical Framework.

The framework provides an approach to address measures at all levels in the organization. Stakeholders are represented by organization-level measures such as return on investment (ROI), customer satisfaction, and employee satisfaction. Process measures can be detailed at whatever level of aggregation makes sense, and activity performance may be tracked in detail or not. The challenge is to know which measures are the critical few. Depending on level of responsibility and purview, each manager will have a different perspective on which measures to watch. Senior managers need to watch organization level measures, i.e. those that depict the degree to which the interests of stakeholders are being addressed. In the event of a deviation from expectations or for routine inquiries, senior managers need to “drill” down from organization level measures to process measures to find out how well they are performing. Operating managers, who are responsible for process performance and workers, all need to understand their goals and current performance by activity. Finally, everyone needs to know how the measures that they are responsible for link to strategies and other measures for which others are responsible. This is accomplished by the combination of two tools—the Measures Wiring Diagram and the software that captures all aspects of measures at all levels.

The framework in Figure 2‑1 satisfies the requirements for information that can be used by DOI to measure GPRA performance plan goals.

2.2      The Performance Measures Wiring Diagram

The measures wiring diagram (Figure 2‑2) is a graphic representation of the links between measures as they are decomposed from stakeholders to organization level measures, to processes, and finally to departments and activities. The purpose of the measures wiring diagram is to ensure the resulting measurement system is designed to work correctly.

The performance measures wiring diagram is a method of displaying and organizing all the performance-related data into a comprehensive format. It takes all measures and corresponding results and presents them in a way which decision makers can use to help run the business. It is a simple, yet complete, system to link measures at all levels of the organization together.

Figure 22:  Performance Measures – Wiring Diagram

Activities are at the core of the performance measures wiring diagram. Analysis of activities provides the initial data and forms the key initial foundation of the model. Activities are linked in two different directions. The first direction assigns activities to processes. All activities are done within the context of a process. Next step is to align processes with organization goals. Activities are then “wired up” to processes, and processes to strategies, by depicting an assignment path. The next step is to put measures and goals on processes, so that the achievement of the process goals will directly relate to the achievement of the organization goals. Measures must be concrete, measurable, realistic, and relate to the organizational goals. The organization measures should be equal to the sum of process and activity measures.

Once process level measures have been established, activity-based measures are developed, using the same logic as described for processes. Activity measures must clearly depict the contribution made to the processes within which they function, and to their linked strategies. This logic extends down to the job or individual performer level. This completes the performance measures wiring diagram, covering the business unit view.

2.2.1    The Software Tool

Software developments since 1995 have created significant capability for designing effective and inexpensive Enterprise Wide Cost Management Solutions (EWCMS) solutions. Of particular importance has been the development of generic capabilities such as data warehousing, data base software, on-line analytical processing (OLAP) tools, graphic user interface tools (GUI), simulation modeling, and Internet browsers linked with communications. Powerful capability offered by personal computing permits these new tools to manipulate substantial volumes of data, previously unimagined. Languages and protocols facilitate the open movement of data from one software environment to another. These new tools offer significant opportunities for the acquisition, integration, manipulation, and distribution of data in multidimensional and multi-attribute perspectives, which are fundamental to effective Enterprise Cost Management Systems (ECMS).

Consequently, general ledger suppliers who have usually included modules for fixed assets, accounts payable, cost accounting, and accounts receivable, are now adding production planning, human resource planning and tracking, order processing, inventory tracking, and Executive Information Systems (EIS). By adding utility, software providers also offer highly desirable integration of the system so those users only have to concern themselves with managing one data processing solution. However, these systems have disadvantages, too. In order to be applicable to the widest possible range of customers, these systems have to be highly flexible with many different settings available, but once established, the system becomes highly inflexible. Thus, users are very much locked in to a rigid structure. The second disadvantage is that these systems may offer excellence in one or two capabilities, but are less adequate in others. For example, the general ledger system may be good, whereas the personnel module may be less adequate.

However, with the development of the new software and communications tools and highly effective transport of data between them, it is becoming feasible to manipulate data in one software product and pass it on to another for further processing or distribution. There are three levels of processing in most applications coupled with the communications to suppliers and users of the information: (1) data, (2) query, and (3) application. The approach used by most ERP solutions is to store data (in a data base such as DBII or Oracle) only once, at the data level. Data is then made available to any application that needs it. In the application layer, data is processed or manipulated and put back in the data warehouse or made available to people who wish to see the data. Data is made visible on computer screens by way of the GUI, which paints an electronic image on a computer screen.

Recent developments in OLAP tools have provided them with massive capability such as the ability to perform all the mathematics required to prepare a budget or to model ABC results. OLAP tools obtain data in a secure manner from either the data warehouse or manual sources and distribute the information through built-in GUI. OLAP tools interface with simulation modeling tools to perform what-if scenarios. The GUI interface can now link to the Internet without having the application software on the user’s computer. Information is provided over the Internet by sending one screen at a time; thus, it is no longer necessary to have continuous on-line terminal hook up, nor is it necessary to send large amounts of data.

The implications of these new tools to ECMS are that much of the information can be obtained electronically from either a data warehouse or from diverse data bases using SQL (standard query language) queries. Information that is not maintained electronically may be entered manually into a data base such as Microsoft Access or even Excel. If needed, data can be manipulated in the application layer (e.g., general ledger or activity costing), and can then further organized for comparative analysis by an OLAP tool. In an environment where specialized competent applications are developed, users may choose to use the best ABC application software on the market, the most suitable general ledger for their business, or the best process mapping software. Information from these applications can then be organized into data cubes using an OLAP tool ready for distribution and then a GUI to present the data. The GUI software provides a user-friendly environment with push buttons and pull down menus, reports that can be displayed in table or graphic form, with trends or performance ranges highlighted by different colors. The combination of GUI software with modeling capability in OLAP provides for data to be manipulated simply by users grabbing lines on a graph with a mouse click and then dragging the curve to a more desirable profile, and by doing so the software automatically updates the data base. Information can be distributed and manipulated by many users over the Internet. If necessary, security facilities exist to ensure that only the right people have access to information.


Section 3       Department of the Interior ABC Initiative

3.1      The Arizona Pilot

The Department of the Interior has decided to implement a pilot for their ABC initiative. In this pilot they will use the Strategic Plan that complies with GPRA and create software to test the pilot. DOI’s Activity Based Costing System Pilot Core Implementation team oversees testing of six department wide ABC models developed to capture cost and performance metrics for Invasive Species, Recreation, Maintenance, Law Enforcement, Wild land Fire and Indirect Cost. These models will be tested in Arizona. The pilot began in January and is expected to end around April 30, 2003.

The Core Implementation team has three major responsibilities:

DOI has already begun the process of implementing ABCM through the Arizona pilot. Based on the draft GPRA Performance Plan the following framework is in place at a high level. However the actual measurement of the strategic goals requires an integrated cost management system. The purpose of this report is to suggest a feasible alternative to achieve that goal. A sample of the work being done by the Arizona pilot is given below in Figure 3‑1. The implications of this framework are discussed later in this report.

The deliverables for the pilot are:

The deliverables will serve four of the DOI Missions (recreation, resource protection, resource use, and serving communities). Concurrently, DOI is evaluating the alternatives for a robust solution that can be deployed Department wide by October 1, 2003.

Figure 31:  A Sample Performance Plan.

3.2      Cost System versus Performance Measurement System

Historically there has been a Performance Measurement System unrelated to a Cost System, due to DOI’s legislative reporting requirements. The Performance Measurement System is a Microsoft Access Database in to which information is entered manually. In the current Strategic Planning Cycle, Figure 3‑1 is the framework which defines the End Outcomes (Outcome Goal and Outcome Measures), Intermediate Outcomes (Outcome Goal (Strategies) and Outcome Measures), and Outputs.

The Cost System, as envisioned by DOI, will define activities and these activities will also be measured by Outputs. The link between the Strategic Plan and the Cost System will be established by the Outputs of the Cost System being linked to the Intermediate Outcomes in the Strategic Plan. Some of the outputs will be qualitative in nature and will be tracked outside of the Cost System.


Section 4       Gap Analysis

4.1      DOI MIS Design Principles

DOI, having decided that ABCM is an important tool to meet the information needs of many stakeholders, has created high level design criteria for a DOI MIS. In the absence of a robust requirements document, these design principles and a study of the BLM MIS system was used by G&B to create high level requirements. This helps to measure the gap between the existing capabilities of the systems at the Bureau level and the proposed DOI MIS system.

An internal document circulated to the ABC Steering Committee details eight design principles:

  1. A single source of management information accessible by all employees
  2. Cost information will be based on official accounting transactions
    1. time as recorded by employees through a time and attendance system
    2. record of what they buy
  3. Costs will be coded to reflect actual work performed or actual resources consumed rather than budget activity
  4. Uniform definitions of crosscutting activities will be used by all Bureaus
  5. Individual Bureaus can choose to define additional or lower level activities but must be consistent in linking to crosscutting activities
  6. Data will be real time so that finance and performance data will be daily and as soon as generated by other source systems
  7. Data will be entered once, but will be accessible for multiple purposes
  8. Reports will be predefined or generated by the user without technical help

4.1.1    Gap Analysis and Mitigation Strategies

Based on the above principles the following requirements (in Column 1 of the table below) may be derived for the purpose of this Gap analysis only. The focus in the survey was to focus on features, functionality, and capabilities of the systems from a user perspective. While data warehousing has a standard technical architecture, the resource consumption in implementation is driven by the amount of complexity and customization in a particular project.

The gaps are the inability of the current systems (BLM MIS, OROS, or other ad hoc systems) to meet the design principles established above and the functionality and usability requirements detailed below.

 

 



Functionality, capabilities: Description or list of basic features to be developed as part of this project and criteria for measuring them. Internal / external specifications, requirements, and other documents when developed will be referenced appropriately.

 

Requirement

Gap

                Mitigation

1. Cost Data Coverage – provide visibility to 80% of DOI, which will account for $13.2 Billion

Six of eight Bureaus do not have cost data available. Though they use FFS and ABACIS and have financial data available, cost data at the transaction level is not available. In addition, the time and attendance system does not capture time associated with activities.

The installation of DOI MIS will close this gap. The Arizona pilot will make available an activity dictionary with appropriate codes. When these codes are installed in both the financial and payroll systems, the data at the transaction level will be captured.

2.  Data Accuracy – data reconciles to the general ledger

BLM and BOR reconcile to the general ledger for activity cost and project cost respectively.

When Requirement 1 is completed, the reconciliation will be possible.

3.  Dimension – by Cost    Activity:

  • Program
  • Project
  • Activity
  • Object Class
  • Goals
  • End Outcomes
  • Intermediate Outcomes

FFS allows all Bureaus to roll up by Object Class, Activity, Program, Office, State, and Bureau. However the performance management system does not exist in any of the Bureaus where the current Strategic Plan has been approved.

The Arizona Pilot has to ensure that the outputs for intermediate outcomes equal the activity they have defined. If they do not match, while costs can be reported by activity, performance measures will not roll up appropriately.

4.  Data Sources

  • Input from standard transaction systems         
  • Input from standard data bases
  • Time and attendance systems

The data sources, especially for current performance reporting, are not based on transactions. It is based on multiple ad hoc Bureau specific systems.

The front ends of the time and attendance systems used by the Bureaus are not standard. The use of time keepers to enter time sheets into the FPPS terminal is prevalent.

The implementation of DOI MIS will ensure that all data is based on transaction systems.

DOI must ensure that Bureaus with no web based tools for time and attendance data entry are mandated to use an automated system. This will require resources for a new system and more importantly employee training.

5.  Reporting:

  • For a focused group of financial community users: ad hoc views, reporting, and export capability
  • For the casual user: a tool to access reports on-line
  • Limited number of pre-defined reports
  • Ability to report by account number
  • Ability to print full dimension hierarchy for any dimension
  • Ability to print report selection with hierarchy
  • Ability to link to  detail

Three out of Five Bureaus have a warehouse implementation for their individual MIS. They can meet most of the reporting requirements. However the definition of the hierarchy is not uniform among Bureaus.

Also the ability to link to the detail is dependent upon feeding transactions into the warehouse.

Those without an MIS can typically use FFS to report financial data, but performance and cost data are unavailable.

Multiple tools exist.

The work done by the Arizona pilot will ensure that uniform reporting is possible. In the implementation of the DOI MIS, explicit standards will have to be established for reporting so that the requirements are met.

The use of special query tools like Brio, Cognos, or a report generator like Crystal Reports needs to be standardized.

6.  Data Availability

  • Daily or real time
  • Monthly
  • Quarterly
  • Data is available for the current and entire previous fiscal year (beginning with FY05)
  • Include FY04 data

Again, only three out of five Bureaus have a data warehouse that has interfaces to transaction systems.

The ability to compare activity cost to prior year may not be possible.

The DOI MIS system when implemented will meet this gap. However, the ability to compare at the activity level to the prior year.

 

                               

Usability:  List of criteria concerning access, ease of use, ease of learning, and ease of maintenance. This also includes user interface, help features, documentation, and training materials.  Usability will be a key differentiator.

                                                                                     

Requirement

Gap

Mitigation

1. User Access

  • All employees should have access to the data electronically

The BLM MIS is available to all BLM employees. The OROS pilots provide limited to access to different levels of users. All other Bureaus provide limited access to employees depending on the system.

It is one of the design principles of the DOI MIS to provide access to all the employees. This has cost and design implications. The use of internet as the platform to provide read only access at the basic level can be part of the requirements.

2. Security

  • A rudimentary security framework to allow either full read access or no access to the data

 

While security standard exists among the Bureaus, especially for the core systems, there is no uniform standard enforced throughout the DOI for MIS Systems.

This will be part of the requirement for the new DOI MIS.

3. User interface

  • Interface should fit the skills of the user group
  • Leverage existing user group interface standards
  • Web interface

There are currently multiple tools used for the user interface.

The new DOI MIS when implemented will provide a standard Graphical User Interface.

4. User Training

  • Expert user training should not take more than 4 hours
  • Casual users should have self-training that takes less than 1 hour

These criteria were not tested in the survey for each system.

To be included in the requirements for the new system.

 

 

The above ten gap items are the major ones identified through the survey and interview process. Appendix 2 is a listing of additional requirements that should be incorporated in specifications for the new DOI MIS system.  In the next section, we will discuss the implementation risks that can be identified based on the Gap Analysis.

4.2      Implementation Risks

The Gap Analysis has identified ten major gaps between the “ideal” requirements and the existing systems. While the Arizona Pilot will mitigate some of the risks and a robust requirements document will address other risks, it is prudent to highlight some of the risks which could affect the success of this implementation.

1.      Coding the Strategic Plan

The current Strategic Plan has the following structure as given in Figure 4‑1:

Figure 41:  Strategic Plan Structure.

It is critical that the outputs link up to the goals associated with intermediate outcomes. Outputs are activities that are defined in the Cost System. If different outputs are mapped to the End Outcomes, a new layer will be created and there is a risk that this output may not map to an activity in the Cost System. If some of the outputs are not measurable, then this must be separately addressed in the system design for the DOI MIS. Qualitative goals like employee satisfaction or customer satisfaction may derive their output from an independent study and be input in a separate module. This is a measure that cannot be derived from transaction-based systems.

2.      Coding the Financial System

Crucial to the mitigation of Risk #1, is the imperative that activities in the Cost System map to the outputs in the Performance Measurement System. Figure 4‑2 below represents visually the data dimension roll up structure. This is critical to the design of the data structure within the new DOI MIS that is being contemplated. It will affect both the data sources and reporting if the integrity of the roll up structure is not maintained. It will also affect the volume of transactions that will be transported daily to the data warehouse once that is built.

Figure 42:  Rollup Structure

If this rollup structure is not applied consistently across the Bureaus, then the rollup of transaction level data will be rendered meaningless.

3.  Employee Input into Time and Attendance Systems

NPS is the largest Bureau with 20,000 employees that does not require employees to input an activity code for their time. Employee input represents a behavioral change that needs to be planned and appropriate resources need to be provided for implementing a new Time and Attendance System. The timing and introduction of a new Time and Attendance system needs to be evaluated in conjunction with the design of the DOI MIS.

4.   The Cost Ladder:  Level of Detail Risk

In the design principle for the DOI MIS, it has been stated that all employees should use the Time and Attendance system to input their time against uniformly defined activities. This is considered the direct trace method. The OROS pilot uses the survey method. The cost ladder below indicates that there is a trade off between degree of accuracy and level of effort required. While the survey method may be practical, BLM has shown using a Lotus Notes application that the direct trace can work with thin the DOI environment. To be consistent, DOI should ensure that all Bureaus follow a consistent method of tracking resource consumption in terms of labor dollars.

Figure 43:  Cost Ladder.

It is imperative that the Arizona Pilot address this issue in their deliberations about creating standard definitions for activities, processes, and data structure definition and data sources.

 


Section 5       Feasible Alternatives

5.1      DOI MIS Alternatives

The Department has made an executive decision that it requires an integrated management information system immediately. Therefore, keeping the status quo is not an alternative. It could be argued, however, that since the Department is going to replace the core financial system, the DOI MIS project should be deferred and the status quo maintained until FBMS is implemented. We will evaluate the advantages and disadvantages of this approach. Since DOI already has a proven product operating at BLM, the alternative of building a warehouse merits serious consideration. A third alternative is to implement COTS software such as OROS.

5.1.1    Alternative 1: Status Quo

The Department maintains the current disparate systems within the Bureaus and relies only on the Hyperion system for consolidated results and the Access database for Performance reporting. Under this option, DOI will have to make changes to existing systems as required to meet the new needs of information.

Advantages:

  1. The current operations continue with minimal disruption
  2. Resources can be directed towards the new FBMS implementation

Disadvantages:

  1. The urgent need for DOI to obtain cost and performance measurement to meet the mandates and needs of stakeholders like OMB will not be met. Mission goals will be in jeopardy if there is no way to measure resource consumption and progress.
  2. The FBMS system will not be fully functional and operational for at least eight years commencing in FY 2004. The DOI needs a system in the interim to track costs and performance.

5.1.2    Alternative 2: Build Warehouse

DOI already has the experience of building an MIS system at BLM. This is fully functional and meets the design principles of DOI. The BLM MIS tracks costs at a sub activity and program element level. Performance and work load measurements are tied to the strategic plan and all employees have access to this system. The data source is transaction based systems and employee input into the Time and Attendance system. This warehouse was customized for DOI using COTS solutions. A proliferation of this system across all the Bureaus will immediately satisfy the needs of stakeholders.

Advantages:

  1. The legacy systems continue with minimal disruptions.
  2. DOI staff will be able to access data within a year for management reporting.
  3. The DOI MIS will reduce manual processes, increase data availability and access, reduce response time to data calls and increase data quality.
  4. This alternative has the significant advantage of making changes to the data tables in the warehouse as the needs and priorities of the department changes each year.

Disadvantages:

  1. DOI will have to ensure that standard definitions exist for activities and build cross walks to legacy systems.
  2. Bureaus that do not have employee input into Time and Attendance will have to implement new systems.
  3. Compared to the BLM MIS, an additional system like ABACIS has to be integrated with the DOI MIS.

5.1.3    Alternative 3: Implement a COTS Solution

Three Bureaus within DOI have commenced a pilot using COTS software named OROS. This is one of the leading products for activity based costing systems and has a good reputation. However, the pilots do not have the objective of integrating the information of Bureaus. They are contemplated as stove pipe systems to satisfy the Bureau’s needs for operational independence. For example, the pilots use a modeling technique to arrive at labor costs by using a survey tool. Integrating the time and attendance system with this tool will result in a significant increase in cost and timeline as compared to the Lotus Notes solution used by BLM.

Advantages:

  1. Perceived ease of implementation
  2. A COTS solution upgrades technology over the years
  3. The DOI MIS will reduce manual processes, increase data availability and access, reduce response time to data calls, and increase data quality.

Disadvantages:

  1. A COTS solution is easier to implement only when the standard options are chosen. Any customization will result in significant costs and often such customization is not an option.
  2. A COTS solution typically may not address the needs of all customers. DOI is a diverse environment.
  3. Once installed, the COTS solution can prove to be inflexible.

 


Section 6       Evaluation of Alternatives

6.1      Selection Criteria

The three criteria that will be used to evaluate the alternatives are cost, flexibility, and ability to meet the design principles.

6.2      Cost

The scope of this project was defined as finding feasible alternatives to close the gap and due to the limited resources available, a high level analysis based upon DOI staff input. The internal information suggests that the BLM MIS system cost $2 million for use by 7,500 employees over a period of 17 months. The BIA pilot of OROS costs $182,000. An outside contractor is implementing this software and will approximately take 12 months. The outside contractor’s fee was not provided. The total cost of the pilot has not been estimated. The summary is below:

Table 61:  Cost Summary, Internal Data.

The above data unfavorably compares the COTS software to the Build alternative due to the inadequacy of data on scalability of the pilot. To mitigate this weakness in data, G&B Solutions obtained a project financial planner provided by SAS, the parent company of OROS with prices and resource requirements provided for a hypothetical project. The estimated costs are presented in this model below (Table 6‑2).

The analysis shows that there are three crucial elements by which the COTS alternative is expensive.

  1. The labor rate is at least 25% higher than the Build alternative.
  2. The viewer licenses are at $900 per user compared to the Brio alternative which is around $168 per user.
  3. COTS will charge a licensing fee per user, whereas under the Build alternative, software costs include the development of web based training content.

Therefore using cost as the criteria, Alternative 1, Status Quo, is the cheapest. Though some costs will be incurred to provide information through ad hoc systems, this alternative does not meet the design principles and the management information needs of DOI. Alternative 3, Implement a COTS Solution, results in a cost increase of 38% at the most conservative estimate over Alternative 2, Build Warehouse. In fact, if the viewer software is to be provided for 75% of the DOI employees, around 48,750 an additional cost of at least $5 million after significant discounts will be incurred. The alternative will be to build a separate user interface which Alternative 2 already delivers within its present cost estimates. Therefore, Alternative 2, Build Warehouse, is the most cost effective solution.

Table 62:  Cost Comparison:  Build Warehouse versus COTS.

6.2.1    Flexibility

As stated earlier, the ability of any vendor to be able to produce a flexible solution is an important criterion. Alternative 1, Status Quo, does not meet the Department’s information needs. Alternative 3, Implement a COTS Solution, requires a significant participation of DOI staff to make the software work. The BLM MIS model has already been tested and its functionality has been proven. It has the flexibility of being modular and its Performance Measurement System can accommodate the annual changes in performance measures.  In the case of the COTS software, there is an inability to track performance unless the relationship between measures, outcomes, and activities are hard wired. Typically the COTS software was written for manufacturing industries that contain inventory of products, rather than service industries, where the indirect costs are significantly higher. Alternative 2, Build Warehouse, takes this into account and builds the logic through an application based on the information needs specific to DOI and therefore meets the needs of the service oriented DOI in a more cost effective and compatible fashion. Above, all changes can be made to the logic and the queries at a minimum cost and can be maintained much more efficiently compared to the COTS software where changes to the original code will almost be impossible and result in suboptimal work around routines. Therefore Alternative 2, Build Warehouse, presents the most flexibility.

6.2.2    Ability to Meet Design Principles

Alternative 1, Status Quo, fails to meet most of the design principles. Alternative 3, Implement a COTS Solution, fails to meet the principle that all employees should input their time one time into an automated application that can feed the payroll system. The OROS product has been built on the logic of Modeling and therefore a Survey Tool is used to estimate the allocation of time between activities. Alternative 2, Build Warehouse, as implemented in BLM allows for the direct tracing of costs for labor dollars. Also, Alternative 2 meets all of the design principles, whereas the ability of the COTS product to meet the many of the design principles is yet to be tested. We will not have evidence until the pilots are completed, which is scheduled to conclude in October, 2003. These facts again favor Alternative 2.

Based on the above evaluation, it is our conclusion that the Build Warehouse alternative is the best way to close the gap between the capabilities of existing baseline systems and the required DOI MIS system.

 

 


Section 7       Conclusion

The need for a Department level Management System has been well established. The Bureaus also recognize this need, but have invested resources in building their own MIS system. Some of them believe that only summary information needs to be passed on to the Department, whereas the design principle for the system is that the data sources will be original transactions. This leads to the traditional issue of what information technology processes need to be centralized and those that need to be decentralized. The figure below visually presents the framework for choosing the best strategy.

Figure 71:  Decision Framework.

If the Bureaus were to build their own systems like BLM, using the BLM costs of $266 per seat, for 65,000 employees, the cost would approach $17 million. The DOI MIS approach saves at least $11 million, not counting the productivity and other savings related to significant improvement in response times. BLM has estimated an annual savings of $3 million since its implementation of MIS.

The DOI should pursue building its own data warehouse using commercially available database and query tools. The Department can also ensure that this warehouse can be integrated with the FBMS that will be deployed later in the decade. A proliferation of systems within Bureaus does not ensure that actionable management information is available in a timely, accurate manner with sufficient detail. Building a DOI MIS does.

 


Appendix 1  Survey of Systems

DEPARTMENT-WIDE SYSTEMS

Core Financial System (FFS)

  • Federal Financial System (8 Bureaus/Offices)

Core Financial System

  • Advanced Budget/Accounting Control and Information System (2 Bureaus)
  • Accounting and Aircraft System (OAS)

Payroll Personnel System

  • Federal Personnel/Payroll System (FPPS)

Interior Department Electronic Acquisition System (IDEAS)

 

BUREAU SPECIFIC SYSTEMS

Bureau Level Executive Information Systems

  • Management Information System (BLM)
  • Administrative Financial System II (NPS)
  • Federal Aid Information Management  System (FWS)
  • Financial Reporting and Reconciliation System (NPS)
  • Budget and Science Information System (GS)
  • TSC Management Information System (BOR)

Budget Formulation Systems

  • Budget Allocation System (FWS)
  • Program and Budget System (BOR)
  • Budget Formulation System (NPS)

Loan Management Accounting System (BIA)

National Irrigation Management Information System (BIA)

Trust Funds (BIA, OST)

  • Trust Funds Accounting System
  • Integrated Resources Management System

Facility Construction, Operation, and Maintenance System (BIA)

Land Management System (BLM)

  • Payment in Lieu of Taxes
  • Collection and Billing System

Property Management Systems

  • FFS Fixed Assets Subsystem (BIA, BLM, GS, NPS)
  • Moveable Property System (BOR)
  • Property Management System (MMS)
  • Property Management Web (New System Being Developed by MMS)
  • Personal Property Management Information System (FWS)
  • Real Property Inventory (FWS)
  • Federal Real Property Management (GS)
  • Property Accountability Ledger System (OSM)

Inventory Systems

  • FEDSTRIP System (BOR)
  • DORRAN (GS)
  • Peachtree 2000 Inventory System (GS)

Travel Management Systems

  • Travel Manager Plus

Minerals Revenue Management (MMS)

Surface Mining Grant/Revenue System (OSM)

  • Grant Information Financial Tracking System
  • Fee Billing and Collection System
  • Audit Fee Billing and Collection System
  • Civil Penalty Accounting Control System

Maintenance Management Systems (Various)

Source:  Financial Management Status Report and Strategic Plan, FY 2003 - FY 2007

               

 


Appendix 2  Requirements

 

Reliability:  (Release) criteria regarding the product’s ability to keep running under stress and adverse conditions. This includes design robustness, design stability, and learning products.

                    

Requirement

Comments

1.Use a change control process (e.g. configuration changes, distribution, ... )

 

2. No appreciable impact on  PC client reliability

 

3. Repeatable, consistent reporting

 

4. System Control Reports

 

 

 

Performance:  Criteria concerning product speed (e.g. time to perform certain function), also compared to previous revisions. Can be tested (performance test suite) or judged by simulation or applying modeling techniques.

 

Requirement

Comments

1. Minimized  impact on the resources used (LAN, WAN,  system, service, ...)

 

2. Execution of pre-defined reports and ad hoc queries stays within published time parameters

 

 

Supportability:  All measures that make the product easy to support require less maintenance and minimize customer calls.

 

Requirement

Comments

1.  All Phase1 dimensions have identified definition/ content     owners

 

2. A methodology and documentation to administrate the Phase 1 dimensions

 

3. Phase 1 Support Plan

  • Roles and responsibilities need to be communicated appropriately with adequate lead time for training, etc.

 

Allow a minimum of 2 months lead time for Help Desk requirements

4. Documentation –

  • Installation/Customization instructions
  • Systems Guide/Processing documentation
  • FAQs

 

5. Authorization Process

  • control/identification of users

 

 

 

Compatibility:  Description of the product’s ability to coexist/run/interrelate with other products, and possible dependencies on those other product’s revisions.

 

Requirement                                                                                           Comments

Requirement

Comments

1.      Linkage to specified systems

  • FFS
  • FPPS

 

 

 

 

Installability: Criteria describing how easy / fast it is to install the product in a typical environment.

Requirement

Comments

1. Self-installable on client

 

2. Easily installable from central server

 

 


 

Portability:  Design goals as to how the product can later on be ported to other hardware platforms and / or operating system revisions with minimal effort.

 

Requirement

Comments

1.  Platform

  • Client supported on different platforms

 

2. Access over low speed connection

 

3. Must run under native language COE

 

 

 

Availability: Criteria describing the time parameters for product availability to the user.

 

Requirement

Comments

1. The server and application will be “up” during 95% of normal business hours in all geographies.

 

2. System/Application Recovery

  • Within 3 business days
  • Within 2 business days

 

3. Disaster Planning and Recovery (DPRP) – recovery within 2 weeks