DFAS also collaborated across the Department of Defense (DoD) financial community and listened to customers, stakeholders, and most importantly, agency employees on the front lines of service delivery. According to Norton (2007), the front line employee is the key to successful strategy execution. Successful organizations know that; that’s why they put resources into communicating strategy to employees- over and over, through different channels and in different formats.
Private industry case studies have shown that crisis can be an effective catalyst for change. Several factors are now creating the kind of crisis climate appropriate to affect fundamental changes.
According Gaddy (2007), DFAS team members has been playing important roles in supporting the mobilization and demobilization of more than 195,000 military members. Many DFAS members deployed to provide support to commanders in theater. Meanwhile, other DFAS personnel contributed finance and accounting expertise to help rebuild the Iraqi nation by establishing control, disbursing and pay processes.
According to DFAS manual, DFAS’ workload continues to grow year in and year out. Currently, the team processes an average more than 104 million pay transactions for about 5.9 million military members, civilian employees, and military retirees and annuitants per year. The team also process an average of 6.9 million travel payments, 12.6 million commercial invoices, 127.3 million general ledger postings, $455 billion disbursements. The DFAS team also helps make money for the department by managing military and health benefit funds worth approximately $234 billion. The trend seems continue to grow because the war on terrorism does not seem short lived, and DFAS’ customers also demand more and accurate and timely information.
Furthermore, the government agencies are traditional bureaucratic, and rooted in the 200-plus old foundations, and DFAS is not an exception. Moreover, since DoD accounts for the biggest discretionary portion of the federal budget, Defense and the army in particular are prime targets by the public for any potential abuse of tax payers’ money. Nowadays, getting better government at less cost, has been the theme of the National Performance Review and Government Performance and Results Act, which emphasize process improvement and performance measurement by the Congresses.
While improving the overall performance measurement is essential, but every step has to be approved by customers. According to the DFAS website (2007), some of the comments from across the spectrum called for:
- More focus on the warfighters
- Emphasis on leading the way integrating technological advances in finance and accounting practices
- Greater use of technology and innovation in deceasing cost to the customer while increasing quality and productivity
- Easy access to integrated financial information and increased availability of business intelligence to enhance customer decision making
- Encourage new ideas and fresh thinking through focus on employees
- Increased focus on partnerships with our customers, and especially in working together as a community in developing innovation and solving enduring problems
The above information has broadened agency thinking and provide focus a 10 year strategic plan. DFAS is integrating system and streamlining the organization in line with Base Realignment and Closure (BRAC) requirements. Employee skills and capabilities are being enhanced through successfully implementing National Security Personnel System (NSPS) requirements. In addition, important technical advances are being made through close alignment with the DoD Business Transformation Agency (BTA) and aligning management practices with the President’s Agenda (PMA).
DFAS has 10 year long-term strategic plan to help bring its mission, vision into clearer focus. This plan outlines the DFAS priorities.
Goal 1: Attain operational excellence in finance and accounting services
Outcome: Operational excellence in the delivery of finance and accounting services
Strategic Objectives:
- Implement best business practices to increase productivity and reduce costs. Execute accounting and finance process efficiently and to deliver timely and accurately financial information that meets the goals of the Secretary of Defense and the Administration.
- Integrate e-solutions through state of the art technology
Goal 2: Deliver financial information on-demand for decision-makers
Outcome: Trusted partnership with the customers and on-demand business intelligence
Strategic Objectives:
- Provide instant access to comprehensive financial data
- Provide useful and insightful monthly, quarterly and yearly financial analysis and timely advice to the Under Secretary of Defense (Comptroller)
Goal 3: Transform DFAS to become a Center of Excellence
Outcome: Agile organization with fully integrated and automated systems
Strategic Objectives:
- Create center of excellence and high performing organization
Goal 3: Attain a highly professional workforce with indispensable skills competencies
Outcome: Be known as the employer of choice: right people, right skills, right job
Strategic Objectives:
- Reshape workforce to meet mission needs
Developing a great corporate strategy is one thing, implementing its initiatives and assessing progress is an on going process of plan, do check, etc. The greatest of ideas and noblest of strategic interests will flounder in corporate archives with a structured method to assess progress.
Measuring the impact of agency on its customers, internal operations, the financial health of the organization, and its ability to grow, train, and motivate the workforce is crucial in meeting the flexing demands of a dynamic marketplace.
DFAS uses the Balance Scorecard methodology to measure business performance and track progress in achieving its strategic goals. According to Garling (2007), Balance Scorecard provides the strategic bridge DFAS needed to transition from a site-focused, transaction based organization to performance-driven enterprise. The different DFAS corporate units embarked on the improvement of individual scorecards, consistent with the goals and missions articulated by the senior management staff. This procedure will be an interactive one that engages participants throughout the entire organization at all levels. The goals are as follows:
- Customer: DFAS’ performance focuses as perceived by the customer.
- Financial: measures weather DFAS is the proper stewardship of Defense Department funds.
- Internal: Measures internal operations’ practices and system processes for efficiency and effectiveness
- Growth and Learning: Measures the recruitments, train and retention of DFAS employees.
Each of the above goals has distinctive objectives. These are very crucial objectives because using these tools; DFAS will accomplish its strategic goals. During the process, DFAS organizational scorecards will be continuously examined and revised as missions’ and goals’ priorities amended.
External influences and opportunities
World events such as the Global War on Terror such as Afghanistan and Iraq war, increasing competition in the financial services sector and changing technological security requirements for the customers will require DFAS to maintain agility and anticipate customer needs.
As military operational tempo increases, DFAS must increase support to the customers but with fewer resources’ tolerance for poor quality services decreases. DFAS will need to respond to these changing demands and expectations. As technology becomes more advanced and available, DFAS will need to develop improved security and privacy measures for the customers’ personal and financial information.
In responding to this changing global environment and increased competition, DFAS will have the opportunity to improve operational support to the warfighters.
Despite the increased demands, limited resources and changing world events, DFAS needs to continue to post break-through results. Customers and employee satisfaction will continue to improve.
DFAS customers’ requirements, demands and wants will develop and evolve. As DFAS exceeds its basic service goals, customer expectations will increase, and it will need to be ready to deliver the next generation of financial services and products. As a result, DFAS will have the opportunity to better anticipate customer needs and proactively deliver additional value-added services.
Refining Strategic Vision
DFAS’ vision is to provide best values services to the customers by becoming a world-class finance and accounting organization. As DFAS reach for that vision, it will establish objectives and milestones that enable DFAS to measure and evaluate its progress. In addition, it will compare itself to other best of breed finance and accounting services, private and public to ensure that it is in fact the best value for its customers.
Achieving its vision is dependent on continual improvements of DFAS value proportion in the core functions of its business: paying people, paying vendors and accounting for business events. As the war on terrorism drags on, DFAS must be informed by the expected changes in its business. Over the next 8-10 years, DFAS expects the following shifts in its business environment and the way DFAS delivers services.
First, DFAS customer profile evolving and so will DFAS: DFAS customers will demand improved quality for reduced costs. The customer base will need to expand to include other federal agencies and/or state & local governments.
Second, DFAS will better able to present the full spectrum of customer offerings & deliver tailored customer solutions. DFAS will establish a culture committed to customer service, operational excellence, advancement of DFAS employees and professionalism.
Third, As DFAS become an advisor to its customers, it will more actively partner with them to better understand, anticipate and meet their requirements. DFAS will deal directly with decision-makers, customer management teams, and warfighters to provide high-value and affordable solutions that will help achieve key objectives.
Customers wants and needs
For DFAS to identify its strategic priorities, it must have a through understanding of DFAS from its customers’ point of view. The value chain is an excellent tool for this analysis. The value chain provides an external perspective of DFAS’ competitive position. This approach starts by determining its customers and their priorities and then how the business is designed to meet customers; requirements.
DFAS is in business to deliver high-value outcomes to its customers and to do this; DFAS must first identify its customers and determine what they want. DFAS has divided the customer base into two categories: individual and organizational. The individual customers are DFAS’ first-line payment recipients and the organizational customers refer to the DFAS’ partners in servicing those payments recipients.
As DFAS transforms over the next 10 years, DFAS evolution will be in phases. During the next phase of transformation, DFAS will focus on achieving five strategic targets that have been identified based on what DFAS have heard from the customers, legislative and regulatory organizations, and their own internal evaluation.
In identifying the agency’s five strategic targets, DFAS has considered three timeframes. DFAS have evaluated where DFAS today, developed plans that prepares DFAS for its near term future, and ensured that DFAS will be positioned for where it needs to be in their long-term future. The five targets are to:
- Pay Service Members what they are entitled to on the scheduled pay date
- Implement electronic commerce for all Commercial Pay processing
- Receive an Unqualified Audit Opinion on the FY2011 Financial Statements
- Develop a corporate capability to deliver client-unique business intelligence
- Retain, recruit and train a DFAS work force capable of developing and implement the DFAS strategy
The first three targets focus on achieving world-class operations in our major business lines-paying people, paying vendors and accounting for events. Without achieving these world-class capabilities, DFAS cannot provide its customers more innovative and enhanced services and solutions. Targets four and five are focused on enhancing DFAS’ core competencies. These competencies are the foundation upon which DFAS core competencies. These competencies are the foundation upon which DFAS will achieve the previous three targets and become a trusted, innovative financial partner.
Pay Services Members what they are entitled
Primary prerequisite for a world-class finance and accounting organization is the ability to pay customers what they are entitled to on the scheduled pay date. By focusing on the quality and accuracy of on-time payments, DFAS will identify and correct pay inaccuracies, which cannot be corrected in advance of the payment. This target will require a seven-part process:
- Work with process partners to improve the timeliness and quality of incoming data.
- Detect errors early and correct identified problems before pay date
- Develop error prevention procedures to isolate the cause and effect
- Work the system to make sure DFAS have system efficiencies and data integrity
- Make the errors transparent to the customer
This concept will incorporate performance intelligence metrics, which include customer intelligence, quality intelligence and process intelligence. Accomplishing the above process is critical to meeting the agency goal of providing world-class customer service. Success dependence on the collective efforts of not only agency assets within the areas of military pay, policy, acquisition management, corporate communications, and technology services, bust also service personnel, finance and communication professionals.
If DFAS fails on this initiative, it may create financial hardships for our military members and their families. Failure to meet this mission adversely affects the readiness and morale of America’s military forces. It is a national security matters.
The process will benefit to customers to receive accurate and timely, receive advance notice that a pay inaccuracy exist and is being resolved immediately, and enhance communication with process partners.
Implement Electronic Commerce for Commercial pay processing
The electronic commerce goal is to move from a paper-based environment where transactions are entered multiple times, to an electronic environment where transactions are entered once by the source and transmitted systematically to all process partners. This goal will enable DFAS to process transactions in a more timely, accurate and efficient manner. Implementing these tools will improve the process through:
- Single source entry- results in improved data accuracy; elimination of redundant data entry; and reduction in unmatched transactions.
- Electronic transaction of data- results in lower postage, handling and document management costs; reduction of lost or misplaced documents; and more ttimely availability of data
- Electronic storage of data-provides capability to view and track transactions throughout the process; results in fewer customer service calls for transaction status.
Accomplishing this strategic goal enhances DFAS’ ability to provide services at a competitive price and therefore remain a provider of choice.
Achieving this goal requires a cooperative effort between DFAS, its service and industry partners. These services must develop a deployment strategy to ensure their members are properly trained and are using available tools. Equally important is the effort the services must make in working towards standardization of processes an business rules. Industry must comply with electronic invoicing and payment mandates. Contractors and vendors must register in the central contractors’ registry to provide electronic file transfer (EFT) payment routing information and must submit invoices electronically using approved methods.
The primary benefit to DFAS customers is that lower transaction processing costs, reduced interest penalties, and increased discount earned will result in reduction customers’ cost.
Receive an Unqualified Audit Opinion on the FY 2007 Financial Statements
Audited financial statements are expected to provide timely, reliable and useful information to the DoD program managers, congress, and the public. They facilitate effective allocation of resources and enhanced assessment of management performance and stewardship. Receiving an unqualified opinion provides assurance that every line on the financial statements has reliable data that are traceable to source records and were posted in accordance with laws and regulations.
The target is to deliver FY2009 financial statements capable of receiving an unqualified audit opinion. DFAS goal is to establish a reliable and repeatable end-to-end process to produce statements that contain timely, reliable and useful information-statements that can and will be used to manage the Department.
The primary impact on DFAS customers will be the provision of enhanced business intelligence for DFAS customers and lay foundation for accumulating reliable cost information the Secretary of Defense wants to run the Department in a business-like fashion.
Develop a Corporate Capability to Deliver Client Unique Business Intelligence
This strategic target delivers seemliness, integrated business intelligence capability to the customer base. This effort will also result in making delivery of customer-unique business intelligence solutions, a core competency within DFAS. The end state of the target is to move beyond the DFAS success in place today (e.g. the Army Shared Knowledge-Financial Management Dashboard, the Business of DFAS Dashboard, etc. are all of them are underdevelopment. These are web based near real time access to dynamic information.
Successful integration of business intelligence methods will contribute to the vision of being a world-class provider of finance and accounting services and trusted, innovative financial partner.
The development of an integrated of an integrated and robust DFAS business intelligence capability allows DFAS customers to receive and conduct better enterprise analysis. This will enable the customers to combine financial and non-financial information in an enterprise-wide central repository, accessible via the customer’s performance management system. Furthermore, it improves availability of relevant, consistent, integrated information. This will be integrated and fit onto the net-centric vision of the business enterprise Architecture and will potentially impact everyone who deals with financial and accounting data. A highly scalable business intelligence capability will make consistent information visible, in a secure environment, to any authorized user in the DoD enterprise.
Retain, Recruit, and Train a DFAS work force
The future of DFAS depends on its ability to recruit, train, and retain a dedicated team capable of implementing the DFAS strategy and achieving its mission. This target provides a foundation for achieving the previous targets by developing robust programs to attract, develop, and retain and support the best talented possible, because the cornerstone of any service-based organization is superior people and leadership.
For DFAS to deliver excellent service to the customers, DFAS must focus our efforts toward meeting their needs. To address the wants and needs of the customers, remain competitive and thrive as an organization, DFAS must dedicate resource to develop the people, processes and system necessary to accomplish the strategic targets and provide the customers with the greatest solution possible.
In order to accomplish of these strategic goals, DFAS needs to focus on three core initiative including:
- Development a national recruiting strategy
- Establish of competency assessment and skills inventory program
- Formalization of succession planning
The strategic management of human capital is an integral part of day to day business operations within DFAS. The human capital strategy demonstrates the commitment of the organization to support employees in the critical dimensions of human capital: leadership, talent and environment.
In order to meet the customers’ need and provide the greatest solutions possible, DFAS must dedicate resources to develop the people, processes and systems necessary to accomplish the strategic targets. This initiative will allow the customers to:
- Obtain consistent, high-quality and seamless delivery of future service
- Receive superb customer service and have professional interactions with DFAS employees
- Have available financial consulting and advisory services
By defining the skill set of DFAS future employees with the context of the business strategy, DFAS will be able to recruit, support, develop, and retain the talent it needs to realize the strategic goals and vision. Furthermore, this will also provide DFAS with the opportunity and resources to have the right talent with the right skills at the right time for the right cost.
How DFAS will implement the Strategy
To ensure successful implementation of DFAS’ strategic plan, DFAS will need t identify target masters responsible for each strategic target, launched the development of an operating plan, and committed to supporting a set of management initiatives. (Example, Strategic Target: Pay Services Members what they are entitled; Target Master: Military & Civilian Pay Business Line Executive).
The target master is accountable to the agency Director for the successful of the target. The progress of each target will be reported monthly to the DFAS executive leadership and significant events will be communicated to the DFAS work force.
Operational Plan
The operating Plan will identify short-, mid, and long-term objectives, and delineate the key initiatives that must be implemented to achieve the desired results. Progress against the operating plan will be monitored by DFAS’ executive leadership.
Management Initiatives
DFAS will continue to champion a set of management initiatives that contribute to the success of each strategic target and its overall vision. These initiatives help the organization achieve success through increased efficiency, improved business management and more accurate performance measures.
Using the Balance Scorecard to measure Strategy
As Kaplan and Norton (1996) said measurements matters: “If you can’t measure it, you can’t manage it.” The DFAS Balance Scorecard provides a comprehensive framework that translates the DFAS vision and strategy into a reasoned set of performance measures. The measures relate to the strategic outcomes and align within the following four performance: customer, financial, internal, and growth and learning perspective
Conclusion
This strategic plan provides direction and focus for all aspects of the DFAS functions, from operations to customer service. From the plan’s goals, outcomes and objectives, the DFAS leaders and managers can establish the initiatives that will ultimately allow the agency to realize its potential to be the world’s best finance and accounting partner for the nation’s military men and woman.
However, what does mean this plan means to many groups that will impact?
For the DFAS employees, this plan requires their commitment and participation in transforming the agency while maintaining and exceeding the standards of service and support they provide to customers. It is their experience that will allow specific initiatives to make a real difference in how agency does business now in the future. Understanding the overall direction that DFAS is heading will make their input all more effective.
The DFAS customers, from military members and civilian employees to contractors and DoD leadership, have maintained consistently high expectations for the finance and accounting services the agency provides. This plan directs all the agency’s efforts, from transformation programs to development of faster, smarter, and more accurate pay processes, to meeting the growing and diversified needs of all the DFAS customers. From this strategic plan, these varied groups can take confidence that they will and will be the agency’s prime focus.
DoD leadership depends on the DFAS to provide the very best business intelligence and accounting services. The demands on decision makers in a time of rapid change and the Global war on Terror and War on Iraqi Freedom continue to rise. The need for accurate data in making these critical choices is crucial. The goals contained in this plan will result in more up to date financial information that leaders can use with utmost confidence.
Confidence is also the agency’s aim for stakeholders, including the American taxpayers. Every aspect of the DFAS organization, operations, and system reflects the responsibility for financial stewardship placed upon the agency.
The DFAS Strategic Plan 2007-2017 will be dynamic and guiding documents for the agency’s evolution. It forms the foundation that DFAS can use to realize its strategic vision of transforming to day to be the trusted financial partner for tomorrow’s warfighter.
Reference
Assistant Secretary of Defense manual. (2005). Strategic Plan. Retrieved from website http://www.c3i.osd.mil/doc/index.html on May 29, 2007
ASA(FM&C). (2007). DFAS Manual 7097.01. Retrieved from website
on May 29, 2007
Gaddy, Z. (2004). How We Will Meet our Customers Wants and Needs. Retrieved from
from website on June 30, 2007
Garling. (2007). Winning the Transformation Battle at Defense Finance and Accounting Service. Retrieved from website on June 12, 2007
Norton. (2007). Balanced Scorecard : Report. Harvard Magazine. Volume 9. Number 3.
Pearce & Robinson. (2005). Strategic Management (9th ed.). New ork: McGraw-Hill
