Spreadsheets or ERP -- Why They Are Inadequate for Government Property Management?

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1 Spreadsheets or ERP -- Why They Are Inadequate for Government Property Management? Disclaimer: This document contains general information, is not substitute for professional advice or services. E-ISG Asset Intelligence is Commercial Off the Shelf software solution provider. It is not affiliated with any financial accounting or tax planning professional service companies. In Jan 2016, the national CPA firm Dixon Hugh Goodman organized a webinar called Government Property Management the Forgotten System with E-ISG Asset Intelligence. Hundreds of people attended this webinar. The attendees are people involved in managing Government Property in mid to large sized government contractors. Their roles include: 1. CFOs, Accounting Managers 2. Government Property Managers 3. Project Managers 4. Contract Managers 5. Compliance Managers We asked the participants some questions before the webinar. When asked the question Do you believe you know where every item of Government Property is, with good records to show an Auditor?, only 47% of the participants says yes, and more than half of the participants said I sure hope so, or No. 1

2 Answers to question "Do you believe you know where every item of Government Property is, with good records to show an Auditor?" (# people answered = 264) "Yes" 47% "I sure hope so " 33% "No" 20% Most of the audience (58%) indicated that they either use ERP asset management module or excel sheets to manage government property. Only a quarter of them have dedicated system to manage government property. Answers to question "What type of system do you use to track Government Property?" (# people anwered=243) "We've got some spreadsheets" 38% "Need to look into that " 15% "Dedicated system such as equip! or Sunflower System" 27% "Currently tracking throught our ERP Asset Module" 20% 2

3 These two answers are somewhat related. Spreadsheets or ERP s Asset Management module don t do an adequate job in managing Government Property. As we can see from the small sample survey, more than 50% of the companies use spreadsheets or ERP s Asset Management module, and more than 50% of the companies are not convinced they have a good record of their government property. Challenges for using spreadsheets or ERP system to manage Government Property Let s go through the 10 Performance Outcomes from Government Property Management System, as outlined by FAR , and whether they are sufficient. 10 Performance Spreadsheets or ERP Why They are Inadequate? Outcomes Acquisition Information in the Acquisition record doesn t automatically transfer to spreadsheets it requires manual data entry and is prone to errors Reconciliation between Acquisition records and Property records takes more time and resources Receiving & Lack of mechanism to easily track returns, generate shipping Identification documents (e.g. DD1149 s) for change of custody or simply confirming the receipt Lack of automated mechanism to exchange/update information with the IUID registry (a DOD requirement) Multiple items in one PO line can t automatically be serialized upon receipt Asset tags/labels require additional manual data entry Records Spreadsheets can t keep track of the entire history of the asset, can t be searched for the history of a subset of assets (Audit Trail) ERP asset management systems are not easy to use when it comes to supporting frequent moves of assets, updates on the condition and location of assets, assigned custodian or consumption While many ERP systems have a Materials module, most are not optimized to manage Property through the full lifecycle Spreadsheets or ERP asset management systems can t track the assembled products as linked assets, with each asset having its own history and other information such as condition, asset category, price, linked PO information, etc. Spreadsheets typically are vulnerable to errors when multiple users work from the same file 3

4 Physical Inventory Subcontract control Excel sheets can t support inventory by exception transaction based inventory methods. This method saves time and resources while meeting the standards Physical inventory using Excel files usually means printing out a file, verifying inventory compared to the records, then updating manually later very prone to error Most ERP asset management modules don t come with mobile applications on handheld computers/scanners, that are used in physical inventory data verification Subcontractors are not able to have the same access to the spreadsheets or ERP module as the prime. If the subcontractors have their own spreadsheets, typically in their own format, this will present challenges to reconcile records Reports It s hard to generate customized reports from information in spreadsheets quickly The reporting tool in ERP asset management module is typically hard to use, not formatted to support Government Property Management report requirements time and resource consuming Relief of stewardship Spreadsheets can t regularly monitor the loss rates, shortages and overages for a contract Lack of mechanism to retain records for recycling/retiring assets in an auditable form Most ERP systems and spreadsheet databases have no mechanism to retain document records (e.g. scanned copies of DD1149 s, DD250 s, WAWF confirmations, etc.) Utilization A great deal of manual effort, prone to error, is necessary to use spreadsheets to track all the usage history of assets. ERP asset management module usually only tracks the beginning and ending of the life cycle for assets, but missing many steps in between Maintenance Spreadsheets can t easily track maintenance history, schedule routine maintenance or ad hoc maintenance, while generating and tracking the work orders Most ERP systems lack a maintenance management module to manage and track maintenance, calibration, etc. Property Closeout Lack of ongoing updates and record keeping makes the property closeout a challenge Contract Property Closeout requires final Physical Inventory, Reports and documentation to support Relief of Stewardship, all mentioned above 4

5 Special Consideration in choosing a Government Property Management system 1. The type of contract, the work that a Government Contractor is performing, the types, quantities and frequency of necessary transactions of Government Property are all important to consider when choosing an Asset Management System to support the needs of managing Government Property. If a Contractor has just 20 items to manage and track, with just a few changes in content over the course of a year or a contract life, perhaps keeping records in a simple spreadsheet is adequate. But even so, care would need to be taken to be sure all transactions are carefully recorded, the data fields are complete, notes for each record include who made what changes, and when, etc. Managing significant quantities of assets with frequent transactions using spreadsheets can become very unwieldy and prone to error very quickly. 2. Even the best ERP systems available, which are quite costly, are not typically designed to manage Government Property. They are typically designed and built to support financial processes and manufacturing processes well. Manufacturing inputs, such as parts and materials, are different that most Government Property. Even those with modules developed as add-ons to support tracking of materials or assets are not designed and built to support the needs of a Government Contractor. They cannot easily automate custom reporting in a format required by the Government, populate and produce transaction documentation (e.g. DD1149 s, DD250 s ) or transmit reports (e.g. WAWF transactions) to Government reporting systems. There is no perfect, all-encompassing system that can fully support all Enterprise Resources, that also supports Government Property well. The best approach is to use an Enterprise Asset Management System and or Procurement system that is built for that purpose, preferably that can connect with an existing ERP system and also import from and export to existing Excel spreadsheet files. Government Property Management is a specific discipline, with its own unique requirements. It is neither very simple, nor overly complex. It can be easily supported with an Enterprise Asset Management System designed and built for that purpose. 5

6 Special Thanks to Alex Barenblitt for contributing to this article. Alex Barenblitt is a consultant to E-ISG Asset Intelligence on Government Property Management system. He is a NPMA Certified Professional Property Manager (CPPM) and a NPMA Member Council of Fellows, Consulting Fellow (CF). About E-ISG Asset Intelligence E-ISG Asset Intelligence provide out-of-box software solutions equip! and implementation services for managing enterprise assets. Available equip! products include the equip! Government Property Management system. The equip! software can be installed on premise or delivered as Software as a Solution. The equip! software is Flexible, Extendable and Mobile. 6