sap solutions for government contracting in aerpspace & defense

Solution in Detail

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Aerospace and Defense

Government Contracting in Aerospace and Defense

Executive Summary Solution Overview Contact Us


2 / 23 © 2013 SAP AG or an SAP affiliate company.

All rights reserved.

Deliver Excellence Across the Board

U.S. federal government buying agencies such

as the Department of Defense have always

expected contractors to provide exceptional

value. Today, though, they expect contractors

to deliver that value at lower, more affordable

costs. At the same time, contracting and

auditing agencies, such as the Defense

Contract Management Agency (DCMA) and the

Defense Contract Audit Agency (DCAA),

expect contractors to demonstrate that they

have met their contractual obligations – and

that they have done so in compliance with the

labyrinth of regulations that apply to

government contracts.

Contractors are caught in the middle. They

must try to execute these complex programs in

the most efficient and cost-effective ways, while

also complying with regulatory requirements

that can be burdensome and often increase the

cost of doing business.

Successfully executing such programs

efficiently, cost-effectively, and in compliance

with regulations requires contractors to adopt

business processes that are more automated

and integrated than ever. They need solutions

that are fast, lean, highly optimized, and highly

transparent.

Managing any complex, large-scale program poses big challenges. But when

the customer is the U.S. federal government, the challenges grow even greater.

Complex government contracts introduce the need for additional oversight and

regulatory compliance. An organization’s ability to manage these challenges

successfully can impact program cash flow significantly and can even create –

or limit – future business opportunities.

Optimize Compliance

Deliver Excellence

Leverage SAP Innovations

Run Better


20% Lower compliance costs

among companies that

implement software designed

to support government

requirements

Source: SAP Performance

Benchmarking

https://valuemanagement.sap.com/disclaimer/



The contract is the starting point when

optimizing program operations with compliance

in mind. Program managers need a full

understanding of the contract’s requirements,

deliverables, key terms, and conditions. They

need to understand which terms must flow

down and which elements they must track for

regulatory compliance through subsequent

work orders and activities.

Operationalizing this understanding is key.

The contract needs to be integrated into the

underlying architecture of the project and

execution systems so that information flows

through all parts of the system – from execution

to accounting – without cumbersome

translations and manual interventions.

A solution optimized in this way facilitates

earned value reporting, rapid and accurate bill

generation, and comprehensive change and

modification tracking. When the time arrives for

incurred cost submissions, such a solution can

segregate direct and indirect costs, properly

account for unallowables, and generate reports

in the proper formats. And it does all this with

full traceability.

Optimize Operations with Compliance in Mind

Federal contractors face enormous and competing pressures. There are

operational and competitive pressures to execute programs more efficiently

and cost-effectively in order to deliver results on time and within budget.

Simultaneously, there are pressures to operate ever more transparently and

in compliance with government regulations. Solutions that can help optimize

operations with compliance in mind are crucial to managing these competing

pressures.


Optimize Compliance

Deliver Excellence


Run Better



SAP software can help contractors drive operational excellence and achieve

compliance. Working with our partner, Dassian, SAP offers integrated and flexible

solutions with the functionality that contractors require. These solutions enable

contractors to streamline operations based on their policies and procedures while

automating compliance to meet the Federal Acquisition Regulation (FAR), Defense

FAR Supplement (DFARS), and Cost Accounting Standards (CAS).

Improve contractual compliance by integrating directly with project and execution systems

Improve invoice accuracy and reduce disputes by integrating directly with project cost

information

Decrease delays in earned value reporting by streamlining the movement of project information

within the system

Increase earned value accuracy via access to integrated project cost and schedule information

Improve accuracy and efficiency in incurred cost reporting via automatic incorporation of

accounting and project costs and use of regulation-compliant report formats

Run Faster, Run Better, Run Smarter


Optimize Compliance

Deliver Excellence


Run Better



The amount of information captured, stored,

created, and shared during the course of an

aerospace and defense program can be

staggering. And just as the U.S. federal

government relies on the experience and

specialized skills of contractors to manage

key programs, contractors have come to rely

on the experience and innovation found at

SAP to manage the business and information

challenges that these programs present.

SAP innovations in the areas of Big Data,

real-time analytics, and in-memory computing

can provide government contractors with the

resources they need to manage day-to-day

program operations more effectively than

ever. These innovations enable the real-time

manipulation and analysis of huge volumes of

information. They provide detailed insights into

costs, performance, trends, schedules, and

variances.

Moreover, these same innovations can help

contractors meet the regulatory and compliance

requirements that go hand-in-glove with

such programs. The information required for

invoicing, compliance reporting, and more can

be retrieved and formatted for presentation to

the appropriate agencies.

SAP Innovations

SAP innovations for aerospace and defense (A&D) contractors can help optimize

operational processes while simultaneously increasing the transparency and

accuracy of reporting processes – a critical consideration where regulatory

compliance is concerned. SAP solutions leverage powerful analytics and real-time

computing technologies to help contractors manage, analyze, and report on vast

amounts of program data.


Optimize Compliance

Deliver Excellence


Run Better



Manage Government Contracts Better

Government Contracts and Billing

Establish complex contracts that include accounting classification reference numbers

(ACRNs), limits, and fee types; manage terms and flow down; track modifications;

and bill all contract types.

Earned Value Reporting

Generate control account plans, responsibility assignment matrices, and properly

formatted contract performance reports; analyze performance trends, variances, and

more.

Project Accounting and Incurred Cost Reporting

Segregate, analyze, and report direct and indirect costs in detail; generate properly

formatted incurred cost submissions with greater automation.

Contracting and Billing

Solution Overview

Project Accounting


Why SAP?

Program Management




Government contract and

billing solutions from SAP

support the needs of

companies doing business

with the U.S. government.

Government Contracting and Billing



Solution Overview

Project Accounting


Why SAP?

Program Management

Design, Build,

Support, and

Management

Contracts and

Billing

Program

Management

Financials and

Accounting

Government Contracts

and Billing

Project Accounting and

Incurred Cost Reporting Earned Value Reporting

Procurement

Time

and

Expense

Project-

Driven

Manufacturing

Project

Creation and

Execution

Payroll Financial Close

Applied

Indirect

Costs

Project

Accounting

Maintenance

Operations

Incurred

Cost

Reporting

Billing

Details

Maintenance

of Contract

Changes

Invoice

Creation

Management

of Contract

Flow Down

Contract

Creation

Payroll

Reconciliation

Earned

Value

Reporting

Earned

Value

Management

Accounts

Payable,

Accounts

Receivable



Software solutions from SAP and Dassian

enable aerospace and defense companies to

capture all the details related to government

contracts – and to link those details back to the

business processes helping to manage the

underlying project. This tight integration of

contract and project information improves an

organization’s ability to comply with flow down

and billing requirements.

Aerospace and defense contractors can quickly

and efficiently generate inception-to-date

invoices that automatically reflect the proper

limits, as well as the correct withholdings, billing

rates, and ACRN balances.

Capture government contract details,

terms, and conditions, including all

information needed to execute billing

for all contract types. Manage and track

the history of contract modifications.

Establish and control contract flow

down. Monitor contract performance,

including billed and unbilled costs.

Government Contracting and Billing

Capabilities


Benefits

SAP Innovations

Solution Overview




With government contracting and billing

software from SAP and Dassian, contractors

can efficiently manage all types of contracts

(cost type, time and material, firm fixed price,

progress payments, performance-based,

milestone, and more). They can use distinct fee

structures, such as fixed, award, and incentive

fees. They can also establish limits on costs

and fees by cost element, and manage with-

holdings and ACRN balances.

Contractors can link contract line items (CLINS)

to specific project efforts. They can register key

contract information, such as Defense Priorities

and Allocation System (DPAS) ratings and FAR

clauses. All this information flows down into the

project’s purchase orders, production orders,

work breakdown structure (WBS) elements,

service orders, and deliveries, which helps

ensure contract and regulatory compliance.

Contractors can also accurately maintain and

track changes throughout a contract’s lifecycle

for items such as awarded values, incremental

funding, and more.

Finally, SAP software can help automate and

orchestrate billing processes with workflow and

approval processes – helping the organization

generate timely, accurate invoices with the

level of detail and information that government

customers require.

Execute Government Contracts with Greater Efficiency

and Compliance


Capabilities


Benefits

SAP Innovations

Solution Overview



With integrated software from SAP and

Dassian, contractors can perform ACRN

accounting and generate accurate invoices

without error-prone and costly manual

calculations, thereby reducing customer

disputes and delayed payments. This can

improve days sales outstanding (DSO) and

maximize cash flow.

The software handles corrections without

affecting the billing cycle, enabling contractors

to place partial or entire costs on billing hold

and send out invoices without waiting.

It enables rapid cost reconciliation for DCAA

audits with detailed and traceable billing

backup reports.

Contract administrators can stay on top of

contract performance via dashboards that

present contract metrics at a glance. They

can track modifications to contract and funding

values to stay up-to-date and operate with

full awareness of current contract funding.

Automated e-mail messages can alert

managers when approaching specified

contract spending levels.

Unlock greater efficiency with a billing

solution that can generate accurate and

compliant invoices, reduce receivables

aging, and improve cash flow. Automate

processes and calculations to reduce

labor associated with preparing

invoices. Track contract metrics to

understand performance at a glance.

Achieve Efficiency in Compliance and Optimize

Visibility into Contract Performance


Capabilities


Benefits

SAP Innovations

Solution Overview



SAP Business Suite software and Dassian

government contract accounting solutions take

advantage of the SAP HANA platform. The in-

memory computing technology in SAP HANA

can significantly reduce the cycle time for

billing, decrease unbilled receivables, and

facilitate the rapid recovery of incurred costs.

This improves

Innovations for Government Contracts and Billing

program cash flow and can significantly

decrease working capital requirements across

the company. And, since SAP Business Suite

powered by SAP HANA can be deployed in a

nondisruptive manner, aerospace and defense

contractors can achieve these benefits without

having to learn new processes or retrain staff.

SAP Business Suite software powered

by the SAP HANA platform delivers

valuable innovations for government

contractors. In-memory computing

helps minimize the time spent

performing contract management and

billing processes and enables the

management and processing of large

volumes of data with greater efficiency.


Capabilities


Benefits

SAP Innovations

Solution Overview



Software from SAP and Dassian supports

comprehensive earned value reporting,

enabling aerospace and defense contractors

to analyze program performance at every level

of the WBS. Detailed reports include interactive

analytics, such as S-curve charts, cost and

schedule performance indices, and more. The

contractor can discover program performance

issues as well as variance root causes.

Built-in cost performance reporting (CPR)

formats enable compliance with U.S.

government reporting requirements, so

contractors can share program performance

in the formats expected.

Finally, contractors can submit program

performance information electronically to

government customers using the integrated

program management report (IPMR) format.

SAP software complies with the latest United

Nations Center for Trade Facilitation and

E-Business (UN/CEFACT) XML data

schema, described within the IPMR Data

Item Description (IPMR DID).

Analyze, report on, and share a pro-

gram’s earned value information with

program and company leadership, as well

as with customers and auditors. Detailed

reporting and informative analytics

provide key insights into program

performance and inform government

customers of program progress – in

precisely the formats they expect.


Capabilities


Benefits

SAP Innovations

Solution Overview




Even with programs involving vast amounts

of data, SAP software can provide contractors

with the in-depth insights they need to comply

with program performance reporting require-

ments. The software integrates analytical tools

with program management and reporting tools

to enable true earned value (EV) reporting.

At any level of the WBS, contractors can

access key EV information. This includes the

budgeted cost of work scheduled (BCWS),

budgeted cost of work performed (BCWP),

and actual cost of work performed (ACWP),

as well as budget, estimate, and variance

at completion (in both dollars and hours).

Embedded and interactive charts can facilitate

insight, graphically presenting EV information

with S-curves, bull’s-eye performance graphs,

variance and trend analysis charts, and more.

Analyses presented in this way help contractors

spot issues and trends at a glance. If a more

detailed view of data is required, the underlying

transactional information is just a few clicks away.

Once the EV analysis is complete, contractors

can report on program performance using a

range of government-compliant CPR formats,

including IPMR, which can be shared via

approved UN/CEFACT XML schemas.

Analyze Program Performance with Confidence and

Report with Compliance


Capabilities


Benefits

SAP Innovations

Solution Overview



SAP software can help contractors do more

with less. Without the need to engage multiple

systems, contractors can commence the

analysis-to-report process without waiting

for time-consuming interfaces. They can

gain insight into a program’s earned value

information at any level and access underlying

transactional information without having to

jump from system to system. They can identify

problems with source information quickly and

cycle corrections into the analysis without

manual intervention.

Because the critical EV data, analytical tools,

and charting and reporting tools are all part of

the same integrated SAP solution, contractors

eliminate the need to reconcile the program

system of record with a separate EV system.

They gain improved transparency and trace-

ability, along with the ability to generate timely

and accurate reports that are automatically

formatted to comply with the requirements of

individual agencies and sponsors.

Minimize analysis-to-reporting cycle

time and gain greater insight into

earned value performance by using

analytical and reporting tools that are

deeply integrated with the program

system of record itself. Meet analysis,

charting, and reporting requirements

more efficiently using a single solution

rather than multiple systems.

Increase Efficiency and Gain Deep Insight into Earned

Value Performance


Capabilities


Benefits

SAP Innovations

Solution Overview



The SAP HANA platform extends innovations

in in-memory computing to all aspects of

aerospace and defense program management

and reporting. It enables the management

and manipulation of huge volumes of data in

real time. It provides the data management

foundation for SAP Business Suite powered by

SAP HANA, as well as for integrated software

products provided by SAP partners such as

Innovations for Compliant Earned Value Reporting

Dassian. It facilitates the use of interactive

and embedded analytics that present program

analysts with at-a-glance insights about the

state of the program under management. And,

they can do this without having to pour over

endless rows and columns of program data or

jump from system to system to find disparate

fragments of information they can piece

together to form a more complete picture.

SAP innovations in areas such as in-

memory computing, Big Data, and

embedded, real-time analytics introduce

exceptional levels of performance,

analytical insight, and automated

compliance reporting to aerospace and

defense contractors performing earned

value reporting.


Capabilities


Benefits

SAP Innovations

Solution Overview



Accurate and transparent accounting is the

basis for efficiency and CAS compliance in

government contracting. The ability to capture

detailed cost and revenue information consis-

tently, appropriately, and accurately enables

efficient execution of critical downstream

processes such as billing, earned value

reporting, and incurred cost reporting. It can

also provide a contractor with the tools required

to survive the scrutiny of an audit.

Project accounting solutions from SAP can

integrate with program execution systems to

capture, burden, and analyze the accounting

information generated by these system.

Flexible revenue recognition methods enable

contractors to record project revenues

according to their own requirements.

Incurred cost reporting features enable

contractors to analyze and validate direct and

indirect cost rates and generate the required

reports for incurred cost submissions.

Compliance and efficiency in govern-

ment contracting depend on an ability

to account accurately for all activities

undertaken in connection with a program.

Companies that can account for incurred

project costs consistently and accurately

can operate more efficiently – and

achieve and maintain compliance.

Project Accounting and Incurred Cost Reporting

Capabilities

Project Accounting

Benefits

SAP Innovations

Solution Overview




SAP software provides features that support

both comprehensive project accounting as well

as detailed and accurate incurred cost

reporting.

The software accurately and automatically

accounts for activities performed across the

organization, such as time and expense

reporting, payroll, purchasing, manufacturing,

maintenance, and others. It enables the

segregation of costs (such as direct and

indirect costs, allowable and unallowable

costs). It also allows contractors to define and

apply complex indirect rates to burden project

costs accurately – and to update those rates

retroactively as final rates are approved.

Project accounting tools integrate with broader

financial accounting tools to facilitate the

reconciliation of project costs with the general

ledger. The software generates incurred cost

submissions with a high degree of automation.

It also supports multiple disclosure statements

(and multiple versions of each statement).

Contractors can create and export incurred

cost submission schedules A through H into

Microsoft Excel; adjust and annotate trans-

action information with notes and clarifications;

and run audit and reconciliation reports to verify

accuracy.

Improve Compliance and Accuracy in Project

Accounting and Incurred Cost Reporting


Capabilities

Project Accounting

Benefits

SAP Innovations

Solution Overview



Project accounting software from SAP collects

time, expense, purchasing, and other cost

information from the program execution system.

Automation minimizes manual intervention

and improves accuracy. Integration with

downstream processes such as billing and

earned value reporting facilitates consistency

and compliance.

The software improves insight into total costs

by automatically applying indirect rates. As

actual rates are confirmed, rate adjustments

can be calculated and applied retroactively.

Comprehensive reporting and traceability

foster transparency to facilitate audits.

Project accounting software from SAP

automatically ties into and reconciles

program-wide general ledger accounts

and other sources to help ensure accuracy.

It automatically generates incurred cost

schedules (ICS), which helps increase

operational efficiency. Because ICS

data resides in the secure SAP software

environment, it can be locked down and

protected from accidental changes.

Automation and integration with the

overall program execution system

facilitate project accounting. Information

from projects and accounting can be

incorporated automatically into incurred

cost submissions, reducing the time and

effort required to maintain regulatory

compliance.

Access to Accurate Accounting Information Facilitates

Compliance


Capabilities

Project Accounting

Benefits

SAP Innovations

Solution Overview



SAP HANA extends innovations in in-memory

computing to all aspects of aerospace and

defense program management and financial

reporting. It enables the management and

manipulation of huge volumes of data in

real time. It provides the data management

foundation for SAP Business Suite powered

Innovations for Project Accounting

by SAP HANA, as well as for integrated

software products provided by SAP partners

such as Dassian.

It facilitates faster processing of large amounts

of project accounting information, enabling

faster project allocations, burdening, retroactive

rate adjustments, project revenue calculations,

and more.

For government contractors in aero-

space and defense, SAP innovations

in areas such as in-memory computing

introduce exceptional levels of perform-

ance and analytical insight. The SAP

HANA platform facilitates automated

compliance reporting and improves

performance in project accounting and

incurred cost reporting.


Capabilities

Project Accounting

Benefits

SAP Innovations

Solution Overview



Managing Complex Customer Programs Value Map

SAP solutions can help

manage complex A&D

programs.



Solution Overview

Project Accounting


Why SAP?

Program Management

Management of Complex Customer Programs

Collaborative Sales Force

Automation

Government Contracting

Program Management

Technology

Solutions

3D Business Visualization

Enterprise Mobility

Analytics Data Management

Application Development

and Integration

Consumer Experience

SAP HANA Platform

IT Management Application Lifecycle

Management

IT Strategy and Governance

IT Infrastructure Management

IT Portfolio and Project

Management

IT Service Management

Procurement

Supplier Discovery and

Lifecycle Management

Commodity Management

Strategic Sourcing and

Contracting

Procurement and Order

Collaboration

Collaborative Invoice

to Pay

Finance Financial Performance

Management

Enterprise Risk and Compliance

Management

Accounting and Financial Close

Treasury and Financial Risk

Mitigation

Collaborative Finance

Operations

People and Talent Core Human Resources and

Payroll

Talent Management

Time and Attendance

Management

Workforce Planning and

Analytics

Aftermarket Services

Maintenance, Repair, and Overhaul (MRO) Services and Lifecycle Support

Service Parts Management

Equipment Visibility and

Performance

Responsive Supply

Network

Collaborative Supply Planning

Supply Chain Execution

Supply Chain Analytics

Design and Build of

Complex Products

Product Development

and Compliance

Embedded Systems

Technology

Project Manufacturing

for Complex Assembly

Plant Operations and Maintenance



Why SAP?

Government contracting solutions from SAP and its partners can help aerospace

and defense companies improve operations, increase transparency, and comply

with accounting and reporting requirements when doing business with the U.S.

federal government.

Efficiency

Break down information silos and share contract, project, accounting, and operational data across

functions.

Integration

Work without delays and interruptions as information flows between contracts, projects,

accounting, and execution systems.

Compliance

Operate transparently using a solution built to maintain a single version of the truth and designed

with government compliance in mind.



Solution Overview

Project Accounting


Why SAP?

Program Management



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Solution in Detail


Aerospace and Defense

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