SPEAKING OF SAVINGS


not. In between the terra firma of cost savings and avoidance, however, lies a heavily mined no man’s land of varia- tion in how we report efficiencies across Better Buying Power 2.0, will cost/ should cost, services acquisition opti- mization, Lean Six Sigma (LSS) and value engineering.


Te question is, at what point does the distinction between cost savings and avoidance become useful? Te answer may depend on your perspective.


Te term “savings” does not automati- cally distinguish between the current year and the future, and there is reluctance among managers to group current-year savings with future savings. Given the fiscal environment, one could be forgiven for only counting money that is in hand. “Real” cost savings is money in the bank that can be used to buy something else, whereas a funded future requirement is only as good as the promise to fund it.


One might argue that to a program man- ager (PM), there is no tangible difference between a reduction in unfunded require- ments and a cost reduction in an out-year subject to future POM planning.


TARGET PRECISION Terminology can be good, bad or confusing. Despite the guidance provided, ad hoc definitions are continuously created and destroyed in the service of efficiencies, taskers and funding drills. The root of our problem is that we only have a few terms to describe a delicately nuanced scale of efficiencies. Here, CW2 David Franco (left), a 101st Airborne Division (Air Assault) targeting officer, assists SGT Chad Beyer, a student in the precision fires operator course, with a practical exercise to mensurate targets during training at the Kinnard Military Training Complex at Fort Campbell, KY, Jan. 30. Franco, along with two other targeting officers from the 101st, were the first in the Army to achieve precision fires instructor certification at a division level. This certification can contribute to as much as $1.5 million savings for the division in its training budget. (U.S. Army photo by SFC Stephanie Carl)


However, for a Program Evaluation Group (PEG) chair responsible for the long-term funding strategy of a functional area such as equipping, sustaining, or training, a reduction in a future funded requirement means that someone else’s unfunded requirement may now be funded. To the PEG chair, that’s a cost savings, because those dollars can be reallocated.


Consider another scenario: A PM takes an action that reduces costs for another organization. Does the PM who took the action record this efficiency as avoiding cost for the receiving organization, or does the receiving organization record


162 Army AL&T Magazine


October–December 2013


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