DOD takes initial steps toward new finance net

DOD's Catherine Santana stands before a wall chart that identifies the 1,128 systems that house Defense financial data. The goal is to eliminate 90 percent of them, she says.

(GCN photo by Lawrence Jackson Jr.)

The Defense Department's financial systems are in such disrepair it takes nearly four months to generate a departmentwide year-end statement.

But DOD is inching closer to integrating these systems to produce, with far less hassle, a simple spreadsheet of expenditures.

Currently, Dov S. Zakheim, undersecretary of Defense and chief financial officer, must sift through hundreds of nonstandard data elements from 1,128 systems'covering everything from acquisitions and logistics to human resources and health care'to arrive at the final count.

IBM Corp. has submitted a plan detailing the steps to develop anenterprise financial architecture that will serve as a transition from DOD's current passel of disparate systems to an integrated financial network. The department is determining the resources needed over the next year to complete the project's first phase.

The plan lists more than 3,000 line items and lays out DOD's path to reduce by 90 percent the number of systems that produce and feed financial data to the CFO, said Catherine Santana, acting financial management modernization program manager.

'This is an incredible task,' Santana said. 'We can't just fix the accounting systems. We have to fix all those systems feeding the majority of the data into the accounting systems to deliver accurate and timely information. The scope of this architecture includes all of DOD except the warfighter.'

Santana dubbed it the government's largest enterprise architecture undertaking ever. DOD is finishing an inventory of the 1,128 systems in its financial feeder network.

DOD officials in April began tackling the financial mess by hiring IBM under a $100 million blanket purchasing agreement. It will develop the plan to merge all business systems that contain financial data into an agencywide network.

Defense's financial management dilemma dates back to stovepipe systems developed in the 1970s and 1980s to support the budget and appropriations process, said Larry Lanzillotta, deputy undersecretary for management reform.

'Past reforms took a piecemeal approach, which yielded only marginal changes,' he said early this month at a hearing of the House Government Reform Subcommittee on National Security, Veterans Affairs and International Relations.

Lanzillotta said current systems do not 'generate the type of cross-cutting, corporate financial information that meets the needs of the department's decision-makers. And they do not incorporate standard accounting requirements.'

The new network will deal with what Lanzillotta calls the root of DOD's problem: old, uncontrolled standalone systems and inefficient business processes. Once the department approves IBM's strategy, an architecture and transition plan will be developed over the next year. IBM then will launch a proof-of-concept effort to validate the architecture.

By 2004, Santana said, DOD plans to test a prototype system in six major business areas, such as procurement, with each branch of the military and other Defense agencies.

'We are looking to test areas where we have material weaknesses and where we will get the biggest bang for the buck,' she said.

Six-year rollout

Defense-wide implementation would begin by 2005, but the entire rollout will take up to six years, she added.

The network could combine current systems and new technology, Santana said. She also said emerging technology will be part of the system so it will remain current and be adaptable.
DOD requested $96 million for fiscal 2003 to pay for the proof-of-concept effort.

Meanwhile, Santana's office also is working closely with the Office of Personnel Management on the E-Payroll e-government project and two other enterprise architecture efforts within DOD.

She said the e-government initiative will help define DOD's financial architecture because Defense will have to mesh its systems with the civilian half of the government's pay systems.

And her office is working with the Office of the Undersecretary of Defense for Acquisition, Technology and Logistics, and the Office of the Secretary of Defense's Global Information Grid team on their architecture efforts.

'This is a business transformation that will eventually give us timely financial data,' Santana said.

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