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CHIPS Articles: Talking with Scott Boggs, Vice President, Corporate Controller, Microsoft Corporation

Talking with Scott Boggs, Vice President, Corporate Controller, Microsoft Corporation
By CHIPS Magazine - July-September 2002
Connecting Technology provides the perfect venue for networking with colleagues. Dave Wennergren, Department of the Navy Deputy Chief Information Officer for Enterprise Integration and Security; Ron Turner, Department of the Navy Deputy Chief Information Officer for Infrastructure, Systems and Technology; Floyd Groce, DON CIO Team Leader for Enterprise Licensing; Jim Clausen, OSD Co-Chair for Enterprise Licensing; and Don Reiter, DON Liaison Officer and Team Lead for Communications and Outreach, joined Microsoft executives, Scott Boggs, Vice President, Corporate Controller; Mary Peth, Navy Team; Ted Craig, Account Executive; and Roger Carlsen, Navy Marine Corps Team Manager for an informal chat.

Mr. Boggs was a keynote speaker at CT and talked about how Microsoft is utilizing technology internally to improve efficiencies, increase revenues and drive profits. He also briefed on the .Net Framework to provide seamless integration and reduce IT spending in the business arena. He was anxious to meet with Navy and DoD leaders to discuss current technology initiatives. Mr. Boggs expressed a keen interest in the Navy Marine Corps Intranet (NMCI) contract.

Turner: OSD just authorized the DON to order an additional 100,000 seats resulting from the completion of the mandated Contractor & Customer Test & Evaluation (CT&E-3) phase of the NMCI. The additional 100,000 seats being ordered brings the total authorized number to 160,000 of the 411,000 seats planned. NMCI is a performance-based, service level contract that includes everything necessary to ensure transmission of voice, video and data information.

Each seat includes 24x7x365 helpdesk support, support infrastructure, enhanced security and information assurance, hardware, software, network monitoring and training. We basically "sold" our existing infrastructure investments to the vendor — told industry what we wanted and left it up to them to deliver. The only specific requirements are for interoperability and security. There are four prime contractors: EDS, Raytheon, WorldCOM and WAM!NET. A Request for Proposal (RFP) went out in December 1999. The contract was awarded and implementation started October 2000.

Boggs: Very impressive, phenomenal.

Turner: Yes, it is. There is nothing like NMCI in Government today, but other agencies, such as the NSA, CIA, NASA and others have been investigating this type of contract…some already have an NMCI–like deal in place.

Wennergren: The Department of the Navy is the Executive Service for executing Smart Card deployment, currently 160,000 Common Access Cards [CAC] have been issued — only 3.85 million to go. Seriously, the target population is 4 million active duty military, DoD civilian, select Reserve and eligible contractors. Currently, the Navy has deployed a mass issuance campaign at high population areas. The vision of DON Smart Cards to access information and authenticate messages is getting closer. The Department has made great progress.

Boggs: It sounds like you are really excited about the technology and can't work fast enough. What's next for NMCI?

Wennergren: Actually, we can't. There is so much we want to do.

Turner: After getting more seats rolled out on NMCI, the next piece of the puzzle is to see if we can do something like NMCI afloat. We are working on applying the same type of acquisition lessons learned and technologies for afloat forces. We are also very interested in cost savings initiatives like the DoD Enterprise Software Initiative [ESI]. We are doing everything we can to help Jim Clausen and Floyd Groce complete Microsoft contract negotiations. We have contracts expiring in mid-June, and it is critical to get something in place quickly. We meet weekly with the Working Group and Lt. Gen. Cuviello [Director of Information Systems for Command, Control, Communications, and Computers, U.S. Army] and everyone is very anxious to get something in place.

Clausen: I assure you our requests are essential to DoD and we do need to move quickly.

Carlsen: We are aware of the problem and we are working on it. You should be seeing some results soon.

Boggs: What is ForceNet?

Turner: ForceNet is a concept that looks at the integration of all of the technology initiatives we have been talking about – tying together logistics, finance, warfare and all of the programs and capabilities that fall into this area… It is a long-term strategy that tries to compare the total cost of delivering a mission capability to meet the needs of the warfighter… including any computing and communications needs that fall into that category.

Boggs: This is great, this is exactly what I talked about in my presentation. You need a long-term vision and strong leadership support to meet your objectives. Even if it isn’t executed the way you envision now – just having a vision with leadership guiding the way guarantees positive results.

Peth: What about the new Naval Network Warfare Command? Was it really necessary to stand up a new command?

Turner: Yes, definitely. The Network Command combines several functions that were performed by other activities and centralizes them to monitor the Navy’s portion of NMCI network operations. The RFP, acquisition and testing were conducted at the department level, but now that NMCI is deployed, it is important that oversight for day-to-day operations is centralized and monitored by the operational forces… and IT Type Commander… to make sure everything is working as it should.

CHIPS: Mr. Boggs, in your presentation you talked about the importance of “empowering knowledge workers with business intelligence.” What do you mean by this?

Boggs: It is important that our employees have access to information from many sources. Microsoft doesn’t impose any standard to manage information, but it is essential that information be easy to access. So much of what employees do is web-based. If the Internet goes down, and that rarely happens, we might as well go home.

CHIPS: You spoke about the intellectual power of Microsoft employees. What else gives your employees an edge?

Boggs: We, we don’t use a digital dashboard or that type of technology, but we do not have an intranet where employees probably spend 90 to 95 percent of their time because the information it contains is so relevant to their jobs.

Peth: We also have a best practices database that is very popular with employees.

CHIPS: At a recent conference I attended, I heard a speaker say that DoD contractors’ best practices do not translate well in DoD.

Boggs: I’m surprised to hear that and I disagree. There is not one example from my slides this morning that would not work for DoD. DoD faces many of the same challenges that we do in private industry—increasing efficiencies, productivity, cost savings, human resources management, finance, interest in technology… [Refer to the table below.]

Turner: I disagree strongly. We actually looked very closely at industry best practices in modeling department technology initiatives. The top leaders in the Secretary of the Navy office have met consistently with industry executives that have had tremendous commercial success. These discussions always shed light on the problems industry has experienced and then we try to apply their lessons learned as we start on this change journey.

The department has invested some of the emerging technologies, such as SAP. [The SAP R/3 system is a group of sophisticated business modules that span a range of highly specific business processes. The business and data processes implemented in these modules are exposed to application developers through the Business Application Programming Interface (BAPI), a group of objects that provide an object-oriented view of the SAP R/3 system.] Modeling business practices is the smart thing to do to achieve department objectives.

Wennergren: I can’t imagine why anyone would think that industry best practices would not work in the DoD. Leveraging lessons learned from industry has been key to developing and deploying new technology in DoD.

Challenges in the 21st Century
• Constantly evolving business models
• Rapidly changing technologies/requirements
• Knowledge-based workforce
• Rapid growth, dynamic workforce
• Global business environment
• Many, diverse legacy systems/rapidly changing technologies
• Pressure to increase efficiencies/reduce costs

Microsoft Case Study – What we had…

• Multiple, disparate business systems
• Lack of worldwide revenue information
• Inability to track people and positions
• 350,000 hard copy financial reports distributed worldwide, available 14 days after end of period
• Hundreds of paper forms for purchasing, benefits, 401K, policies, etc.
• Excessive resources focused on transaction processing, not adding business value

Microsoft Today

• Single transaction system worldwide
• Consistent business policies and processes
• Key financial and operational metrics available real-time including:
• Revenue and inventory by product, customer, location, channel
• Organization headcount and people detail worldwide
• Transaction cost detail worldwide
• All financial reports distributed electronically 4 days following month end
• Over 99% of all procurement processed electronically
• Vendors have real-time access to PO and invoice status
• All employee services are web-based

Key Strategies

• Clear vision and leadership
• Hire the best and the brightest
• Alignment with the business
• Standardize policies, taxonomies and views
• Leverage technologies
• Expect constant improvement

System Strategies – Information Any Time, Any Where

• Integrate enterprise applications
• Business unit specific applications
• Empower knowledge workers with Business Intelligence
• Automate with e-commerce
• 100% employee self-service
Left to right: Ron Turner, DON Deputy CIO for Policy, Infrastructure, Systems and Technology; Scott Boggs, Vice President, Corporate Controller, Microsoft Corporate and Dave Wennergren, DON Deputy for Enterprise Integration and Security.
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