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Tuesday, July 18, 2006

Transformation at Defense

"A cursory glance at any government-focused publication, particularly those covering information technology and management, clearly demonstrates that the Defense Department is transforming the way it manages its finances. A flood of articles and reports detail both new initiatives and progress on improvements to existing programs.

During the past half century, the military services and Defense agencies developed a wide variety of financial management programs, each unique to its specific needs. With the advent of IT, the array of systems has exploded and today there are literally thousands of programs and processes. Most are a combination of old and new, ranging from paper-and-pencil legacy processes to near state-of-the-art, computer-based management systems. Few can interact with others, none meets congressionally mandated requirements, and all fail to provide the level of reliability, accuracy and timeliness needed for today's rapid-fire environment.

Examples of effective and efficient financial management systems are more readily found in the commercial environment than in any level of government. Out there, businesses survive and grow by having a firm grip on income, expenses, assets and liabilities. Most speak a common financial language and adhere to well-defined business rules and processes. Businesses take advantage of commercial off-the-shelf (COTS) software to manage data, provide their customers with consolidated and accurate bills, and measure performance.

The federal government, particularly Defense, is acutely aware of the need for transforming financial management to more closely mirror the commercial world. That means enterprisewide solutions using COTS, a common language, and tried and proven processes. And while it may not be measured by a profit and loss statement, transformation at Defense will be measured against congressionally mandated standards and must comply with Defense’s own business enterprise architecture. "

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