As IT and financial systems intersect, people and processes matter as much as technology
Financial systems and operational systems have always been intricately connected. In order for operations to move forward, military programs need a steady flow of supplies and personnel — all of which require funding. But as technology grows more advanced, financial and operational systems have often been siloed — making it difficult for operational teams to have an accurate, up-to-date picture of their budgets.
The Military Health System (MHS) is currently operating under a network of legacy and modern financial systems. However, these legacy systems require a specialized skill set to maintain, make it difficult to extract data from one system to another, and often struggle to communicate with today’s modern technology. And because these older systems are not connected in the same way as their modern counterparts, they can also complicate the sharing of data between the various military treatment facilities (MTFs) within the MHS.
To overcome these barriers, military health agencies must ensure that financial systems are fully integrated across the enterprise. This integration also goes a long way in creating an easier, more effective reporting structure — which is crucial for informed decision-making across the MHS.
Why accurate data is so important for MHS operations
At the core of this issue is the MHS’ need to aggregate data from multiple financial systems in an accurate and timely manner. However, this is complicated by several different factors.
For starters, different branches of the U.S. military already have pre-established processes in place. They may use different terms for the same supplies or report on financials in their own unique way. As the MHS continues transitioning to a joint operating environment, they have had to secure consensus from all key stakeholders across the armed forces so that everyone is operating under the same set of assumptions and business rules. This also ensures that data can be easily standardized and communicated out across the services.
Next, because the MHS is spread out across such a broad geographic range, it’s crucial that data is updated as close to real-time as possible. This can be especially difficult when you consider how many MTFs are located in rural areas or at the tactical edge caring for combat forces. However, an ongoing stream of complete financial data is necessary for command to know how many supplies they can order, whether or not a mission has sufficient funding, the financial cost of maintaining a medically-ready force, and more.
Finally, not all decision-makers within the MHS come from a government finance background. Instead, they’re relying on financial analysts to communicate the information they need to know. They might be told that there’s a 10% delta between authorized and on-hand funds, but what does that indicate from a funding perspective or risk profile? The right financial management partner can help communicate that information in a more modern format.
In the past, the MHS has been forced to consolidate multiple financial reports into a single spreadsheet that can be presented via Excel or PowerPoint because their legacy financial systems aren’t able to integrate. However, with the help of IT support and third-party vendors, parts of the MHS are exploring custom web apps that are directly tied to the system for real-time financial updates.
How strong IT integration can help
While all of these solutions are steps in the right direction, modernization is not without its challenges. Look at the MHS’ ongoing implementation of Genesis, for example. Originally intended to digitize military health records, Genesis has encountered multiple deployment challenges due to insufficient funding and staffing shortages.
In the case of financial systems, having strong IT support in place means that the MHS is better positioned to address technical difficulties as they come up. For areas where a robust IT system has already been established, this may be enough. However, given that IT staffing is a continuing challenge across the DoD, bringing in outside expertise can free up the organization to focus on mission-related tasks. The right financial management partner can work side-by-side with the in-house team to produce better outcomes. The partners bring expertise but rely on IT services, especially when trying to pull or consolidate financial data from legacy systems. That’s why it’s so key for financial and IT systems to coordinate across all MHS operations.
This IT intersection is also crucial from a change management perspective. Any time you deploy new technology, there will be a learning curve associated with it — whether that’s new terminology or even process modifications to better fit that new system’s limitations. IT teams and outside vendors can work with financial leaders in the organization to design a thoughtful change management plan that minimizes, if not outright eliminates, any unnecessary effects on day-to-day operations. MDC has a long history of creating better change management efficiencies for our clients. In fact, we’re currently in the process of building a budget navigator to align disparate financial systems and make it easier to extract and manipulate data into user-friendly and accessible reports.
Likewise, it’s important to implement strong knowledge continuity procedures to ensure that multiple people know how to operate, maintain, and extract data from the underlying systems that power MHS operations. This ensures that the agency can maintain the system of record as well as any data aggregation systems in the face of future workforce changes.
Finally, there’s a human element to all of this. IT and financial systems cannot replace good processes. Instead, it’s important to identify a partner that can convey financial information in an actionable way that allows leaders to make smart decisions, make a difference in patients’ lives, and ultimately improve operational effectiveness. MDC has years of experience in the government finance sector — managing resources valued at over $12B annually
Visit our financial accounting and management page to learn how MDC can help you maximize your budget’s impact on your mission.