Financial Management and Program Management: Integration ...€¦ · Program Management:...

American Society of Military Comptrollers

Professional Development Institute

May 26 – 29, 2015

Financial Management

and

Program Management:

Integration and Intersections

D e b r a E . H a h n

d e b b i e . H a h n @ d a u . m i l 1

DoD Acquisition Context:

The development, production, deployment of a new system which meet the technical requirements within the limits of cost and schedule requirements approved by the Decision Authority which meets the needs of the ultimate “User.”

DoD Acquisition Context:

The development, production, deployment of a new system which meet the technicalrequirements within the limits of cost and schedule requirements approved by the Decision Authority which meets the needs of the ultimate “User.”

Program Management

Project Management:

The application of knowledge, skills, tools, and techniques to project activities in order to meet or exceed stakeholder needs and expectations; typically technical in nature with a defined beginning and end.

Program Management:

The management of a related series of projects [a program] executed over a broad period of time, and which are designed to accomplish broad goals, to which the individual projects contribute; typically business and technical in nature and my be a an ongoing effort

2

Program Management

TechnicalSchedule

Cost

Financial ManagementEarned Value ManagementCost Estimating

3

Program Management

TechnicalSchedule

Cost

Program Management is Managing Risk


Risk

4

Acquisition Program Baseline

The contract between

Milestone Decision Authority

and

Program Manager

regarding

cost, schedule, and technical performance

5

Estimate

Cost AnalysisCAIV

CCA

POEAOA

ICE

LCC

FiscalEnvironment

BudgetAuthority

President’s

Budget

From Requirement to Operational Capability

HBC

SBC

HASC

SASC

HAC

SACBudget Resolution

Appropriation Law

Authorization Law

Operational

Capability

Congressional Enactment Process

DPG JPG POMBES

CPA PDM PBD

MFP

FYDP

Funding

Policies

Incremental

Full

Annual

Exceptions

Planning, Programming, Budgeting and Execution Process

Operational

Concept

Requirements

Feedback

Budget

Execution

Reprogramming

ObligationCommitment

ExpenditureOutlay

Cost EstimatingEarned Value ManagementInterrelationships

Execution

POM-BES

MeasurementObs & Exp

MSDecisions Cost Schedule Technical

APB/PMBKtrPerformance

BOE

What-If

Estimate

WORK-VALUE(BCWP)

ACTUALS(ACWP)

PLAN(BCWS)

EAC

Financial ManagementFinancial ManagementEarned Value ManagementCost Estimating

7

WORK-VALUE(BCWP)

Interrelationships

BOE

Execution

POM-BES


Cost Schedule TechnicalKtr

Performance

ACTUALS(ACWP)

PLAN(BCWS)

Estimate

EAC


APB/PMBMSDecisions

What-If

8

WORK-VALUE(BCWP)

Interrelationships

BOE

Execution

POM-BES



Performance

ACTUALS(ACWP)

PLAN(BCWS)

Estimate

EAC


APB/PMBMSDecisions

What-If

9

WORK-VALUE(BCWP)

Interrelationships

BOE

Execution

POM-BES



Performance

ACTUALS(ACWP)

PLAN(BCWS)

Estimate

EAC


APB/PMBMSDecisions

What-If

10

WORK-VALUE(BCWP)

Interrelationships

BOE

Execution

POM-BES



Performance

ACTUALS(ACWP)

PLAN(BCWS)

Estimate

EAC


APB/PMBMSDecisions

What-If

11

WORK-VALUE(BCWP)

Interrelationships

BOE

Execution

POM-BES



Performance

ACTUALS(ACWP)

PLAN(BCWS)

Estimate

EAC


APB/PMBMSDecisions

What-If

12

Decision Factors

Decision

How much does it cost?

Can we do it?

Can we afford it?

Cost Estimating

Earned Value Management

Financial Management


13

Purposes

Financial Management:

Has two major activities; budget development and budget execution; requesting the level of funding need to achieve mission requirements and the distribution and consumption of the allocated funds while with measuring the effectiveness of the financial execution process.

Earned Value Management:

A system to measure contractor planned cost, schedule, and technical performance to their actual performance; identifies their cost and schedule efficiency along with providing data to estimate their future cost and schedule performance.

Cost Estimating and Analysis:

The process of analyzing program attributes/requirements to develop the estimated cost of the program while identifying cost drivers and key parameters thus allowing for “What if” analyses.


14

Decisions & Problem Solving

Type 1: • Problem can be clearly defined• Clear (right or wrong) solutions

StraightForward

Type 2: • Problem can be clearly defined• Multiple “right” solutions Complex

Solution Process:1. Define Problem2. Determine Alternatives3. Analyze Alternatives4. Determine Solution5. Implement Solution

Type 3: • Problem can not be clearly defined• No right or wrong solution Dynamic

Solution Process:

?WickedProblem


15

Characteristics of a Wicked Problem

• No definable problem• Unique, one-of-a-kind problem; no historical perspective• Problem cannot be bound; entwined with other problems• Problem cause changed based on perspective• Multiple interrelated factors• Implementing solution changes the relationship between the factors• Dynamic problem; problem is a symptom of another problem

• No definite solution• Difficult, if not impossible, to measure success • Solutions are judgment calls • Multiple measures of success

• Has a social context; multiple stakeholders with differing objectives• Each possible solution has good and bad aspects; no right or wrong solution• Implementing a solution leads to unforeseen consequences; another problem

Wicked Problems tend to occur in organizations

which undergo constant change

DoDWeapon System

Acquisition

16

DoD Acquisition Process

Technology Maturity

Funding Risk

Logistics Foot Print

Development Cost

Production Costs

Operating Costs

Test Results

Technical Risk

Cost Risk

Schedule Risk

Engineering Design

Software Development

IOC Date

Type of Contract

Industrial Base

Contractor Profitability

War Fighter Priority

Congressional Support

Contractor

OSD Comptroller

Service Comptroller Milestone Decision Authority

Program Executive Officer

Program Manager

Authorization Committees

Appropriation Committees

SequestrationAcquisition Process Changes

Acquisition Policy ChangesNational Defense Strategy

Debbie HahnASMC-PDI 2015

Slide 17

Collaboration Between StakeholdersObjective

User

MDA

Warfighter

Comptroller

President

PM

Congress

Contractor


Slide 18

Issue

Perspective of the ProblemSolution

Collaboration Between Stakeholders

User

MDA

Warfighter

Comptroller

President

PM

Congress

Contractor


Slide 19

Issue

Collaboration Between StakeholdersDebbie Hahn

ASMC-PDI 2015Slide 20

IssueDecisionFactors

Congress

Contractor

Problem

Solving Wicked ProblemsFinancial ManagementEarned Value ManagementCost Estimating

?Problem

21

Decision-Making & Problem Solving

Input ChangesProcess Changes

Inputs OutputsDefine theProblem

DevelopAlternatives

DetermineSolution

ImplementSolution

Problem Solving Process

22

Critical Thinking

Limits

23

Decision-Making & Critical Thinking

Input ChangesProcess Changes

Inputs OutputsDefine theProblem

DevelopAlternatives

DetermineSolution

ImplementSolution

24

Consequences

Simplifying the ProblemDebbie Hahn


Critical Thinking (Paul & Elder)

Elementsof

Thought

Implicationsand

Consequences

Assumptions

ConceptsInterpretation

andInference

Information

Questionthe

Issue

Pointsof

View

Purposeof the

Thinking

26


Elementsof

Thought

PointsOf

View

Purpose of the

Thinking

Implicationsand

Consequences

Assumptions


andInference

Information

Questionat

IssueElements

ofThought

Elementsof

Thought

PointsOf

View

Purpose of the

Thinking

Implicationsand

Consequences

Assumptions


andInference

Information

Questionat

Issue

Standards

27

THE STANDARDSClarity PrecisionAccuracy SignificanceRelevance CompletenessLogicalness FairnessBreadth Depth

THE ELEMENTSPurposes InferencesQuestions ConceptsPoints of view ImplicationsInformation Assumptions

Must be applied to


28

Program Management Tools

ProgramManagement

FinancialManagement

EarnedValue

Management

CostAnalysis

ProgramManagement

ProgramManagement


29

Stove Piping Career Fields

Earned ValueManagement

FinancialManagement

Cost Analysis& Estimating

30

BCEFM Stove-PipingDebbie Hahn


Earn

ed

Val

ue

Man

age

me

nt

Fin

anci

al M

anag

em

en

t

Co

st E

stim

atin

g/A

nal

ysis

Acc

ou

nti

ng

Bu

dge

tin

gC

ost

Est

imat

ing

Acc

ou

nti

ng

Earn

ed

Val

ue

Tear Down the Walls

Innovative solutions require

integrationbetween

EVMs, FM, and Cost

one-dimensional thinkingresults in

one-dimensional solutions

32

Back-Up

33

Program Management

Program Management is Managing Risk


34

Pro

fess

ion

al

Dev

elo

pm

ent

Inst

itu

teM

ay 2

6–

29

, 2

01

5

Financial Management and Program Management: Integration ...€¦ · Program Management:...

Documents

Transcript of Financial Management and Program Management: Integration ...€¦ · Program Management:...