Functional Process Improvement Fundamentals
Chapter 2: Introduction to Functional Process Improvement (FPI)

Department of Defense
Topic(s): Government BPR, Reengineering / BPR

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Chapter 2

Introduction to Functional Process Improvement (FPI)

" A lot of money that should be cut out of the federal bureaucracies would be found if you had a really serious effort to review operations from a quality perspective. I read in Fortune a great article on General Electric under Jack Welch. When he started this sort of review, they found - and this is a very well run company...- they found there were four people working in a room sending copies of reports to 24 different people...No one ever read the report. Everybody always thought someone else was. When they cancelled this operation, they saved $150,000 a year. That's the sort of thing I am convinced is out there all over the government."

-- Democratic Presidential Nominee Gov. Bill Clinton, August 1992.


Functional Process Improvement is a key component of defense policy that is guiding the restructuring and reorganization of the Department of Defense. Let's begin this section with a little history lesson.

The Functional Process Improvement Program (FPIP) was established in January 1992 by the Corporate Information Management (CIM) Information Technology Policy Board to assist functional areas in making improvements in their business processes, in order to achieve cost savings mandated by Defense Management Review Decisions (DMRD).

The DMRDs require the Department of Defense to achieve $71.1 Billion in savings during the period of 1990 through 1997 without compromising DoD's mission capability, readiness and security. In essence, we need to manage this drawdown by cutting overhead without losing mission effectiveness. This is sometimes called improving the tooth-to-tail ratio.

The Department of Defense is required to implement a series of Defense Management Review Decisions (DMRDs), which are designed to improve the overall effectiveness of the Department by streamlining functional processes and centralizing the management of technology.

As we learned from chapter 1, Corporate Information Management is one of the programs resulting from the Defense Management Report. The Corporate Information Management (CIM) Initiative mandates that satisfying functional requirements is our primary objective. Information technology is secondary but directly supportive of our primary objective.

DoD's Corporate Information Management (CIM) initiative is the largest information management program ever conceived by any U.S. public or private sector organization. The Initiative calls for major re-engineering and restructuring of business methods and administrative processes throughout the DoD.

CIM requires a commitment from all DoD managers to identify and implement functional process improvements in their functional areas of responsibility.


Functional Process Improvement is defined as "the application of a structured methodology to define a function's "as-is" and "to-be" environments, current and future mission needs and end user requirements; its objectives and strategy for achieving those objectives, and a program of incremental and evolutionary improvements to processes, data, and supporting AISs that are implemented through functional, technical, and economic analysis and decision making."

"Information management is the creation, use, sharing, and disposition of data or information by functional proponents as corporate resources critical to the effective and efficient activities, consistent with IM guidance issued by the DoD senior Information Resources Management (IRM) official.

"This includes structuring of functional management improvement processes by OSD Principle Staff Assistants to produce and control the use of data and information in functional activities ... In the past, information resources management in DoD tended to concentrate primarily on automated information systems and their associated technology. Through the Defense Information Management (IM) program, the Department will emphasize the primacy of functional requirements in the supporting role of information technology." (From DoD 8020.1-M Interim Management Guidance on Functional Process Improvement, August 5, 1 992, and Change 1, 15 January 1993.)

"A dramatic lessening during the last three years of the threat of a large-scale, fast-reaction land war in Europe permits the United States to significantly reduce the size of its armed forces. This reduction is underway and will continue for several years until a Base Force structure is attained which is approximately 25 percent smaller than the pre-Desert Storm armed forces...yet we must also recognize the uncertainties that remain and maintain a military capability we need to guarantee our security in future years. Balancing these requirements will not be easy, but it is essential that we succeed." - Donald J. Atwood, Deputy Secretary of Defense (April 28, 1992)


The Functional Process Improvement Program (FPIP) is based on a vision of the future that is increasingly shared by enterprises around the world. It is evolving into the sum total of everything we've learned about management in the industrial age recast into an information age framework.

Shared Information. Information is a corporate asset. Some would say that, next to people, it is the most important asset an enterprise has. Like all important assets, information must be well managed if it is to provide a return on the investment made to acquire it.

As the Information Age takes hold, the principles of data management are clear. Data is entered into the corporate data base once, and only once; it is maintained at the point of entry. Corporate data is to be made available where and when it is needed, and in the format and context in which it is needed, along with appropriate security.

Our vision sees joint task force commanders in the battlefield calling information resources needed to achieve their objectives from anywhere in DoD. This could include battle plans, personnel data, logistical data, weather, data about the enemy, simulations, and other mission-related information.

Mission Support. All information resources in DoD will have a mission focus. There is no other reason for capturing and maintaining data except that it supports the defined mission of DoD. Functional processes will be redesigned in such a way that those activities which support mission will be strengthened; those activities that do not add value will be eliminated.

Functional Leadership. DoD components are responsible for supporting and participating in functional process improvement efforts led by OSD Principal Staff Assistants (PSAs). They are also responsible for conducting continuous process improvement in areas not yet being addressed at the OSD level. Without leadership from the PSAs and other leaders throughout DoD, process improvement efforts will not succeed.

Reduced Costs. Activities that increase the cost of doing business but provide no benefits to the customer are to be reduced or eliminated. Functional managers will search out and eliminate such non-value added activities and costs so that scarce funding resources can be applied to those activities that provide a higher return on investment.

Reusable Technology. The emphasis has shifted from custom developed, unique information management systems to the use of off-the-shelf technology and software to support standard functional processes. Systems that must be custom developed will employ engineering-like development methods and strong life-cycle project management controls.

Single Interface. Functional elements will have to master only one system interface for accessing DoD information resources. This is critical in battlefield applications where there is no time to dig out the user manual. Increasingly, this interface will be visual, point-and-click, and voice sensitive. The paradigm is that of the heads-up display in a fighter plane.

Just-in-Time. Information, training and support will be delivered electronically to the work site at the precise time it is needed, whether that work site is an office or a command vehicle.

This vision shares many features with the transformation that is occurring in the private sector in this country and around the industrial world. The hierarchial, compartmental corporation organized by function, product, or territory is giving way to the horizontally structured enterprise organized around business processes.


Let's focus on five key objectives of the Functional Process Improvement Program. Achieving these objectives will help us realize the vision of the future, which will ensure that we meet DoD mission requirements.

The Defense Management Report (DMR) calls for the DoD to centralize policy, standardize and simplify procedures, and decentralize implementation and execution. Let's see how we're going to do it.

Cost of Doing Business. The purpose of the FPI Program is to reduce the cost of doing business by getting organizations involved in eliminating their:

Obsolete and inefficient processes

Obsolete regulations and controls

Unnecessary management overhead

Lengthy review and approval cycles

Unit-cost Management. We are going to determine the cost of products and services produced within DoD. Once these costs are known, functional managers can use FPI principles to lower the cost of production while at the same time improving quality and customer service.

Fee-for-Service. If our products and services have value, then our customers, should be willing and able to pay for them. Our goal is to run our activities as a business by determining customer requirements and then meeting those customer requirements competitively. In short, functional managers are going to become business managers. Increasingly, your customers, who may be captive now, are going to have other options to get what they need to perform their job, just as you will have other options than to use your present captive suppliers.

Continuous Process Improvement. Process improvement is not a one-time exercise. Functional Process Managers all over the world are learning that responding to customer needs, searching for quality materials and making processes more efficient and effective by the wise use of available resources is a continuous process.

Leadership. Functional managers are accountable for results and are therefore empowered to act with much discretion with respect to functional process improvement. Leadership is critical to the success of the FPI Program!



Do not let yourselves get confused by the terminology. As you might expect, gurus or experts in the field of functional process improvement have their own pet terms. We want to focus on the principles involved, not necessarily the terminology as we go through this section.

Strategic/Business Planning. Strategic planning provides a set of business goals and defined requirements which are expressed in terms of customer needs all within the context of mission, vision, values and beliefs. A strategic plan defines what an organization is all about, who it will serve, what needs it will fulfill, and under what terms it will operate (values and beliefs). The strategic plan must be consistent with the constraints placed upon the organization by higher authority. This means that no element of the strategic plan can conflict with the mission, vision, values and beliefs expressed by higher authority.

Business planning provides a set of business objectives with appropriate performance measurements, and a detailed, complete list of required output product and service features that will meet customer needs as defined in the strategic plan. It is important to understand that the business plan itself should not be concerned with identifying customers or customer requirements. That is the function of the strategic plan. The business plan should focus on what the organization will do to satisfy the goals, needs and requirements expressed in the strategic plan.

Activity Modeling. Activity modeling is a technique which assists us in understanding how a functional process really works. We use activity modeling to describe how things are (called AS-IS modeling), and also how we want them to be, based on our redesign criteria (called TO-BE modeling).

In activity modeling, we decompose a functional process step-by-step into activities that make up the process. This results in a multi-level diagram that corresponds to the way we do work.

Each activity is shown in a diagram, complete with the inputs to that activity, the outputs of that activity, the controls or constraints on the way we perform the activity, and the mechanisms or factors of production consumed by the activity in transforming inputs to outputs.

Data Modeling. Information is the glue that holds an organization together. Data modeling is a technique for accurately describing exactly what information you need to perform each and every activity that makes up the business process you perform.

As with activity modeling, we produce an "as-is" model, describing the current data environment, and then a "to-be" model showing what our data structures will need to be to support our redesigned processes.

A data model shows all of the entities (things or objects which an organization values enough to keep data about) you work with while performing an activity, the attributes (data items) of each entity, and the relationships between and among entities.

One of the results of data modeling is a clear delineation of business rules which are statements that constrain the way our function and its processes work.

The level at which you will be called upon to do data modeling is easily learned, even if you are not technically inclined. If you can write a functional procedure or design a simple form, you can successfully model data with the assistance of a facilitator.

Activity Based Costing. Activity-based costing (ABC) is a technique that allows us to determine the costs of producing our primary products and services. In other words, our unit costs, which are the basis for satisfying the fee-for-service mandate contained within the DMRDs. ABC is an extension of activity modeling and while it requires a fair amount of work to produce the numbers, it too is an easily learned technique.

Economic Analysis. Applying the principles of FPI within our functional areas will result in a slate of improvement opportunities. There will always be alternative means of implementing process improvements. Economic analysis gives us the capability to determine the costs and benefits associated with alternative investment opportunities, taking into account the life cycle characteristics of each investment. Economic analysis also presents the decision data in equally valued dollars (taking the time value of money into consideration), as well as the risks associated with making decisions about future conditions and performance.

Best Business Practices. Most functional managers carry around two questions about their areas of responsibilities:

Is this the best way to do it?;

and, How does what I do compare to what others do who have the same responsibilities?

The first question can be answered by using the techniques of "Best Practice," the second question by the techniques of "Benchmarking." Both are outgrowths of the Total Quality Management (TQM) movement of which Process Redesign is a part.

We will discuss these techniques and others later in this course in more detail. But for now you should get a general sense of what is available to assist you in your endeavor to improve your functional processes.

Functional Economic Analysis (FEA). FEA is a methodology for analyzing and evaluating management practices and alternative process improvements and investments. It provides a framework for exploring alternative opportunities for improving DoD business processes based on sound business case practices.

An FEA and the traditional economic analysis (EA) are similar. Both evaluate the economic feasibility of a project using classic economic analysis techniques. The primary difference between them is scope. An EA usually covers a single initiative or information system while an FEA has a broader scope, usually covering duties assigned to a group of organizations or individuals that work together to produce a common product or service.


Every functional process or sub-process exists to provide a needed product or service for a defined customer. These products and services are produced within the process according to defined requirements, rules, or constraints. The process requires materials and information which are provided by suppliers and consumes the resources allocated to the process.

When you hear the terms "downsizing" or "restructuring" on the evening news, or read about them in the morning paper, you are learning about companies that are moving toward process management and away from hierarchical management. Process management includes a lot of concepts you are becoming familiar with: Total Quality Management (TQM) or Continuous Process Improvement (CPI), Self Managed Teams, Business Reengineering, and High-Performance Companies. Every one of these aspects of organizational enhancement starts with the concept of the "business process."

The Business Process. Before we can fully understand why and how we are to proceed, we must first examine the fundamental principle behind functional process improvement. Every process or sub-process exists to provide a needed product or service for a defined customer. These products and services are produced within the process according to defined requirements, rules, or constraints. The process requires materials and information which are provided by suppliers and consumes the resources allocated to the process.

The Value Chain. A functional process starts with external suppliers and ends with external customers. Everything in between is part of a value-chain of operations that add value to "stuff" coming in, transforming it into something a customer wants and is willing to pay for. Each operation (or activity) within the process has internal suppliers and internal customers. Each activity adds value to its work-items or it is not needed and should be dispensed with.

If you work behind a desk, you have an "in-basket,' and an "out-basket." As you move items from the in-basket to the out-basket, hopefully you are adding value to those items, if not, why are you there?

Remember, a functional process is a collection of interrelated tasks and activities that together satisfy a business objective of the enterprise.

Another way to look at a functional process is that it is a group of interrelated tasks and activities that accomplish a defined goal or mission of an enterprise. By this definition, even the largest organizations have no more than five or six functional processes. It is the improvement of these processes on a continuous basis that will allow DoD organizations to be able to continue to perform their mission during a time of dwindling resources.

Let's look at three aspects of functional process improvement:

New Process Design

Process Redesign

Continuous Process Improvement

New Process Design. New process design is performed based on a change of mission, strategic or business plan. New process design would be required if a previously out-sourced function was brought in-house. The distinguishing characteristic of new process design is that there is no baseline from which to work. Benchmarking can be critical to the success of a new process design effort.

Process Redesign. Over the last few years, a body of knowledge and experience has been built up which we will use in redesigning DoD functional processes.

Process redesign is performed based on a significant change in output product and service requirements, a significant change in controls or constraints imposed on the functional process or a significant change in the technological platform supporting the functional process. A process redesign effort might also be undertaken following a radical change in financial resource availabilities (i.e. budget cuts or downsizing requirements).

Process redesign usually has significant impacts across organizational boundaries and generally has impacts or effects on external suppliers and customers. For this reason, the process improvement team (or Process Action Team [PAT]) must include members from all impacted organizations. Process redesign can have impacts on the organizational structures supporting the functional process. This means that process action teams must have the support and backing of senior leadership if improvement initiatives are to be given frank consideration by review and approval agencies. So, how do we redesign our processes?

The first step is to identify your functional processes by going directly to your mission statement and strategic plan. Each functional process in your organization is based on these documents.

Next, you identify your customers and suppliers. Your customers determine what products and services your processes should provide. Your suppliers provide the raw materials and components your process will use in building your products and services.

Then you analyze all of the activities that take place in your process that are in the value-chain between what you get from your suppliers and what you deliver to your customers. Those activities that add value to your products and services are strengthened and optimized. Those activities that do not add value are reduced or eliminated. Later, we will take a more detailed look at the step-by-step methodology that we use to do this.

Process Improvement. Continuous process improvement embodies the philosophy that no matter how good something is, it can be made better. And if you don't make it better, someone else will, and then steal all of your customers.

Process improvement (Continuous Process Improvement [CPI]) actions are defined as those improvements which can be undertaken and supported by an organization with minimal impact on external suppliers, customers and other organizations within the functional area.

The focus of this level of process improvement is an emphasis on reducing the overhead associated with self-imposed controls and restrictions, eliminating non-value added activities, reducing non-value added costs, optimizing available resources with respect to process and activity output requirements, and other improvements that can be made within the authority level of the target organizational element.



Now that we have shown you the "basics" of the Functional Process Improvement Program, let's see how we will accomplish the task of actually improving our processes within our organization. DoD Interim Management Guidance on Functional Process Improvement, 8020.1- M, lays out a general outline for doing an FPI project. Six major tasks make up what is referred to as the Functional Management Process. These tasks are:

Define. Define functional objectives; determine the functional management strategy to be followed in streamlining and standardizing processes; and establish the process, data, and information systems baselines from which to begin process improvement. A framework is established by defining these baselines, objectives, and strategies for the function.

Analyze. Analyze the functional processes to eliminate non-value added processes, simplify and streamline limited value added processes, and examine all processes to identify more effective and efficient alternatives to the process, data, and system baselines.

Evaluate. Evaluate alternatives to baseline processes through a preliminary functional economic analysis to select a preferred course of action.

Plan. Plan implementation of the preferred course of action by developing detailed statements of requirements, baseline impacts, costs, benefits, and schedule.

Approve. Extract from the planning data the information needed to finalize the functional economic analysis, which is used by the OSD Principal Staff Assistant to approve proceeding with the proposed process improvements and any associated data or system changes.

Execute. Execute the approved process and data changes, and provide functional management oversight of any associated information system changes. Technical developers provide information system changes on a fee-for-service basis in response to the OSD Principal Staff Assistant's validated requirements, and in conformance with a DoD-wide technical integration and migration strategy.

This Functional Management Process is to be used as a general guide as to how one progresses through an FPI project. Another way to view the activities that are inherent in an FPI project is depicted in the six activity process model shown in figure 2-11. Each of these activities have subordinate procedures or steps that give a more detailed picture of the FPI process. It is important to note, however, that 8020.1-M and other FPI documents do not represent "cookbooks" for all of the methods and procedures that are available for FPI. This area of CIM policy and methodology is still evolving and each student should expect to be part of a dynamic process of change in the corporate DoD culture -- both functional and technical. With that in mind, let me introduce one particular methodology that has a lot of promise in leading you through a very detailed FPI project.

A 25-step methodology has been developed that will take your FPI project team from developing a strategic plan to the development of a final functional economic analysis (FEA) or business case. It is important to note that your organization may have already completed some of the steps of the methodology through other means such as Total Quality Management (TQM) initiatives or an Information Systems Planning (ISP) effort. The information generated as a result of these efforts will greatly reduce the amount of time necessary to complete your FPI project.

We are not going to go into depth for any of the individual steps of the methodology at this time. Other courses in Strategic Planning/Business Planning, IDEF modelling, Activity Based Costing (ABC), and Functional Economic Analysis (FEA) are available to go into greater detail. This course will only address a cursory perspective of the method, emphasizing the integration of the various steps. So, for now, let's take a look at the steps involved in executing this methodology.

Strategic Planning (Steps 1-4).

1. Secure Executive Commitment for Functional Process Improvement Project

Conduct executive briefings

- Concepts and principles of FPI

- DoD policy and requirements

- Functional management process (DoD 8020.1-M, Ch 2)

- FPI Management Framework

- Intended expected benefits

- Project management considerations

Arrange site visits to organizations committed to TQM/FPI

Develop Charter defining scope and extent of project

Secure explicit commitment to launch project

2. Confirm/Define Functional Mission

Identify higher authority mandates/constraints

- Review DoD relevant policy

- Review applicable DoD directives (8000 series)

- Review DMRD requirements/constraints

Identify current resource availability

Develop statement of values and beliefs

Develop mission statement

Test mission statement for consistency and efficacy

- Mission statement is consistent with higher authority mandates/constraints

- Mission statement can be accomplished with current resource availability

- Mission statement embodies stated values and beliefs

3. Develop Strategic Plan

Identify functional Customers

- External

- Internal

Establish critical customer requirements and needs

- Analysis of current service levels

- Customer surveys and interviews

- Value-chain analysis (customer products and services)

Prioritized customer requirements and needs

Identify/rank current and potential competitors (alternative sources)

Test customer requirements and needs against mission statement

Resolve mission/customer requirements and needs inconsistencies

Develop prioritized list of customer requirements that will be met

Develop functional goals for satisfying customer requirements

- Develop vision statement (Guiding Principle(s))

- Identify goals for key results areas

- Customer satisfaction

- Productivity

- Innovation

- Resource conservation

- Management development and performance

- Employee development and performance

- Public responsibility

- Develop critical success factors

Test goals statements against mission, values and beliefs

4. Conduct Strategic/Customer Benchmarking and Best Practices Analysis

Conduct Competitive analysis

Examine available benchmarking databases

Interview customers

Interview functional area experts

Research literature

Validate goals statements against benchmarking best practices data

Refine statement of goals

Business Planning (Steps 5-8).

5. Develop Business Plan

Develop measurements for each stated goal

Identify product and services features for each customer requirement

Develop specific objectives for satisfying customer requirements

Develop performance targets for each objective

Resolve goals, objectives and product features anomalies

Develop/refine quality matrices

6. Identify, Understand and Document Current Business Processes

Conduct/validate business systems planning (BSP)/Information Systems Planning (ISP) data

List business processes

List current organization structures

Develop process/organization matrix

Develop product feature/process matrix

Evaluate/analyze/prioritize relative process performance

Select functional process for FPI action

7. Document the Functional Architecture

Document the mission of the functional area

Document the mission of the subordinate functional activity(s)

Relate functional area and activity(s) to Enterprise Architecture

Describe the business process(s) (of activity) subject to process improvement

Identify all organizational impacts for the business process(s)

Establish scope of effort for improving the business process(s)

Identify and charter the Functional Activity Program Manager

Restate/revise the parameters for process improvement

- Process objectives

- Performance measures and methods

- Performance targets

- Current performance variances to targets

Develop the Functional Management Strategy

Secure OSD Principle Staff Assistant approval to proceed

8. Initiate Functional Process Improvement Project

Develop project plan

- Develop project scope

- Develop work breakdown structure (WBS)

- Develop organization breakdown structure (OBS)

- Select process improvement action team (PAT)

- Identify project resources and facilities

- Develop resource assignment matrix (RAM)

- Develop initial schedules

- Develop initial cost estimates

Conduct initial training

Develop project execution management plan

Launch project

Process Analysis [Problems/0pportunities] (Steps 9-1 3)

9. Review, Revise or Develop AS-IS Activity Models for Selected Process

Model AS-IS process/activities

Model AS-IS activity process flow

Review process models

Update process models

Validate process models

10. Review, Revise or Develop AS-IS Data Models for Selected Process

Model AS-IS data models

Review data models

Update data models

Validate data models

11 . Perform Activity-Based Costing Study of AS-IS Process

Review metrics, measures and methods

Conduct activity-based costing

- Analyze activities

- Gather cost data

- Trace costs to activities

- Establish output measures

- Analyze costs

Conduct time-line analysis

12. Conduct Cost/Process Benchmarking and Best Practice Analysis with respect to AS-IS Models

Develop benchmarking strategy

- Identify features, functions and services

- Identify operating, administrative and personnel cost categories

Select and screen comparison companies

Collect data

- Proprietary information

- Physical observation

- Trade data

Develop conclusions

Refine performance targets

13. Perform Functional Process Improvement Analysis

Review objectives and measures

- Produce the "right" products and services

- Consistency of performance

- Timeliness and customer response

- Appropriate cost (competitive)

- Safety, morale, job satisfaction

- Good citizenship (affect on other organizations)

- Customer relationships (flexibility, accommodation)

Perform techniques to discover problems and improvement opportunities

- Pareto analysis

- Histograms

- Cause and effect diagrams

- Scatter diagrams

- Statistical process control

- Process simulation

Identify quick fixes

Conduct what-if analysis

Conduct scenario analysis

Analyze cost drivers

- Economies of scale

- Learning curve effects

- Capacity utilization

- Linkages (value-chain analysis) (overhead)

- Interrelationships (other business processes)

- Integration (make us buy analysis)

- Timing (just-in-time analysis)

- Policy (constraints, mandates)

- Location (geographical analysis)

- Institutional factors (environmental considerations)

Analyze quality drivers

- Inputs (data and materials)

- People (process personnel)

- Equipment (machines, computers, systems)

- Methods (procedures, rules, regs, training)

- Materials (supplies, tools)

- Environment (including location)

- Outputs (data, products and services)

- Administrative functions

- External agencies and higher authority

- Feedback (control systems, measurements)

Prepare Improvement Opportunity Analysis Report

Conduct in-progress review (IPR)

Make IPR changes to AS-IS models and improvement report

Publish AS-IS report

Process Design/Justification (Steps 14-21)

14. Develop Process Improvement Initiative Packages (four classes)

Class 1: Package quick fix improvement initiatives

Class 2: Package improvement initiatives that have little or no impact on existing information systems

Class 3: Package improvement initiatives that have major impacts on existing information systems

Class 4: Package improvement initiatives that will require new information systems (new technology)

Rank improvement initiatives within class

15. Develop Potential High-Level TO-BE Activity and Data Models

Develop/revise the "vision" of the TO-BE environment

Select TO-BE concept

Select improvement packages for high-level modeling

Perform high-level modeling

- Activity models

- Data models

- Process models

16. Revise Improvement Initiative Packages Based on TO-BE Models

Develop clear statement of problem/opportunity

Revise improvement initiative packages based on high-level TO-BE models

Develop assumptions and constraints

Determine implementation alternatives for each selected improvement initiative package

17. Select Initiative Package Based on Economic Analysis of Potential Alternatives

Perform economic analysis

- Collect cost/benefit data for each alternative

- Perform Risk Adjusted Discounted Cash Flow (RADCF) analysis

- Perform sensitivity analysis

- Document non-quantitative considerations

18. Develop Detailed TO-BE Activity and Data Models Based on Selected Initiative Package

Develop detailed TO-BE models

- Activity models

- Data models

- Process models

Perform simulation

Perform functional level integration analysis

Document information systems support considerations

19. Develop Preliminary Functional Economic Analysis (FEA) Decision Package

Summarize functional strategic plan

Identify functional activity performance measures and targets

Document activity improvement program

Document economic analysis of proposed improvement initiatives

20. Develop Data Management and Technical Management Plans

Develop functional activity information systems strategy

Analyze data systems

Document recommended changes and redirection

21 . Develop Final Functional Economic Analysis (FEA) Decision Package

Document savings, benefits and risks of selected alternatives

Develop project white papers

Develop integrated financial plan

Update Planning, Programming and Budgeting System (PPBS)

Define approval requirements

Obtain policy approvals

Obtain FEA approval

Improvement Execution Plan (Steps 22-25)

22. Develop Project/Action/Transition Plans

Develop integrated implementation plan

Develop new goals and strategies

Establish new performance targets

Develop implementation schedule

Determine implementation resource requirements

Establish implementation team

Designate implementation steering committee

Design project implementation controls

23. Conduct Executive Presentations

Prepare executive briefing

Conduct executive briefing

Review recommended changes to the Project/Action/Transition Plans

Revise Project/Action/Transition Plans

Produce project implementation plan

24. Execute Approved FEA

Develop design specifications

Develop prototype/pilot

Manage change

Conduct IPR for steering committee

Produce project execution report

25. Evaluate Results, Update Baseline Data and Document Lessons Learned

Monitor industry trends and developments

Evaluate results-of improvement action

Establish criteria for future improvement projects

Document lessons learned

Update baseline models (convert TO-BE to AS-IS)


The success of the Functional Process Improvement Program is based, in part, on the preparation and readiness of each component in DoD. Experience has shown that there are several factors that need to be in place before launching an FPI project

Leadership. No organization can transform itself as radically as is called for in FPI without the active and motivating influence of top management. It can't be done. The CIM program has a mission to reach senior leadership throughout DoD and brief them on the FPI program and their role in its implementation and success.

Strategy. Since all functional process redesign begins with mission and business plans, each organization must have a clear statement of mission and a well-developed business plan that lays out goals, objectives, critical success factors, and evaluation techniques. From these elements, functional processes can be identified, defined, and prioritized.

Project Teams. Advanced planning needs to be in place to organize FPI project teams. Since teams are made up of individuals from different organizational elements, this is not a trivial exercise.

Training. FPIP changes the very nature of an organization and that means overcoming organizational inertia and culture shock. Some people will have to learn new skills and new patterns of working, and the nature of the work itself will change.

The remainder of this course in FPI Fundamentals will concentrate on familiarizing you with the necessary tools to start and complete an FPI project in your organization. So, let's get started!

Activity -- Student Exercise. (Chapter 2)


1. What is the primary objective of the Corporate Information Management (CIM) initiative?

2. Define Functional Process Improvement (FPI).

3. List and describe the components of FPI.

4. Describe the concept of process management.

5. List and describe the three levels of process design.

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