The US Government Accountability Office (GAO) continues to issue reports on the importance of improving financial management operations. While many reports highlight federal accounting challenges, recent reports specifically call out issues related to the reliability of the statement of budgetary resources as an area for improvement.
Recent financial challenges in the federal sector continue to drive heavy scrutiny of agency operations and spending. The climate of budget cuts and staff reduction coupled with increased business performance demands is forcing federal executives to look across agencies for cost-saving opportunities. These include operational efficiency, staff reorganization, and shared services.
In this current environment, building strong financial management practices and efficiencies in data collection, synthesis, and analysis improves accuracy, performance, and provides the capabilities for success.
Paul Burke and Edward Cody lead Definitive Logic’s Financial Management Practice, which provides solutions for federal and commercial organizations on Planning and Budgeting, Performance Management, Decision Analytics, Business Process Reengineering and Systems Integration.
Tackling the Challenges: A Path Forward to Financial Management Maturity
Solving the complex challenges faced in the budgeting and execution phases of federal business processes is not a simple task. However, following the approaches below can be instrumental in effective management and delivery of a financial management transformation effort that modernizes and delivers near-term benefits with a long-term focus on excellence.
Start Small, Think Big
Financial management practices across planning and budgeting allows for the segmentation of activities into phases or discrete cycles. The goal is not an immediate shift to a one-size-fits-all system, but rather a phased approach with small, discrete, and aggressive steps to immediately realize benefits with a long-term vision of a future target environment. With complex organizations and varying business rules at every level, it is necessary to provide the ability to individually address legacy applications, business processes, master data constructs, and data silos while maintaining existing operations. The phased approach allows the necessary time to assess processes, adapt to future business changes, identify technology constraints and refine requirements.
Make Strategic Technical Investments
However, a phased approach requires a technology platform that supports a segmented implementation. When looking across technical solutions, there are many alternatives to modernization. Examples include commercial software solutions, government off-the-shelf (GOTS) alternatives, and custom application development. While each has its pluses and minuses, interest is growing for the use of commercial solutions, which have reached a tipping point in analytic and workflow capabilities. Improvements in technology and scalability now provide the federal government with opportunities to streamline business processes, reduce cycle times and lower total cost of ownership. While many agencies are hesitant to move away from a functioning system, most legacy systems require significant investments and lack the flexible data configuration of modern platforms.
Implement with Agility
Executing effective software implementation practices is a major component in success. Agile methods and rapid prototyping increases success through business partnering and visual realization of end-state components during the development cycle. Commercial software packages provide a significant benefit over custom development techniques in executing prototyping phases, allowing for iterative design and review of capability early in the project schedule. Since new requirements are commonly introduced and business processes may need to adapt to new technology, prototyping and agile development effectively allows organizations to evaluate and adapt to new processes without negatively impacting project budget and schedule.
While modernization efforts appear daunting, strategic investments in short-term improvements lays the groundwork to effectively execute a long-term transformation. When effectively executed, modernization provides significant benefits to an organization with improvements ranging from the quality, detail and accuracy of deliverables to a more efficient workforce. With continuously improving technology and improved capabilities, executing proper planning, investment and selection of capable technology partner lays the framework to ensure a successful modernization of financial management practices and the ability to execute continuous improvement.
This article was published on the Federal Times.