|
Business Systems Modernization
The Challenge
USAID has a proud tradition of innovation and autonomy in designing development programs and managing its missions overseas. The Agency has also been highly creative in applying information technology in its missions and at its headquarters in Washington, DC. However, the lack of telecommunications capacity in many countries combined with an organizational culture that prefers decentralized, non-standard solutions have presented challenges. Until recently this situation prevented the Agency from realizing efficiencies and other benefits of a common worldwide technology platform connecting headquarters and mission- based systems. Widespread use of personal computers, e-mail and office automation without a standard global strategy for business applications has led to disconnected "islands of automation" throughout USAID. This has resulted in extensive use of unique, informal and un-audited data and systems for reporting at each mission and at a high cost. In addition, timely, accurate and reliable standardized management reports are often not able to be produced.
In the 1990's, USAID recognized the need to modernize, standardize and integrate its business processes into a single global business platform. Unfortunately, an ambitious modernization effort failed and led to perceptions of USAID as a poorly-managed organization. The Administrator's assessment of the Agency's service delivery capabilities when he arrived in 2001 indicated that USAID's business systems remained slow, cumbersome, based on obsolete business practices and technology, and out of compliance with federal standards. The challenges of the 21st century require that USAID develop management systems that provide:
- Faster, more cost-effective processing of transactions and delivery of foreign assistance overseas
- Improved surge capacity for emergencies and unanticipated workload spikes
- Elimination of paper-processing, freeing employees to perform higher-value work
- Comprehensive, consistent, and timely information to Agency managers worldwide, enabling them to monitor, direct, and report on program performance
- Systems that work together seamlessly to merge financial management, procurement, and management reporting into one easy-to-use system
- State-of-the-art internal controls to prevent and detect unauthorized activities
The Response
In recognition of these challenges, the BTEC developed a Business Systems Modernization (BSM) plan to establish a worldwide business platform capable of supporting higher levels of performance. The goal of the BSM initiative is to enhance the delivery of Agency services and programs through Internet-enabled, globally deployed systems and standardized processes and practices. The BSM initiative is incorporating the lessons learned from past Agency efforts and is designed to focus on customer and employee needs.
Over the past several years, USAID has made significant progress in modernizing its business systems by: implementing a new core accounting system, Phoenix, in Washington, DC; planning for the integration of Phoenix with the State Department's accounting system through the Joint Financial Management System (JFMS) project; planning to deploy Phoenix overseas along with a new State-USAID Joint Acquisition and Assistance Management System (JAAMS); and by participating in numerous cross-agency e-Government initiatives through the President's Management Agenda.
Phoenix Accounting System - Enabling Fast,Transparent and Accountable Transactions
Deployment of Phoenix overseas will extend the headquarters core accounting system to USAID's world-wide missions and when fully implemented will be the central component of the Agency's global business platform. The overseas deployment of a Web-based, financial management system will provide an affordable and standardized agency-wide system for budget execution, accounting, and financial management. Phoenix will replace the current Mission Accounting and Control System (MACS) system with one that is compliant with federal regulations. A key benefit is that financial transactions entered in the field will post immediately to the general ledger accounts. Mission employees in financial management offices will benefit by accomplishing their tasks more efficiently.
Phoenix provides the following benefits to USAID employees and U.S. taxpayers:
- Accountability: Phoenix will allow rigorous compliance with federal audit requirements. The Agency will be able to routinely produce detailed federal financial statements directly from the financial system that will provide an accurate accounting of funds for employees and U.S. taxpayers.
- Improved Decision Making and Planning: Phoenix will enable USAID managers to quickly access financial management data, answer important day-to-day business questions, and make strategic decisions based on up-to-the-minute data.
- Efficiency and Effectiveness: Phoenix will enable close collaboration among administrative and program staff throughout financial, procurement, and budget life cycles, while enforcing appropriate separation of duties. As a result, financial management activities will enhance mission delivery.
Phoenix has been successfully implemented in Washington and now supports Washington-based accounting transactions. The system went live in eight Controller missions in the Latin America and Caribbean (LAC) region in the beginning of 2005. These missions are in addition to the five pilot locations that began using Phoenix as their financial management system of record during FY 2004. All of these missions have access to Phoenix and are posting financial transactions to the system. Phoenix is scheduled to fully replace the MACS system in up to 50 overseas missions during April - June 2006.
USAID is coordinating the implementation of Phoenix overseas with the State Department through a project referred to as the Joint Financial Management System (JFMS). This project began in 2002 when it was recognized that State and USAID were independently implementing the same financial software package, and they could achieve savings by working together to produce a single system to serve both organizations. Plans call for USAID and State to converge onto a single system running on the same platform serving both agencies at the end of calendar year 2005. Savings of over $5 million in software license fees are expected to accrue through fiscal year 2007 as a result of leveraging the combined purchasing power of the two agencies.
Joint Acquisition and Assistance Management System - Enabling Accurate Procurement Data Anytime & Anywhere
The Joint Acquisition and Assistance Management System (JAAMS) is the other core building block of USAID's global business platform. Similar to the collaboration effort on financial systems under JFMS, USAID is coordinating the implementation of a new procurement system with State. Because over 60% of USAID's budget funds are obligated through contracts and grants, the acquisition and assistance (A&A) process is the primary means by which USAID implements its international development and humanitarian assistance programs. More than half of the Agency's procurement transactions are conducted overseas. Modernizing A&A processes and integrating A&A
transactions with Phoenix is critical to USAID's ability to reduce transaction cycle time, accelerate the delivery of foreign assistance where it is needed, and produce more timely and accurate business information.
The proposed software for JAAMS is in the same family of software products as Phoenix. This means the Agency will have a procurement system that is fully integrated worldwide with the financial system. This will prevent duplicate entries; eliminate the cumbersome interface between the two legacy systems; and enable easily accessible information on program commitments, obligations and expenditures. The new system will be rolled out to both the Washington, D.C. offices and to the overseas missions beginning in 2006. At the same time JAAMS will also be integrated with Phoenix and USAID's e-Grants activities. Once this integration has been successfully completed, the combined system will be merged with State's systems to create an integrated global business platform.
Program Management Office - Providing Project Management Support
A Program Management Office (PMO) has been established to provide project and portfolio management support to the Agency's major IT capital investments including those comprising the BSM initiative. The PMO will implement centralized and structured coordination of these major initiatives; oversee and monitor project performance; and measure project results. A key responsibility of the PMO is to assure that the Agency, in partnership with State, develops an Enterprise Architecture that informs the rational investment of IT resources in support of the Agency business goals.
E-Government Initiatives - Enabling Citizen-Centered Services
The Agency is an enthusiastic participant along with other federal agencies in the President's e-Government initiatives. These initiatives were selected by an interagency task force in 2001 to simplify and unify common functions across the federal government. The purpose of these projects is to expand the use of the Internet and computer resources in order to deliver government services that are citizen-centered, results-oriented, and market-based.
USAID is supporting the PMA by participating in 9 of the 25 cross-agency e-Government initiatives including e-Recruitment, e-Payroll, e-Travel, e-Records, e-Clearance, e-Training, Grants.gov, e-Records, and Integrated Acquisition Environment (IAE). The latter, IAE, is designed to ensure that federal agencies follow the same procurement processes and buy from the same suppliers. (View the list)
Achievements
New Core Accounting System Successfully Implemented at USAID's Headquarters
The successful implementation of Phoenix in Washington, DC has resulted in highly efficient payment operations.
Phoenix provides accurate financial information to managers to enable key decisions about Agency resources.
Clean Audit Opinions
USAID received two consecutive clean, unqualified audits for fiscal years 2003 and 2004. This represents a major milestone for USAID since FY 2003 marked its first ever clean audit opinion. In previous years, the Office of Inspector General was unable to audit any of the Agency's financial statements due to internal system and data deficiencies. Obtaining a clean audit opinion was greatly facilitated by the efficiencies provided by the Phoenix Headquarters operations.
Enterprise Architecture (EA) - A Blueprint for Modernizing Business Processes and IT Systems
USAID began developing its Enterprise Architecture, an IT and business process modernization blueprint, in 2003 in close collaboration with State. USAID focused its initial efforts on defining the architecture supporting a single business segment. The HIV/AIDS program in the Global Health Bureau was selected for the first EA segment and it was successfully completed in March 2004. The Agency's EA efforts have had a number of positive results such as identifying opportunities to strengthen the management of HIV/AIDS programs. EA also provides the foundation for developing the HIV/AIDS executive information system (EIS) prototype for the Bureau of Global Health to support the President's HIV/AIDS reporting requirements.
The Agency developed its EA through extensive interaction between its IT staff and the business managers in the Global Health Bureau who will be end users and primary beneficiaries. This collaborative process has ensured that end users understand and accept the EA as their management tool, rather than as one developed and imposed on them by IT staff. This highly successful approach and the resulting EA have been recognized as a best practice, and nine other federal agencies have been referred to USAID for briefings and demonstrations. In addition, USAID and State are currently working together to consolidate both organizations' enterprise architectures, building from a base in large part established at USAID.
Capital Planning and Investment Control - Accountability for IT Investments
USAID established new Capital Planning and Investment Control (CPIC) procedures that are streamlined and compliant with federal regulations. The new procedures were designed to implement investment practices required by The Clinger-Cohen Act of 1996. This legislation requires that major IT investments be supported by comprehensive business cases, evaluation and control mechanisms, and be approved by a high level executive body representing agency-wide business interests. The BTEC serves as the CPIC authority for USAID. To ensure approved projects are meeting the objectives described in business cases, quarterly progress reports are required.
Next Steps
USAID is developing an Executive Information System (EIS) -- an agency-wide automated reporting system that integrates program performance, budget, accounting, and procurement information. This information system facilitates data analysis and reporting to meet the needs of Congress, OMB, the Administrator, Headquarters employees and overseas mission staff. An EIS will enable managers to obtain information from Agency data bases to make informed decisions and to track program performance. USAID began developing a prototype of the EIS in 2004 and expects to have the system linked to Agency information sources - including Phoenix, field support information systems, and emerging specialized systems - by 2006.
USAID will also:
- Complete a joint Enterprise Architecture with the Department of State by its institutionalization as a strategic management tool.
- Continue to integrate systems, networks, and IT infrastructure with State.
- Collaborate with the State Department on the messaging management initiative called State Messaging and Archival Retrieval Toolset (SMART) which will replace current diplomatic cable distribution systems.
- Continue participation on the PMA cross-agency e-Gov initiatives.
Summary of Business System Modernization Achievements
and Benefits
FY 2001 - Present
| Initiative |
USAID Employee
Benefits |
Taxpayer
Benefits |
Implemented Phoenix accounting system at USAID headquarters.
Implemented Phoenix at 13 overseas missions (as of March 2005).
Phoenix is a standard, commercial off the shelf (COTS) system that is regulatory compliant.
|
Timely, accurate, reliable reports enable improved business decision-making and
reporting. |
Two consecutive clean audit opinions (FY '03 & FY '04) assures taxpayers that Agency can manage and account for its funds.
Significantly reduced late payment penalties for vendor payments. Interest of $18,000 was paid in FY '03, only 14% of the amount paid in 2001.In FY '04, only $1,132 in late payment interest was paid to vendors during first six months - projected annual savings of $127K less than 2001.
|
| New CPIC policies and procedures approved and implemented. |
Clarifies for employees the requirements to justify and manage an IT project for senior management approval. |
Ensures that IT investments are focused on efficient and cost effective use of funds to support the Agency mission. |
| Developed HIV/AIDs EA as first section of Agency EA that serves as foundation for a prototype for a Global Health Bureau EIS. |
As the Agency EIS develops, USAID will increase its capacity to acquire performance data at a more detailed and comprehensive level within and across bureaus. This benefits Agency decision makers. |
Increases USAID's access and application of performance data to better monitor the distribution of resources in order to maximize taxpayers' investment in Agency services. |
| State/USAID Joint Financial Management System collaboration. |
Improved employee customer service due to streamlined and standardized services, for example, single point of contact for help desk and system upgrades. |
$5 million cost savings through FY '07 due to joint licensing agreements for financial systems services provided by a common vendor. |
Related Links
Back to Top ^
|
