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Thursday, August 9, 2001
Mr. Lawrence: Welcome to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers, and the co-chair of The Endowment for The Business of Government. We created The Endowment in 1998 to encourage discussion and research into new approaches to improving government effectiveness. Find out more about the Endowment and our programs by visiting us on the Web at endowment.pwcglobal.com.
The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business. Our conversation this morning is with Karen Cleary Alderman, executive director of the Joint Financial Management Improvement Program. Welcome, Karen.
Ms. Alderman: Pleased to be here.
Mr. Lawrence: And joining us in our conversation is Ken Breznahan (phonetic), the director of PWCs ECFO practice. Welcome, Ken.
Mr. Breznahan: Good morning, Paul.
Mr. Lawrence: Well, Karen, let's start by finding out more about JFMIP. Could you tell us about its history and its activities?
Ms. Alderman: Well, the Joint Financial Management Improvement Program was established about a half century ago with the passage of the Budget and Accounting Procedures Act of 1950. At that time, it was known as the Joint Program for Improving Accounting in the Federal Government. The sponsors included the General Accounting Office, the Bureau of the Budget, and the Treasury. And the focus was on streamlining and improving accounting operations, which at the time were choked with even more red tape and conflicting requirements than they are today.
Over time, JFMIP has been called upon to facilitate solutions to a host of financial management challenges, particularly in while we're transitioning to new technology and processes to help facilitate that process.
Mr. Lawrence: Could you give us a sense of how many people are in the program and the types of people?
Ms. Alderman: Well, it's a very small program. Right now we have nine full-time, permanent employees. We have a number of folks who rotate through on developmental assignments. I'm very proud to say we've had -- hosted a CFO fellow for every year that that program has been in existence. But basically our ability to get work done is because we are enabled to work throughout -- bring teams from throughout the federal government to participate on projects. We do our projects jointly.
Mr. Lawrence: And what are the skills of these people? I imagine they're all accountants from the description.
Ms. Alderman: They're not. I'm not an accountant myself, actually. We do have systems accountants, basically. The folks we have there today are a mixture of skills, heavily in accounting backgrounds, but I think we have -- I'm an economist by training, frankly. So a mixture of folks.
Mr. Breznahan: Karen, you mentioned something about GAO in your opening remarks. Could you tell us a little bit about the relationship JFMIP has with GAO, other central agencies, governmentwide councils, and the like?
Ms. Alderman: Well, the JMFIP principals, currently include the comptroller general, David Walker; the Secretary of the Treasury, Paul O'Neill; the director of OMB, Mitch Daniels; and the director of OPM, Kay Cole James (phonetic). The JMFIP steering committee, which runs the day-to-day operations, is chaired by Jeff Steinhoff (phonetic), and he is the managing director for GAO's Financial Management and Assurance Organization. It also includes the chief financial officers from OPM, Cathy McGedigan (phonetic), and GSA, Bill Early (phonetic). And the fiscal assistant secretary of the Treasury, Don Hammond (phonetic) and Joe Cowell (phonetic), who is the OMB deputy controller.
The steering committee sets the major milestones and agenda items for JMFIP. But since the inception of the CFO Council in 1990, we work closely with the CFO Council and very closely, particularly, with the Financial Systems Committee and the HR committees to help bring about governmentwide policies and studies.
We also, in the conduct of our organization's mission, for instance, in setting systems requirements, we work with the other related committees, like, the Human Resources Technology Committee and the personnel payroll requirements process and the Procurement Executive Council in establishing acquisition system financial requirements.
So we work with everybody who will work with us.
Mr. Breznahan: Keeps nine people pretty busy, doesn't it?
Ms. Alderman: Yes, it does.
Mr. Lawrence: Well, you intrigued me, because you said you were an economist. I'm also an economist. Tell us about your career.
Ms. Alderman: Well, I became the executive director for JMFIP in 1998, but that was after I had served about 20 years in the Department of Defense at the Office of the Secretary. But even before that, I served a number of years at the Center for Manpower Policy Studies, working for a gentlemen called Sar Levitan (phonetic), where I co-authored books on veterans policy, the transition to the old volunteer force, and women in the labor force, at that time transitioning to continue working even though they were having children. That was in the early seventies.
Since 1983, I've been in the Senior Executive Service. so I've had a long career and served in a variety of different areas manpower, productivity programs, civilian personnel policy, and financial management.
Mr. Lawrence: Was there a plan to connect those things? Such a wide range. How did it all end up this way?
Ms. Alderman: I can't say that when I started I had a plan. When I started, I was just so grateful to be employed, but I happen to work for great teachers and mentors who, I guess, brought me along in my career. It wasn't always an easy process because they set very expectations, but every position I was in, I learned a lot and built on it, built networks and found new opportunities as a result of it.
I can remember going from the Center from Manpower Policy Studies in 1976, having finished a book on the all-volunteer service and looking in the newspaper about a presidential commission on military compensation. And I called up people I knew and said, do they need staff. And then was hired by Charlie Zwick (phonetic), who was the ex-director of the Bureau of the Budget, who was the head of that commission to work on that commission. So it's those type of opportunities that arose in my career by simply working very hard, but keeping my eyes open for other opportunities.
Mr. Lawrence: I heard a rumor and I wonder if you can confirm it. I understand one of the -- you're one of the youngest members of the SES?
Ms. Alderman: Well, in 1983, I was 33, and at that time, I was a woman in the Department of Defense, who became a member of the Senior Executive Service. There was a very few women and very few senior executives under the age of 40. So yes, I was very young. Sort of -- if I had thought about it a lot, I probably would have felt very uncomfortable.
Mr. Breznahan: It's good that you didn't.
Ms. Alderman: Yes, it was.
Mr. Breznahan: Along the way, was there any particular job or challenge that you faced that you think best prepared you to be executive director of JMFIP?
Ms. Alderman: Well, every position has been an education. I would say in the early seventies, the opportunity to write about child care and women in the labor force and the transition to the all-volunteer force, these two areas were, you know, basically analysis of major institutional changes in how government deals with institutional changes of that magnitude.
In the Department of Defense, there's two types of positions or experiences that I draw upon every day, continuously. One, part of my portfolio for 10 years was managing the productivity in enhancing the Capital Investment Fund. That was a fund of about $100 to $200 million -- it varied year to year. But it financed high payoff capital investments that we selected through a competition for -- based on return on investment, discounted return on investment, total return on investment and manpower savings. The projects allowed -- the management of that process gave a real good education on the cost of current processes and the potential for reducing costs and improving mission capability through doing things differently.
Examples, things that we funded through that pot of money included bar-coding, the introduction of bar-coding for logistics in the Department of Defense; chip-based technology to track transactions -- this was back in the eighties, when this was just cutting-edge desktop computing, even such things as tank washers, which allowed -- those gadgets reduced the time to task the manual labor, the water usage and pollution. Something, you know, that's vitally important to the troops on the ground who are mucking around with these tanks.
Another type of experience that, I guess, was a real stretching experience was heading up the Defense Travel Re-engineering Initiative in the Department of Defense. Now, that was more recent. That was under the leadership of Dr. Don Hammery (phonetic), who was the comptroller. In that project, I was responsible for making it all happen, and it required identifying a vision, changing basic business practice, partnering with industry, using electronic commerce principles, when they weren't really commonplace -- this was in '94 through '97.
So we also had to change rules and regulations, and that sort of reintroduced me to the Joint Financial Management Improvement Program, because we went to Virginia Robinson (phonetic), my predecessor, and said, help us get these laws changed, things like Telephone Act Requirements of 1939, that were still in place that said you had to authorize every long-distance telephone call, even though the authorization process cost more than the call.
Mr. Lawrence: That's a good stopping point, because it's time for a break. But stick with us, because when we come back, we'll ask Karen Cleary Alderman of the JMFIP to update us on the latest from the current financial modernization projects.
This is The Business of Government Hour. (Intermission)
Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers, and today's conversation is with Karen Cleary Alderman, executive director of the Joint Financial Management Improvement Program. And joining us in our conversation is Ken Breznahan, PWC director of our ECFO practice.
Mr. Breznahan: Thank you, Paul.
Well, Karen, you know, financial management continues to be a pretty high-profile issue around town here. Can you tell us a little bit about your take on the current financial management environment in the federal government?
Ms. Alderman: Well, I think the financial management environment and the priorities are continuing to evolve. For a number of years, the agencies have focused and made significant progress in -- on achieving timely, clean audit opinions on their financial statements, "timely" meaning 5 or 6 months after the close of the fiscal year.
The goal has been shifting to improving the value and utility of financial information. Specific goals outlined in this Administration's draft for and content have accelerated reporting deadlines, established interim reporting on a quarterly basis, comparative reporting focused on program performance.
The goal has also been established for us getting clean opinions for all civilian agencies by 2003, and a government-wide clean opinion by 2005.
I would say right now, the focus is shifting more to getting timely information for management in performance, though.
Mr. Lawrence: In the first segment, you talked about the steering committee and the relationships at JMFIP. How does JMFIP develop priorities?
Ms. Alderman: Well, the JMFIP priorities are established through consensus of the steering committee and reflect JMFIP responsibilities that are in statute and regulations. We also work closely with the CFO Council to help facilitate their governmentwide priorities for financial management. We are in a very good position to deal across agencies and work on these governmentwide issues.
And the current priorities? Those include finishing up the systems requirements documents that we've been developing, issuing those; updating core financial system testing and qualification process; and also, as of the last year, we've been asked to focus on trying to come up with a strategy and recommendations on how to reduce the unreconciled differences in intergovernmental transactions. And that's -- there's about $250 billion worth of those in the last governmentwide financial statement. It's too big a pot to dismiss -- you won't get a government-wide, clean opinion unless we figure out how to reconcile buying and selling activity between agencies.
Mr. Lawrence: Now, when you're updating these documents, is it a matter of pulling things together and standardizing them or is it a matter of clarifying and expanding the body of knowledge? What takes place?
Ms. Alderman: Well, for the functional system requirements, those really are getting together the affinity groups, whether it's direct loans or core financial system or personnel payroll, and defining what is the minimum mandatory functionality to operate a system and to comply with the laws and regulations.
And it's really just pulling information that's distributed in a whole variety of different sources together in a manner that communicates effectively to government systems folks and to the private sector, who is now principal source of our software and applications to support these functions. What it is that the government operations have to be able to perform to do their jobs.
Mr. Breznahan: We hear a lot about the need to modernize financial systems to meet some of the requirements that JFMIP is articulating. What is the current landscape for financial systems modernization? What kind of work needs to be done?
Ms. Alderman: Well, there's a lot of activity in that area. A lot of agencies currently rely on very old systems. There has been a tremendous wave of system replacement effort since 1999. Right now, we do an annual survey and publish who is in the market to buy new -- or replace their systems. And since 1999, 20 of the 24 CFO agencies, '99 to 2006, indicate that they are replacing their core financial system in some or all of their organizations.
Comparable numbers are replacing feeder systems. These are things like property systems and direct-line systems. So there's a tremendous wave of activity, and they are replacing home-grown or highly customized systems with commercial products, or they're trying to. So that's a great -- great deal different approach to the issue.
Some of them are actually looking for application service providers for certain areas.
Mr. Lawrence: What's the main reason these are all being replaced?
Ms. Alderman: Well, some of them were built in the sixties and the seventies using system language that there isn't anybody left in colleges or anybody else who understands it. Some of them actually have language that predates COBOL, and COBOL isn't even taught anymore in U.S. colleges.
I think, you know, the old systems, a lot of them are stove-piped and inefficient. But I think the principal reason there's a wave of replacements is because agencies are concerned that the stuff that they have today will totally break down by the time they -- you know, unless they act and it takes several years to get a new system in place.
Mr. Lawrence: Ms. Daniels, the Director of the Office of Management and Budget recently spoke to an Endowment sponsor luncheon and told us that clean opinions are a means to a means to an end, where the end is good financial management information. What advice would you give to your listeners about both the means and the end?
Ms. Alderman: Well, I think a clean opinion is a -- indicates a baseline level of financial discipline and accountability. It's good to have. It's a -- it communicates responsibility to the American public about stewardship of funds. But I think it's important to get to that step for timely consistent information that supports decisionmakers in everyday management. That's where action can be taken based on financial information and performance information.
Mr. Breznahan: I want to come back to a point you were discussing a couple of minutes ago about the systems modernization efforts that agencies are undertaking.
Some of our other guests have mentioned that they're looking to partner across agencies or even with the private sector to build systems, including financial systems, when they have similar business processes. Does JMFIP have a role in this kind of endeavor? And how would you -- how would you see to facilitate these kinds of partnerships?
Ms. Alderman: Well, basically, the JMFIP requirements documents and the testing and qualification process have helped communicate standard functionality. And that provides private sector companies critical information that allows them to develop administrative systems that will work in the federal environment and meet requirements. And will allow federal agencies to take advantage of commercial off-the-shelf offerings without having to customize, which is expensive and risky, you know, will undermine the system if you change a lot of the code.
We also have facilitated cross-servicing. Most of the cross-servicing occurred -- well, most of the cross-servicing is now using federal agency systems. But I see a future where there will be opportunities to use application service providers that are commercial offerings in the future.
And I would have to say that there are examples of using commercial infrastructure every day in federal processes. Think about all the transactions that are now handled through charge cards. That was not the case 10 years ago.
Mr. Lawrence: It's interesting you mention the possibility of commercial application service providers. Is financial management something that should always be run by government employees?
Ms. Alderman: Well, there are certain aspects of financial management that's important that the government control -- just basically stewardship. But in terms of the infrastructure that runs it? I -- there's going to be different models emerging over time. Part of the challenge has been that the government requirements were sufficiently different that there weren't commercial providers that could provide that type of service.
And the whole model of application service provider, actually, is a relatively recent model. With the exception of transaction processing through electronic fund transfers, the banking infrastructure, and charge-card transactions. But the applications, even in the private sector, largely have been run by in-house operations.
Mr. Lawrence: Okay. It's a good stopping point. Come back with us after the break. We'll ask Karen Cleary Alderman about how one buys a financial system.
This is The Business of Government Hour. (Intermission)
Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers, and today's conversation is with Karen Cleary Alderman, executive director of the Joint Financial Management Improvement Program. Joining us in our conversation is Ken Breznahan, PWC Director of our ECFO, practice.
Mr. Breznahan: Thank you, Paul.
Karen, you talked a little bit earlier about the role JMFIP plays in developing functional requirements that agencies can use for financial systems.
Can you tell us a little more about the process that you use for developing those cross-agency requirements?
Ms. Alderman: Well, we look for a senior-level team leader from an agency with a strong incentive to develop system requirements. For instance, the Department of Education led the process to update the direct loan system's requirements document. They manage a huge direct-loan portfolio and they also were looking to replace their direct loan system. So they were a strong advocate of doing that. The Department of Defense led the development of the property system requirements.
After identifying a leader from an agency, we organize representation from all around the federal government -- who has an interest. We get work teams together. JMFIP staff facilitates the process. We don't consider ourselves the expert in every area. We are the facilitator to bring the experts together. We develop the document. We vet it around within the federal environment first, to the interest groups and to the organizations -- make sure we haven't said anything really dumb.
And then after the steering committee is satisfied that the document is reasonably complete, we put it out through a formal exposure draft process. We put it in the Federal Register, we put it out for open comment, and we get thousands of comments on these documents. And we resolve every comment before it's issued in final.
That's basically the process and we've done it about 12 times in the last 3 years.
Mr. Lawrence: I was going to say, how long does the whole cycle take?
Ms. Alderman: Depending on the difficulty -- when it's a update of an existing document, it usually takes, maybe 6 to 8 months. The development of a new document that's never been done before -- grants, property, we're currently doing benefit systems. That may take a year to 18 months.
Mr. Lawrence: How should we measure how well our financial systems are doing? What indicators should we be looking at?
Ms. Alderman: Well, the high-order measure is whether an agency can get a clean opinion. On that measure, 18 agencies succeeded in 2000. There are a variety of debates about how to measure the goodness of your financial systems. In addition to clean opinions, there has been whether the systems support the requirements of the Federal Financial Management Improvement Act, and those high-level requirements or whether the systems comply with the U.S. Standard General Ledger; whether they support federal accounting standards; and whether they comply with systems requirements.
Based on those measures, the -- I will tell you that auditors and agency heads disagree, but agency heads said that nine agencies complied with the requirements of the Federal Financial Management Improvement Act in 19- -- no, in 2000. And the General Accounting Office has a somewhat lower number, about half that number.
But those reviews do suggest that many agencies do not have integrated systems. They -- their systems do not support accounting standards. In some cases, they do not apply or use the U.S. Standard General Ledger. Many organizations have trouble fully complying with security requirements associated with systems. So based on those types of measures, they paint a little less optimistic picture than the clean opinions.
And then finally there's other types of benchmarks you might want to look at for systems. How -- what is the process cost? The process is the system support. What's the cycle time? What's the access to information by managers? These types of benchmarks are not audited for, but I think they're very important.
Mr. Breznahan: Karen, can you tell us a bit about JMFIP's role in redesigning the procurement process for financial systems?
Ms. Alderman: Well, when I came to JMFIP in 1998, I knew that a principal job I had to do was to facilitate the transition from the existing mandatory FMSS schedule. That was the mandatory schedule where agencies who wanted to buy a commercial core accounting system had to buy it from a specific schedule that GSA managed.
The vendor offerings on that schedule were tested as part of the procurement process, but because the testing and procurement were linked, agencies did not know what was tested, how it was tested. Vendors did not know what was on the test until they walked into the test. The testers were volunteers. The test itself was not comprehensive. They didn't really find that out until after they acquired their system off of this and found that out.
So basically the -- and a study called the Joint System Solution Team Study had made a series of recommendations to separate the procurement and the testing process for core financial systems provide a mechanism to provide a lot more information about what these systems entailed and how it was tested. Get rid of the mandatory schedule and JMFIP was tagged to facilitate this transition process. So that's how we got into the business of testing and qualifying a core financial systems.
Mr. Breznahan: What about your role in actually doing the testing of vendor systems?
Ms. Alderman: Well, what we do, we issue the core financial system requirements document. That's part of that series of documents that I talked about. Then we develop a functional test that the goal was to test 100 percent of the mandatory requirements. We hit about 91 percent the first time we managed this test. And to do an end-to-end functional test that tests each requirement and tested whether the accounting calculations were done and the general ledger effects were appropriate and so forth.
We built that test and we started testing software in 1999. In 2000, a major new requirement came out, FACTS 2 (phonetic), so we did an incremental test on that software. The impact on the community, I think, it's a very effective communication device to industry that, unless they pass this test, they can't -- their products can't be used by the federal government. So they got a lot more interested in finding out what the federal requirements were.
And I think on balance, the federal agencies got much better products than they would have had absent this process. We published the test. We published expected results. It's an open-book test. Federal agencies can have full disclosure about how we test, what we test.
Now, the testing process has helped organize the market; helped get better products available to federal agencies, but it doesn't do the whole thing. Federal agencies still have to do a selection of what best fits their environment. They have to figure out how this product fits with their legacy systems, their feeder systems. So there's still a lot of work on the agencies in terms of getting these products to work in their environment.
Mr. Lawrence: How difficult was it to organize this process? What was the feedback from the agencies?
Ms. Alderman: From the numbers that I told you before, all these agencies that were replacing their systems -- the agencies were very anxious to have a better process than what was available to them prior to 1999.
The agencies would have liked, I think, even more centralized quality assurance, because it's a -- it's a very tough business replacing systems. The type of feedback that I've had generally is great acceptance of what we've been doing; they just wish that we could actually do more in terms of mitigating risk. It's still a very tough business, getting -- successfully transitioning to new systems.
Mr. Lawrence: We know that more and more agencies are moving towards using COTS (phonetic) packages. Could you describe the challenges and the benefits of this approach?
Ms. Alderman: Well, basically, for COTS, you have to look at what the economics of software is these days -- the economics of administrative systems. Agencies are moving from a period where they built their own systems, basically, back in the seventies and eighties or, in some cases, they acquired products from commercial vendors, but those products were actually almost custom-built for the federal environment.
The current environment is that the agencies are taking advantage of products that are built for mass markets, in many cases -- the Oracle, Enterprise Resource Suite, the SAP, the -- even the AMS has a fairly broad marketbase. The benefit, I guess, of commercial, off-the-shelf software is that companies which are expert in building these systems and also are investing significantly in R&D are supplying products that the government sector can use.
Our core competency is not building administrative systems. It shouldn't be. We should try and take advantage of this when it's available in the commercial place.
Mr. Lawrence: It's a good stopping point, and it's time for a break. Stick with us. When we're back, we'll ask Karen Cleary Alderman of JMFIP about the effects all these planed retirements will have on financial management.
This is The Business of Government Hour. (Intermission)
Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, a partner at PricewaterhouseCoopers, and today's conversation is with Karen Cleary Alderman, executive director of the Joint Financial Management Improvement Program. Joining us in our conversation is Ken Breznahan, PWC director of our ECFO practice.
Well, Karen, as we finished the last segment, you were talking about COTS packages. I wonder if you could tell us some lessons learned for people who are considering a COTS approach?
Ms. Alderman: Well, one of the things that JMFIP has done at the behest of the CFO Council is that we've created a section on our website, and that's -- www.jfmip.gov is our website, called the Road Map, and that is on systems planning, selections, implementation issues. There are many challenges in implementing a new system. They're not all technical. Some of them are change management and things of that nature, but we've tried to organize information so it's readily available to the community, so everybody doesn't have to do all their own original research.
Mr. Breznahan: Well, Karen, let's shift our attention now to human capital issues. How do you think the financial management community in the federal government will be affected by the impending retirement wave that we keep hearing about?
Ms. Alderman: Well, I think the retirement wave is a challenge and an opportunity. Agencies will not have the resources in the future to do business the way they've done in the past. I expect for agencies to look for ways to consolidate, streamline, simplify, automate, and use commercial infrastructure.
The shear competition for resources will foster cross-servicing and, perhaps, use of application service providers in the future. Think about the use of charge cards. If we were not using charge cards to serve all these transactions, we'd have people doing it the old way. I expect we'll be taking advantage of different ways of doing business, simply as a result of not having the resources to do it the way we did it in the past.
I think the future workforce will have different tools, and I think that critical capability for the future workforce will be analysis and advice, rather than transaction processing.
Mr. Breznahan: What's JMFIP's role going to be in this?
Ms. Alderman: In human resources in general, we have tried to serve the community by defining the core competencies in the different business areas. Most recently, we issued a core competency document for project managers implementing financial systems, simply because there was a huge demand in the community and they need to know what skills they need to have.
Mr. Lawrence: What advice would you give to a young person who's perhaps interested in a career in public service, and maybe even who is interested in financial management?
Ms. Alderman: Well, I think there's lots of interesting opportunities in the federal government. I've loved my federal services. I've had opportunities to work with some of the best. Come in for a while and just look around. There's many different areas in the federal arena that I think will teach you a lot. It's taught me a lot.
Mr. Breznahan: Looking down the road a bit, what do you see as the future demands for financial management in the federal government? And what will users of that information need to be successful?
Ms. Alderman: I believe that the managers of the future, the financial managers, will not be -- I mentioned this before -- will not be responsible for transaction processing shops. A lot of the manual integration work that people cut their teeth on in the past, that's going to be automated in the future.
They will be responsible for understanding what all that information means and providing advice on how to use that information in better managing government operations.
Mr. Lawrence: How in terms of technological changes for the workplace? To do this kind of activity you're talking about, what changes might you foresee?
Ms. Alderman: You know, one of the questions here was, how will technology change the workplace in the next 10 years, and how will it impact financial management? And I thought about that question. And I said, you know, if my colleagues -- if I had said to my colleagues in 1990 that by 2000, we would be routinely using the Internet to order our supplies and access our retirement information, and file our taxes, folks would have figured I needed a rest, you know, I was breaking up.
The basic technology that's common in our lives today, really wasn't that accessible in 1990. It was there, but it wasn't widely used. So basically I think we've lived in the last 10 years through an information revolution, even though we haven't fully digested the impact of that. And that revolution is not complete.
I expect that there's going to be a shake-out in the industry that drives this. I think there's going to be consolidation of information technology with some dominant players in networking and databases and application development and service providers.
And I think, as a result, I think the industry will move more towards standards and seamless integration. I think they recognize opportunities for end-to-end integration.
Government will have to find ways to use industry standards to conduct their business, because government will not be able to afford to have unique infrastructures for administrative purposes. I think that's one thing that'll happen.
I expect electronic processes will become the norm for transaction processing. I think the mantra of enter the data once and reuse it will become a reality in the next 10 years. The source of that data, I think, is largely going to be customers and front-line workers with managers electronically approving these types of things. The specialists who were in the middle of those processes in the past, I think will be replaced by electronic edit checks built into the systems. Self-service without intervention by financial personnel and other specialists, I think, will become a norm.
So that also has implications for how the business gets done. I think brick-and-mortar will disappear, you know, installations. I think there will be a lot more consolidation of processing centers. And there'll be more end-to-end integration of systems, supply-chain management all the way back into financial management.
So I think the emphasis in financial specialists will change from interpreting information put into the system, which is where we have specialized in the past, to interpreting the information that results from the process.
Mr. Breznahan: You mentioned at the outset that JFMIP has a 50-year history in its existence. How would you -- how would you think ahead in terms of how JFMIP will evolve over the next 10 years?
Ms. Alderman: That's a really hard question. As I said, you know, 10 years ago, if I had thought all the things that would have occurred -- if I had seen it and pressing, people would have thought I was nuts.
Basically, the JFMIP vision really is shaped by the steering committee. I anticipate that we're going to continue as an organization to be a cross-agency facilitator, a facilitator for change, and a barrier-removal agent. I think we've played that role in the past, and I think we'll play that role in the future. We're specifically chartered to enable collaboration across government entities, and particularly for cross-cutting issues. In a network world, where resources are tight, I see demand for both those roles increasing over time.
Mr. Lawrence: You did a very interesting job a question back of describing sort of the future in the different roles, and I want to take you back to that and maybe work through the employees at different levels.
It seemed as though, in the description, you envision that there will be many fewer employees, certainly, doing the work as we know it. They'll be much more specialized and much less general, is that -- did I get that right?
Ms. Alderman: I don't know that they'll be more specialized. I think right now we have a system that's built on a tailor model, where you have work breakdown and specialization and people who do vouchers and people who do specific types of functions and lots of data entry associated with those functions. I actually think that there will be demand for much general analytic capability. I think there will be fewer personnel. And I think that stove-pipe -- you know, if you expect to stay in a narrow functional stove-pipe as to progress in your career, I don't think that model's going to be there in the future. I think that people are going to have to be broader and more analytic.
Mr. Lawrence: And how about the managers? Your tailor analogy, perhaps, is apt, because I imagine what you describe, those type of activities, a certain management style. And now if that work changes, what skills will the managers need?
Ms. Alderman: Well, I think that managers in general -- well, leaders, specifically, are going to have to be able to establish a vision, organize work around that vision. They're going to have to reach across functional boundaries, facilitate partnering, both within organizations and externally. And their skills are going to be more broad. They'll have a technical component to it, but I think managerial breadth is, I hope, what gets rewarded in the future, because I certainly see, with technology, you're going to, you know, look more broadly.
Mr. Lawrence: Karen, Ken and I want to thank you very much for joining us today.
Ms. Alderman: Well, it's been my pleasure. Thank you very much.
Mr. Lawrence: This has been The Business of Government Hour featuring a conversation with Karen Cleary Alderman, executive director of the Joint Financial Management Improvement Program.
Be sure and visit us on the Web at www.endowment.pwcglobal.com. There, you can learn more about our programs in research into new approaches to improving government effectiveness. You can also find a transcript of today's interesting conversation. Once again, that's endowment.pwcglobal.com.
This is Paul Lawrence. See you next week.