Over the past two decades, a staggering array of government requirements has placed considerable focus on enhancing federal financial management. From the CFO Act of 1990 to the President's Management Agenda, government executives are being tasked with crafting a system that complies with a large network of laws and regulations-all while feeling the squeeze of reduced budgets and staff.To meet this challenge head on-and, more importantly, to demonstrate to government stakeholders their return on investment-government agencies must put in place broader, more comprehensive, modern financial management systems. But creating a system that delivers agency-specific results requires more than buying a commercial off the shelf (COTS) software package. Instead, agencies must use enabling technologies as a means to leverage people, policies and processes to realize a new standard of financial management. As set forth in the President's Management Agenda, modern financial management programs have four key characteristics: A focus on improving financial performance. Agencies can achieve this goal by implementing a modern financial management system that provides timely access to financial information to improve decision-making, financial accountability, customer service and vendor relationships, and management of assets and grants.Tight links between financial and budget decisions and performance and program results. Financial management leaders of tomorrow will apply new technologies to analyze "what-if" budget scenarios, define performance measures, and formulate performance-based budgets grounded in program results. By developing the appropriate measures, determining the cost of the measured activities, obtaining reliable outcome data, and regularly reviewing timely and accurate reports, agencies can align plans, budgets and performance measures with program goals and objectives. Use of competitive sourcing. Outsourcing all or part of a given activity can often be a cost-effective and efficient strategy. Outsourcing is very valuable for comprehensive strategic consulting as well as program and project management. It also is particularly helpful for day-to-day processes, quarterly preparation of financial statements, preparation of FACTS I and II reports, and development of ad hoc and exception reports. Alternatively, some agencies may consider the Application Services Provider (ASP) model in which an outside entity hosts and manages an agency's financial management software. Expanded electronic government. In designing a modern financial management program, agencies can apply open standards such as XML, SOAP and PKI alongside electronic government tools, such as security, workflow, enterprise application integration, and business intelligence technologies. These tools can connect systems and stakeholders (both inside and outside the agency's walls) across the entire accounting, budget, and procurement cycle. The agency can then utilize centralized business rule controls, perform transactions throughout end-to-end business processes, generate consolidated financial reports, provide faster and more secure access to financial information, and better enable decision-makers to answer business questions. Getting ResultsAt a minimum, financial management systems must meet the Joint Financial Management Improvement Program (JFMIP) core requirements and support clean audit opinions. But to reach the level of financial management excellence that the President's Management Agenda demands, agencies will need to do more. They will need to establish an end-to-end system that ties together people, policies, processes and technologies to enable strategic financial management. Here is a six-step roadmap that may help. Define goals. Specific financial management goals should be set for program delivery, financial accountability, operational efficiency and customer service (done in a strategic plan in accordance with the Office of Management and Budget (OMB) Circular A-11). These are some of the overarching financial management goals an agency might consider:All financial resources are aligned and deployed to deliver maximum program results.Program results are measured and integrated with associated cost information. Financial activity is monitored and controlled to provide full accountability to taxpayers, Congress and the OMB.Funds are protected against theft, fraud and abuse.Financial management information is timely, complete, accurate and accessible to all stakeholders with security control.Processes and technologies comply with federal financial management system requirements, federal accounting and transaction standards, and federal laws.Define actionable outcomes and ways to measure them. Turn your financial management goals into specific, targeted outcomes that are achievable, and that can be accurately measured. Good performance measures have these characteristics: Aligned. The measure is related to a driver of performance or a desirable strategic outcome.Actionable. Results can be controlled or influenced to improve performance.Clearly defined. Managers and employees know what the measure represents and how it is calculated.Measurable. The measure can be quantified and its data elements are available. Credible. Agencies must be confident in the accuracy of the data.Timely. Results must be made available according to the frequency of change and sensitivity of the measures.Lay out an optimization strategy for achieving these target outcomes.This strategy is action-focused in three areas: Identifying potential actions, policy changes, process improvements and technology upgrades.Prioritizing quick-win and long-term projects.Organizing projects under a single financial management improvement program management office.Identify the right mix of technologies and how to apply them to deliver agency-specific outcomes. Consider how these technologies might support your optimization strategy:Security technologies that enable all authorized stakeholders to access and exchange financial information throughout end-to-end business processes. Workflow and system integration technologies that prompt action from all stakeholders and enable them to exchange financial data among interrelated business systems (both inside and outside the managing agency).Business intelligence and performance measurement technologies that transform raw financial data into management information to answer common and ad hoc questions for improved business decision-making and planning.Optional and mandated government-wide systems for functions such as payroll, vendor profile data and vendor payments.Financial management applications compliant with new JFMIP core requirements.Applications that deliver previously unachievable automation and integration of financial-related business processes like budget formulation, procurement, grant management and asset management.Build the business case to get the resources necessary to execute the financial management improvement program. A good business case will do the following:Estimate required human and technological resources.Identify resource gaps.Analyze multiple options for filling resource gaps, such as reallocating and hiring staff; transferring or purchasing technology licenses; and outsourcing financial management strategy, preparation, operations or applications. Forecast outcomes of the agency's financial management improvement program.Demonstrate the return on investment of receiving additional resources. Consider ROI in the context of the President's Management Agenda, the Federal Enterprise Architecture and ongoing OMB e-government initiatives (using OMB Form 300B).Install a program management team to execute the financial management optimization strategy. The team has some critical tasks:Establishing a communications plan that emphasizes the importance of executing the improvement program to all stakeholders in the agency's federal financial management system.Orchestrating a coordinated plan across the portfolio of specific performance-based projects.Measuring performance results in the context of program costs.Monitoring individual projects to ensure they stay focused on achieving the agency's strategic financial management goals and target outcomes.Putting It All TogetherEngaging in the sort of responsive, responsible financial management improvement program described herein may be a daunting task. But it is a challenge agencies can master with a little perspective and help from knowledgeable consultants who can augment agency expertise with experience in implementing federal financial management system solutions. Make sure that the partner you choose has a significant understanding of federal financial mandates as well as experience with implementing best practices and in conducting federal financial management operations. Your partner should also have extensive knowledge of data structure, a detailed understanding of the CFO Act and OMB requirements, a full grasp of accounting and budgetary relationships, and a detailed understanding of the link between budget and finance.By aligning with a proven partner and following a deliberate actionable roadmap, agencies can produce real business results:Goals and measurable outcomes are clearly defined Strategy linked with performance targets to achieve desired outcomes Technology investments focused on delivering agency-specific outcomes Business case made for resources needed to execute the strategy Improvement program managed and monitored to performance-based measures Financial management stakeholders are aligned toward common goals Measurable results are achieved, such as meeting or exceeding accelerated financial statement deadlines Projects are compliant with President's Management Agenda, Federal Enterprise Architecture and e-government initiatives Looking to the FutureExpectations for financial accountability and management will likely get even more demanding, as customers and government oversight bodies require faster response times. For example, OMB is already considering shortening the deadline for producing financial statements.Agencies that take appropriate action now-by tapping people who have lived and breathed federal financial management systems for decades-will be poised to handle those challenges. These agencies will have the people and tools in place that can adapt to changes quickly and handle new requirements. And they will leverage outside experts with both technological and program expertise to close the productivity gaps that can occur when new requirements surface. Gary Labovich is Senior Vice President for AMS Public Sector - Federal Solutions. Joining AMS in 1986, Labovich has specialized in systems development and integration, product-based solutions, and IT consulting for Fortune 50 corporations, public regulatory agencies, and healthcare organizations. For more information on federal financial management, visit AMS's Federal Solutions site.