RFI_Attach_2_ONRR_BPR_To-Be_State_Report_Final_1.pdf

U.S. Department of the Interior

Office of Natural Resources Revenue

Business Process Reengineering To-Be State Report

Prepared by Booz Allen Hamilton

December 27, 2019

ONRR BPR To-Be State Report i

Contents

1.0 Executive Summary

2.0 Introduction

3.0 Approach

3.1 Designing and Developing As-Is Models

3.2 Benchmarking and Research

3.3 Designing and Developing To-Be Models and Formulating BPR Recommendations

4.0 Results

4.1 Life Cycles and Information Exchanged

4.2 Differences Between As-Is and To-Be Processes

5.0 BPR Recommendations

5.1 Recommendation #1: Enterprise-Wide Case Management/CRM Solution

5.2 Recommendation #2: Comprehensive Redesign of Data Validation

5.3 Recommendation #3: Internal- and External-Facing Self-Service Portal

5.4 Recommendation #4: Direct Billing

5.5 Recommendation #5: Expanded Federal Index Pricing

5.6 Recommendation #6: Increased Automation

5.7 Recommendation #7: Enhanced Compliance Work Planning

5.8 Recommendation #8: Enterprise Approach to Compliance

5.9 Recommendation #9: Continuous Improvement Approach

6.0 Implementation and OCM Implications

6.1 OCM Considerations for BPR

6.2 BPR Implementation Strategy and Planning Considerations

7.0 To-Be State Progress Summary and Way Ahead

Appendix A Focus Groups..................................................................................................... A-1

Appendix B To-Be Life Cycle Vision and Guiding Principles ............................................. B-1

Appendix C To-Be Processes ................................................................................................ C-1

Appendix D To-Be Information Flows .................................................................................. D-1

Appendix E To-Be Process Maps........................................................................................... E-1

Appendix F ONRR Submitted Ideas for BPR ........................................................................ F-1

Appendix G Business Logic Focus Group Outputs ............................................................... G-1

Appendix H Case for Change Analysis Details ..................................................................... H-1 ii

Acronyms

AI Artificial Intelligence

AoA Analysis of Alternatives

AM Audit Management

BI Business Intelligence

BIA Bureau of Indian Affairs

BLM Bureau of Land Management

BOEM Bureau of Ocean Energy Management

BPR Business Process Reengineering

BSEE Bureau of Safety and Environmental Enforcement

C2D Collect to Disburse (life cycle)

CC Compel Compliance (life cycle)

CM Compliance Management

COTS Commercial Off-the-Shelf

CRM Customer Relationship Management

DAT Data (life cycle)

DIRT Data Inquiry Reporting Tool

DOI Department of the Interior

EDM Enterprise Data Management

EMARF External MRMSS Application Request Form eSOA Electronic Statement of Accounts

FM Financial Management

FS Financial Services

FTE Full Time Equivalent

FY Fiscal Year

GAGAS Generally Accepted Government Auditing Standards

GAO Government Accountability Office

IPT Integrated Project Team

IRS Internal Revenue Service

IT Information Technology

KSA Knowledge, Skill, and Ability

LOR Lessee of Record

MRMSS Minerals Revenue Management Support System

MSA Market and Spatial Analytics

NoA Notice of Appeal

NONC Notice of Noncompliance

NRRD Natural Resources Revenue Data

O&G Oil and Gas

OCM Organizational Change Management

OE Office of Enforcement

OGOR Oil and Gas Operations Report

OMB Office of Management and Budget

OMT Operations Management Tool

ONRR Office of Natural Resources Revenue iii

ORO Operating Rights Owner

ORPS Online Rental Payment System

OTR Order to Report

POC Point of Contact

RFP Request for Proposal

RRM Reference and Reporting Management

SAO Strategy and Analytics Office

SME Subject Matter Expert

SPOT Strategic Oversight Planning Team

STRAC State and Tribal Royalty Audit Committee

VC Verify Compliance (life cycle)

VCT Volume Comparison Tool

1.0 Executive Summary

The U.S. Department of the Interior (DOI) Office of Natural Resources Revenue (ONRR) collects, accounts, and disburses close to $10 billion annually in royalties and related revenue payments from the leasing and production of natural resources from Federal and Native

American leases. To fulfill its mission, ONRR relies heavily on business processes supported by its mixed financial information technology (IT) system, the Minerals Revenue Management

Support System (MRMSS).

In 2017, ONRR engaged Booz Allen Hamilton (Booz Allen) to evaluate alternatives for the modernization of MRMSS. That Analysis of Alternatives (AoA) recommended that ONRR pursue an IT solution that offers more control, flexibility, and agility while leveraging advanced technology and tools to increase the efficiency and accuracy of its business processes. However, Booz Allen found that for ONRR to most effectively modernize, it would need to reengineer core business processes, eliminating highly customized, manual, and unnecessarily risky processes. In

October 2018, ONRR moved forward with business process reengineering (BPR).

For the past 15 months, Booz Allen has worked with the ONRR BPR Integrated Project Team

(IPT) to lead a multi-phased BPR approach culminating in development of To-Be process models and BPR Recommendations. Through this phased approach, ONRR progressed from an evaluation of its value chain and documentation of 82 underlying As-Is business processes and associated pain points and strengths1, to an identification of a more optimal 56 To-Be processes representing 15 major activities and 70 unique information exchanges. The data collection and supporting process map development was time and resource intensive. In total, 113 ONRR employees participated in the “grassroots” To-Be Design. Booz Allen and IPT members co-facilitated 23 focus groups to develop 16 of the 56 To-Be process maps, with more mapping planned in follow-on work.

To inform the To-Be Design, Booz Allen: (1) benchmarked practices of state and tribe natural resource revenue agencies, (2) identified leading practices across the public and private sectors, and (3) fielded and vetted more than 300 BPR ideas from across the Office.2 These staff-sourced ideas ranged from incremental to transformational, and this outreach ensured that those that know ONRR’s business processes best had input on the To-Be Design. From these efforts, Booz

Allen and the IPT identified nine recommendations that will transform how ONRR does business:

1 U.S. Department of the Interior, Office of Natural Resources Revenue. “Business Process Reengineering As-Is

Baseline Report.” August 26, 2019. Prepared by Booz Allen Hamilton.

2 The benchmarking and leading practices research culminated in six recommended practices relevant to ONRR’s

BPR effort, as documented in the report: U.S. Department of the Interior, Office of Natural Resources Revenue.

“Recommended Practices Report.” September 13, 2019. Prepared by Booz Allen Hamilton. ONRR-sourced ideas for reengineering opportunities were captured through various formats (e.g., email, “imagination” sessions, direct conversations with ONRR business users); those results were catalogued by Booz Allen and reviewed by the IPT.

Recommendation #1: ONRR should expand its case management capabilities and adopt customer relationship management (CRM) capabilities to effectively manage all forms of internal and external interactions.

Recommendation #2: ONRR should make data validation and verification standards progressively more stringent and increase data acquisition and management capabilities.

Doing so will build a rich reservoir of data and information and reach toward the goal of not allowing data to be used in ONRR processing that is not certified as accurate.

Recommendation #3: ONRR should create a self-service portal, consisting of an “internal-facing” component accessible to ONRR staff and an “external-facing” component used by all external stakeholders, to efficiently collect, access, and share all data used in ONRR processing.

Recommendation #4: ONRR should adopt a direct billing model for lease and royalty obligations with a phased approach to simplify the collection and verification of data.

Recommendation #5: ONRR should expand its use of index prices for royalty calculations based on wellhead volumes (including an adjustment for quality) for properties in areas that have identifiable, transparent third-party publication pricing to further simplify the collection and verification of data.

Recommendation #6: ONRR should automate processes that are best performed by technology so employees can reallocate their time towards higher value-add work that cannot be performed by computers.

Recommendation #7: ONRR should leverage automation, coverage goals, and a continuously improving risk model to develop a compliance work plan that aligns with the organization’s strategic goals and maximizes use of limited resources.

Recommendation #8: ONRR should develop and consistently apply an ONRR-wide approach to proactively verify and compel compliance that includes a comprehensive compliance strategy, streamlined compliance activities, and standard policies and procedures.

Recommendation #9: ONRR should institutionalize a process and data improvement approach for the betterment of ONRR in an agile manner that includes governance, training, and continuous implementations.

These nine recommendations touch all four functional areas or life cycles of ONRR’s business:

Collect to Disburse; Compel Compliance; Data; and Verify Compliance. These nine evolved from more than two dozen preliminary recommendations across those life cycles. The recommendations fit the vision and guiding principles for each life cycle developed by ONRR subject matter experts (SMEs), ensuring that the To-Be Design addressed factors most important to the ONRR future state.

The IPT has communicated the case for adopting each of the recommendations, and Booz Allen continues to analyze cases for change that capture benefits (quantitative and qualitative), implementation challenges, and risk. Booz Allen and the IPT will focus on completing these assessments in the months ahead.

Booz Allen identified and the IPT validated other critical next steps for implementing the BPR recommendations and associated To-Be business processes. ONRR will need to apply organizational change management (OCM) best practices that will prepare its environment and employees for the changes to come. Those initiatives include providing an updated OCM plan, conducting a skills gap analysis and “get well” plan, ongoing employee engagement, training, and communications, to name a few. Careful and consistent implementation and OCM planning will help ONRR capitalize on BPR opportunities and facilitate the transition to new, optimized ways of doing business with minimal disruptions.

ONRR recognizes that modernization is a multi-year endeavor, and BPR is the keystone. The

IPT, with support from Booz Allen, has worked intently to garner BPR ownership at all levels of the Office. Goals, visions, and guiding principles were established early. ONRR has diligently applied those guideposts so that recommendations would capture not only opportunities for improvement, but a future state design for ONRR that will be a paradigm for an effective, mission-driven, and outcome-oriented government.

2.0 Introduction

In July 2018, the U.S. Department of the Interior (DOI) Office of Natural Resources Revenue

(ONRR) engaged Booz Allen Hamilton (Booz Allen) to support ONRR with comprehensive business process reengineering (BPR) of its primary mission functions. This report summarizes the final recommendations, results, and other findings from initial BPR activities.

ONRR’s decision to tackle BPR directly resulted from a

2017 Analysis of Alternatives (AoA) for its core information technology (IT) system, the Minerals Revenue

Management Support System (MRMSS). Through the AoA, ONRR identified a need and opportunity for modernizing

MRMSS. Armed with this information, ONRR moved forward in its modernization efforts.

From extensive research used in the AoA, ONRR recognized that in order to leverage and maximize the potential benefits of modernizing MRMSS, it must reengineer its current – and outdated “legacy” – business processes. Thus, BPR became one of three principal activities under the ONRR Modernization Project (Figure 1).

Figure 1. BPR comprises one of three principal activities of ONRR Modernization

With the decision to pursue BPR, ONRR established three goals. BPR should:

Result in more flexible and dynamic business processes and supporting system(s)

Enable ONRR to more readily incorporate current and future (new) IT solutions

Remove organizational silos through streamlined business functions.

Definition of BPR

The fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance such as cost, quality, service, and speed.

Figure 2 captures ONRR’s BPR approach that

Booz Allen and ONRR have taken. The To-Be

Design, the focus of this report, spans Step 4 and

Step 5 of that approach. Data collection and current state assessment of ONRR’s As-Is processes (Steps 1 through 3), completed in mid-

2019, informed the To-Be Design. Step 6 and Step

7, further vetting of BPR Recommendations and development of an implementation approach, will be tackled in the next BPR phase, slated to begin in January 2020.

Figure 2. BPR Approach

This document covers the nine recommendations that ONRR developed through BPR. It provides a description of those recommendations, details behind them, and an overview of the approach taken to arrive at those recommendations. The report layout works up to the recommendations and ONRR’s path ahead with BPR and implementation as follows:

Approach: The approach describes how ONRR documented its As-Is processes, benchmarked leading practices, conducted the research to inform To-Be Design, and developed the BPR Recommendations, including associated process maps.

Results: The results section focuses on the To-Be Design phases and outcomes, including how the BPR Recommendations evolved from the evaluation of life cycles and information flows across those key activity areas to arrive at the To-Be processes and

BPR Recommendations. It also provides important context on the difference between

ONRR’s As-Is and To-Be states for a select number of processes.

BPR Recommendations: This section describes each recommendation in detail. Each recommendation includes: a description of the business function and need for the recommendation, differences from the As-Is state (e.g., systems, processes, stakeholder impacts), To-Be processes impacted or driven by the recommendation along with impacted stakeholders, the case for making the change, and implementation considerations specific to the recommendation.

Implementation and Organizational Change Management (OCM) Implications:

This report includes broader, organization-wide considerations for ONRR’s To-Be

Design and associated OCM needs. BPR success depends on effective technical implementation of the BPR Recommendations and their associated business processes, successful design of systems needed to support those requirements, and, as importantly, having and executing a plan for managing change within the organization.

ONRR BPR Vision

Empowering ONRR to drive from great to excellent and to build the ONRR of the future by harnessing our collective brainpower, leveraging technology, simplifying requirements, and eliminating organizational silos.

To-Be State Progress and Way Ahead: The report closes with a discussion around next steps for ONRR with BPR, its implementation, and incorporating BPR results into other modernization activities. Modernization for ONRR is a multi-phase, multi-year endeavor.

More BPR work remains around finalizing business process mapping for the To-Be state to develop a comprehensive list of requirements for supporting systems.

As additional information, eight Appendices are attached to the document. They provide much of the detail used to develop the recommendations and related findings found in the body of the report.

ONRR executives, program managers, supervisors, and staff should all view this document as a reference and guide for BPR implementation. This report will feed into the critical next steps for

BPR. However, guides can change. ONRR faces a multi-year modernization effort. The BPR

Recommendations developed by ONRR capture what ONRR should do to improve and transform. Those recommendations will not change. But updates to reengineering and implementation plans will likely occur as information avails over the project life. ONRR should expect successes and failures and associated highs and lows. With this guide, ONRR can control and own the direction of BPR so that any changes to the plan can be vetted and adopted, keeping

ONRR on course.

3.0 Approach

This section summarizes the results of Steps 1 and 2 and describes Steps 3, 4, and 5 of the BPR approach outlined in Section 2.0 (Figure 2). Steps 4 and 5 were focused on the To-Be Design and consisted of benchmarking and research, designing and developing To-Be processes, and formulating BPR Recommendations. While BPR can be carried out using a variety of approaches, the approach taken by ONRR is typical, with nuances in sequencing, work products, and deliverables.

3.1 Designing and Developing As-Is Models

Prior to initiating To-Be Design efforts, Booz Allen performed an As-Is analysis of ONRR’s primary mission functions, focused on positive and negative impacts to performance. The As-Is phase kicked off with the establishment of the ONRR BPR Integrated Project Team (IPT) and initial data collection around existing ONRR business processes, such as identifying and reviewing statements of procedures and any pre-existing process descriptions and maps. With this information, Booz Allen worked with the IPT to develop an ONRR value chain, which was used as a basis for identifying and inventorying As-Is processes (Figure 3).

Figure 3. The ONRR Value Chain

The IPT identified all business processes (presented in the BPR As-Is Baseline Report, August

26, 2019) currently performed by ONRR, aligned those processes to a value chain, and prioritized them for process mapping. Table 1 provides an overview of a few key As-Is results that demonstrate the coverage and level of effort undertaken to develop and document the understanding necessary for the To-Be Design.

Table 1. As-Is Results

As-Is Output Result

Processes identified 93

Focus groups 38

ONRR subject matter expert (SME) participants 197

Process maps 82

3.2 Benchmarking and Research

To inform redesign of ONRR’s business processes, Booz Allen conducted research on leading and best business practices leveraged by other public and private entities. This research included case studies of recently adopted practices across the public and private sectors as well as benchmarking studies of other minerals revenue management entities. To frame the research, Booz Allen used five topic areas:

Enterprise Data Management (EDM)

Data Analytics and Reporting

Compliance and Enforcement

Information Collection, Sharing, and Validation

Other Technologies and Practices

Booz Allen developed the ONRR BPR Recommended Practices Report (September 13, 2019) that outlined the results and key takeaways from this research. The report identified six recommended practices and six noteworthy practices, along with five associated recommendations to focus ONRR’s efforts when redesigning its business processes and modernizing its technology. Booz Allen leveraged these findings to guide discussions in To-Be

Design focus groups and otherwise inform the development of BPR Recommendations.

3.3 Designing and Developing To-Be Models and Formulating BPR

Recommendations

ONRR and Booz Allen progressed through six phases to reach the To-Be Design and BPR

Recommendations (Figure 4). The following sections describe the approach for each phase, including extensive coordination and participation from ONRR SMEs. Appendix A provides a list of all focus groups conducted for each To-Be Design phase, along with meeting dates and number of participants. Figure 5 summarizes the level of

ONRR engagement and participation.

Figure 5. Unique ONRR SME Participant Counts by To-Be Design Phase

Figure 4: To-Be Design Phases

3.3.1 Phases 1, 2, and 3: Vision, Guiding Principles, and Information Flows

At the beginning of To-Be Design efforts, Booz Allen and the IPT segmented ONRR’s work into four business process life cycles to help break down organizational silos and look at ONRR’s business from a new perspective. The life cycles represented a series of processes and activities to produce an output or achieve an outcome. Using this life cycle construct facilitated early To-

Be Design work by structuring conversations on ONRR objectives and information exchanges that are critical to success. Figure 6 captures the four life cycles and their vision statements.

Booz Allen worked closely with ONRR to facilitate 32 meetings with 91 ONRR

SMEs3 during these three phases of To-

Be Design. The IPT worked with program managers, supervisors, and other ONRR leadership to identify participants from across ONRR’s programs to ensure focus groups harnessed a broad spectrum of views and skillsets. During these sessions, participants defined visions and guiding principles for each life cycle (Appendix

B) as well as information flows within and across the four life cycles (Appendix

D). The information flows showed where key information in the To-Be

Design must flow from one process to another and revealed how processes and information needs across ONRR’s To-

Be Design were linked.

3 Booz Allen engaged 91 unique SMEs during the first three phases of the To-Be Design, and many of these SMEs participated in more than one phase. Summing the number of SMEs engaged in each phase as listed in Figure 5 would double or triple count these participants.

Figure 6: To-Be Life Cycles

3.3.2 Phases 4 and 5: Key Themes and Business Logic Focus Groups

Throughout the BPR project, Booz Allen collected and analyzed more than 300 ideas4 for transforming the way ONRR does business. These ideas came from various sources, including

IPT members, To-Be Design focus group participants, BPR Spotlight (an internal ONRR website) submissions, and Ideation Sessions in multiple geographic locations. A comprehensive list of these ideas can be found in Appendix F. To address these ideas, Booz Allen grouped them into four themes of Business Logic and formed focus groups to explore and address them. These themes, listed below, represented logical groupings of ideas for transforming the way

ONRR does business:

Data from Industry

Validate Data/Analytics

Comprehensive Compliance Strategy

Customer Relationship Management

(CRM)/Case Management System

During October 2019, ONRR and Booz Allen facilitated ten Business Logic focus groups with

40 ONRR SMEs to discuss the submitted ideas and ensure ONRR could incorporate truly innovative approaches into future state business processes. For each theme, focus group participants discussed key terms and definitions, pros and cons of implementing various options, and high-level frameworks to guide more specific process mapping later.

Business Logic focus groups were smaller to enable productive discussion and involvement, and participants were selected by IPT members. These Business Logic focus groups yielded 27 preliminary recommendations for ONRR’s To-Be state. Booz Allen reviewed the preliminary recommendations with the IPT, summarizing associated pros, cons, and potential implementation risks.

The review also determined that 25 of the 27 recommendations would require some form of investment from ONRR to implement. Booz Allen consolidated these 25 recommendations into nine final recommendations, detailed further in Section 5.0.

Appendix G contains a comprehensive list of the preliminary BPR Recommendations aligned to their respective Business Logic focus groups and the nine recommendations discussed further in

Section 5.0.

To further analyze potential benefits and impacts of these recommendations, Booz Allen worked with the IPT and other ONRR SMEs to develop the case for adopting each recommendation. To build these cases for change, Booz Allen collected information on potential time and/or effort

4 These ideas took a number of forms and were intended to be ”radical” or “inspirational” and ranged from more detailed process improvement to enterprise-wide initiatives.

Business Logic

A tool for framing how ONRR will perform one or more mission-related functions that combines key terms, definitions, approaches and frameworks to describe those functions. For BPR, it informs what business processes may or may not be performed in the future and informs what activities are performed within those processes.

that could be saved in the To-Be Design. This benefits analysis focused primarily on the productivity benefits to ONRR from implementing the various activities, based on the anticipated amount of time saved using the new approach, compared to legacy processes.

Booz Allen and ONRR collected benefits information from ONRR SMEs, then estimated opportunity costs by annualizing time savings across one year and converting full time equivalent (FTE) hours to dollars using General Schedule salary rates. Booz Allen also researched publicly available use cases for similar work and consulted additional internal Booz

Allen SMEs to inform its overall approach to this analysis. With this information, Booz Allen also identified qualitative benefits and identified risks associated with each recommendation.

3.3.3 Phase 6: To-Be Process Maps

During To-Be life cycle discussions, ONRR identified 56 processes for inclusion in its To-Be state (Appendix C). Booz Allen reduced this list to 46 processes by eliminating concepts that were activities rather than actual processes (e.g., monitoring). Due to time and resource constraints, Booz Allen prioritized the 46 To-Be processes to recommend an initial set for process mapping. This prioritization primarily focused recommendations for initial mapping on areas representing core ONRR functions (e.g., Analyze Case) and/or To-Be processes representing a fundamental change or new process (e.g., Comprehensive Compliance Strategy, Validate Data, Enhance and Create).

Ultimately, Booz Allen recommended mapping 16 processes via 11 To-Be process mapping focus groups. Section 4.2 presents additional information about these 11 focus groups.

All participants were selected by IPT members and included SMEs working outside the specific process area to help provide an objective perspective on the To-Be Design. Booz Allen worked closely with ONRR to facilitate 23 process mapping sessions with ONRR SMEs.

To-Be process mapping followed a similar approach to the As-Is process mapping, with one primary exception. While As-Is mapping included detailed information about systems and data used in process steps, To-Be mapping included system-agnostic technology references to allow flexibility in specific solutions to fit future ONRR modernization decisions. For example, if an

As-Is map referenced PeopleSoft as a data source, the To-Be map more generally referenced the

“ONRR data source.”

The 11 focus groups generated process maps capturing each process performer using horizontal

“swim lanes.” Booz Allen used standard process mapping shapes to identify each step or activity.

A separate swim lane at the bottom of each map illustrated technology interactions, as described above. Figure 7 shows an example process map output.

Figure 7: Sample To-Be Process Map

Booz Allen also developed an accompanying narrative that described each process. Figure 8 shows an example narrative. The narrative includes four key pieces of information: (1) each numbered step (activity/description), (2) a description with more detail on each process step, (3) notes with additional information from the focus groups, and (4) a column highlighting major differences between the As-Is and To-Be states.

Figure 8: Sample To-Be Process Narrative

Booz Allen shared completed maps and narratives with focus group participants. SMEs provided feedback on the documents during a review period. Feedback included editorial changes, additional process details, and logic corrections. Booz Allen reviewed SME feedback and either addressed the changes or escalated the decision to the focus group's IPT lead. Finally, the IPT lead for a given focus group’s output reviewed and signed off on each map and narrative.

Appendix E lists the focus groups and process maps developed by the BPR team. ONRR will map the remaining To-Be processes in the coming months. A complete list of To-Be processes can be found in Appendix C.

4.0 Results

The To-Be Design results provide the outputs of a comprehensive, ONRR-wide and ONRR-driven effort to reengineer the way it does business. The To-Be Design was a grassroots ONRR effort that leveraged the participation, expertise, and ingenuity of 113 ONRR SMEs (about 1/6th of ONRR’s ranks). This section of the report describes:

The four life cycles used to structure the To-Be Design

Information flows within and across these life cycles

To-Be processes generated thus far

A discussion of the key differences between the As-Is and To-Be states

4.1 Life Cycles and Information Exchanged

Early in the To-Be Design, ONRR determined that its primary mission functions in the To-Be state should be structured using four distinct life cycles:

Collect to Disburse – processes for collecting revenues and disbursing and distributing them to the proper fund recipients

Compel Compliance – processes for using the government’s authority to compel industry to comply with applicable policies, regulations, and statutes and penalize companies for noncompliance

Verify Compliance – processes for checking that industry is acting in compliance with applicable policies, regulations, and statutes

Data – processes for ingesting, sustaining, sharing, and using all data needed for ONRR’s processes

The life cycles served as an initial framework for the To-Be Design and revealed several key relationships within ONRR’s work. Collect to Disburse addresses ONRR’s primary mission to correctly disburse and distribute mineral revenues to fund recipients. Compel Compliance and

Verify Compliance collaborate to ensure compliance by verifying information is reported accurately and taking actions to discourage and resolve noncompliance. The Data life cycle supports the other three by providing readily accessible, high-quality data.

For each life cycle, ONRR SMEs established broad groupings of ONRR processes, which were labeled “major activities.” The purpose of this step was to group similar processes and activities and reveal how multiple processes work together to produce a key output or outcome. In total, ONRR SMEs identified 15 major activities. ONRR SMEs then worked to identify the To-Be processes within each activity. Table 2 illustrates how each major activity was further decomposed into specific processes. ONRR SMEs identified a total of 56 To-Be processes.

Table 2: Major Activities and Processes

Major Activity Processes

1. Intake Direct Retrieval/Interface

Electronic Transmission from Source

Optical Recognition of Submitted Documents

Manual Data Entry

2. Validate Logic Edits

Crosswalk Internal Data

External Check

3. Sustain Store

Update

Enhance and Create

Protect

Metadata

4. Use/Share Pull (Self-Service)

Push (Sharing)

5. Manage Funds Payment Reconciliation

Investments

Process Refund Request

Manage Offshore Funds

Disbursements

Receivable Maintenance

Debt Collection

6. Financial Reporting Treasury-Level Reporting

Department-Level Reporting

ONRR-Level Reporting

7. Ongoing

Communication

Distribute Explanation of Payment

Handle Inquiries

Analyze Inquiries

Stakeholder Contact

8. Strategize Gather Information

Update Unified Compliance Strategy

Perform Analysis

Update Unified Compliance Strategy

Capture/Share Noncompliance Data

Proactive Policy Making

9. Identify Identify Potential Assignments

Make Assignments

10. Analyze Full Scope

Targeted Scope

State and Tribal Royalty Audit Committee (STRAC) Support

Process Request or Notification

11. Proactive Improvements Update Reporter Resources

Compliance Assistance Program

Handle Reporter Questions

Monitor After the Fact for Compliance

Major Activity Processes

12. Execute Action Referral to External Agency

Issue Civil Penalties

Issue Official Correspondence

13. Monitor Action Monitor Official Correspondence

Monitor Open/Outstanding Cases

Monitor Dispute Resolution and Close

Monitor Civil Penalties

Monitor External Agency Referrals

Continuous Data Sharing

14. Manage Disputes Analyze Dispute and Prepare Response

15. Manage Guidance Provide ONRR-Internal Guidance

Provide ONRR-External Guidance

Continuous Data Sharing

Track and Maintain Guidance History

Compliance Assurance Program

Handle Reporter Questions

Booz Allen asked participants to identify what information flows are necessary for each process and major activity, both within each life cycle and across all the life cycles. ONRR identified 93 unique pieces of information that flow throughout the organization to enable the key processes, outputs, and outcomes. Booz Allen grouped similar pieces of information into 70 information flows. For example, Guidance, Guidance and Procedures, and Guidance and Resources were combined into Guidance. This exercise allowed ONRR to simplify the To-Be state by identifying what key information is truly needed to execute ONRR’s missions and ultimately streamline or eliminate information that is not needed. Table 3 lists the information shared between five or more major activities to illustrate some of the key information flows in the To-Be state.

Appendix D contains the complete list of information flows.

Table 3: Frequent Information Flows

Information

Flow Description

Major

Activities

Touched

Data Need All instances where a major activity is accessing ONRR stored data. Its connection to nearly all major activities illustrates ONRR’s desire to manage and store information using one central repository in the future state.

Action Actions taken by ONRR (e.g., issuing an Order or Notice of

Noncompliance (NONC)) and status notifications (includes compelling and non-compelling actions).

Comprehensive

Compliance

Strategy

ONRR’s strategic approach to compliance and the information gathered from within and outside the Office to inform its updates.

Information

Flow Description

Major

Activities

Touched

Receivable Information provided to ONRR that indicates a payment is due, adjustments to a receivable, or notifications regarding receivable activity.

Guidance Communication of ONRR’s final opinion on a situation

(e.g., Valuation Guidance, Appeals Guidance) and its proper application and interpretation.

Additional

Information

Information gathered by the Verify and Compel Compliance life cycles that is not routinely collected by ONRR.

Collections Money received by ONRR. 5

The establishment of life cycles and information flows shaped the early stages of the To-Be

Design and resulted in key changes from the As-Is processes.

4.2 Differences Between As-Is and To-Be Processes

In total, ONRR SMEs developed and IPT members approved process maps for 16 processes (29 percent of the total 56). These 16 processes provide an initial take on how ONRR can simplify or streamline its work and remove organizational silos. As ONRR maps the remainder of the 56 To-Be processes (and potentially identifies additional processes), additional results and differences will become apparent.

However, this section provides an initial analysis of how the As-Is processes differ from the To-Be processes. The initial key results include:

Processes – As-Is processes were combined and streamlined into To-Be processes to break down silos

Performers – To-Be processes feature new and updated roles for ONRR staff, including process performers who serve to reach across silos and dedicate time to continuous improvement

Information – To-Be information flows are holistically redesigned to ensure that information flows to where it is needed across ONRR

Technology – The To-Be Design leverages new technology solutions to simplify

ONRR’s work

The following sections discuss some key changes to processes, performers, information, and technology.

4.2.1 Processes

The BPR team identified several opportunities to address multiple As-Is processes with a single

To-Be process by building in flexibility to address a range of issues or scenarios. For example, What’s New in the To-Be Processes?

Reduced the number of processes

New roles and performers

New information exchanges

New ways to leverage technology the Identify Case Assignment process addresses multiple work planning processes by using a single pool of cases and more generalized research steps. In another example, ONRR’s initial validation of industry reported data in the As-Is 2014 and Oil and Gas Operations Report

(OGOR) processes is completely captured in the To-Be Validate Data process. Table 4 shows the consolidation of multiple As-Is processes into single To-Be processes.

Table 4: Consolidated Processes

To-Be Process As-Is Processes

Analyze Case Audit – Company and Issue

Audit – Solids & Geothermal

Audit – Unbundling

Compliance Reviews – Oil & Gas

Compliance Reviews – Solid

Enhance and Create

Data

Disburse – Daily Indian

Payment Reconciliation

Handle Inquiries Data Retrieval – Requests

Indian Consultation & Outreach – Inquiries

Identify Case

Assignment

Work Planning - Audit & Compliance (Assignments)

Work Planning - Audit & Compliance (Issue Identification)

Work Planning - Audit & Compliance (Request)

Work Planning - Exception Processing (100 Percent Missing)

Work Planning - Exception Processing (Agreement Monitoring)

Work Planning - Exception Processing (Assignments)

Work Planning - Exception Processing (Processed Gas/Net Negative)

Work Planning - Exception Processing (Volume Comparison)

Issue Official

Correspondence

(Finding)

NONC

Order to Report (OTR)

Issue Official

Correspondence

(Missing/Insufficient

Payment)

Debt Collection – CMP 2014

Debt Collection – Oil & Gas

Debt Collection – Solids

Setup Stakeholder Reference Data – Customer Info (Change Name)

Reference Data – Customer Info (Customer Setup)

Reference Data – Customer Info (External MRMSS Application

Request Form (EMARF) Grant/Cancel Access)

Reference Data – Customer Info (Form 4444 Change)

Reconcile

Payment(s) to

Receivable(s)

Debt Collection – CMP 2014

Debt Collection – Oil & Gas

Debt Collection – Solids

Payment Reconciliation

Validate Data 2014 (Royalty Report)

OGOR

4.2.2 Performers

Several changes were made to process performers to remove organizational silos, simplify

ONRR’s work, and consolidate the application of key skillsets across multiple processes:

1. The Compliance Ambassador is a new role and major performer in the Develop

Comprehensive Compliance Strategy To-Be process. Each ONRR program will have at least one Compliance Ambassador who will collect data on issues and opportunities and coordinate implementation of approved recommendations.

2. In another new role, Help SMEs, who will exist in multiple program areas, will address technical stakeholder inquiries. Help SME roles are flexible and may rotate across a pool of employees in each program area.

3. The Compliance Specialist is the primary performer for the Analyze Case process. This role can perform either an audit or compliance review of a company or property to help

ONRR verify compliance with relevant statutes, regulation, and policy. This role aligns with the Analyze Case process, which combines both audit and compliance reviews and helps reduce silos between the audit and compliance program areas.

4.2.3 Information

The BPR team and ONRR SMEs identified opportunities to simplify information. The To-Be

Issue Official Correspondence (Missing/Insufficient Payment) process provides two examples:

1. ONRR issues multiple types of invoices to industry that address interest charges, missing payments, and insufficient payments. Different processes exist for these invoices depending on which program area is issuing the invoice and what the issue is.

ONRR SMEs determined that all invoices that include appeal rights should be consolidated into a Demand for Payment in the future state.

2. ONRR currently uses either of two documents (Order to Pay or Notice of Demand) to notify the Lessee of Record (LOR) or Operating Rights Owner (ORO) of an outstanding obligation. Both documents serve the same function but have slightly different processes. In the To-Be state, ONRR will use one document – the Order to Pay – to address all instances where a LOR or ORO have not provided sufficient payment.

4.2.4 Technology

The To-Be Design leverages new technologies across the organization to improve access to information, communication, and process efficiency. These enhancements are accomplished through universally accessible centralized repositories of information, a single case management system deployed across the organization, and the self-service portal. The following examples illustrate some of the technology featured in the To-Be Design:

1. Appeals staff currently do not have access to most of the systems where other ONRR programs store information, preventing them from easily accessing appeal-related files.

The To-Be Analyze Dispute process addresses this issue by providing the Appeals team access to the ONRR Data Source where they can access the same information used by other ONRR programs.

2. The current tool used by Appeals to track cases does not integrate with the system

(Operations Management Tool (OMT)) used by the Audit Management (AM) and

Compliance Management (CM) programs. In the To-Be state, Appeals will leverage the case management system to enable the Appeals Analyst to easily review the entire history of the appeal.

3. The self-service portal is a technology featured in the To-Be Design that will allow industry to submit production and royalty reports, as well as Notices of Appeal and

Statements of Reasons. The portal will also enable up-front validation of industry data and internal ONRR access to key mineral revenue information.

5.0 BPR Recommendations

This section presents information about the nine BPR Recommendations to illustrate how each would work in practice, the changes that may result if implemented, and a case for adopting the recommendation. Specifically, each recommendation contains the following information:

A description of how the recommendation could change what and how ONRR performs work, including examples of changes that impact ONRR’s IT systems, processes, and key stakeholder groups

A case for change including quantitative productivity benefits when available, qualitative benefits, implementation considerations, risk analysis, and other factors

Booz Allen and ONRR worked together to capture details about each recommendation. Time and resource limitations necessitated a limited analysis, which requires additional input before recommendations can be finalized. The following limitations and qualifications should be considered when reviewing each BPR Recommendation:

Description o The differences between As-Is and To-Be systems were derived from desired IT system capabilities expressed by SMEs during process mapping focus groups o The purpose of including these differences is to frame future expectations on how

ONRR’s system requirements may change o The lists of To-Be processes and stakeholder impacts are preliminary since

ONRR intends to validate and map additional To-Be processes

Case for Change o Quantitative benefits were calculated using time and cost saving estimates provided by ONRR SMEs o The calculations presented may not capture all financial benefits achievable under a given recommendation o The benefit calculations are preliminary and represent initial rough order of magnitude estimates o The purpose of the rough order of magnitude benefits analysis is to frame future expectations around key benefits and costs for the BPR Recommendations o Quantitative benefits may overlap across recommendations, so they cannot be added together to estimate a total savings amount o Time permitting, Booz Allen will collect additional information to strengthen the financial analyses o Booz Allen calculated the estimated times savings associated with the adoption of each recommendation; ONRR can leverage the inefficiency hours saved to allow employees to focus on higher value-add work o For more detail on benefits calculations, see Appendix H

5.1 Recommendation #1: Enterprise-Wide Case Management/CRM Solution

ONRR should expand its case management capabilities and adopt CRM capabilities to effectively manage all forms of internal and external interactions.

5.1.1 Description

Case management capabilities will be made more flexible and powerful, with a broader range of

ONRR staff and, potentially, selected external users given the ability to register issues and create candidate cases. ONRR Work Planning staff will have support and capabilities to confirm, disconfirm, assign, and draw upon historical case data. Case management may be integrated into the new CRM solution, potentially as a commercial-off-the-shelf (COTS) component. Broadly speaking, a CRM solution will provide interactions with stakeholders throughout the stakeholder journey with ONRR and will have the following capabilities.5

Engagement: For every stakeholder, ONRR would have an initial interaction and ultimately produce a stakeholder profile with a common, unique identifier

Continuous Promotion: Enable better management and tracking of promotional activities for all applicable stakeholder groups

Education: Centrally house educational materials and manage the educational interaction with stakeholders

Sustain: Keep all stakeholder information up-to-date; stakeholders will perform these updates

Support: Track all stakeholder exchanges to produce a rich history of interactions; these interactions would be available for various uses such as payment history, relationship management, case management, and inquiries

ONRR does not have to predefine what may constitute a case in order to establish a successful case management system. A candidate case may be created upon discovery of any unusual combination of facts, and the potential case may then be evaluated by a combination of expert consideration by ONRR SMEs and possibly artificial intelligence (AI)-mediated, machine-driven evaluation.

Information about cases and potential cases can be stored indefinitely, so that periodically, either an ONRR SME or an AI program may review situations not designated as cases and – using combinations of data and strategic objectives that may not have been available at the time of original referral – determine that some of these situations should be designated cases and worked as such.

5 There are other features that may be unique to COTS solutions depending on the vendor, such as invoicing, but the list above contains the general capabilities. In summary, a CRM solution will be a centerpiece for all stakeholder data and interactions.

Automated capabilities will be utilized to make recommendations to the Compliance Strategy

Council to facilitate adjustment of the strategy, and tailorable search algorithms can be used to expose relevant facts and trends to inform strategy revision.

Case management systems can be implemented either within the framework of, or as integrated with, a CRM solution. Since the exact characteristics of the CRM solution are not known, the functional interfaces of case management and CRM solution will not be specifiable until CRM solution acquisition.

Differences Between To-Be and As-Is Systems

A CRM solution represents a new set of capabilities for ONRR to centrally manage stakeholder relationships. Interactions with a broad range of stakeholders regarding engagement, promotion, education, sustainment, and support will be stored in the system for access and aligned to any cases. While ONRR has an existing case management system, this recommendation involves expanding functionality (e.g., new automated search and ranking capabilities), users, and data stored.

List of To-Be Processes Impacted

1. Analyze Full Scope

2. Issue Official Correspondence – Missing Report

3. Issue Official Correspondence – Insufficient/Missing Payment

4. Issue Official Correspondence – Finding

5. Develop Compliance Strategy

6. Handle Inquiries

7. Analyze Disputes

8. Analyze Case

9. Identify Potential Case Assignment

10. Proactively Assist Reporter

List of Stakeholders Impacted and Example Impacts

Stakeholder Example Impacts

Industry Receive consistent education from ONRR and sister bureaus (e.g., Bureau of Land Management (BLM), Bureau of Ocean Energy

Management (BOEM), Bureau of Safety and Environmental

Enforcement (BSEE))

Receive fewer requests for information from different ONRR programs

Sister Bureaus and Offices Ability to use self-service portal to register issues that may be used to create a case

Ability to collaborate and track education activities with stakeholders

Capability to access and update stakeholder information through a

CRM solution

Stakeholder Example Impacts

Fund Recipients Ability to use self-service portal to register issues that may result in a case

ONRR Staff Increased accessibility since anyone can use the self-service portal to create a potential case when acquiring information about an unusual situation (i.e., occurring during periodic processing or with the status of a stakeholder)

Ability to use prepopulated reference data for case creation

Ability to receive automated status and notification related to cases

Ability to review situations not previously designated as cases and – using combinations of data and strategic objectives that may not have been available at the time of original referral – determine that some of these situations should be designated cases and worked as such

Ability to access information about inquiries, cases, potential cases, companies, leases/agreements, and properties at any time (i.e., information stored indefinitely)

Ability to quickly adjust, add, or remove risk factors used for case selection

Tribes Ability to use self-service portal to register issues that may…