DFAS tidies up stovepiped landscape

GCN Photo by Laurie Dewitt

'Probably the biggest lesson learned is being able to deliver capabilities quicker and in smaller chunks instead of trying to do a big bang.'

'DFAS CIO Audrey Y. Davis

When the Defense Finance and Accounting Service was created in 1991, it took shape as an electronic Tower of Babel: 324 systems, dispersed around the globe and speaking in different tongues, to serve Defense Department agencies and the military services.

'We inherited existing LANs and platforms, and we couldn't talk to each other; we couldn't share information,' DFAS CIO Audrey Y. Davis recalled.

'They all had their own clients ... their own business processes for accomplishing either paid functions or accounting functions. There were multiple accounting systems, contractor pay systems, civilian and military pay systems,' she said.

Along with all those systems was an unwieldy infrastructure of just more than 300 sites ripe for consolidation.

'Looking around, from a DOD standpoint, the question was asked: Why do we have to do it multiple ways? Why can't we do it one way? That's why DFAS was created,' Davis said.

The agency's goal was to streamline DFAS' operation, which disburses $299 billion a year, by reducing systems and enhancing their ability to communicate. The agency expected to save money in the process as well.

Davis has participated in nearly the entire process. She joined the agency in 1992, a year after its inception, and worked in a progression of jobs before assuming the IT helm. She became CIO in January of last year.

Goal of 30 systems

DFAS now runs 65 systems at 26 sites worldwide, with a goal of consolidating down to 30 systems by 2005. The agency also will add an enterprise portal for users, putting many functions on the Web.

The approach to its legacy systems? 'It's been consolidate and replace,' Davis said. Decisions are made on a case-by-case basis, she said, but 'the large part of the strategy has been: Let's get rid of the legacy systems, turn them off and replace them with something new.'

That required standardizing the infrastructure, 'what we call our enterprise local area network, or ELAN, that really ties the 26 sites we have together,' Davis said.

DFAS now has a standard desktop configuration and backbone. It's in the process of upgrading from Microsoft Windows NT to Win 2000; its network operating system is Novell NetWare.
The agency also is upgrading from asynchronous transfer mode to Gigabit Ethernet topology, Davis said. DFAS relies on the Defense Information Systems Agency as the service provider for its WAN.

The first step in getting to this point was reducing systems. 'One of the easiest cost-saving initiatives was consolidation. It was kind of low-hanging fruit,' Davis said. 'Let's get one civilian pay system, let's get one military pay system, let's get down to one vendor pay system'which ended up being our systems strategy.'

Replace or rehost

Many of the legacy systems DFAS inherited ran on IBM Corp. or Unisys Corp. mainframes, some of which are still in operation. 'We've been moving toward an open Unix environment, which really puts us at a midtier platform,' Davis said.

Aside from replacing systems outright, DFAS also is rehosting systems in its new environment. Davis gave as an example the Defense Industrial Financial Management System used by the Navy. DFAS is moving the system from a flat-file Unisys database to Oracle8i running under Unix.

The agency is testing the system and will bring it online later this year. 'But so far, the projected benefits are tremendous, just in processing costs. So, we're looking at rehosting in other cases.'

Another benefit of an open environment and standard infrastructure is the ability to move services and functions to the Web.

For DFAS, that includes a Web invoicing system for contractors. 'We worked for years trying to get vendors to use electronic data interchange to send us their invoices electronically,' Davis said. 'Big companies did it because it was cost-effective.'

But small and midsize companies didn't realize the same payoff, so DFAS developed a Web invoicing application that accepts information online and converts it to EDI.

'That has been tremendously successful for us. We link them to a vendor pay inquiry system that allows them, again via the Web, to go in and check the status of payments,' Davis said.
DFAS also has added Web functions for its employees, such as providing earnings statements and W-2 forms online and letting employees make changes to their direct-deposit programs.

Davis said a long-term strategy for legacy systems needs to be all-encompassing but focused on taking small steps.

'I think you start with the business objectives, you start with where the organization wants to go, and you assess whether your systems and technology can support you getting there,' she said. 'And then in terms of the legacy systems, where you see gaps, you build a business case for either putting a Web front end on the legacy system or completely swapping it out for something else, or modernizing. ... You really do need a business case because money is not plentiful.'

The agency has a target environment, the DFAS Corporate Information Infrastructure that is built around a corporate database with standard data elements. By keeping the data elements common across programs, DFAS organizations can share data regardless of the underlying applications.

'We laid out what our overall enterprise architecture and plan was in terms of our DCII and where we were headed,' Davis said. Most databases are Oracle8i systems, but DFAS has been testing Oracle9i and plans to implement its first production version within DCII this summer.

Davis broke down the challenges of modernizing legacy systems into three parts:

  • Laying out overall requirements

  • Staying the course once you've established a vision and an architecture you're driving toward

  • Figuring out a way to deliver in bite-sized chunks.

She emphasized the importance of establishing short-term goals.

'Probably the biggest lesson learned is being able to deliver capabilities quicker and in smaller chunks instead of trying to do a big bang and taking multiple years to deliver new functionality or new capability,' Davis said.

'On our new efforts, we're being more successful. For instance, in our enterprise portal, we're doing that in bite-size pieces,' she said. 'Frankly, it will be successful because of that.'


Using a standard database and standard development tools has proved cost-effective in building applications. Although DFAS will buy off-the-shelf software and has found some apps that did not have to be modified, it typically does its own software development, Davis said.

DFAS' Technology Services Organization, led by chief technology officer William G. Head, provides software engineering services.

Another part of the big picture is interoperability. 'DFAS doesn't operate in a vacuum,' Davis said. Defense secretary Donald Rumsfeld last year began a push to build a departmentwide financial infrastructure.

'There is a larger financial management modernization effort going on in the Defense Department in which an overall enterprise architecture will be put in place in the next year,' she said.

Information from logistics, personnel and other DOD groups feeds into DFAS' systems, underscoring the need for compatibility.

'That data is not data we own, and it's about 80 percent of the data we deal with,' Davis said.

About the Authors

Kevin McCaney is a former editor of Defense Systems and GCN.

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