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The billion-dollar dashboard at the U.S. Department of Defense

May 23, 2008

Every day, Tina Jonas, CFO for the U.S. Department of Defense, consults the Cognos dashboard on her desktop to monitor her budget of over $400 billion. The challenges of managing a budget of this size, along with assets of $3.6 trillion, are self-evident. Ms. Jonas has provided the strong budget leadership required at DoD since 2004, building on her previous role as CFO of the FBI.

Ms. Jonas joined Cognos senior writer Sherry McPhail at the IBM Cognos Government Forum in Washington to discuss good stewardship, a common language, and the importance of the tone at the top.

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The hardest job in the world?

SM: "Is it true that you have the hardest job in the world?"

TJ: "I have a hard job, but probably not the hardest in the world! My job is actually a terrific job. True, it has its pressures and stresses. But the departments and the people working for us are superb. So it's a great delight and a great honor to work with them every day."

SM: "In what Government Executive magazine called 'the most formidable management job in federal government,' what reports or scorecards would you count as indispensable to your decision-making process?"

TJ: "I now have an executive dashboard that I did not have when I walked into my office. I was determined that the decisions I put before the Secretary of Defense, or other senior leaders in the department, be based on good information – on real data.

"This may be hard to believe for a department of our size, but when I started I didn't have that information readily available."

"Through the hard work and innovation of a lot of our terrific folks, we were able to pull together what I call my executive dashboard. It is, in a sense, my financial sight picture.

"It allows me to understand on a daily basis what my cash balances are. It lets me see how we're doing on efficiencies for our accounting operations, our progress and internal controls, and other key metrics that we manage for the Secretary."

SM: "And to go to Capitol Hill for more?"

TJ: "Absolutely. And it also lets us go to Capitol Hill for less. One important example of this is our accounts receivable. If we're not keeping track of them, we're not being efficient with the resources appropriated. In my view, that's not good stewardship. We need to do better in that regard. And now we are."

Nearly $250 million in savings

"For many years I have tracked a metric called Interest Penalties Paid, a fine we incurred if we paid our vendors late. I saw that we could waste hundreds of millions of dollars if we didn't fix this.

"And indeed we've saved over $247 million dollars by tracking and fixing this. Our vendors love us. Sometimes, when we pay ahead of time, we even get discounts."

"So that's the beauty of this executive dashboard. It's been an enormous help to me. I just can't imagine doing my job without it."

SM: "Now that you're completing your fourth year on the job, can you tell us what the greatest challenge is in managing this budget?"

Finding efficiencies in place of cutting budgets

TJ: "Ultimately budgets are about priorities. And with a budget of this size and a department as large as ours, we have many competing priorities. We need to get resources out to the important missions. Sometimes I'm not the most popular person in the hallway!

"If we get fiscal guidance that is less than we had hoped for, we have to cut budgets. But instead of cutting budgets, I would prefer to find efficiencies. That is why we have put this system in place."

SM: "On the two improvement efforts that you've undertaken during your term, let's talk first about improving financial reporting. Could you tell us a bit about the accomplishments and the difficulties in this area?"

TJ: "When we began the effort, the department had 4,000 different stove-piped financial systems. They were not integrated. They couldn't talk to each other. So we had no clear financial picture."

"To correct that, we have done two things. Firstly, our financial improvement and audit readiness (FIAR) program takes care of the process issues related to our material weaknesses. We've made enormous progress in that realm to date.

"Secondly, our enterprise transition plan (ETP) deals with systems issues and brings data up to the corporate level."

"These two plans are connected, and they are delivering results. Our ERP deployments, such as the one in our logistics agency, are improving supply orders enormously.

Cutting process times from 24 hours to four

"It used to take 24 hours to get supplies ordered and through to the field. Now it takes four hours. The bottom line for our mission is the men and women in uniform. So that makes it exciting."

SM: "For the benefit of other organizations that are facing the same challenge, what are the barriers in DOD to being able to issue a clean financial statement?"

TJ: "The barrier is really the successful deployment of our ERP systems. And I think we are very much on track to do that."

"But moving forward also takes a committed leadership. The tone at the top makes a big difference to creating a committed workforce to carry this through. And of course committed political administrations as well."

Establishing a common set of business rules

SM: "Can you speak about the second improvement effort – integrating business practices? Why was this necessary and how far have you come?"

TJ: "We had four different organizations, all with different ways of doing things. Our accounting systems were all different. Some of them had accounting lines of code up to two hundred characters long. We couldn't talk to each other if we tried."

"We needed a common language and a common set of business rules and practices. We've been able to do that, and in two months it'll be complete. For the first time, the department will have real business intelligence."