Cost Awareness of Financial Operations

in Theater

Army Day 2010

June 2, 2010

Steve Bagby - MG Phil McGhee COL Sawyers

In Tune with Army Financial Management

 Agenda
Agenda

Operationalizing Cost Management

Cost Education and Training
Cost Management - Policy / Guidance / GFEBS
Support
Resource Informed Requirement Processes

USARCENT Financial Management Operations

Financial Management School

GFBES Sustainment Training Products
Cost Management and Cost Accounting Courses

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 Cost Culture - Cost Management

Single Use Persistent Universal Use

Use
Estimated Planned &
Future Cost Expected & Actual Cost
Actual Cost
Cost Informed Role Based,
Decision Continuous Org Based,
Making Improvement Output Based
Control
Cost-Benefit Cost Managed
Analysis Enterprise Cost Culture

Cost War Cost War High Cost War Full Spectrum

Insurgency Intensity Conflict Operations

Starting here TARGET

(some work is being done)
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Cost Planning
Operational managers
set cost targets and
efficiency goals
Plan cost based on
outputs produced
Cost
Planning
Resource Informed
Decisions
Take action based on
analysis and external
demands
Change targets
Change resources
Change quantity / quality
Cost Management
Full Cost Measurement
Accurate, timely and relevant data
Connecting operational output/performance
data to financial data
Allocate Overhead, Unfunded Costs,
Indirect Support
Cost
Accounting
Cost Analysis
Cost Variances
Management Cost Trends and forecasting
Analysis
Process Product, service or activity
cost by expense (labor,
material, contracts, etc)
Understanding full costs of
organizations, operations,
Cost
products and services
Controlling
Comparison Analysis &
Benchmarking
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 Cost Management Enablers

Policy & Guidance

Training (Operational & Resource Mgrs)

Cost Management 101

- Cost Management Overview
- Cost Object (ERP) Definitions Tools
- Cost Flow Methods
- Cost Analysis and Reporting

GFEBS Cost Management Training

These courses are either computer-based or
instructor-led training classes to learn how to
operate within the GFEBS cost module.

Cost Management Certificate Course

The program of instruction (POI) is designed to
teach the fundamentals of cost management with
a view to developing a cadre of Army personnel
who are professionally knowledgeable, analytically
competent, and personally motivated to serve as
proactive change agents within their respective
Enterprise line and staff organizations.

Self Study-Cost Management Community of

Practice
https://www.us.army.mil/suite/page/593701

Cost Management Courses in all Professional

Development Programs

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 Cost Informed Decisions

Cost Benefit Analysis The Value of Cost Benefit Analysis:

Supplements professional experience and judgment
Costs Benefits with sound analytical techniques
Ability to make better resourced-informed decisions
Results in a strong value proposition

n
e atio g l sh
ip ne
l s
tr i n
a ni z
i n i n
er i e
d er
s o n
i l i tie POM / BES
c g Tra t a r c
Do Or Ma Le Pe Fa

Manning

Equipping

Training

Sustaining

Organizing

Installation

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 USARCENT Financial Management Operations
Theater Army Financial Management Report

Imperatives
Visibility
Accountability
Transparency DoD Resources
Oversight Link end-to-end processes Exceptional
Controls FM/Contract Systems Stewardship
Mgmt/System Accts Model and analysis Performance metrics
Cost Analyst Team Resource informed
Theater FM Initiatives Effect major cost drivers
Cost savings
Lean Six Sigma Team
FM/Contracting systems
Lean out inefficiencies Cost avoidance
Cost culture Banking Team
Process efficiencies
Cost of war Materiel Enterprise Maximize e-commerce
FM doctrine Near cashless Theater
Strategic Partners

FY10 $714M Cost Avoidance $434M Cost Savings $1,148M

Monthly Disbursements
91% EFT Payments 9% Cash Payments 1 % Goal
$396M

Credibility
v2 as of 18 APR10 Confidence Trust 7
 GFEBS Sustainment Training Products

The US Army Financial Management School will implement GFEBS financial management training
products no later than 1 OCT 2011 in order to sustain FM Community knowledge and skills

Instructor Led Training Distributed Learning (dL)

Cost Management (80 hrs) GFEBS Essentials (20 hrs)
Financials (80 hrs) Reimbursables (20 hrs)
Funds Management (24 hrs)
Non FM Spending Chain (50.5 hrs)
Roles
Training Support Packages
GFEBS Project Systems (8 hrs)
PM dL Products
Training Technical Training
(53 Education
Courses) Principles Cost Act/Mgmt (120 hrs)

Intermediate Cost Act/Mgmt (120 hrs)

GFEBS Material
w/in Legacy Courseware
(AIT, NCOES, OES, Functional Courses)
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 Cost Management (CM)
within Professional Military Education
Course: FM BOLC
Purpose: Provide CM foundation.
Introduce cost concepts and
terms.
Describe the Armys cost
culture.
Relate CM to GFEBS
capabilities.
Audience: 2nd Lieutenants
Length: 8 Hours
Cost Management (CM)
Cost Culture within the Army
Content: Cost Terms and Concepts
Cost Benefit Analysis (CBA)
Practical Exercise
FMCCC
Introduce advanced Cost
Accounting and CM concepts.
Cost Benefit Analysis (CBA)
case study.
Develop communications skills
to influence leaders decisions.
Captains
16 Hours
Cost Management (CM)
Cost Accounting (CA)
Cost Benefit Analysis (CBA)
Practical Exercise
Cost Decision Briefings
Intensive Group CBA Exercise
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 Cost Management (CM)
Functional Courses
Principles of
Course: Cost Accounting & Management (PCAM)
Purpose: Offer a basic cost management and cost
accounting functional course
Provide underlying cost accounting (CA)
and CM principles, theories, and
application.
Prepare military and DA civilians to
leverage CM tools within GFEBS
Intermediate
Cost Accounting & Management
(ICAM)
Build on the PCAM course and provide
more advanced CA and CM concepts.
Provide an increased focus on analysis,
reporting, and communication skills.
Provide the knowledge necessary to fully
leverage the CM and analytic tools within
GFEBS.

Target Audience: SGT, LT, CPT, entry level CP 11 Personnel SSG, SFC, CPT, mid level CP 11 Personnel

Course Length: 3 Weeks 3 Weeks

Prerequisites: Math dL Prep Course Math dL Prep Course, PCAM

Cost Management Principles Cost Management

Cost Term/Concepts Cost Accounting
Course Content: Cost Accounting Cost Management Paper
Cost Benefit Analysis Cost Management Briefings
Variance Analysis Cost Benefit Analysis
Practical Exercises Intensive Case Studies/Exercises
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 Cost Management and Cost Accounting
Achieving Readiness at Best Value

Soldier Support Institute Naval Postgraduate School

Principles of Intermediate
Cost Management Certificate Course
Cost Accounting and Management Cost Accounting and Management

PCAM ICAM CMCC

Cost Terms Cost Flow Methods Managerial Costing

Cost Concepts
Fundamentals of Cost
Acct. and Cost Mgmt
Practical Exercises
Analysis and Reporting Operations Management
Practical Exercises Cost Control
Complex Case Studies Organizational Development

LT CPT MAJ LTC / COL

SGT SSG SFC MSG / SGM

End State:
FM Community possesses the knowledge and skills necessary
to leverage cost management and cost accounting
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