A rmy Cost Culture Initiative

1. Army Cost Culture Initiative May 2013 DASA(CE) Brief to the Honorable Dr. Westphal • Changing Processes • Resource Informed Decisions (CBA) • Changing Technology • Enterprise Resource Planning (GFEBS, LMP, GCSS-A, IPPS-A) • Changing People • Training Cost Management Changes the Army Culture Ad-hocArmy todayCost Managed Organization 1

2. Cost Management End-to-End Process Cost Management Changes the Cost Culture People Leadership Commitment Training RM Workforce Technology Data Quality (ERP) Tools & Models • Process • Cost Planning • Cost Analysis (CBA,) • Cost Integration to Requirement, Acquisition, & Resource • Cost Control (LSS)

3. Cost Management E2E Process its Current Maturity May 2013 People Leadership Commitment Training FM Workforce (AFMO) Technology Data Quality (GFEBS) Tools & Models • Process • Cost Planning • Cost Analysis (CBA, AoA) • Cost Integration to Requirement, Acquisition, & Resource • Cost Control (LSS & AFBRT) Cost Management Professionals • Goal: Better Value for Lower Cost • Stewardship of nation’s resources • Cost informed decision making • Continuous improvement • Accountability for costs • Tracking progress as of May 2013

4. Army Resource Informed Decisions (as of 09 May 13) May 2013

5. GFEBS Technology Enables Cost Management May 2013 DASA(CE) Army Cost Management Framework GFEBS will provide Multiple Cost Views for Decision Making at Every Level … provide essential data to transform the Army to a cost culture

6. GFEBS Provides Total Cost Visibility 1. Customers May 2013 DASA(CE) 2.Contracts Total Cost Visibility Example: 1- Customers by Contracts 2- Customers by Services 3- Customers by Funding 4- Customers by Cost Centers 5- Contracts by Service 6- Contracts by Funding 7- Contracts by Cost Centers 8- Services by Funding 9- Service by Cost Centers 10 –Funding by Cost Centers 1 2. Contracts 3.Services 2 5 3. Services 4.Funding N * (N-1) / 2 for each FY 6 3 8 4. Funding PE 5.Cost Centers 9 10 4 7 10 views (table) cost visibility for five dimension Polygon

7. Army Cost Management Training May 2013 DASA(CE) Cost Management Education • CMEX • Cost • Leadership-Driven Cost Management • Cost-Benefit Analysis • Value Proposition Principles of Cost Analysis and Management Cost Management Executive Course • PCAM • Cost Terms • Cost Concepts • Fundamentals of Cost Accounting and Cost Management • Practical Exercises • Cost-Benefit Analysis Intermediate Cost Analysis and Management • ICAM • Cost Flow Methods • Analysis and Reporting • Practical Exercises • Complex Case Studies • Cost-Benefit Analysis • CMCC • Managerial Cost Accounting • Operations Management • Cost Control and Cost-Benefit Analysis • Organizational Development for Cost Managers Army Cost Management Certificate Course TBD 3 Weeks 3 Weeks 4 Weeks GFEBS Online Training Cost Benefit Analysis (CBA) Training • GFEBS General • GFEBS Overview • Integrated Process Overview • Navigation and Reports • Business Intelligence Reporting • Fundamentals GFEBS: Other Training • GFEBS Other Training • Cost Management • Equipment and Assets • Financials • Funds Management • Plant Maintenance • Project Systems • Real Property • Reimbursable • Spending Chain • 4-Hour CBA Training • What is CBA? • Why do we need CBA? • Who are the key players? • What Army processes call for CBA • What are the processes and methodologies used • 4-Day CBA Training • Policies, Regulations, Methodology, and Roles • Workflow Automation Tools • Other Tools • Case Studies and Exercises • Other Training • Online • Defense Acquisition University (DAU) • Force Management (FA50)

8. CM Community of Practice May 2013 Cost Warrior Listserv Cost Warrior Roundtable Cost Warrior Newsletter AKO Cost Management Community CBA Field Trainers Cost Warrior milSuite web site 1

9. Senior Leadership Commitment May 2013 DASA(CE) SECDEF Leon Panetta, 5 Jan 12: New DoD Strategic Guidance—Impact of fiscal constraints We are shaping a Joint Force for the future that will be smaller and leaner, but will be agile, flexible, ready, and technologically advanced. • Army • USA/VCSA memo (30 Dec 2009) Directed CBA's are to be prepared (For APGM and TGM, Force Design Updates, Concept Plans, Part of VCSA portfolio analyses, ACP, BRP, AR2B, etc..) • SECARMY McHugh at AUSA, 10 October 2011 • USA Efficiency Memo, 2 September 2010 • ASA-FM&C Cost Management Memo, 7 January 2011 • Army Campaign Plan Object 9.4 and 9.8 • OSD • SECDEF Memo, 16 August 2010 • SECDEF Robert Gates 24 May 11 • SECDEF Leon Panetta, 5 Jan 12 • USD (AT&L) Dr. Ashton Carter, June 28, 2010 Better Buying Power • DEPSEC William Lynn, 11 May 11 SECDEF Robert Gates 24 May 11: • …not repeat the mistakes of the past • …salami-slicing” approachresults in a hollowing-out of the force • USD (AT&L) Dr. Ashton Carter, June 28, 2010: Better Buying Power: Mandate … • …we can't support our troops with the capability they need unless we achieve greater efficiency (doing “more without more”) • DEPSEC William Lynn, 11 May 11: • America’s cut forces after every war: WW II, Korea, Vietnam, Iraq • …the Army had to reversecourse, rebuild • …we’re 0-for-4 in managing drawdowns • SECARMY McHugh at AUSA Oct. 10, 2011: Army Bracing for More Budget Cuts • No matter what happens, we are not going to have a hollow force • We have been analyzing the best ways to meet these challenges, …and do it in a way that truly makes sense.

10. Army Campaign Plan Objective 9 May 2013 DASA(CE) OBJECTIVE: Increase the number of Generating Force (Infrastructure) organizations executing quarterly cost management reviews, increase the use of cost benefit analysis and improve the Cost Management Maturity Model index score. 10

11. Army Campaign Plan Objective 9 May 2013 1 11

12. Cost Management Policy and Guidance May 2013 1

13. Cost Culture Activities Mapped to Process, Technology, and People May 2013

14. Cost Management Acronyms May 2013