1. The Defense Finance and Accounting Service Story ASMC April 13, 2005
Zack E. Gaddy
Director, Defense Finance and Accounting Service
7/20/2019
Integrity - Service - Innovation

2. Integrity - Service - Innovation
Topics
DFAS…
Where we are
Where we’re going
My closing thoughts
7/20/2019
Integrity - Service - Innovation

3. DFAS at a Glance -- Our Mission, Vision & Values
Mission: Provide responsive, professional finance & accounting services for the people who defend America.
Vision: Best value to our customers
World-class provider of finance & accounting services
Trusted, innovative financial partner
One organization, one identity
Employer of choice, providing a progressive & professional work environment
Values: Integrity, Service, Innovation
7/20/2019
Integrity - Service - Innovation

4. DFAS at a Glance - Magnitude of Annual Operations
Process 104M pay transactions to 5.9M military, civilians, retirees and annuitants
Make 6.9M travel payments
Pay 12.6M commercial invoices
Process 127.3M general ledger postings
Manage military and health benefits funds ($234B)
Make an average of $455B in disbursements to pay recipients
Manage $13.5B in foreign military sales (reimbursed by foreign governments)
Account for 282 active DoD appropriations
Updated with FY 2004 figures on 9 Nov 04
World’s Largest Finance and Accounting Operation
7/20/2019
Integrity - Service - Innovation

5. DFAS at a Glance - The State of DFAS Today
Total Work Force
This is a chart that is used by our senior executives all the time to show the health and performance of our agency.
It shows our value and efficiency improving as our employee satisfaction and customer satisfaction grows.
324 87
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Integrity - Service - Innovation

6. Our Strategic Challenge
Our customers expect:
Accurate and timely payment of personnel
Accurate and timely payment of vendors and contractors
Auditable financial statements
Business intelligence that enables better decision-making
Lower costs of products and services
Customers deserve a financial service partner who enhances their readiness & mission capability
Is there anything we can add on systems (the Enterprise Architecture, perhaps?). It would be nice to have the tools correlate with the strategy listed on the previous chart.
7/20/2019
Integrity - Service - Innovation

7. Our Strategic Challenge
Challenges
Stressed military pay systems
Manual processes used to pay vendors
Numerous barriers to achieving unqualified audit opinion
Disparate systems continuing static financial data
Demographics and skill sets of DFAS work force
BRAC and NSPS will affect DFAS
Strategic targets to meet the challenges
Pay service members what they are entitled to on the scheduled pay date
Expand e-commerce for Commercial Pay
Support DoD’s objective of auditable financial statements
Develop a corporate capability to deliver unique business intelligence
Recruit, train and retain a work force needed to develop & implement the DFAS strategy
Despite making great strides in the last few years there is still a lot of room to improve. We face a varietry of challenges.
Aging systems <Insert story about COBAL programming>
So far only a handful have been successful. DFAS has accomplished this four times running.
While eCommerce is success story for Commercial Pay Services, it is also the biggest opportunity. While we pay 95% of invoices electronically we only receive less then 50% of them electronically.
We also need to strengthen our core capabilities of providing business intelligence and financial resource information to decision makers in time and in a manner that lets them take advantage of that information to make better decisions about their resources.
Most fundamentally, we need to dramatically improve our human resources. Success depends on the ability to retain, train and recruit the right people with the right skills.
To meet the challenges facing DFAS, we are taking a good look at our strategy to make sure it is forward-thinking to provide a clear vision of what we need to become while being practical enough to guide or operational decisions and shorter range planning.
While the strategy looks down the road, we’ve identified five specific, achievable strategic targets that we must achieve. These targets get to the core of our mission. <discuss importance of these targets and the challenge associated with achieving them>
7/20/2019
Integrity - Service - Innovation

8. Transformation Approaches
Business Case Analyses
Competitive Sourcing
Lean6
Portfolio Management
Business Management Modernization Program
DoD Financial Management Work Force Development Working Group
Achieving our strategy and delivering on the five strategic targets will take a complete team effort and our team has a number of tools we rely on to help make it all happen.
First, we are taking Transformation very seriously. We know we have to do things differently tomorrow if we are going to solve the problems we have today. So we have created process that coordinates and evaluates transformation initiatives to ensure they support the DFAS strategy based on business case analyses that are being conducted for every DFAS function.
Also helping us perform better is DFAS commitment to deploying Lean6 throughout the agency. Lean6 combines the Six Sigma and Lean Thinking. <Insert personal story regarding Lean6 and brake assembly line>
Serving our customers better also requires making the right investments. To help make sure we are funding the right projects at the right amount, we are using Portfolio Management to inventory all of our initiatives, evaluate them against standard criteria and make sound fact-based judgements about about priorities.
Another tool that has been around DFAS for a few years now is our Balanced Scorecard which is used to track our progress toward achieving specific goals on measures that are true indicators of how well we serve the customer and achieve our mission. The Balanced Scorecard starts at the highest level to see how the agency is succeeding as a whole and cascades down to the individual level so each person can see how they contribute.
7/20/2019
Integrity - Service - Innovation

9. Transformation Results
Completed A-76 Competitions & Studies
Function
Year
Type
Competition Result
Study Recommendation/ Status
Studied FTE
On board FTE as of 12/31/04
Facilities, Logistics & Admin
FY95
A-76
In-House
279 94
DeCA Vendor Pay
FY96
240 28
DeCA Accounting
FY97 84 49
Transportation Accounting 89 33
Depot Maintenance Accounting
133 69
Retired & Annuitant Pay
FY98
Contract
650
21 (CGA)
Security Assistance Accounting
FY00
460
214
Vendor Pay
FY03
BCA
HPO/Study in progress
1,754
1,727
TSO
Recommendation pending
1,530
1,281
Contract Services
HPO/Developing plan 31
53 + contractors
Disbursing
622
564
Air Force Accounting
FY04
1,641
1,302
Navy Accounting
1,468
Army Accounting
2,696
2,229
Defense Agency Accounting
617
802
Cancelled A-76 Competitions
Out-of-Service Debt
Cancelled
494
222
Civilian Pay
505
273
7/20/2019
Integrity - Service - Innovation

10. DFAS Transformation Objective
Current State
Future State •
Customer Focused
Value Driven
Efficient
Transact
Process
Build
Own
Build & Operate System
Process Transactions
Respond to Customers
Establish transformation outcomes and business strategy
Implement collaborative process that leverages transformation efforts across DFAS
Generate results based on best value to the customer
Leverage operational excellence
Develop client partnerships
Deliver business solutions
Become customer of system capabilities (DEAMS, DIMHRS, etc.)
Integrate
Leverage
Analyze
Partner
7/20/2019
Integrity - Service - Innovation

11. Integrity - Service - Innovation
Closing Thoughts
External forces push us forward
President’s Management Agenda
BRAC
Systems modernization
NSPS
Operational mission needs
Internal drive to excel
Accountable & agile
Dedicated & professional work ethic
Transformation is about finding the “big leap” forward that allows you to accomplish what you can’t even imagine today.
Achieving our strategy and delivering on the five strategic targets will take a complete team effort and our team has a number of tools we rely on to help make it all happen.
First, we are taking Transformation very seriously. We know we have to do things differently tomorrow if we are going to solve the problems we have today. So we have created process that coordinates and evaluates transformation initiatives to ensure they support the DFAS strategy based on business case analyses that are being conducted for every DFAS function.
Also helping us perform better is DFAS commitment to deploying Lean6 throughout the agency. Lean6 combines the Six Sigma and Lean Thinking. <Insert personal story regarding Lean6 and brake assembly line>
Serving our customers better also requires making the right investments. To help make sure we are funding the right projects at the right amount, we are using Portfolio Management to inventory all of our initiatives, evaluate them against standard criteria and make sound fact-based judgements about about priorities.
Another tool that has been around DFAS for a few years now is our Balanced Scorecard which is used to track our progress toward achieving specific goals on measures that are true indicators of how well we serve the customer and achieve our mission. The Balanced Scorecard starts at the highest level to see how the agency is succeeding as a whole and cascades down to the individual level so each person can see how they contribute.
7/20/2019
Integrity - Service - Innovation