Defense finance & accounting service: ABL-AF undertakes business case analysis

Air Force Comptroller, Jan, 2004 by Zack E. Gaddy

ABL-AF Undertakes Business Case Analysis

The Accounting Business Line-Air Force (ABL-AF) of the Defense Finance and Accounting Service (DFAS) is immersed in a Business Case Analysis (BCA) of its organization and operations. This process is an integral part of the DFAS Transformation Strategy that is driving further improvements in how the agency serves its clients.

DFAS has been transforming itself continuously since its inception 12 years ago, moving toward the goal of becoming a world-class accounting and financial services provider. The many changes experienced by the world's largest finance and accounting organization have resulted in a much more professional, efficient, and client-focused organization. In fact, DFAS' recent transformation efforts have led to its decreasing its share of the Department of Defense budget from .56 per cent in fiscal year 1999 to .34 per cent in fiscal year 2003.

The DFAS Transformation Strategy starts with a BCA of a selected business or product line within the agency. The BCA includes information on the scope and boundaries of the business or product line, alternatives for consideration, estimated costs and return on investment, estimated schedule, risks of the transformation options, and a general acquisition approach. Through this rigorous methodology, DFAS leadership can make an informed decision on the best course of action for transforming the business or product line. Some possible options include Competitive Sourcing (A-76), High-Performing Organization, and Business Process Reengineering.

A BCA is broken down into six essential steps:

   1. Appoint the BCA team

   2. Define the scope of the study

   3. Define the current organization

   4. Conduct market research

   5. Define and analyze options

   6. Provide recommendations

From start to finish, a BCA should take approximately three months to complete.

The BCA Team consists of top-level managers and functional experts in the ABL-AF as well as representatives from Human Resources, General Counsel, Acquisition Services, Resource Management, the Union, and Competitive Sourcing.

Next, the scope of the study is defined in the context of three criteria--the boundaries of the ABL-AF function; the relationship to the DFAS mission and clients; and the impact of inherently governmental or "core" functions.

After the scope of the BCA is determined, the current organization has to be defined. This "as is" assessment is the most time-consuming and detailed step in the BCA process. The evaluation maps resources (manpower, facilities, and budget), relationships (internal/external support and clients) and key functions (processes, deliverables, and general workload).

The ABL-AF initiated its own business process reengineering in 2002 to standardize, streamline, and automate processes, and to eliminate rework. During this detailed analysis, interviews were conducted with experts at each site and best practices were identified. As a result of this self-generated assessment, most of the "as is" data required for the BCA has already been compiled. This has saved a considerable amount of time and effort.

A Request for Information (RFI) was scheduled to be issued in late November to fulfill the market research required in Step 4 of the BCA process, and an Industry Day was planned in mid-December to analyze responses to the RFI. The desired outcome of this step is to gain a clear view of the commercial availability of services similar to those provided by the ABL-AF. Market research also assesses the possible level of interest in the commercial sector in competing for this business.

Recognizing the close relationship we have with our ABL-AF clients, we've also chosen to sponsor a Customer Day in late January 2004, during which we will provide an overview of DFAS Transformation and the "as is" accounting processes. We see this as our opportunity to explain the BCA and the clients' chance to voice any issues or concerns prior to finalizing our recommendations and forwarding them to DFAS senior leadership.

Identification and analysis of all available options for delivering the services currently provided by the ABL-AF is the next step in the BCA process. This is a comprehensive assessment of benefits, costs, personnel impact, and risks of each option. In the case of the ABL-AF, the Strength, Weakness, Opportunity, and Threats (SWOT) Analysis model is being used to conduct this analysis.

The final BCA recommendation (Step 6) will result from the assessment conducted in the previous step. This is the course of action with the most benefits and the lowest number of risks. The recommendation will also include a list of critical success factors that must be adhered to so that the selected option produces the desired end result. The recommendation that emerges from the current ABL-AF BCA will be reviewed at several levels within DFAS. The DFAS Leadership Council is the final approving authority in our agency to implement the recommended option.

I am keeping Air Force leadership apprised of the progress of the ABL-AF BCA. By the time the next issue of The Air Force Comptroller is published in spring 2004, I should be able to report the resulting actions in our product line to significantly improve the services we provide our Air Force client.