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ERP (enterprise resource planning) software is a business management system that integrates internal and external management information across an entire organization. It typically includes modules related to finance, human resources, sales, procurement, inventory, and operations. i.e., contract and project management. ERP systems are designed to enable organizations to optimize their processes, increase their awareness and connect them with customers, vendors, and partners. DCAA compliant ERP systems provide real-time insight into data enabling companies to make strategic decisions with accurate real time information.
If you are a prime federal contractor, implementing an ERP system must be a core part of your business management strategy. If you pick a right ERP system, it will improve your competitiveness by streamlining business processes and resources while satisfying strict compliance requirements from the federal government. In this resource page, we discuss how the appropriate ERP system is essential to and strategic for government contractors. It will also assist those who are searching for the best ERP system to support government contracting requirements.
Once innovative legacy ERP systems used for government contracting are, now ineffective and cost prohibitive to implement and maintain. Many federal contractors, employees, and partners are asking for improved customer experiences, increased efficiency, greater transparency, and low cost of ownership. IT leaders are under tremendous pressure to shift attention and dollars to new and emerging technologies-including real-time and predictive analytics, mobility, digital, and cloud-that promise to transform the way organizations fulfill their mission.
Federal contractors face many challenges when it comes to selecting, implementing, and operating ERP solutions. In addition to budget constraints and increased service-level demands, these systems designed for federal contractors also require highly specialized functionality and controls. Choosing the right vendor and solution can be a complicated process that requires in-depth research and often comes down to more than just the solution and its technical capabilities. To make your search easier, we present seven principles you should embrace to realize all the benefits of a DCAA compliant ERP system.
Embracing DCAA compliant ERP Principles
DCAA compliant ERP systems provide a logical alternative to what has historically been a trade-off between business functionality and IT needs. This trade-off has led to the mix of monolithic systems and industry-specific point solutions most federal contractors manage today. Adopting a new approach allows for an environment with a mix of vendors and functionality, on premise or in the cloud.
Cloud-based solutions have lowered the total cost of ownership, reduced implementation times, and made it easier to incorporate best-in-breed solutions with the critical functionality in core ERP.
What Is a DCAA Compliant ERP for GovCon?
An enterprise application approach that deconstructs a legacy ERP suite into a looser set of business functions. In a DCAA Compliant ERP, a core ERP system is supplemented with specialized cloud solutions to meet unique business requirements. DCAA Compliant ERPs, such as AtWork Systems' OneLynk, is implemented using a service-oriented architecture, to provide integrated Human Resources (HR), Cost Accounting/Finance Management, Time & Expense, and Contract/Project Management. This architecture combined with Software-as-a-Service, enables organizations to conduct their business when and where they are needed while also allowing other 3rd party capabilities to be easily integrated.
Seven principles to deliver on the promise of DCAA Compliant ERP
Deciding to invest in an ERP is a great start, but it's no silver bullet. Realizing the full potential of DCAA Compliant ERP takes work and requires a comprehensive strategy. Business and IT leaders need a strategy that includes attention to key factors that will improve capabilities, compliance, and competitiveness. Such as:
- Building a business case: The business case should highlight ways to increase efficiencies and deliver better experiences for customers, vendors, employees, and subcontractors - for example, the ERP system should lay the groundwork for a future where everything is a service (XaaS). It should also include the total cost of ownership while satisfying regulatory requirements. Continue to rely your business on Quickbooks, spreadsheets, and manual processes will be costly and difficult to meet those regulatory requirements. Turning to a legacy ERP system like Deltek will be cost-prohibitive to implement and maintain.
- Leading with a strategy: Early in the process, make strategic decisions about how you will address customization, cloud adoption, the implementation process, and other key capabilities. Prioritize business process improvements and define a multi-year migration roadmap for the strategy, that includes:
- Capabilities ... carefully reviewing short- and long-term business requirements.
- Flexibility ... develop roadmap of comprehensive features that are delivered as needed.
- Competitiveness ... flexible ways to allocate resources to lower indirect cost.
- Affordability... subscription models based on bundled modules and per-transaction usage.
- Timing ... carefully plan capital expenses to minimize impact on indirect rates.
It is important that business and IT collaborate to address critical success factors when considering ERP implementation. With the right strategy and roadmap aligned to your unique requirements, a DCAA Compliant ERP will be a more flexible and agile approach to transforming your business to be more competitive while satisfying regulatory requirements
What are the compelling reasons for implementing DCAA Compliant ERP System?
Federal Contractors (GovCon) face a common set of challenges. They must implement processes and systems to recruit, manage, support, and retain a top-notch workforce, while exceling in financial, operational, contract, program, and project management disciplines as they meet complex regulatory requirements mandated on the contracts that they are awarded. Far too many firms address these challenges by implementing a patchwork of manual processes and point solutions.
The widespread use of spreadsheets and stand-alone applications, such as QuickBooks or ADP, are inadequate as a fully functional business operating platform for GovCon firms. The result is they introduce inefficiencies into the environment which increases indirect costs thereby increasing indirect rates and ultimately competitive pricing. This inflated price negatively impacts the ability to win new contracts in a low cost technically acceptable (LPTA) competitive environment. To control indirect costs, government contractors require a DCAA Compliant ERP platform that provides digital business transactions. They need a platform that empowers their leaders and employees throughout the organization(s) to operate within a framework of integrated digital workflows guided by policies that shape organizational behavior across all business functions. A DCAA Compliant ERP platform captures and uses data in near real-time as employees perform daily business operations. Back-office analysis, reporting, and decision-making become routine activities that channel organizational resources and energy toward business objectives. A DCAA Compliant ERP platform allows leaders to implement their mandates via collaboration and digital workflows to create a competitive advantage through cost controls while steering the organization to profitability.
Learn More: Ten Compelling Reasons to Implement a DCAA Compliant ERP Solution for Managing Government Contracts - Why OneLynk
How can a DCAA Compliant ERP solution improve internal controls and compliance?
Managing government grants and contracts requires a robust set of processes and systems, including cost accounting, timekeeping, expense tracking, contract, and project management to handle financial and project reporting. Government contracts involve a steady flow of contract modifications that must be managed properly to handle the government funding correctly including generating accurate and timely invoices.
A government contractor's accounting system must track all the organization's costs and allow the costs to be separated by what is allowable (direct and indirect), and what is unallowable. Each grant, contract, or project must be allocated a portion of the indirect costs. The unallowable cost cannot be charged to any government grant or contract. The accounting system must also help contractors demonstrate that their indirect cost allocation methodology is fair and equitable and can withstand the scrutiny of a government audit. A government contractor's contract and project management system must provide detailed job cost reports while supporting the entire contract and project lifecycle including estimating, planning, executing (operating), and reporting. Supporting all these functions requires putting in place a DCAA Compliant ERP system.
DCAA Compliant ERP systems, such as AtWork Systems' OneLynk platform, include integrated modules for all the required functions needed by federal contractors. The SOA architecture and REST-based APIs allow other vendor solutions to be integrated. OneLynk is built using a mobile first strategy to allow organizations to operate 24/7 from anywhere. Security is based on role-based access that allows access to be restricted based on user functions, organizational responsibility, and role. OneLynk also leverage end-2-end workflow and document management to allow processes to be automated and streamlined. The net result is improved internal controls and compliance.
What are the factors to consider when selecting an ERP solution?
View: A Government Contractor's Guide to Selecting an ERP Solution - Factors to consider when selecting an ERP system.
Addressing compliance requirements while also improving the ability to deliver and win new contracts requires thoughtful investment in the back-office infrastructure (processes and systems) that underpin required capabilities. GovCons who wish to become prime contractors (primes) will be required to put in place a range of capabilities.
The capability journey often starts with establishing what you need to successfully deliver staff augmentation services and concludes once you've set up a range of capabilities required to become a prime. For most GovCons, the decision to implement an enterprise resource planning (ERP) system is a critical milestone because it serves as a building block for establishing core capabilities while introducing the change management needed to mature their organization's operating model.
What are the factors to consider when selecting a GRC solution?
Cloud-based technology has allowed organizations to operate more efficiently. It has also opened the door to new security concerns that must be addressed. Data leakages, IP theft, system outages, data privacy, denial of service, financial theft, and ransoms are just a few of the current threats facing all organizations. As organizations continue to combat these threats, they will be required to implement security controls and establish a governance program focused on ensuring compliance. A key outcome of good governance is ensuring compliance with established controls, and when needed, implementing new security policies and practices to reduce risk. To be cost-effective, the governance program must be supported by tools that reduce manual processes while enabling continuous assessment and monitoring.
View: A Guide to Selecting a GRC Solution -- Continuous Security Assessment and Monitoring - Security frameworks, requirements, and building blocks.The US government is one of the largest buyers in the world and relies heavily on its industry supply chain of government contractors to provide goods, services, and innovative technology to improve our way of life. The ecosystem and supply chain runs deep and not only includes government agencies and large enterprises, but also small, specialized businesses that have unique skills or products. Over the last decade, we have seen an increased number of security breaches at all levels of this ecosystem, exposing years of development and innovative technology and putting it into the hands of our adversaries and those who seek to use it to their benefit. To help mitigate the risk and ensure organizations at all levels are using best security practices within their organization, good governance is essential. Cost-effective governance establishes systematic security programs that assess, remediate, and continuously monitor security posture. As security threats continue to evolve, organizations need to implement continuous assessment and monitoring tools to avoid spending a large portion of their operating budget on governance and compliance. For organizations of all sizes, including government agencies, what are the building blocks for establishing cost-effective governance?
What is the business case for implementing a DCAA Compliant ERP System?
Many federal contractors have a high percentage of back-office staff manually processing business transactions because of regulatory requirements and their current systems lack required capabilities. This state is not only is suboptimal but also a key reason many 8(a) firms fail to graduate from the program due to noncompetitive indirect rates. A DCAA Compliant ERP, such as OneLynk, enables organizations to operate when and where it is most cost-effective. OneLynk provides an integrated suite of apps that transform back-office operations by automating many routine accounting, HR, timekeeping, expense tracking, contract, and project management tasks performed by federal contractors. Digital transactions and automated workflow approvals, combined with role-based security, and integrated document management dramatically increases productivity while lowering cost. DCAA Compliant ERP like OneLynk provides built-in analytics and real time reporting using which organizations can transform their operations by moving resources from low-value manual activities to high-value data analysis. And most importantly, OneLynk allows organizations to run a streamlined operation while meeting mandatory compliance requirements.
Below is a summary of the factors to consider when building a business case and the ROI by module.
|Module||Impacts on Operations|
|Core (mobility, workflow & approvals, document management, security)||
|HCM - Resource Management||
|HCM - Self Service||
Learn More About AtWork Systems
AtWork Systems is an Arlington, Virginia based software development company. Its principals have decades of experience doing business with and working for federal, state, and local government. They developed OneLynk as a configurable and scalable business operating platform that digitizes and optimizes processes while providing just in time business intelligence for decision making. OneLynk contains a suite of easily configurable web applications for automating and monitoring business transactions, including: human capital management, finance, timekeeping and expense management, procurement, contracts and project management, payroll services and more. Check it out at www.AtWorkSys.com and see for yourself!