Your Financial Partner @Work
Balanced Scorecard Evolution
Briefing for NAPA BaSIG
Ed KufeldtDeputy Director, Plans and [email protected]
February 17, 2005
Your Financial Partner @ Work Page 2 of 13
World’s Largest Finance and Accounting Operation
DFAS at a Glance - Magnitude of Annual Operations
Process 104M pay transactions to 5.9M military, civilians, retirees and annuitantsMake 6.9M travel paymentsPay 12.6M commercial invoicesProcess 127.3M general ledger postingsManage military and health benefits funds ($234B)Make an average of $455B in disbursements to pay recipientsManage $13.5B in foreign military sales (reimbursed by foreign governments)Account for 282 active DoD appropriations
Your Financial Partner @ Work Page 3 of 13
Balanced Scorecard Journey
4 Year Evolution started in 2000 with SWOT analysis
Began with a top down approach to implementing strategy and improve quality, timeliness and decrease costFocused on improving customer and employee satisfactionMeasures focused on what we needed to do to achieve our strategic vision to become Best Value using the BSC 4 perspectivesMeasures hard cascaded from Corporate BSC to Business Lines (BLs) & Product Lines (PLs)Ratings rolled up from PLs to BLs to Corporate
Your Financial Partner @ Work Page 4 of 13
Cascade DFAS Corporate Goals to BL Goals
CUSTOMER PERSPECTIVE - Corporate Measure: Commitments Met Performance Plan
CUSTOMER PERSPECTIVE - Corporate Measure: Commitments Met Performance Plan
BaselineFY 2001 - $24.8MFY 2002 - $22.3M
TargetReduce FY 2001 Baseline by 40%
Vendor PayVendor Pay
Product Line
MeasureInterest Penalty
Payments
BaselineFY 2001 - $35.0MFY 2002 - $32.6M
TargetReduce FY 2001 Baseline by 40%
Commercial Commercial PayPay
Business Line
MeasureExecution of
Agency Performance Plan
deliverables
TargetSuccessfully meet
all 11 Agency Performance Plan
deliverables
DFASDFAS
Corporate
BaselineFY 2001 - $209KFY 2002 - $368K
TargetReduce FY 2001 Baseline by 40%
RomeRome
Site
TargetContribute to
interest penalty reduction goals by averaging 32-34
contract type payments or 64-66 miscellaneous type payments per day
with a 99% accuracy rate
RomeRome
Employee
Your Financial Partner @ Work Page 5 of 13
FY 2005 Corporate Balanced Scorecard
More focused on stakeholder expectations and the strategic objectives higher up the chain of commandEmphasis is on the DoD, OMB and the President’s strategic objectives BSC measures and targets are closely aligned to the Financial Management Metrics ProgramBenchmark and customer satisfaction measures to track Best Value and becoming World Class
Your Financial Partner @ Work Page 6 of 13
How DFAS Changed the FY 2005 BSC
Reduced number of measures from 24 to 10
One measure for each President’s Management Agenda objective
Two composite performance measuresOperational Performance Index has four measures for each of our three main Business LinesFinancial Performance index has three measures for Corporate Resource management
Two customer-oriented measuresCustomer satisfaction Closing cost and service gaps identified through Benchmarking
Your Financial Partner @ Work Page 7 of 13
FY 2005 DFAS Corporate BSC
Your Financial Partner @ Work Page 8 of 13
FY 2005 BSCs Relationships
Business Line Specific Measures
13 Accounting
19 Commercial Pay
18 Military &Civilian Pay
DFASDFAS
Business Lines
Cascaded Measures from Business Line
DFASDFAS
Product Lines
Six PMA Measures
Two Performance Index Measures
Two Customer Measures
DFASDFAS
Corporate BSC
34 DoD-wide Financial Measures
DoDDoDComptrollerComptroller
FinancialMeasures1. Competitive
Sourcing2. Improved
Financial Performance3. Budget and Performance Integration
4. eGovernment5. Improper Payments6. Human
Capital
OMBOMB
PMA
DFAS BLs are the source ofData for DoD Measures
Your Financial Partner @ Work Page 9 of 13
FY 2005 Business Line BSC
Measures for delivery of services at the Business LinesBLs brief the Director monthly on their ScorecardsIt’s acceptable to be red if root cause analysis done and action plans working – Quad chart analysisBL metrics are the source of data for DoD Financial Metrics reporting to DoD ComptrollerProduct Lines’ BSCs roll up to BLMore Business Line and Product Line accountability
Your Financial Partner @ Work Page 10 of 13
BSC Measures by Perspectives
Customer
Financial
Internal
Growth &Learning
•Encourage•innovation
•Improve and•leverage quality
•Enhance corporate•capability and
•intellectual capital
•Deliver systems•solutions
•Reduce cost to•the customer
Best Value
Client/CustomerSatisfaction
Operational Performance
ImprovedFinancial Performance
Budget andPerformanceIntegration
ImprovedFinancial Performance
eGovernment
CompetitiveSourcing
ImproperPayments
BenchmarkedCost andService Gaps
Human Capital
Your Financial Partner @ Work Page 11 of 13
DFAS Strategic Governance – old model
Your Financial Partner @ Work Page 12 of 13
Executive Council/Director
Por
tfolio
M
anag
emen
tAcquisition
Management
Lean 6
BusinessLine
Projects Killed
Thre
shol
d fo
r Bus
ines
s Li
ne D
ecis
ion
Concept Development/Due Diligence/ Initiation•Single point of entry
Decision Execution/ Management
Clie
nt
Exe
cutiv
e In
put
DFAS Governance Business Model
Cus
tom
er V
alue
Workgroups
ExecutiveSteeringGroup
Bus
ines
s Li
nes
orC
orpo
rate
offi
ces
Oth
er
Inpu
ts
Issu
es o
utsi
deof
Por
tfolio
Customer Advisory Forum (Client Executive & Customer)
Office of Secretary of Defense
Workgroups
7/4/04 v 2.0
Strategic Direction
Customers
Acquisitions
Approved Lean 6Blackbelt Projects
Business Line
Initiatives
DFAS Governance Business New Model
DFASYour Financial Partner @Work