SAP solutions for government contracting in Aerpspace & Defense

Solution in Detail
© 2013 SAP AG or an SAP affiliate company. All rights reserved.
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

3 / 23
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

4 / 23
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

5 / 23
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

6 / 23
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

7 / 23
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
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

8 / 23
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

9 / 23
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

10 / 23
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

11 / 23
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

12 / 23
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

13 / 23
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

14 / 23
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

15 / 23
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

16 / 23
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

17 / 23
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

18 / 23
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

19 / 23
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

20 / 23
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

21 / 23
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

22 / 23
Benchmark Your Performance
Position your organization for dominance in this new economy with the business performance
benchmarking program from SAP – available free to SAP customers and select prospects.
The SAP benchmarking program has helped more than 3,000 organizations assess their
strengths, uncover areas for improvement, and identify best practices and IT strategies that
generate clear, tangible value – not someday, but today.
Go Live in Weeks
Here’s the fastest way to run your business better: our rapid-deployment solutions. In one
package, you get everything you need to be up and running quickly – including preconfigured
software and implementation services – in just weeks. With a defined scope and predictable
costs, there are no surprises.
Join Your Community of Practices
Every day, SAP Community Network (SCN) changes the way that thousands of SAP users work.
It lets members help one another solve problems, learn, and invent new ways to get things
done – faster. Find out how to connect with people, content, and resources.
Find Out More About How Your Organization Can
Become Best-Run
Visit valuemanagement.sap.com >>
Visit sap.com/solutions/rds >>
Visit scn.sap.com >>

Solution in Detail
Aerospace and Defense
Visit us online to learn more:
www54.sap.com/industries/aerospace-defense.html
http://scn.sap.com/community/aerospace-and-defense
www.youtube.com/playlist?list=PL3ZRUb1AKkpSoGaVEIqk
lzKWk8QvsR2c9
www.youtube.com/user/dassianinc
www.linkedin.com/groups?gid=2053109&trk=myg_ugrp_ovr
https://twitter.com/DassianInc
http://dassian.com/index.php
CMP 26933 (13/09)

No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission
of SAP AG. The information contained herein may be changed without prior notice.
Some software products marketed by SAP AG and its distributors contain proprietary software components of other
software vendors. National product specifications may vary.
These materials are provided by SAP AG and its affiliated companies (“SAP Group”) for informational purposes only,
without representation or warranty of any kind, and SAP Group shall not be liable for errors or omissions with respect to
the materials. The only warranties for SAP Group products and services are those that are set forth in the express warranty
statements accompanying such products and services, if any. Nothing herein should be construed as constituting an
additional warranty.
SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered
trademarks of SAP AG in Germany and other countries.
Please see http://www.sap.com/corporate-en/legal/copyright/index.epx#trademark for additional trademark information
and notices.

SAP solutions for government contracting in Aerpspace & Defense

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (20)

Similar to SAP solutions for government contracting in Aerpspace & Defense

Similar to SAP solutions for government contracting in Aerpspace & Defense (20)

More from Dassian Inc.

More from Dassian Inc. (7)

Recently uploaded

Recently uploaded (20)

SAP solutions for government contracting in Aerpspace & Defense