what cfos need to know about cloud-based systems …€¦ · 5 i what cfos need to know about...

WHAT CFOs NEED TO KNOW ABOUT CLOUD-BASED SYSTEMS

FOR MANAGING GOVERNMENT PROJECTS

Government contractors require systems that are secure and flexible

INTRODUCTION: THE RIGHT TOOLS FOR GOVERNMENT CONTRACT SUCCESSGovernment contractors are closely scrutinized when it comes to safeguarding their systems and data. With so many of today’s companies relying on cloud-based systems because of their capacity and flexibility, governments at the federal level want to ensure their contractors are using systems that are secure and compliant with regulatory standards.

2 I WHAT CFOs NEED TO KNOW ABOUT CLOUD-BASED SYSTEMS FOR MANAGING GOVERNMENT PROJECTS


A myriad of compliance standards exist that financial leaders within government contracting firms need to be familiar with, and they tend to go above and beyond the typical regulations that concern the finance team. The challenge for the CFO is to have full visibility into all of the company’s revenue streams to accurately manage and attribute costs to various government projects.

Some enterprise resource planning (ERP) solutions are not designed to accommodate the needs of government contracts. CFOs need to enlist internal and external sources to ensure that their system will meet the demands of government work.

As cloud-based solutions become the norm, government contractors must meet stringent standards for data management and protection. As the executive in charge of risk management, CFOs must take the reins to ensure that the company can comply with the added complexities of data security of government projects.

“The government is among the largest customer of goods and services in the world, which comes with tremendous benefits and challenges,” said Peter Lauria, Partner, Baker Tilly, a consultancy specializing in accounting and financial system design. “If you secure a government contract, there is the potential for larger orders that can change the trajectory of your business. The challenge from the seller’s standpoint is that it is highly regulated and there is little if any wiggle room for error.”

This eBook will explore:

� Addressing data security and other challenges in meeting government standards such as the NIST SP 800-171 guidelines;

� Using a cloud-based solution to manage the process from pre-award to project close for on-time and on-budget performance;

� Assessing the impact of government contract work on the business; and

� Looking at the future of government contracting and security measures.


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ENSURING SYSTEMS COMPLY WITH GOVERNMENT STANDARDSWhile many companies have invested in cloud-based solutions to replace manual processes, data accuracy and visibility remain concerns.

“Many companies are at the point where their cloud-based solutions are meeting their needs within their four walls, but they have not fully leveraged the value of their systems when interacting with those outside of their organization,” said Daniel Andrew, VP of Strategic Accounts for


“MANY COMPANIES ARE AT THE POINT WHERE THEIR CLOUD-BASED SOLUTIONS ARE MEETING THEIR NEEDS WITHIN THEIR FOUR WALLS, BUT THEY HAVE NOT FULLY LEVERAGED THE VALUE OF THEIR SYSTEMS WHEN INTERACTING WITH THOSE OUTSIDE OF THEIR ORGANIZATION.”

— Daniel Andrew, VP of Strategic Accounts, Deltek

Deltek, a global provider of enterprise software and solutions for project-based businesses.

For example, Andrew noted that many companies are still issuing manual checks and processing paper invoices, missing opportunities to optimize their ERP systems.

In addition, many organizations are not fully prepared to track expenses to individual projects.

“As a government contractor, you must accurately record the materials and labor used for the project,” said Joe Yearta CFO/Director of Business Operations, Trideum, a small business provider of test, modeling, simulation and IT solutions. The company has implemented systems from Deltek, a global provider of software and solutions for project-based businesses.

“The government has specific requirements for billing based on the cost of labor and expenses associated with the project, and we have to invoice monthly — rather than the milestone-based billing cycle that is common with commercial work. “

Yearta noted that mistakes in attributing costs to individual projects can be costly. “It is critical to get it right the first time or there can be significant payment delays.”



ADDRESSING GOVERNMENT SECURITY REQUIREMENTS One of the critical challenges as a government contractor is ensuring that sufficient security procedures are in place. New government regulations — NIST SP 800-171 — regarding the security government contractor that deals with controlled unclassified information (CUI). Under NIST SP 800-171, companies that do work for the federal government may be required to provide documentation and evidence as


to how the organization protects CUI, such as research and engineering data, in addition to financial and project management information.

“It is not just about protecting your own data, but the government’s data you’re entrusted with,” Mike Cullen, Senior Manager, Baker Tilly.

NIST SP 800-171 outlines 110 requirements, spanning access control, incident response, system and communications protections and other security functions. Some examples include:

� Limiting information system access to authorized users, processes acting on behalf of authorized users, or devices.

� Creating, protecting, and retaining information system audit records to the extent needed to enable the monitoring, analysis, investigation, and reporting of unlawful, unauthorized, or inappropriate information system activity.

� Tracking, documenting, and reporting incidents to appropriate officials and/or authorities both internal and external to the organization.

By signing a contract and submitting an invoice, your organization agrees to comply with NIST SP 800-171. Penalties include negative ratings, lower award fee scores, and termination for default.


“It can cost the company money and wipe out any profit the company would have realized from the project, not to mention the damage to your reputation that will make it more difficult to win business going forward,” said Mike Dunn, CFO of NeoSystems, a provider of safety and compliance platforms. Dunn noted that the same regulations apply to any work performed by sub-contractors.

One security feature gaining attention is the need for multi-factor authentication, a method of computer access control in which a user is granted access only after successfully presenting several separate pieces of evidence to an authentication mechanism. “Access controls are critical when it comes to working with government data,” said Monique Maimon, Director of IT, Infotek Consulting.

Review security policies at least yearly, and have checks in place to ensure that procedures are being followed. “If you have exceptions, especially when it comes time to implement NIST SP 800-171, the government may not allow you to move forward.”

“ACCESS CONTROLS ARE CRITICAL WHEN IT COMES TO WORKING WITH GOVERNMENT DATA.”

— Monique Maimon, Director of IT,

Infotek Consulting



ADVANTAGES OF A PROJECT-BASED ERP SOLUTION A project-based ERP solution provides a strategic advantage for every level of business involved in government contract work due to the ability to track budgets and resources throughout the organization. Small and mid-sized firms can benefit from visibility as much as an enterprise business.

“We’re able to leverage the data to track how we are performing against the terms of the contract,” said Yearta. “Access to real-time information on how resources are being used is important.”


“WE’RE ABLE TO LEVERAGE THE DATA TO TRACK HOW WE ARE PERFORMING AGAINST THE TERMS OF THE CONTRACT. ACCESS TO REAL-TIME INFORMATION ON HOW RESOURCES ARE BEING USED IS IMPORTANT.”

— Joe Yearta CFO/Director of Business Operations, Trideum

Yearta said a cloud-based solution enabled the company to continue operating and issuing invoices even when a tornado disrupted part of its business. “If we had to delay processing our invoices, or any other critical function, that would have been a serious blow to the business.”

A project-based solution simplifies the process of attributing the company’s overall resources to a specific government contract. This makes invoicing easier and less prone to error.

Project-based solutions provide greater visibility into the entire process, according to Deltek’s Andrew. “Every time a team member from procurement makes a purchase, the finance team can see when it was received, when it was invoiced, when it was paid, and when cash left the bank.”

Greater visibility into the transaction lifecycle improves cash management and forecasting, Andrew said. “This is far more effective than waiting for an invoice to hit,” he said.

CONCLUSION:PROJECT-BASED SOLUTIONS HELP NAVIGATE GOVERNMENT WORK Securing a government contract is a feather in the cap of any business, and small to mid-sized firms in particular can see their business skyrocket with a boost from government work.

But, CFOs need to bear in mind that government work is different from the commercial side of their business, with special requirement when it comes to tracking progress, compliance and invoicing.


Best-in-class government contractors use project-based solutions that are geared toward monitoring projects and providing visibility at all points in the contract lifecycle.

“Having the systems and knowledge to keep up with rapidly changing requirements for government contractors enables us to differentiate ourselves from competitors,” said Trideum’s Yearta.

Key takeaways include:

� Streamlining the contract management lifecycle is essential for success in fulfilling government contracts. Cloud-based project management and finance solutions can help track progress and how resources are allocated.

� With greater visibility into the data surrounding a contract — even interactions prior to the deal being signed — CFOs can more accurately forecast cash needs and improve cash management.

� Data protection is critical when it comes to government work, and senior finance executives should be aware of NIST SP 800-171 guidelines to safeguard CUI.


ABOUT THE SPONSOR

Deltek is the leading global provider of enterprise software and solutions for government contractors, professional services firms and other project-based businesses. For decades, we have delivered actionable insight that empowers our customers to unlock their business potential. 22,000 organizations and millions of users in over 80 countries around the world rely on Deltek to research and identify opportunities, win new business, recruit and develop talent, optimize resources, streamline operations and deliver more profitable projects.

Deltek – Know more. Do more.® www.deltek.com


http://www.deltek.com

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