© 2010 IBM Corporation Overview of the Case Study (UVA OM 1447) USAF - IBM Financial Management 9 September 2100

© 2010 IBM Corporation

Overview of the Case Study (UVA OM 1447)USAF - IBM Financial Management

9 September 2100


Scenario

Air Force Financial Management

The Air Force Financial Management community has contacted IBM after hearing about our

success with large-scale transformation efforts. Presently, each of the approximately 100 Air

Force Bases around the world has its own local Financial Services Office that provides pay

and travel processing and customer support. Similar processes are performed at each

location. Staffing and quality assurance are managed locally, and legacy systems have

been modified over time in response to local preferences. Following a Presidential Directive,

the Air Force Financial Management community is under pressure to significantly reduce

manpower while continuing to deliver high-quality customer service to Airmen and their

families.


Air Force Installations

The bulk of the service delivery model resided in 93 separate base-level Financial Services

Offices (FSOs) at bases allocated around the world


Base Financial Service Offices (FSOs)

Personnel utilized this walk-in facility for pay inquiries and related financial services.

Functions performed were largely transactional in nature.

Services ranged from generic requests for information to customized service inquiries.

Staffed by Air Force personnel - trained within the Air Force FM career field and were not dedicated experts in any one process.

Workload and staffing varied from base to base and typically corresponded to the population of the base (i.e. higher volume).


Primary CustomersFSO

Customer Support(Back Office)

Trav

el,

Mil

Pay

an

d R

elat

ed D

ata

FSO Customer Service

(Lobby)

FSO Inquiry Channels Outside Support

(If required)

Active Duty Airmen

Senior leaders/ Commanders

Civilians

Families/Retirees

Reservists and National Guard

Face to face interaction with

customer

• Answer Customer Inquiries

• Assist with document prep

• Verify paperwork is complete

• Route work to customer support for processing

FSO Accounting Liaison Office

Defense Finance & Accounting Service

(DFAS)

Mil: Military

Civ: Civilian

TDY: Temporary Duty

PCS: Permanent Change of

Station

Face To Face (65%)

Phone (20%)

Limited IT Systems(10%)

Mail (5%)

Misc9. Casualty cases10. Civ timecards11. Debt mgmt

Travel 5. TDY processing6. Mil/Civ PCS7. PCS In & Out-

processing8. Travel Audit

Pay1. Separation &

retirement2. Mil/Civ pay3. Mil leave4. Pay audit

Processdocuments

Processing time varied for each type of document or review. Often, paperwork was not submitted correctly and was routinely returned for rework.

The customer could be required to visit several times prior to completion.


Pay Processes

Ensure all military and civilian personnel were paid accurately and in a timely manner. – This could include up to several dozen pay-related sub-processes; dependent upon the

requirement of the customer as each entitlement required a separate and unique process to ensure proper payment.

Documents were completed and processed at the FSO and were frequently forwarded to other organizations for further processing.

Incorrect or delayed documents led to the disruption of pay and other entitlements.

Other pay-related processes included– Payment upon separation or retirement from the military or government service.– Pay documents pertaining to military or civilian leave (i.e., vacation hours). – Verification, review or auditing of pay related documents.

Military & Civilian

Pay

Audit &

Review

Separation &

Retirement Pay

MilitaryLeave


Travel Processes

Ensured military and civilian personnel received timely and accurate reimbursement for travel related expenses. FSO personnel processed all documents relating to military and civilian temporary duty (TDY). The percentage of vouchers returned for corrections or rework also varied.

Other processes included: – Pay and entitlements due a military member or civilian employee who made a permanent

change of station (PCS) move. – PCS in & out processing for inbound & outbound base personnel– Reviews and audits pertaining to travel and expense documents.

Military & Civilian

TDY

Audit &

Review

PCS In & Out Processing

Military & Civilian PCS


Miscellaneous Processes

FSO personnel routinely performed other finance-related functions.

Upon the death of a military member, FSO personnel determined entitlements due to the next-of-kin. Within a few days, personnel prepared and (personally) delivered the entitlement to the deceased’s beneficiary.

FSO personnel also received, reviewed, and processed timecards for civilians located at their respective base and executed procedures related the voluntary and involuntary collection of debts. Document processing ranged from garnishing or holding pay to processing fines and forfeitures resulting from punitive action.

Personnel also advised military and civilian members on debt management issues.

Casualty Cases

Debt Management

Civilian Timecards


Survey Results

Customer Feedback: “My questions and problems get fixed.

However, it often takes a number of trips and FM is rarely proactive in providing me with status updates.”

“I have friends who work in the FSO, or I have developed a knowledge of who does what in the FSO and I use them directly without going to the counter.”

“FM personnel are not trained enough to handle problems.”

“ FM processes seem to work differently at every base I go to – even the same forms when filled out the same can have different results”

“When I PCS or TDY, I know my pay will be messed up.”

Employee Feedback: (From a supervisor) “I only have personnel

for 2years, by the time they are fully trained, they are about to transfer to another base.”

“There is lack of training prior to coming to work at the FSO”

“We receive so many documents a month we are unable to let individuals know where they are in the process”

“Customers are not educated on how the FSOs do business”


Fiscally Constrained Environment

Following September 11th 2001, President Bush recognized that the nation’s defenses would need to evolve to meet a rapidly-changing national security landscape. In 2002, the President’s Management Agenda (PMA) was released.

Initiatives included the establishment of a DOD Office of Force Transformation – designed to integrate transformation into the national security strategy

In 2005, the Office of the Secretary of Defense issued Program Budget Decision (PBD) 720 - directed the services to reduce manpower and resources.

The Air Force would be required to reduce their force by 40,000 Active Duty, Guard, Reserve and civilian full-time employees.

In order to realize cost savings and efficiently shape the future of the financial management

community, significant transformation would be necessary.