What analytic power can you unlock with a sea of authoritative data
The Department of Defense (DoD), one of the world’s largest entities, has thousands of disparate data sets across its entire organization. Imagine the analytic capabilities that could be unlocked if the right authoritative systems were accessible and paired with the right technical capabilities. Since 2019, Ernst & Young LLP (EY US) has been supporting the Department's advancement of their cost and performance management analytic capabilities.
Data analytics backed by sustainable architecture
We are working with the DoD to drive insight generation using advanced analytics to identify opportunities to enhance mission effectiveness. Examples of these analytical focus areas include:
DoD-wide cost analytics by function
The DoD has an annual estimated budget of $700b but it did not have an effective way to analyze its spend across the enterprise. We developed a common analysis framework by function across financial management, medical, IT, maintenance and supply chain, acquisitions, real property and human resources. Underpinned by a consistent, sustainable architecture, the models are refreshed monthly to provide leadership with a holistic view of cost among a variety of dimensions, trending data and mechanisms to identify where and who is driving cost fluctuations for the DoD to further analyze and develop potential corrective action plans.
Revolving fund analytics
The DoD working capital funds and other revolving funds (representing over $100b in FY21 revenue) fulfill a critical role in the most vital functions of the department, from weapon system sustainment to financial management and network infrastructure. Facing both the diverse challenges of a Fortune 500 company and the strict regulatory controls of a government agency, the DoD revolving funds must balance exposure to market forces with their mandate to maintain net-zero profit. Monitoring the cash balance of these funds is essential to maintaining this balance, but it has been historically challenging for the DoD to track this at a granular enough level across the enterprise to identify potential areas that need further analysis.
To help solve this visibility challenge, we have linked and transformed data from over a dozen different accounting systems to produce an automated daily cash balance estimate and an application to convey both the current balance and historical trends. This analysis also tracks key performance indicators that enable senior leaders to quickly identify areas for greater analysis and proactively address potential areas of concern.
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Fourth estate operating picture
The DoD lacked a common central view of operating costs and performance across its fourth estate agencies. We aggregated and linked more than 20 systems to develop over 50 key metrics across each organization. Metrics span the DoD’s top areas of operational spend and performance, including financial management (budget to execution) for all appropriation types, personnel and contracted spend with vendors.
In addition to key metrics, we developed numerous dashboards to rapidly identify cost and performance trends that enable internal benchmarking against peer organizations. These analytics are refreshed automatically on a regular basis to enable decision-making.
Evolving into advanced data analytics
Expanding on its cost-by-function methodology, the DoD sought to categorize its research development test and evaluation (RDT&E) spend of ~$50b annually by leveraging advanced analytics, such as natural language processing (NLP) and machine learning (ML). We have successfully linked RDTE&E project budget request data to obligations and expenditures and further link that data to procurement information.
We worked with DoD functional experts to develop a series of key words and phrases to search free-form text fields and recommend an applicable taxonomy classification for each transaction. This enables the RDT&E organization to analyze its pipeline of projects from basic research through operational system development.
Framing analytic solutions across the enterprise
The dashboards developed through the analytics are automatically updated on a routine basis and provide near-real-time insights, enabling leadership to focus on the highest-priority items that impact the mission. As a result, the DoD is furthering its ability to use analytics to make data-driven decisions, enabling it to refine strategies, deliver savings and mitigate risks.
Our sustainable architecture can be quickly replicated and re-purposed to suit other business needs. In one instance, we replicated our existing logic and applied additional business rules to turn around an application in a matter of days that would have taken months to build from scratch
