Property Management Transformation

Enabling the intelligent enterprise Consulting Services Software SBA certified 8(a), Small Disadvantaged Business Property Management Transformation Property Management process, technology and organizational improvements at a DOE Science Lab Project Overview http://www.brillient.net For more information, please contact: Sukumar R. Iyer, 703 597 7858, sukuiyer@brillient.net

The challenge Effective property management is a challenge for any Government agency Tax payer dollars spent in acquiring assets have to be properly accounted for Acquisition, receiving, tagging and control Inventory management across multiple locations Managing proper use, custodianship, loans, borrows, transfers, property pass, excess Preventing theft, pilferage, loss Wall to wall inventories, audits and reporting requirements Changing regulations on definitions of controlled and sensitive assets Managing agency IG audits, GAO audits Adverse media publicity on stolen or lost assets invites congressional scrutiny Technology issues quality & accuracy of property data, integration of property systems with procurement and rest of supply chain Process issues lack of well designed and documented processes & procedures enabling effective property management Organizational issues defined roles & responsibilities, accountability and authority Page 2

Introduction Brillient Corporation has built strong capabilities in Property Management Transformation Property management transformation involves Taking a holistic approach to Property Management Data analysis and data driven approach to identify problems and gaps Analysis of processes, procedures and policies Evaluation of people, training and best practices Technology and software applications used Integration with the rest of the supply chain process Identify transformational changes and recommendations to improve the state of property management Tie improvements to organizational goals cost savings, reduced risk, compliance with policies and regulations A past performance project executed for a Department of Energy (DOE) science lab in two phases is presented (referred to as Client or lab in the following slides) Client references are available on request Page 3

Phase 1 summary Brillient Corporation was contracted to perform a Phase 1 assessment of Property Management at the Client The team assessed the current as is state of the Client s Property Management System data quality, standardization, taxonomy as well as asset management processes and the technology elements impacting data quality Defined a to be state to achieve the lab s property management goals The as is and to be states were measured using quantitative and qualitative Key Performance Indicators (KPIs) Executed a gap analysis which identified contributing gaps with processes, technology, and organization Detailed recommendations were identified to bridge the gaps and achieve the to be goals - listed by priority (critical, important, needed and optional); along with implementation estimates The overall state of property management at the Client is complex, evolving and can be further improved. This is not atypical of any large organization involving multiple departments, systems and complex processes Page 4

Goals & challenges Key value levers Reduce Risk with passing IG/GAO audits and any adverse publicity Ensure compliance with DoE policies and regulations Cost reduction & cost avoidance Goals of a sound Asset Management process Lab Management Ability to pass an IG or other audit Contract performance scoring Property Management is a significant part of the Management & Operations (M & O) score Sound capitalization and depreciation process for finance to pass internal/external audits Divisions & scientists Scientific work proceeds unimpeded Assets procured from division funding controlled Traceability to report back to funding sources Challenges Client s property management team and system face the following problems and challenges: Data quality issues with inventory data Inconsistent definitions and lack of standardization with taxonomy Process gaps leading to data quality issues Technology challenges integrating with the supply chain process Lack of data insight Page 5

Assessment Methodology The assessment team utilized a proven methodology analyzing the data, process, technology and people impacting data quality. Key Performance Indicators (KPIs) were used to quantify findings. Out of scope Organization & Human Performance Data analysis Assessment of Property Management System Data Quality & Standardization Technology Analysis of Property Management data extract for trends and data quality, standardization and taxonomy issues Analysis of Property Management data to a procurement data Statistical sampling of assets on premises, compare with AMS data Statistical sample Process analyses o o o 39.6% of all assets by $value 15 building locations (23% of locations) 9 divisions/departments Interviews with key personnel o Procurement o Receiving o Asset management o Finance o IT Documented process flows Reviewed documentation and manuals Analyzed for gaps and weaknesses impacting data quality and inconsistencies Review of Property Management system s technical functionality, user interface and data model Assessed level of data and technical integration with other lab systems Page 6

Analysis of data, processes, technology and supply chain integration The assessment team conducted a bottom up data analysis of data quality, trends and patterns, including: Analysis of a statistical sample Analysis of the entire inventory Comparing a subset of higher value inventory to procurement Analysis of very high value items Processes & policies were analyzed for: Adequate controls and choke points Clearly defined practices Process efficiencies Training of personnel Supply chain integration Data consistency with up front supply chain (procurement etc) Accuracy and data flow Data quality impacts Acquisition Costs ($) 1,000,000,000 100,000,000 10,000,000 1,000,000 100,000 10,000 1,000 100 10 10,000 # of Assets and Acquisition Costs by Year Asset Counts and Aggregate Values by Value Range 3,500 3,000 2,500 2,000 1,500 1,000 500 # Assets $140 $130 $120 # Assets 100,000 10,000 1,000 100 10 1 AUTOMATIC DATA PROCESSING EQUIPMENT (770) LABORATORY EQUIPMENT (720) Number and Percentage of Assets by AMS Asset Type MISCELLANEOUS EQUIPMENT (799) OFFICE FURNITURE AND EQUIPMENT (730) SHOP EQUIPMENT (755) MOTOR VEHICLES AND AIRCRAFT (725) # Assets 11,619 6,511 675 363 268 50 27 18 5 1 Percentage of Assets 59.47 33.33 3.45 1.86 1.37 0.26 0.14 0.09 0.03 0.01 AMS Asset Type HOSPITAL AND MEDICAL EQUIPMENT (715) SECURITY AND PROTECTION EQUIPMENT (750) REACTORS AND ACCELERATORS (680) ELECT. GENERATORS, TRANSMISSION 70 60 50 40 30 20 10 0 Percentage of Assets 1 1948 1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 2003 1,000 Year Acquisition Cost # Assets Count of Assets by $ Value # Assets Aggregate $ Value of Assets 100 Corresponding to Count 10 - $110 $100 $90 $80 $70 $60 $50 $40 $30 $20 $10 Aggregate Value ($M) Value ($) 1,000,000,000 100,000,000 10,000,000 1,000,000 100,000 10,000 1,000 100 Asset Values by AMS Asset Types 10 0.3% Serial Number Data Quality 1 AUTOMATIC DATA REACTORS AND OFFICE 0.6% SHOP MOTOR VEHICLES HOSPITAL AND SECURITY AND ELECT. LABORATORY MISCELLANEOUS EQUIPMENT PROCESSING ACCELERATORS FURNITURE AND AND AIRCRAFT MEDICAL PROTECTION GENERATORS, EQUIPMENT (720) EQUIPMENT (799) (755) EQUIPMENT (770) (680) EQUIPMENT 3.9% (730) (725) EQUIPMENT (715) EQUIPMENT (750) TRANSMISSION Value ($) 288,225,870 144,436,279 138,436,292 15,436,074 10,841,826 6,901,959 3,197,576 384,518 239,855 7,497 Avg Asset Value 44,308 12,432 27,687,259 22,868 4.6% 29,867 25,754 63,952 14,241 13,325 7,498 Percentage of Assets 47.40% 23.75% 22.77% 2.54% 1.78% 1.13% 0.53% 0.06% 0.04% 0.00% AMS Asset Type 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Percentage of Assets # Assets 120 100 80 60 40 20-1 1 2 4 8 16 32 64 128 Assets with Duplicate Serial numbers $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $- Same mfr, different model Potentially same mfr, diffferent Different mfr, same model Same mfr and model model Asset Value ($M) Asset Value Range ($) 256 512 1,024 2,048 4,096 8,192 16,384 32,768 65,536 131,072 262,144 524,288 1,048,576 2,097,152 4,194,304 8,388,608 16,777,216 33,554,432 67,108,864 134,217,728 $0 90.7% SN Populated Empty SN SN Not Found SN is 2 characters or less Noted as "TBD" # Assets Value ($M) Details obscured to preserve Client confidentiality Page 7

Gap analysis and quantification The analysis of the as is state was used to define a to be set of goals quantified by Key Performance Indicators (KPIs). These were then used to conduct a gap analysis also quantified by KPIs. Gaps, goals and KPIs were captured by functional areas mapped to the lifecycle of an asset from procurement through receiving, asset management, audits/checks, retiral, disposal. Page 8

Recommendations to bridge gaps and achieve goals Recommendations Detailed recommendations were identified by functional area of asset life cycle Recommendation themes Process Technology Data integration Data quality Mapped to gaps addressed Gaps Contributing gaps and KPI gaps Organization/mana gement Recommendations were prioritized by Critical essential to ensure ongoing data accuracy Important key improvement Needed improvement is important but is also ongoing Optional Mapped to Value Levers Reduce risk Compliance Cost savings Page 9

Recommendations Recommendations were made at a detailed and tactical level Functional areas and owners were identified mapped to the supply chain cycle For each recommendation a level of complexity to implement was also estimated. Mapped with the benefits, these help identify quick wins and return on investment Page 10

Phase 2 summary Brillient Corporation was contracted to perform a follow on Phase 2 project to assist with implementation of key recommendations The primary goals of this phase were to: Define changes to the organization functions, accountability, roles & responsibilities Develop detailed As-Is and improved To-Be processes, along with quantified benefits Develop training material and best practice recommendations Project Tasks Task 1: Business Process Flows Develop detailed As-Is and To-Be process flows for property management functions Define roles and responsibilities of the Property Management Organization Task 2: Training Documentation Develop detailed step by step training documentation for property management functions Task 3: AMS Data Quality & Cleanup Develop automatic scripts to clean up data in AMS Recommend AMS manual process changes (if needed) Task 4: Best Practices Assess & recommend Supply chain best practices Deliverables As-Is process & To-Be process flows Cost & Process Benefit Analysis Documented Roles and Responsibilities Training Manual/Schedule Training Plan AMS Clean-up process document AMS Clean-up Data Change log Check & Balance process documentation Updated (sub) process flows Recommended Best Practices Cost Benefit Analysis, Estimates & Schedules Benefits Delivered Process time savings ranging from 8% - 90% for different processes Annual savings amounting to ~21% of extended property management budget) Wall to Wall inventory cost savings of ~67% Re-organized Property Management Organization Functions, accountability, roles & responsibilities defined How-To training manual (web publishable) Developed scripts for automated detection of data quality issues Developed automatic data cleanup scripts covering 49.2% assets Developed manual cleanup recommendations covering 50.8% assets Advanced sensing technologies for real time monitoring and dramatic savings in inventory Management, communications & website improvements Page 11

Process & Inputs The assessment team utilized a proven methodology analyzing the data, process, technology and people impacting Property Management Business Process and AMS Data Quality. PROCESS OUTCOMES INPUTS Page 12

Task 1: Process improvements, defined roles, responsibilities Task 1 Scope Finalizing As-Is Phase 1 process flows of Purchase Order, Ebuy/B2B and PCard Developing As-Is process flows for loans, borrows, transfers, excess, property pass, return to vendor and fabrications Developing To-Be process flows of Purchase Order, Ebuy/B2B, Pcard, loans, borrows, transfers, excess, property pass, return to vendor (RTV) and fabrications Cost Benefit Analysis of As-Is & To- Be process flows Qualitative Benefits of To-Be organization and processes: Tax payer dollars saved due to more efficient and tighter processes, well defined organizational functions, accountability and roles & responsibilities Reduced inter-departmental communication and dependencies Divisions more involved, aware of the movement and state of assets, reducing effort/cost to manage assets and Wall to Wall inventories Increased efficiencies, higher data accuracy and reduced errors due to higher degree of automation. ~40 Check and Balances Effective Lifecycle Management of assets resulting in proper tracking and control of assets, compliance and passing audits Defining and documenting specific roles and responsibilities Page 13 14 processes covering the entire property management life cycle were re-designed High level organizational redesign Example of a simple process chart

Task 2:Training Documentation Task 2 Scope Training manual Introducing Property Management basics as defined by DoE Documenting the new Property Management Organization including functions, responsibilities and accountability Describing differences between incoming and outgoing assets Creating specific training requirements and procedures for various property management roles Working with PMIP team on developing step by step procedures Providing information on the types of forms and their uses as it relates property management functions Benefits of Training Documentation: Detailed training manual including definitions, roles & responsibilities, process definitions and How-To processes description for all individuals involved with property management Step by step processes defined for: PO, B2B/eBuy and Pcard procurement methods Process Task # Domestic Loans and/or request transportation to pickup asset Foreign Loans 3,4,12 Forms: form 2. High Risk form 3. DOE 4420.2 Borrows 7,8 Property Custodian Risk (Division) Outward Transfer 30 Property Specialist-High Risk (PMCT) Inward Transfer 9-15 Property 1. Receive Loan Representative (Division) attachment Property Pass Shipping Clerk Excess 3. Assemble DOE 4420.2 & send to Property Liaison Return to Vendor (RTV) about loan received from Fabrications Shipping Clerk WHO WHAT HOW 2,5,6 Requestor 1. Works with Property Custodian to fill form 1. Loan Request web 1. Evaluate asset High 2. Fill web forms 2-1. Fill Loan Request and High Risk web form on the Property Management website 1. Receive High Risk evaluation web form as email attachment request web form and high risk evaluation web form as email 2. Send copy of loan documentation to Property Liaison & 4. Receive notification 5. Shipping document One-stop reference document for property management and training Key attributes for hiring a property liaison or property rep 1-1. Determine eligibility of Loan Request based on High Risk web form Accept High Risk results Do not Accept High Risk results 2-1. Receive Loan Request eligibility information: High Risk results accepted High Risk results not accepted 2-2. Send copy of loan documentation only after high risk result has been accepted 3-1. DOE 4420.2 information can be obtained from the high risk approved loan request web form 4-1. Currently identifying IT requirements 5-1. Inform custodian that Shipping document has been received and asset will be shipped 6. Check in 30 days if 6-1. Check with Shipping if asset has been shipped asset has been or loaned asset has been returned and inform received or sent to LBNL Custodian about status Custodian 16-29 Property Liaison 1. Send to Borrowing 1-1. Receive completed DOE 4420.2 from Property Publishable on the property management web site Page 14

Task 3: Data Quality and Cleanup Task 3 Scope Developing simple data cleanup processes Defining Check and Balances to mitigate future errors and processes Documenting process methodologies for automatic script cleaning and manual data scrub Developing Data Change Log for AMS Assessing 100% AMS assets by determining data quality issues and providing recommendations Benefits of Data Quality Identification and Cleanup: The entire AMS asset base of approximately 21,000 assets was analyzed Scripts developed for detecting data quality issues Financial errors including capitalization and depreciation Taxonomy issues Dates Missing or erroneous data elements Inconsistent data Documentation provided for IT to schedule automated execution of these data quality scripts to find recurring issues Data quality issues found for 17,759 asset instances (a single asset may have more than one data quality issue) Data quality issues (taxonomy) were fixed using automated scripts for 49.2% of the total asset base and 10.63% of the asset base by acquisition value AMS Catalog now contains consistent taxonomy definitions For the remaining data quality issues manual data cleanup processes have been defined Script testing & execution process Page 15

Task 4: Best Practices Task 4 Scope Assessing RFID implementation at LBNL Reviewing supply chain best practice recommendations Providing estimated costs and return on investment analysis Prioritizing recommendations by benefit levels Performing a Cost Benefit Analysis Providing implementation estimates and schedules Qualitative Benefits of Best Practice Recommendations Defined and recommended use of an information-driven supply chain Best practice recommendations categorized under: Advanced Sensing Technologies Communication, education and signage Management Human Resources Property Management website Reporting and other RFID, GPS and Laptop detection recommendations provide real time visibility into supply chain and significant savings in tracking, location sensing and inventory efforts RFID Labels Hand held reader GPS location Page 16 RFID Label printer Door way scanners

How can we help you We can assist you to improve your property management efforts with the goal of meeting or exceeding agency/department goals. Brillient has proven that we can return a good return on the investment in such an effort. A task 1 assessment (as is, to be, gap analysis & recommendations) can be executed in a few weeks Provides a dispassionate and neutral perspective Provides a preview of what if an IG or GAO audit occurred Reinforces what you know, will find new things you did not know Defines recommendations and an execution plan Follow-on tasks assist with implementation and achieving program goals Redesigned and efficient processes, documented and accompanied by training materials can be a significant and minimum win We can work with you to take small steps and show tangible outcomes DOE client references can be provided For further information, please contact: Sukumar R. Iyer President & CEO Brillient Corporation 11417 Sunset Hills Road, Suite 210 Reston, VA 20190 Email: SukuIyer@brillient.net Telephone: 703 994 4232 Fax: 703 793 0660 Web: http://www.brillient.net Page 17