We recently spoke with government acquisition experts from Deloitte during a webinar about current trends and issues in government acquisition. Data was a major topic, with particular emphasis on the most effective way to share data between a finance system and contract writing system to increase efficiency and accuracy and reduce manual effort—all with the goal of accelerating the acquisition process.
[ Watch the on-demand webinar, Discussion with Deloitte: Expert Advice on Modernizing Government Acquisitions. ]
First, some background on the interconnected roles of finance and contract writing systems in government acquisition. The finance system handles financial transactions and budgetary information, while the contract writing system manages the creation, execution, and administration of contracts. The integration of these systems is crucial for accurate financial tracking, compliance, and accountability. Here are some ways they work together:
Budgetary information. The finance system needs to share budgetary information with the contract writing system—including the availability of funds, budget allocations, and any restrictions or limitations on spending—to enable the contract writing system to determine the financial feasibility of proposed acquisitions, prepare accurate cost estimates, and establish appropriate contract values.
Cost estimation. The contract writing system requires data from the finance system to develop cost estimates and ensure contracts align with available funding. This data may include historical pricing information, budgetary constraints, and financial guidelines.
Obligation and commitment tracking. As contracts are awarded and obligations are incurred, the contract writing system must share data with the finance system regarding contract values, deliverables, payment terms, and any modifications or amendments. This enables the finance system to accurately track and record financial obligations and commitments against the budget. Access to real-time information on contract status helps prevent overspending or making unauthorized commitments.
Invoicing and payment. The contract writing system needs to provide the finance system with information related to invoicing and payment processes, such as invoices received from contractors, payment terms, and supporting documentation. The finance system can then verify the legitimacy of invoices, process payments efficiently, and maintain accurate financial records.
Financial reporting and compliance. Both the finance system and contract writing system collaborate to generate financial reports and ensure compliance with financial regulations and policies. The contract writing system provides relevant contract data, such as contract values, modifications, and payment milestones, while the finance system leverages this information to prepare financial statements, monitor spending, and support audits.
What you need to know before modernizing your government acquisition system.
As the Deloitte experts we spoke with acknowledged, both the financial systems and the contract writing systems at most organizations are in need of modernization. But since finance and contracting processes are so closely connected, you can’t address their modernization one at a time. Integration is a critical concern.
Here’s how it typically works: The finance team on one side of the house is using financial systems to deal with tracking and allocating money and where it's being spent, and through the contract writing system, the other side of the house is making decisions about spending that money. Since data is central to acquisitions and needs to flow between systems, agencies are grappling with how to modernize the systems in a structured way that's meaningful for both sides.
To accelerate the acquisition process, agencies aim to track and streamline processes and respond to events that are outside their control, such as the speed of technological change, shifting regulations, heightened employee expectations, and so on. Moreover, agencies need to make sure to spend the funds that have been allocated to them, or they won’t receive those funds again next year and the finance system will have to re-allocate that money someplace else.
All these factors increase the pressure on contracting and finance teams. Fortunately, modernization can help. But to achieve efficient processes and connected systems, the finance and the contracting offices need to work in concert.
Stakeholders shouldn’t be surprised by change. Communications and change management elements are critical to a successful project rollout.
-Gail Guseman, Specialist Leader, Deloitte Consulting LLP
Why you need a dedicated contract writing solution.
Too many agencies make a common mistake when modernizing their financial system: They propose using their financial system vendor to incorporate contract writing functionality. While, in theory, unifying the finance and contract writing systems would make data integration easier, contracting officers are very vocal in their opposition to that approach. And for good reason. Contracting systems built by large financial system providers such as Oracle don’t meet the needs of the contracting community because they’re not built with that audience in mind. In contrast, a purpose-built application like Appian Contract Writing is informed by decades of experience working with the contracting community and includes functionality that is uniquely important to contracting, such as the ability to duplicate CLINs. Large financial system providers don't have that same knowledge of the customer.
While both financial and contracting systems need to be modernized and data standards need to be established to enhance communications between them, they need to be separate products to meet the needs of the separate functions.
-Jake Edelman, Specialist Leader, Deloitte Consulting LLP
Take a platform approach for faster cross-system data sharing and process orchestration.
To facilitate data transfer between enterprise systems, the government established data standards. For example, the Department of Defense Procurement Data Standard (PDS) was developed for enterprise-wide creation, processing, and sharing of contracting actions, with the aim of improving contract data visibility and decision making. PDS includes the Financial Data in Procurement (FDIP) format for linking financial data to contract actions.
But complexity arises when software vendors don't have modern integration points like APIs. Some software vendors also lock in data, which makes it difficult for government agencies to extract it. That’s why robotic process automation (RPA) is a critical component of a contract writing solution. RPA allows connections between systems without APIs. It is important to consider acquisition solution providers that have native RPA capabilities to bridge the gap by automatically copying and pasting data between systems rather than requiring a human to enter data manually.
Of course, financial data isn't the only type of data that contracting officers have to access. Contracting also needs data from ERP, records management, enterprise reporting, and property management systems, to name a few.
So, in addition to RPA, what other features does Deloitte recommend agencies look for in a solution for sharing data between systems without APIs?
Rather than migrating and restructuring all your data sets into a single system—which is a huge effort—a better solution is to use a platform that can seamlessly connect disparate systems and share data as needed. The less rework, restructuring, and migration a platform requires, the more forward-looking it is.
Taking an agile approach to data is vitally important, as it allows you to easily add new requirements and incorporate user feedback.
-Gail Guseman, Specialist Leader, Deloitte Consulting LLP
According to Deloitte experts, a good modern platform should serve as a modernization layer that sits on top of your existing infrastructure and connects data and processes across all systems. By avoiding the need to adapt your legacy technology, infrastructure, and knowledge, it gives you the confidence that you'll be able to incorporate new technologies as they become available and scale at the pace of change.
Learn more about how you can unify your data using Appian’s data fabric to seamlessly access data anywhere in your organization. And watch the webinar with Deloitte on-demand to see the additional insights they shared for improving federal acquisition.
