Can metrics persuade holdouts?

OMB hopes performance measures will make the case for using shared-service providers

The big issue for FM LOB

Federal officials could soon have a clearer picture of how effectively and efficiently agencies provide financial-management services compared with other agencies and particularly compared with providers that operate shared-service centers under the Bush administration’s Financial Management Line of Business program.

Recent Financial Management LOB reporting guidance presents performance measures for evaluating financial-management services. Mandatory reporting based on those measures will provide a credible basis for evaluating financial-management services that federal agencies might seek from shared-service providers, said Keith Thurston, assistant deputy associate administrator at the General Services Administration’s Office of Governmentwide Policy.

“Standardized performance measures for financial-management systems are key to providing fair, visible measures that all agencies can use,” Thurston said.

Officials responsible for the Financial Management LOB say they expect the metrics and new reporting requirement to provide evidence that will help persuade agencies to use shared-service providers. The Office of Management and Budget established the metrics in the Financial Services Assessment Guide, which agencies and shared-service providers must begin using to report April data to OMB by June 15 and monthly thereafter.

Administration officials would like to create a competitive marketplace for shared-service providers in which they compete for agency business on the basis of performance, cost and quality, Thurston said.

Agencies would use the performance data to evaluate potential providers for hosting their financial systems and developing applications, said Trisha Broadbelt, deputy program manager of the Financial Management LOB at the Interior Department’s National Business Center in Denver. The data will provide a better sense of the overall value that a shared-service provider can deliver, she said.  

“By adding new metrics for performance, it will encourage agencies to take a closer look at shared-service providers and give them an objective view of the services that they can obtain” from a shared-service provider, Broadbelt said.

Performance reporting will also promote a level playing field for government and commercial shared-service providers. “It’s going to encourage everyone to do their best to strive to offer the best value on a continual basis,” Broadbelt said. “This in turn will encourage agencies to look more favorably” on a shared-service provider.

Security will be a high priority for agencies and shared-service providers in evaluating financial services, Broadbelt said. Even if an agency’s financial-management systems’ performance doesn’t need improvement, those systems might have unacceptable security vulnerabilities.

Meaningful metrics
Agencies have worked with OMB and GSA through participation on the Chief Financial Officers Council’s Performance Measures Working Group to determine which measures would be most appropriate. It was wise to involve experts from various agency components and programs, Broadbelt said. The metrics changed considerably during the course of several months.

“Everyone knew what we were trying to get at, but we wanted to have metrics that were meaningful and not duplicative,” Broadbelt said.  

Thurston said he anticipates that agencies will comply with the requirement to report their performance data or at least their progress toward setting up that capability. “The results and peer comparisons are in themselves the motivation for agencies to move to better performing solutions,” he said.

Some agencies perform financial-management functions their own way and without a clear business reason for doing so, which makes it difficult to compare their performance with that of other agencies and providers, said Dianne Copeland, program director of the Financial Systems Integration Office. The performance measures will provide data on a consistent level so services can be evaluated and compared.

“After we review the performance information, we will be able to identify the best, most cost-effective practices and be able to work with agencies that may need to adjust their processes,” Copeland said.
The General Services Administration and the Office of Management and Budget have a new policy that requires federal agencies to collect and report financial-management metrics in two phases. In Phase 1, agencies must establish baseline data for their information technology infrastructure hosting and application management services. In Phase 2, agencies must refine those metrics and collect additional metrics, improve their reporting capabilities and accountability mechanisms, and streamline their collection efforts.

Here are six examples of financial management metrics published by the Financial Systems Integration Office.
  • Infrastructure availability.
  • Help-desk response time.
  • System security scans and remedial actions.
  • Core financial systems availability.
  • Report production time.
  • Average response time for user access requests.
Source: Financial Management Line of Business Program Office

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