RFI_Attach_3_ONRR_BPR_Finalization_Report_1.pdf

U.S. Department of the Interior

Office of Natural Resources Revenue

Business Process Finalization Report

Prepared by Booz Allen Hamilton

As of August 21, 2020

ONRR Business Process Finalization Report August 21, 2020 i

Contents Executive Summary

1.0 Introduction

2.0 Background and Approach

2.1 Previous BPR Steps

2.2 Finalizing To-Be Models

3.0 Analysis

3.1 Four Dimensions of Change Approach

3.2 Benefits and Metrics Approach

3.3 Analysis Results

4.0 Discussion

4.1 From Great to Excellent

4.2 Harnessing Collective Brain Power

4.3 Leveraging Technology

4.4 Simplifying Requirements

4.5 Eliminating Silos

5.0 Way Ahead

5.1 Requirements

5.2 Planning for Implementation

6.0 Conclusion and the Path to Continuous Improvement

ii

Acronyms AoA Analysis of Alternatives AP Accounts Payable AR Accounts Receivable BI Business Intelligence BPR Business Process Reengineering CFR Code of Federal Regulations COTS Commercial-off-the-Shelf CRM Customer Relationship Management CSC Compliance Strategy Council DOI Department of the Interior EIN Employer Identification Number ELT Executive Leadership Team FAR Federal Acquisition Regulations FM Financial Management FTE Full-time Equivalent GAO Government Accountability Office GL General Ledger IPT Integrated Project Team IT Information Technology MRMSS Minerals Revenue Management Support System MSA Market and Spatial Analytics NONC Notice of Non-Compliance NRRD Natural Resources Revenue Data O&G Oil and Gas OCM Organizational Change Management OCR Optical Character Recognition ONRR Office of Natural Resources Revenue OST Office of Special Trustee for American Indians PMT Program Managers Team POC Point of Contact RFI Request for Information RFP Request for Proposal RRM Reference and Reporting Management RV Royalty Valuation SDLC System Development Lifecycle SME Subject Matter Expert SSP Self-service Portal STRAC State and Tribal Royalty Audit Committee TROR Treasury Report on Receivables TSAS Tribal and State Audit Services UCA Unbundling Cost Allocation

ES-1

Executive Summary In July 2018, the US Department of the Interior (DOI) Office of Natural Resources Revenue (ONRR) engaged Booz Allen Hamilton (Booz Allen) to support the comprehensive business process reengineering (BPR) of its primary mission functions as part of ONRR’s multi-phase, multi-year Modernization Project.

This report summarizes the final To-Be processes, captures benefits and metrics around those processes, and analyzes key changes from the As-Is to the To-Be state. The goal of this report is to document how ONRR realized the BPR Vision and provide a solid platform for the next phase of modernization, which includes requirements gathering for implementation.

Finalizing the To-Be Processes: Booz Allen supported ONRR through a grassroots effort to reengineer its core business functions, as defined by its Value Chain, into a comprehensive set of To-Be processes. The ONRR Value Chain consists of three primary activities:

• Collect to Disburse – the collection, processing, and distributing of data and funds for mineral revenue obligations

• Compliance – the verification and enforcement of industry compliance with applicable laws, regulations, and policies for mineral revenue management

• Report and Share – the development and communication of ONRR-maintained data, knowledge, guidance, policy, and training to internal and external stakeholders

Analyzing the Four Dimensions of Change: Booz Allen performed an analysis of the identified 39 To-Be processes based on four dimensions of change: people, process, data, and technology. Table ES-1 (found at the end of this Executive Summary) is organized by Value Chain activity and summarizes the findings.

Benefits and Metrics: Booz Allen collected information on the benefits and metrics of the To-Be state.

ONRR stands to realize about $9.6M in annual productivity benefits from BPR. These benefits reflect time that can be reallocated to higher value work based on recommended changes from the As-Is to To- Be state. Figure ES-1 captures these benefits by Value Chain activity.

Figure ES-1. Productivity Benefits of BPR

ES-2

Achieving the BPR Vision: Analysis showed how the ONRR BPR Vision was achieved in the To-Be state. ONRR achieved this vision in several ways:

• From Great to Excellent – This statement acknowledges that while ONRR is currently “great,” achieving its mission in the As-Is state, “excellence” is within reach by pursuing simplified and reengineered business processes.

• Harnessing Collective Brain Power – Over 200 ONRR staff and managers participated in 97 focus groups to map the As-Is environment, develop radical ideas and BPR recommendations, and map 39 To-Be processes.

• Leveraging Technology – The To-Be state will be enabled by several technologies new to ONRR

– the self-service portal (SSP), customer relationship management (CRM), enhanced Business Intelligence (BI) including a more powerful risk tool, the help desk, and enterprise-wide case management.

• Simplifying Requirements – In the To-Be state, ONRR will simplify key regulations (e.g., federal gas index pricing), eliminate redundant compliance notifications, and reduce repetitive and inefficient handoffs and transactions with stakeholders.

• Eliminating Silos – The To-Be processes use integrated approaches at the process and people levels, where activities are performed enterprise-wide rather than driven by individual programs or subgroups.

The Way Ahead: BPR and the resulting To-Be processes represent a significant modernization milestone for ONRR. In the context of the system development lifecycle (SDLC), BPR represents a key piece of up-front planning and analysis needed to modernize. Process maps – along with alternatives, benefits, and budget analyses – must be done early. They are precursors that inform requirements development.

Transitioning to the next phase of its modernization, ONRR will now proceed to document requirements that reflect the To-Be vision. Additionally, ONRR should continue with other planning and analysis activities that will inform modernization. These concurrent activities include identifying and documenting ONRR policy updates needed to implement To-Be processes, an acquisition-focused market research strategy, modernization implementation challenges, an IT governance strategy, and an organizational change management (OCM) plan.

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

ES-3

Table ES-1. Highlighted People, Process, Data, and Technology Changes by Value Chain Ch an ge

Ty pe ONRR Value Chain

Collect to Disburse Compliance Report and Share

Pe op le

• Eliminates reliance on system contractor to access data

• New roles of Stakeholder Specialist, Exemption Analyst, and Compliance Ambassador

• Clarified responsibilities for AR, AP, Debt Collection, FM, and

RRM

• Two new roles: Compliance Ambassador and Compliance Specialist

• Expanded role of the CSC in developing a comprehensive compliance strategy

• New roles of Help Desk Specialist, Educator, Policy Maker, Policy Implementation Team, Improvement Specialist, and Compliance Ambassador

Pr oc es s

• Assist Stakeholder proactively achieves compliance

• Consolidated processes to manage invoices, capture unstructured data, and validate data

• Reduction in reconciliations

• Consolidated 45 As-Is processes into 19 To-Be processes

• Consolidation of the As-Is processes for up-front edits, Data Mining, Exception Processing, Compliance Reviews and Audits into two To-Be processes: Validate Data and Analyze Case

• Reduced 49 As-Is processes to 15 To-Be processes

• Five new formal processes:

Handle Inquiries, Educate Stakeholders, Create, Adjust, or Remove Policy, Assist STRAC Partners, and Continuous Improvement

• Reduced 22 As-Is processes to 15 To-Be processes

Da ta

• Standard data attributes for case types

• Use of third party and source documents in validation

• Identification of industry stakeholders by EIN

• Unique identifier for each report and payment

• Collection and sharing of compliance data across the organization through enterprise-wide case management

• Improved contact information collected and provided through CRM reduces manual effort contacting key industry stakeholders

• Single source-of-truth streamlines efforts to reconcile data, especially within the Push and Pull Data processes

• New data and metadata associated with enhanced data capture, tracking, and sharing via case management and CRM across all the Report and Share To-Be processes

Te ch no lo gy

• Automated reports for reconciliation, disbursement, and more

• Use of CRM and enterprise-wide case management to document interactions and ONRR workstreams

• Use of self-service portal to intake documents, payments, and refund requests

• Push notifications for a variety of activities including reminders to update information, changes to reported information, case status updates, and more

• New enterprise-wide case management system, in conjunction with CRM, promote a consistent approach to compliance across the organization and across time and significantly reduce manual effort to research relevant case information

• New risk tool leverages data science to identify potential cases that pose the greatest risk of non-compliance

• BI tools will support enhanced querying and analytic capabilities

• An internal- and external-facing self-service portal facilitates inquiry submissions, document exchange, and broader communications

• Expanded case management supports documenting, tracking, and sharing information, such as data requests and historical guidance information

• CRM supports capture and tracking of interactions/ communications with stakeholders

1.0 Introduction

In July 2018, the US Department of the Interior (DOI) Office of Natural Resources Revenue (ONRR) engaged Booz Allen Hamilton (Booz Allen) to support the comprehensive business process reengineering (BPR) of its primary mission functions, one of three principal activities of its multi-phase, multi-year Modernization Project (Figure 1). This report summarizes the final To-Be processes, provides benefits and metrics around those processes, and analyzes key changes from the As-Is to the To-Be state. The goal of this report is to demonstrate how ONRR realized its BPR vision and provide a solid platform for the next phase of modernization, which includes requirements gathering for implementation.

ONRR’s decision to pursue BPR resulted from a 2017 analysis of alternatives (AoA) of its core information technology (IT) system, the Minerals Revenue Management Support System (MRMSS). From extensive research used in the AoA, ONRR recognized that to leverage and maximize the benefits of modernizing, it must reengineer its current – and outdated “legacy” – business processes.

BPR became the mechanism and enterprise mindset for that transformation.

Goals and Approach

For BPR to be successful, 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.

Figure 2. BPR Approach

Figure 2 captures the 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 the approach. Data collection and current state assessment of ONRR As-Is processes (Steps 1 through 3) were completed in mid-2019 and informed the To-Be Design.

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

Step 6 and Step 7 included further vetting of BPR recommendations and development of an implementation approach, which will be tackled in the next BPR phase, began in January 2020.

Report Structure

This report covers the To-Be processes that ONRR developed through BPR. It provides an overview of the approach taken to create the To-Be processes, details about changes to how ONRR will deliver its primary mission functions in the future, and how the To-Be processes fulfill the BPR Vision. The report layout builds to the To-Be processes and ONRR’s path ahead with requirements and planning for implementation as follows:

• Background and Approach: The background and approach section summarize all previous BPR efforts to inform the finalization of To-Be processes and describes the tasks performed to finalize To-Be process models and BPR Recommendations.

• Analysis: The analysis section describes the changes to how ONRR will deliver its primary mission functions in the future. The section includes an overview of changes to each To-Be process in the dimensions of people, process, data, and technology. It also includes a summary of people, process, data, and technology changes by Value Chain.

• Discussion: The discussion section describes how the To-Be processes fulfill components of the BPR Vision. Each component contains specific examples that convey the breadth of ONRR’s fulfillment of the BPR Vision.

• The Way Ahead, Conclusion, and Path to Continuous Improvement: The report closes with next steps for ONRR with BPR such as requirements, planning for implementation, and the need for continuous improvement.

As additional information, five Appendices are attached to this document:

• Appendix A lists all focus groups held for the To-Be design, along with their topics, dates, and number of participants.

• Appendix B lists all 39 To-Be processes and includes a short description of each.

• Appendix C aligns each of the To-Be processes mapped by BPR to the ONRR Value Chain.

• Appendix D provides links to the process maps and narratives stored on the BPR Working Site.

• Appendix E contains additional detail on both quantified and qualified benefits and metrics for each To-Be process mapped during BPR.

ONRR executives, program managers, supervisors, and staff should all view this document as a solid platform for the next phase of modernization. During subsequent steps ONRR may learn new information that changes how it performs a process including the steps, people, data, or technology.

Thus, this report should guide and not limit ONRR from further enhancing the To-Be processes to align with modernization and changes within the external environment.

2.0 Background and Approach

This section summarizes the results of Steps 1 through 5 of the BPR approach outlined in Section 1.0 (Figure 2) and describes several activities leveraged to complete Steps 4 and 5. Steps 4 and 5 focused on finalizing the development of To-Be models and refining BPR Recommendations. With the completion of Steps 4 and 5, ONRR can begin the final two steps of the BPR approach to develop requirements and plan for BPR implementation.

2.1 Previous BPR Steps

ONRR’s BPR effort began with an As-Is analysis of its primary mission functions, focused on positive and negative impacts to performance. Booz Allen and the BPR Integrated Project Team (IPT) collaboratively developed an ONRR Value Chain, identified all business processes, developed As-Is process maps and narratives, and analyzed As-Is performance (presented in the BPR As-Is Baseline Report, August 26, 2019). 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 Processes Documented 82

Concurrently with the As-Is analysis, Booz Allen conducted research on leading and best business practices leveraged by other public and private entities. In the ONRR BPR Recommended Practices Report (September 13, 2019), Booz Allen provided six recommended practices, six noteworthy practices, and five recommendations to focus ONRR’s efforts when redesigning its business processes and modernizing its technology.

Booz Allen followed a six-phase approach to design and develop the To-Be Model and formulate BPR Recommendations. The To-Be State Report (December 27, 2019) provided details about the approach and results of each phase. In total, 113 ONRR employees participated in the “grassroots” To-Be Design to produce nine BPR recommendations and 16 To-Be process maps and narratives. Appendix A captures ONRR employee participation across all phases, and Table 2 presents the nine BPR recommendations.

Table 2. BPR Recommendations

BPR Recommendations

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.

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.

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.

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.

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.

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.

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.

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.

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.

2.2 Finalizing To-Be Models

ONRR and Booz Allen performed five tasks to finalize the To-Be process models and fully complete the six To-Be Design phases mentioned in the previous section. The following sections describe the approach for each task, including extensive collaboration and participation with ONRR SMEs. Appendix A provides a list of all focus groups conducted for each To-Be process model, along with meeting dates and number of participants. Table 3 provides an overview of a few key results that demonstrate the coverage and level of effort undertaken to develop and document the To-Be design.

Table 3. To-Be Results

To-Be Output Result Focus Groups 55 Meetings 113 ONRR SME Participants 168 Processes Developed 39

2.2.1 Process Inventory

During January and early February 2020, Booz Allen and the BPR IPT collaborated on identifying a complete list of processes necessary for ONRR to fulfill its mission and achieve its BPR vision in the future state. Booz Allen analyzed various sources from the previous BPR steps to create a preliminary list of 62 processes. The analysis included:

• Identifying overlaps between the 16 To-Be processes mapped in December 2019 and previously identified processes during the To-Be Design

• Determining additional processes for consideration after comparing the As-Is processes to To-Be processes, reviewing To-Be Process Maps to see references to other ONRR processes, reviewing To-Be information flows, and reviewing systems documentation

Throughout 2020, Booz Allen and the BPR IPT updated the process inventory several times as details of the To-Be design were resolved through focus groups. Following the completion of the focus groups in May 2020, Booz Allen refined the process inventory to consist of 39 To-Be processes. Of the 39 To-Be Processes, Booz Allen mapped 35 by holding focus groups with ONRR SMEs. ONRR Data Governance developed the other 4 processes, which were then validated by the BPR IPT. Appendix B provides the descriptions for all 39 To-Be processes.

2.2.2 To-Be Process Maps

Booz Allen held 21 process mapping sessions with ONRR SMEs and one discussion session with ONRR’s Data Governance team between February and May 2020. The IPT selected all participants and included SMEs working outside the specific process areas to provide an objective perspective on how ONRR should deliver its mission in the future.

Collectively, Booz Allen and ONRR’s Data Governance team developed 39 To-Be process maps and narratives. The process maps capture 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 illustrates technology interactions. Figure 3 shows an example process map output, Continuous Improvement.

Figure 3. Sample To-Be Process Map

Booz Allen also developed accompanying narratives that described each process. Figure 4 shows an example narrative for Continuous Improvement. The narrative includes each process step, a description of it, and the business, IT, and policy needs. The business need explains why the step is important to ONRR. IT needs describe ways that technology may support the process. Policy needs identify discussions for internal or external policy changes necessary to implement the To-Be process. The narrative includes five key pieces of information: (1) each numbered step (activity/description), (2) a description with more detail on each process step, (3) business needs that explain what the business requires and why, (4) IT needs that capture IT requirements necessary to support the process, and (5) policy needs that describe the decisions needed to execute a step.

Figure 4. Sample To-Be Process Narrative

Booz Allen shared completed To-Be process 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 approved each map and narrative. Appendix D provides the location to view all To-Be process maps and narratives on ONRR’s SharePoint site.

2.2.3 BPR Recommendations Updates

Beginning in January 2020, IPT members met with multiple ONRR leadership bodies (e.g., Program Managers Team [PMT], Executive Leadership Team [ELT]) regarding the nine BPR Recommendations outlined in the December 2019 To-Be State Report. The focus of these meetings ranged from building awareness about each recommendation to providing specific details to address questions from ONRR leadership.

As a result of these meetings, ONRR leadership approved seven of the BPR Recommendations in their original form and modified two of the recommendations – Index Pricing and Direct Billing. For Index Pricing, the BPR team modified the recommendation and clarified that expanded index pricing should be used specifically for federal gas because an inordinate amount of compliance effort is spent on federal gas issues due to the complexity of federal gas royalty calculations. An index price for federal gas would greatly reduce this time. For Direct Billing, the IPT limited the scope of transactions that would use direct billing to financial terms obligations, which can be calculated in advance – unlike royalties, which pose unique challenges for direct billing. Technically, the lease-level obligations recommendation is more accurately described as invoicing, although the recommendation evolved from a discussion on direct billing.

2.2.4 To-Be Value Chain and Master Maps

To enhance understanding of how ONRR plans to fulfill its mission in the future, Booz Allen organized the To-Be processes into three primary activities (Collect to Disburse, Compliance, and Report and Share) and a variety of supporting activities including Data Management. Figure 5 presents the primary and support activities that comprise ONRR’s To-Be Value Chain. For each primary activity, Booz Allen developed a master process map. A master map was also developed for Data Management because these supporting activities are particularly important for BPR. Booz Allen reviewed the To-Be Value Chain and master maps with the IPT. Based on IPT feedback, Booz Allen updated the master maps. The following sections provide a brief overview of each primary activity and Data Management.

Figure 5. To-Be Value Chain

2.2.4.1 Collect to Disburse

Collect to Disburse is the collection, processing, and distributing of data and funds for mineral revenue obligations. This component of the Value Chain addresses collection of production, royalty, and reference data, and payments. These data elements are matched to create receivables and payables which are processed, then disbursed to fund recipients. Nineteen To-Be processes support this link of the Value Chain, including Validate Data, Enhance and Create Data, Manage Funds, Disburse Money to Federal Fund Recipients, Distribute Indian Disbursement Data, and Financial Statement Reporting.

2.2.4.2 Compliance

Compliance is defined as the verification and enforcement of industry compliance with applicable laws, regulations, and policies for mineral revenue management. This component of the Value Chain contains ONRR activities to verify and compel compliance. Properties and companies are evaluated against risk and coverage criteria defined by the compliance strategy, then analyzed to determine if they are compliant. Non-compliant reporters and payors are issued notifications, and if necessary, compelling documents to achieve compliance. Fifteen To-Be processes support this component of the Value Chain including Identify Potential Case Assignment, Analyze Case, Address Compliance Finding, and Analyze Dispute.

2.2.4.3 Report and Share

Report and Share is defined as the development and communication of ONRR-maintained data, knowledge, guidance, policy, and training to internal and external stakeholders. This primary activity is decomposed into two separate maps based on the content and intended audience of the information shared. The Guidance, Policy, and Training subcategory of Report and Share contains 14 processes such as Educate Stakeholder, Provide ONRR Guidance, and Create, Adjust, or Remove Policy where ONRR develops knowledge and resources for internal and external stakeholders. The Push and Pull Data subcategory contains seven processes including Push Data and Pull Data where ONRR shares information with internal and external stakeholders.

2.2.4.4 Data Management

While Data Management is considered a supporting activity to ONRR’s Value Chain, it is an important area of BPR because it enables and supports all ONRR’s key functions. Data Management features the processes to capture, process, store, use, and report mineral revenue data. The associated master map contains 12 To-Be processes, including 4 that were mapped by ONRR Data Governance – Store Data, Data Quality, Protect Data, and Metadata.

2.2.5 Process Alignment and Gap Analyses

To ensure that the To-Be processes cover all activities necessary in the To-Be state, several gap analyses were conducted, including comparison of the As-Is processes to the To-Be, to determine whether any key activities were missed in To-Be mapping. In cases where key gaps were found, Booz Allen engaged ONRR to discuss whether the gaps represented activities that were appropriately “engineered away” or whether additional To-Be design or detail was needed to cover activities that were missed in initial mapping sessions. Booz Allen evaluated the alignment of BPR Recommendations and the To-Be functional modules to the To-Be processes (this detailed alignment is presented in the Final To-Be Process Inventory and the Master Maps as well). Booz Allen performed all process alignment and gap analyses against the 35 To-Be processes mapped in process mapping sessions. Booz Allen was not able to analyze four To-Be processes mapped by the Data Governance team because Data Governance were unavailable at the time of the process alignment and gap analyses. Table 4 presents the approach and highlights for each analysis.

Table 4. Process Alignment and Gap Analyses

Comparison of As-Is to To-Be processes Approach • Aligned each of the 116 As-Is processes to one or multiple of the 35 To-Be processes mapped in BPR focus groups.

• Reviewed alignment of 34 As-Is processes that do not have corresponding maps to the 35 To-Be processes with BPR IPT Key

Findings

• 108 of the 116 As-Is processes aligned to at least one To-Be process. Eight As-Is processes did not align to a To-Be process due to the following reasons:

One As-Is process was out of scope for mission-related activities (202/205

Agreements – Budget)

One As-Is process was re-engineered away (Notice of Potential Enforcement Action) Six As-Is processes should be addressed by data exchanges (Reference Data –

Contracts for Indian Oil and Gas (O&G), Offshore O&G, Offshore Renewables, Onshore O&G, Pipelines, and Solids)

• Nine of the thirty-five To-Be processes align to one As-Is process

• Four of the thirty-five To-Be processes do not have a corresponding As-Is process

• 22 of the 35 To-Be processes align to two or more As-Is processes

As-Is to To-Be Process Step Alignment Approach • Compared each To-Be process with its corresponding As-Is process(es) as defined by the comparison of As-Is to To-Be processes above

• Identified which steps did not exist in the To-Be process

• Classified each missing step as either a gap to address or reengineered away

• Coordinated with BPR IPT to address each gap through updates to To-Be processes

Key Findings

• 20 To-Be processes contain one or more of the 50 steps reengineered away

• Updated 12 To-Be processes to address 40 identified gaps

BPR Recommendation to To-Be Process Alignment Approach • Aligned each of the 35 To-Be processes to the nine BPR recommendations

Key Findings

• Enterprise-Wide CRM and case management aligns to 22 of the 35 To-Be business processes

• Internal/external self-service portal (SSP) aligns to 17 of the 35 business processes Functional Module to To-Be Process Alignment Approach • Aligned each of the 35 To-Be processes to the nine functional modules

Key Findings

• CRM and Data Warehouse each support 30 To-Be processes

• Case management, SSP, and Financial support 17, 16, and 14 To-Be processes respectively

3.0 Analysis

The purpose of this section is to provide an objective analysis to facilitate understanding of the changes from the As-Is to the To-Be state. The To-Be processes were analyzed based on four dimensions of change – people, process, data, and technology – to highlight what changed (i.e., what changes are notable) from a process perspective, and how (i.e., people, process, data, or technology changes). The dimensions of change are described in the text box below, which also serves as a visual key to the particular changes noted in Sections 3.3.1 through 3.3.3.

People – new roles and updates to existing roles, including those that reach across silos and dedicate effort to continuous improvement Process – new, consolidated, and simplified To-Be process steps and processes to break down silos and simplify requirements Data – new data elements and data management techniques such as consolidating collection forms and sharing data across the organization Technology – enhanced or new functionality in the To-Be system that enables the To-Be processes

This section also provides productivity benefits and key metrics for the To-Be processes. Section 3.1 describes the approach for the analysis based on the four dimensions of change. Section 3.2 describes the approach for the benefits and metrics analysis. The results of the analyses are organized by Value Chain with Section 3.3.1 presenting Collect to Disburse, 3.3.2 covering Compliance, and 3.3.3 presenting Report and Share.

3.1 Four Dimensions of Change Approach

Booz Allen evaluated each of the 35 To-Be processes mapped by BPR focus groups through the lens of the four dimensions of change. The four To-Be processes that were mapped by Data Governance (Data Quality, Metadata, Protect Data, Store Data) were not analyzed here, because Booz Allen was not directly involved in the mapping and design of these processes. The results of this dimensions of change analysis, presented below in Section 3.3.1 through 3.3.3. Each of these subsections features a simplified version of the associated Master Map that shows only the processes being discussed in the subsection (this is necessary because several processes are found in multiple master maps). The processes within the simplified master maps are also numbered to correspond to the accompanying narrative descriptions beneath. The graphic to the right of each paragraph shows which dimensions of change are presented for each process. Not all processes feature all four dimensions of change.

3.2 Benefits and Metrics Approach

Booz Allen worked alongside 73 ONRR SMEs to capture quantitative and qualitative benefits associated with the To-Be processes. The quantitative benefits analysis describes productivity benefits that ONRR could realize if it successfully implements specific process changes. For each To-Be process, Booz Allen engaged focus group participants and ONRR SMEs to derive time efficiencies (i.e., productivity benefits) that would result from reengineering (i.e., time that could be reallocated to higher value-add activities).

To translate productivity benefit hours into a dollar amount, Booz Allen worked alongside ONRR leadership and the ONRR budget office to derive an appropriate cost estimate to apply across all ONRR full-time equivalents (FTE). Additionally, Booz Allen developed a baseline level of effort (i.e., time and FTE) for ONRR to currently perform its primary activities as outlined by ONRR’s Value Chain. This level of effort was a basis for comparison against the benefits of the To-Be state. Appendix E provides associated detailed assumptions and calculations.

Not all process changes are intended to save time or are driven by financial factors. Instead, some process changes help produce qualitative benefits such as enhanced risk mitigation, improved quality of process outputs, and enhanced coordination across ONRR’s work. Booz Allen captured qualitative benefits for each To-Be process to reflect the non-time savings benefits as well as benefits that could not be quantified due to limited time and information. Furthermore, to the extent possible Booz Allen collected metrics around the To-Be processes to highlight the importance and magnitude of select To-Be processes and provide a scope for the potential benefits that could be realized as part of BPR. Key metrics are presented in text boxes throughout the sections below. Appendix E provides more details on metrics collected.

The individual qualitative and quantitative benefits, metrics, and the baseline assessment were all reviewed and validated by the BPR IPT. Qualifications to Quantitative Benefits Analysis includes:

• ONRR SMEs provided the primary sources for input that were the basis for quantifying the key benefits.

• The quantified key benefits do not represent the entirety of financial benefits that ONRR can expect to realize and offer a preliminary rough order of magnitude financial analysis.

• The level of detail for the benefits and metrics may differ across the To-Be processes based on SME input and limited time and/or resources.

• The analysis is representative and intended to help ONRR frame future expectations around key benefits.

3.3 Analysis Results

3.3.1 Collect to Disburse

The Collect to Disburse component of the Value Chain represents ONRR's activities to collect production, reference, royalty, and payment data, process it for disbursement, and report these activities to external entities. While this section does not capture every change, it highlights the key people, process, data, and technology changes to facilitate understanding of the To-Be state. Figure 6 shows a simplified version of the Collect to Disburse Master Map with only the processes discussed in this section.

Figure 6. Simplified Collect to Disburse Master Map

Setup and Maintain Stakeholders (1) is the single process to document the contact information, roles, and relationships for external entities interacting with ONRR. In the To-

Be state, ONRR will leverage CRM and SSP technology to capture and organize stakeholder characteristics and ensure they are periodically and proactively updated. Data changes include the use of the Internal Revenue Service Employer Identification Number (EIN), a unique value, to identify stakeholders and the capture of stakeholder new data in a structured and accessible format using CRM. A new Stakeholder Specialist role (a people change) is responsible for facilitating this process. It will also remind stakeholders to keep their information up to date so that ONRR always knows who is responsible for each component of a lease.

Assist Stakeholders (2) is a new, formal process to engage new industry stakeholders and teach them how to report and pay correctly. ONRR assists each stakeholder with his/her first month's report and continues assistance for a period after. The process leverages new data elements captured in CRM (a new technology) to track stakeholder performance and communicate with them. New roles (people change) in Financial Management (FM) and Reference and Reporting Management (RRM) are responsible for educating each new stakeholder on reporting and payment. ONRR identifies and opens cases should any compliance issues arise after this process.

A single new process, Manage Exemptions (3), features the review and approval or rejection of requests from industry to either provide additional clarity or seek exemption from standard policy. The new role of Exemption Analysts (a people change) perform this process to review and address all exemption requests. The process leverages new CRM and case management technology to track the interactions and status of each request. New data attributes associated with each request improve consistency and allow Exemption Analysts to leverage similar past requests in their analyses.

Validate Data (4) is a consolidated process that checks incoming information for internal consistency and compares against reference and third-party data. This process minimizes the amount of erroneous information entering ONRR systems, resulting in far fewer downstream data quality issues. The process leverages previously validated data, reference data from sister bureaus, source documents from industry (new data), and third-party data to check incoming values. The system stores valid data in a single repository, the data warehouse, which is accessible enterprise-wide and represents a major technology change. The process applies a tiered system to handle data validation issues and reduces the need for analysts to check and or override reported information.

BPR Metric ONRR receives over 250 new industry reporters annually that would require a new profile to be set up. Overall, ONRR has approx. 1,000 existing operator codes and 2,000 payor codes.

Manage Funds (5) leverages new technology to reduce the number of steps performed manually outside of the system. The integrated financial management system removes the need to print documents and scan them back into the system by using electronic signatures (e-signing) instead, which streamlines the new process flow. It also automatically generates discrepancy reports to assist with fund management activities.

The use of unique identifiers (new data) to tie royalty reports and payments together in the SSP eliminates issues matching payments from the Treasury deposit file with ONRR's data.

The Investments (6) process benefits from a direct interface with Treasury's financial security exchange service, which reduces the time spent by General Ledger (GL) switching between the two systems (a process change). The system automatically generates footnotes for use in downstream reporting processes, and it notifies the Department of Commerce of transactions (a technology change). Use of additional data elements from external sources, such as Treasury, supports automation of some process steps such as the identification and retrieval of security pricing data.

Enhance and Create Data (7) is a formalized process that captures routine activities where ONRR either creates new data or enhances existing values. Through this new process, ONRR creates receivables from royalty reports and payables from payment data and attempts to match them. Matching previously occurred in the Payment Reconciliation process which is now an exception process. The system relies on valid data from ONRR’s data warehouse (a technology change). The generalized enhancement flow adds context and value to incoming information by joining it with other data sets or calculating new fields to meet enterprise data needs. Enhance and Create Data also makes use of additional data elements captured by technology such as CRM and SSP.

A single process to Manage Invoice (8) replaces multiple As-Is processes to create and adjust invoices such as bill files, FIN invoices, and interest. The process features several technology changes, including enhanced business rules to generate a significant portion of the billing document automatically and CRM to issue push notifications when one is created. This process also benefits from improved data for payments and royalties stored in ONRR's data warehouse, and more robust stakeholder information through CRM. The Accounts Receivable (AR) role handles receivables creation while the Debt Collection role addresses overdue payments, a people change from the current state where each role handles both, depending on the use case.

BPR Metric ONRR manually matches over 14,000 payments to open receivables annually. SMEs estimate that up to 90 percent of these could be automated with the To- Be process.

The Disburse Money to Federal Fund Recipients (9) process reduces the number of reconciliations necessary to match payment data between systems and allows ONRR Financial Services staff to run reports without a system contractor (these are all process changes). New technology and business rules automatically calculate late disbursement interest, sequestration percentages, and net receipts sharing, and prevents State accounts from maintaining a negative balance. The process leverages more readily accessible data by storing banking information through the CRM to expedite refunds.

In Distribute Indian Disbursement Data (10), ONRR is now responsible for disbursing ready lines for Indian properties instead of the system contractor, a major process change. The Accounts Payable (AP) role has full control of the system and may run reports at any point in the process or adjust without the system contractor (a people change). New technology and the financial system automatically generate exception reports for use in the disbursement process. Additional reference data fields from sister bureaus enhance the disbursement process.

Treasury Financial Reporting (11) is streamlined by reducing the number of reconciliations and eliminating manual steps to manipulate data outside of the system (process changes).

Improved data management and the use of unique IDs (new data) to tie payments and reports together supports these efficiency gains. The system automatically generates reports to assist with reconciliation so that accountants may focus on resolving issues instead of identifying them. New technology creates and formats the initial reporting template for Treasury automatically.

Monthly & Quarterly AR Close (12) leverages a new data interface with Treasury's system to provide higher quality data more frequently. The Financial module improves process efficiency to automatically calculate fields, such as aging and interest for new receivables, by leveraging new technology. It also generates an exception report for the accountant to review. The financial system allows ONRR to access documentation, such as the Treasury Report on Receivables (TROR) backup report, without the system contractor at any point in the changed process.

Financial Statement Reporting (13) is improved through new data exchanges between ONRR and other Department and Treasury systems that provide information necessary to complete each report. New technology in the financial system includes flexibility to automatically reconcile simple discrepancies and adapt to new reporting requirements in the future and generate exception reports for more complex discrepancies.

BPR Metric Currently, an ONRR Mineral Revenue Technician spends up to four full days per month manually creating CDs with Indian disbursement data for approx.

30 tribes.

Manually Capture Data (14) consolidates steps from a variety of current processes to capture unstructured data and enter it into the system (a process change). Payments, reports, and source documents provided on paper or via PDF represent the most common type of unstructured data in the current state. ONRR will deploy optical character recognition (OCR), a new technology, combined with data models to identify and capture information automatically. Data models allow the system to recognize and ingest information in a structured format (a data change). This process eliminates the need for ONRR staff to manually enter values. The system continuously evaluates all submitted documents to identify candidates for new data models via trend analysis. The number and sophistication of data models will increase over time as new data sources become available, allowing ONRR to ingest more types of unstructured data.

Update Data (15) combines steps from several As-Is processes to ingest updates to reporting values. It expands the scope of data updates to document any values in ONRR systems that change over time. The process uses new metadata to provide business context about the change, such as when it occurred, why, and by whom. New technology in ONRR's data warehouse stores the updated values and makes them available enterprise-wide so that the whole organization is always referencing the most recent data. Interested programs within and stakeholders outside ONRR receive push notifications when values change that may impact them.

Process Refund Request (16) utilizes automation to address simple refund requests and issue denials under specific business rules, such as when the requesting entity has an open obligation. Technology changes through CRM provide notifications to the requestor on the status of his/her refund while case management tracks and stores all information associated with it. Industry or a sister bureau may request a refund through the SSP.

Industry must provide banking information with the refund request instead of ONRR retroactively asking for it, which is a key process change.

Reconcile Payments to Receivables (17) is now an exception process as it only addresses payments and receivables that are not automatically matched in the Enhance and Create Data process (a process change). Identifying stakeholders by EIN, a new data element, will reduce the volume of work for this process. The case management system (a new technology) tracks and categorizes issue types, documents information for use in downstream cases such as orders to report or pay and helps to coordinate activities amongst the various ONRR programs involved in achieving compliance. New technology and enhanced business rules in the Enhance and Create Data process automatically identify missing reports or payments and escalate them to Reconcile Payments to Receivables. SSP provides a means for industry to submit corrected or missing documents and limits the submission of a report without a corresponding payment or vice versa.

BPR Metric ONRR currently receives and processes about 1,500 paper OGOR and 2014 reports annually.

Additionally, ONRR manually enters information for about 520 lease segregations per year.

3.3.1.1 Change Summary Table

Table 5 below summarizes the people, process, data, and technology changes in Collect to Disburse.

Table 5. Summary of Changes to Collect to Disburse

Change Dimensions Highlighted Changes

People • Eliminates reliance on system contractor to access data

• Two new roles: Stakeholder Specialist and Exemption Analyst

• Clarified responsibilities for AR, AP, Debt Collection, FM, and RRM

Process • Reduction in the use of offline tools outside of the financial system

• Formal process to proactively achieve compliance, Assist Stakeholder

• Single processes to manage invoices, capture unstructured data, and validate data

• Reduction in number of reconciliations

• Consolidated 45 As-Is processes into 19 To-Be processes1

Data • Standard data attributes for case types

• Use of third party and source documents in validation

• Identification of industry stakeholders by EIN

• Unique identifier for each report and payment

• Use of data interfaces to directly interact with other government systems

Technology • Automated reports for reconciliation, disbursement, and more

• Use of CRM and enterprise-wide case management to document interactions and

ONRR workstreams

• Use of SSP to intake documents, payments, refund requests

• Push notifications for a variety of activities including reminders to update information, changes to reported information, case status updates,…