U.S. Navy-Commander, Naval Installations Command: Financial Management Shared Services

This engagement marked the first time the U.S. Navy considered centralizing such a major function.

CNIC is responsible for providing shore infrastructure support for the U.S. Navy. Operating with an $8.5 billion budget and a 60,000-person workforce, CNIC offers 30 services ranging from cooking food to operating airport terminals to providing facilities maintenance for 95 installations across 16 geographic regions. CNIC was established in October 2003 in a divestiture from eight commands.

As part of its mission of providing services to 95 installations, CNIC processed more than 1 million financial transactions last year—all at the regional level.

CNIC management recognized that it could improve the efficiency of its financial services operation by taking a lesson from private sector companies. Via a shared services operation, it could centralize transactions such as time keeping, bill paying, invoicing and reimbursables processing. At the same time, CNIC could retain value-added analytical work at the regional level. The Command knew the value of establishing a Center of Excellence for financial management and standardizing processes, but needed a trusted partner to help assess its needs and build a business case.

CNIC turned to Accenture, which had successfully worked with the Command on post-merger strategy for eight of the 30 services it provided to U.S. Navy installations, as well as enterprise-level services. Another important consideration was Accenture's ability to use our Accenture Financial Shared Services Methodology, which has helped clients in a range of private sector industries move closer to their goal of high performance.

The engagement represented an important milestone for the U.S. Navy: CNIC became one of the first U.S. Navy commands to express interest in adopting shared services, which has generated significant savings in the private sector. The engagement also marked the first time the U.S. Navy considered centralizing such a major function.

Working with Accenture, the Command conducted a thorough assessment of existing business processes and organization under its distributed business model.

Using the Accenture Shared Services Toolkit, the team identified opportunities for centralizing and standardizing financial management processes for optimal efficiency. With Accenture's assistance, the client determined which services should remain within the regions and how to standardize and optimize those services. Meanwhile, the project team prepared business cases to identify potential savings, designed an organizational structure and proposed improved business processes. Also, CNIC and Accenture created a transition plan and implementation training plan. To determine the best location for the centralized shared services operation, Accenture conducted a location analysis. The Command wanted to keep its centralized operation in the United States and Accenture analysis identified the optimal locations. From three options, the U.S. Navy selected Norfolk, Virginia.

The culture and complexity of the CNIC operation made the project particularly challenging. For example, the project team needed to address the reality that each region maintained its own siloed financial management system. Also, while the U.S. Navy was accustomed to hierarchical organizations, Accenture recommended a lean and flat financial management organization to generate the most value for CNIC. Accenture also suggested that the CNIC establish a solid change management program and implement its changes in phases.

By teaming with Accenture, CNIC now has an assessment of findings and a solid business case to support centralized shared services for financial management as well as standardized operations for its 16 regions.

The recommended changes, once implemented, stand to deliver significant savings and improve the effectiveness of a range of financial transactions. The centralized Financial Service Center and standardized business processes across naval regions are projected to achieve direct savings of $6 million to $10 million per year. Also, standardized processes are expected to provide the U.S. Navy with improved access to real-time information, resulting in faster, better-informed decisions.

Accenture research has determined the traits of high performance within government agencies. Among the traits identified is the ability to rationalize, simplify and standardize IT to manage the total cost of ownership and enhance productivity. High-performance businesses and governments not only spend less than their peers on IT, but also free up more of that investment for new initiatives. These organizations rigorously analyze where performance improvements can be achieved, monitor investments and foster a culture in which IT works with all areas of the organization toward the same objective. As a result, they generate greater value from their IT investments. Choosing centralized and standardized financial management will provide CNIC with the potential to achieve benefits similar to those achieved by leading companies in the private sector—moving the U.S. Navy forward on the journey toward high performance.