The National Aeronautics and Space Administration lands people on the moon, sends research vehicles to Venus and Mars, and is a key partner in the International Space Station. It’s also a highly regulated federal agency with some 20,000 employees, facilities across the U.S. and a $15 billion budget to manage. Over its 45 years in operation, NASA has produced state-of-the-art Space Shuttles, rocket propulsion systems, orbiters, robotic tools and other products crucial to science and space exploration.
To manage its sophisticated and complex business processes NASA runs SAP R/3 Enterprise Resource Planning software and several SAP components, including SAP Business Information Warehouse (SAP BW), Financial Accounting, Materials Management, Sales and Distribution and Controlling. Since September 2000, NASA has been comprehensively integrating its core financial processes into one optimized, streamlined, SAP-based system.
SAP INFO recently spoke with Mike Mann, manager of NASA’s Integrated Financial Management (IFM) project. Mann gave an update about how the project has progressed and he highlights the accomplishments of its core financial system.
What is the scope of the IFM project?
Mann: The scope of the program is to implement improved business processes for human resources, financial management and physical asset management across the agency. Currently, the entire program is made up of nine projects. We have completed five of them. Two of those were in the human resources area. Two of them are the financial management area. In the fifth one, we have implemented a management information system that is used across the entire agency.
Why did NASA decide to undertake the integration?
Mann: Each of our 10 Centers had their own systems in place for every administrative function, making it difficult for us to compare, share and collapse the information. This program focuses on providing quicker access to better information to decision makers across the agency, to improve accountability and communications.
Why did you select SAP?
Mann: Our selection process was constrained to the eight vendors, at the time, that were certified by the federal Joint Financial Management Improvement Program. Federal financial management has a number of unique requirements and the government uses a government-wide certification process to ensure compliance. Based on the size of NASA and the desires for functional integration, we down selected to three possible bidders. We weighted our requirements heavily towards financial capabilities and the potential to expand the solution into other functional areas. We included a two-month test phase against NASA scripts that was extremely helpful to gain confidence – we were at the leading edge of federal implementations. SAP won hands down. This entire process played out between April and September of 2000. Because of the newness to the federal environment we have had several partnerships with SAP to expand their capabilities and these will be critical to future phases of our project.
What was the state of your computer systems prior to the start of the integration?
Mann: We had one small Oracle system in the agency that was used in an asset management function. Most of the applications in the agency were custom-built. So when we implemented core financials, as an example, which was the first major SAP project, we replaced 130 different systems located within our 10 Centers with one new system. At the agency level we had umbrella systems. They summarized the information from each of NASA’s 10 field centers. The problem with that was we could get accurate summary information, but we didn’t have the ability to drill down into a number because they were aggregated from various sources and locations. We couldn’t compare information from one center to another. Because most NASA activities run at multiple field centers, it made it very difficult to run these cross-center projects. So, it wasn’t meeting our basic business needs.
How long did the core financial project take?
Mann: We finished the design phase in about four months. We finished the implementation at the first two centers in another 18 months. Although we implemented a single instance of the system, it took another eight months to roll out the new capability to the other centers. Each of their legacy environments was different so data conversions and interface development were unique to each center. It was more like 10 projects than a single project replicated at 10 centers.
How did the integration streamline some of NASA’s specific business processes?
Mann: In the past, our financial systems and our procurement activities were totally separate despite the fact that they were dealing with the same contracts as the source for data. Eighty-five percent of NASA’s $15 billion annual budget is spent through contract vehicles. So, we constantly were trying to reconcile the procurement information with the financial information. Contractors would report information to the procurement databases by contract task order. Then in the financial database they would report information by funding code. The reconciliation between those two databases was a fairly massive effort, and it led to a lot of confusion for people in the line organizations trying to build spacecraft or do research. In the new system we only have one data input and the difference between the task contract orientation and the funding orientation is taken care of by the system. So, you can drill down and you don’t have to spend your time reconciling numbers. It’s had a huge impact on streamlining information and making it more valuable to line managers.
Did that help with forecasting too?
Mann: One of the natural by-products is having the information available in a consistent way across all of the 10 centers. It is much easier to identify the total cost of investments now. Before, line managers and forecasters had to look at the individual pieces provided by each center. Most of our complex projects involve multiple field centers and multiple contracts. Today they’re able to focus on what the total activity is. And the part that each person plays is clearly visible. The management information system that we deployed in parallel to the financial system links the financial data with performance data and includes forecasts of future performance based on accomplishments to date. We now have consistent, timely, and relevant data visible throughout the management chain that aids decision making and enhances accountability for line managers – the people who are responsible for launching the spacecraft or building the technology programs. The ability to tie together contract and financial data in a seamless way, both horizontally and vertically, is incredibly important to the people who are running the programs and projects. We also automated the input of contractor information. It used to be done manually. Now it’s handled by an electronic interface, so the data comes in much more rapidly and with less opportunity for error.
What were specific challenges you encountered during the implementation?
Mann: We learned that commercially oriented products like SAP could do most of the functions that a federal agency needs. However, there are some unique things associated with federal rules, like appropriations, and some unique things associated with NASA, such as the complex contracting that we do, that you don’t typically find in industry. We have multi-billion dollar contracts that may run for multiple years to build something like a space station. So we don’t buy very many individual commodities. We buy an awful lot of complex things. The combination of the federal requirements and the complex contracts we do posed a number of challenges to SAP as well as to NASA.
You have three additional SAP projects on tap. What are they?
Mann: Our intent is to use SAP as much as we possibly can. We expect to use SAP for our asset implementation, human resources and procurement. Right now we are getting ready to do the asset management project that will include an expansion of project systems. We are selecting an implementer right now and we’ll have them on board by early January. We’ll plan to conduct a blueprinting phase that includes the designs and all the touch points for all the future modules by May 2004.
What else do you have on tap for the future?
Mann: We’ve gone live with the center-level budget planning system using the SAP SEM (Strategic Enterprise Management) product in October. We are now able to do all of our detailed planning, across the 10 centers. This enhances the planning process by allowing joint planning as opposed to serial planning. The budget planning system automatically integrates with the financial system, so the plans will become the baseline for financial performance. When that work is actually performed and actual costs are posted we can then compare directly to plans versus actual. This additional capability will go live next February. The third phase of this project will be a top-down decision support tool for use at NASA headquarters. That will go live at the end of May, 2004.