HR, financial system consolidation next on OMB's hit list

Agencies should be prepared to give up more money to governmentwide consolidation initiatives this year.

For the next 12 months, the Office of Management and Budget has set its sights on merging human resources systems and financial systems across government.

The reviews of fiscal 2005 budget documents that agencies received from the administration last month instructed CIOs to submit a list of human resources and financial systems that are in the planning or acquisition phases.

OMB wants to redirect redundant spending to support development of governmentwide standards and systems.

“These are some of the bigger issues beyond the [25] Quicksilver initiatives,” said Mark Forman, former OMB administrator for IT and e-government. “OMB is moving forward with the lines of business consolidation work.”

These two requirements were among eight that OMB expects agencies to meet in 2004. The office also instructs agencies to sign a fee-for-service agreement with the agencies managing the Recruitment One-Stop, E-Training, and Geospatial One-Stop e-government projects.

Forman, who now is the executive vice president at consultant Cassatt Corp. of Menlo Park, Calif., said there is more than $2.6 billion in duplicative spending in the human resources and financial areas. In an analysis last summer, OMB found overlap in agencies’ plans for 70 human resources systems worth $700 million and 120 financial systems worth $1.9 billion, Forman said.

Although the requirements do not become official until the president issues his 2005 budget proposal next month, it is highly unlikely OMB will change them since decisions at this point usually are firm, Forman said.

“This is not any different than what we saw with the e-government initiatives,” said an agency CIO who requested anonymity. “We were looking at installing a new financial system, and I told my staff to be prepared for OMB to take the money.”

The CIO said the agency would give up a significant amount of money but wasn’t sure how much until the budget and OMB’s plans are finalized.

“Our budget, like everyone’s, is tight, so it will hurt,” the CIO said. “But if it works, we will be able to save money, and that makes sense.”

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