The fifth annual Defense Department-wide financial audit, its most recent, required that independent accountants look at an organization with roughly 2.9 million people and $3.5 trillion in assets. In fact, more than 643,900 assets — including buildings, structures, utilities, roads, fences and more — were located on over 4,860 sites worldwide as of the beginning of fiscal year 2022. While the DoD made strides toward a clean audit, the tough road ahead underscores the sheer size of the task and the challenge of navigating legacy financial management systems.
Legacy financial management (FM) systems are inherently difficult to audit and incapable of keeping up with modern financial data. And due to the time investment and coststhat come with implementation, agencies have put off FM system migrations. But with each audit that comes up short, scrutiny of these legacy FM systems intensifies.
The benefits of modernizing financial management systems extend well beyond improving the ability to conduct clean financial audits. For that reason, agencies are demonstrating growing urgency to modernize. Below find key planning, change management and post-implementation strategies to consider for any financial management modernization initiative.
Planning is key
Benjamin Franklin put it best: “By failing to prepare, you are preparing to fail.” This idiom perfectly describes financial system migration success. There are a multitude of legal and regulatory controls that must be designed and properly implemented to ensure the new system is sufficient and meets established standards.
First, a proper analysis of the legacy system is required to document and map the scope and scale of organizational and business processes the new system will need to support. These include identifying systems interfaces, reporting capabilities, and identifying the current system’s user community and those employees’ responsibilities. This allows for the proper establishment of standards for communication, support, training and process integration in the new system.
Then, an organized approach that takes these considerations into account can provide a solid foundation for any federal agency conducting a focused and standardized financial management support effort across systems. This process will drive efficiencies, reduce costs, increase readiness and improvement, and ultimately ensure a clean migration.
Overcoming the complexity of change
Financial system migration is a complex process that requires careful planning and coordination across multiple departments and stakeholders within a federal agency. While the implementation of the new system is a crucial step in the migration process, it is essential to note that the work does not stop there. In fact, the post-implementation phase is just as important as — if not more so than — the planning stage, to ensure the new system’s successful adoption and long-term use.
Core to the financial management system post-deployment challenge is change management. A major financial system transition demands a strong focus on change management as almost every community within the agency, whether DoD or civilian, will be impacted. Key factors to consider are identifying business processes and systems ownership, supporting the development and transparent dissemination of strategic communication, and ensuring participation from all communities. Through this cohesive strategic approach, agencies can more easily conduct migration processes on massive scales while identifying key policies that need to be updated and developing training specific to the agency and department-level policies and processes.
An improved system is only valuable if people understand how to use it. After implementing the new system, it is also essential to provide ongoing support and training to employees to ensure that they can use the system effectively. This may involve providing regular updates and training sessions, as well as establishing a system for monitoring and addressing any issues that arise with the new system.
The other piece of change management is modernizing the workforce by leveraging robotic process automation (RPA). DoD, for example, estimates it has deployed 607 “bots,” with 54% aligning to financial management processes and 20% directly supporting compliance or audit response. RPA instructs a virtual software robot to mimic human actions in order to automate mundane, repetitive, manual-heavy tasks. RPA and the use of intelligent bots are proving critical for agencies seeking to automate time-consuming manual processes, delivering massive man-hours and cost savings.
Executing for long-term success
Successful implementation of a new financial management system in an agency is not a one-time event but rather an ongoing process that requires continuous attention and support. By conducting constant support, training and monitoring in an effort to improve the system, agencies will ensure their new financial management system is successfully leveraged for the long term.
This process involves conducting regular performance evaluations, making updates and enhancements as needed, and incorporating feedback from users to identify areas for improvement.
As an agency moves through the modernization process, it is critical for team members to document their steps and decision-making processes. This continuous monitoring and feedback is a vital aspect of the post-implementation phase to properly integrate the new financial management system into the agency’s overall operations and strategy. It should also include updating policies and procedures, as well as aligning the new system with other technology and processes used by the agency.
To ensure all work streams within the system are cohesive and consistent, it is necessary to integrate numerous tasks and activities. These include comprehensive measures such as data cleansing, interface development, documentation, testing, policy development, user training, workforce development, establishing tiered help desks, accounting, process analysis, financial reporting and audit compliance.
Reaping the benefits of successful migration
In the end, a successful implementation is defined by a multitude of criteria – for example, timely implementation and go-live, as a cut-over with no significant challenges for end-users, or as a transition with minimal interruption to day-to-day business. However, one factor remains the most important: A successful implementation should not impact the agency’s ability to execute its mission. That can only be achieved through a smooth modernization process with a team that deeply understands both the legacy system environment and the new system being implemented.
Patrick Sweeney is Vice President for the Financial Systems Integration Practice for Aeyon. He has 36 years of Department of Defense (DoD) financial management experience, and maintains a Certified Defense Financial Manager with Acquisition Specialty (CDFM-A) certification, DAWIA Level 3 BFM and is DOD Financial Management Certified Level 3.