Wagner: The wave of the future

Agencies can benefit from shared services, a model based on mutual accountability

I spent much of my government career being supported by organizations I could not depend on or supporting organizations that did not do what was necessary to benefit from my support.

I dare say that many of you have found your efforts to hire someone hampered by tepid support from human resources, and you have known acquisition professionals who are regularly asked to buy something to meet an unclear need. Shared services offer a way out of that morass.

Most discussions on shared services focus on savings or effectiveness. Wikipedia states that 30 percent of Fortune 500 companies have implemented shared services —  primarily for back-room operations — and are saving as much as 45 percent.

Such savings have made shared services the centerpiece of several of the Bush administration’s management improvement initiatives. However, to make those savings real, we need to get the accountability right.

We get the savings because one standardized and optimized business process supporting many users is more efficient than a large number of small, ad hoc operations. An optimized process allows users to focus on the mission while people with specialized expertise and systems support them.

A good example is travel management. But many other services also lend themselves to the shared-services model. Most current federal efforts involve adapting a commercial shared-services approach to the federal space. That can lead to interesting problems, because often the most effective approach is to change our process rather than change an already optimized commercial model. We may say the law requires us to be different, but often it is just tradition.

If we break with tradition and embrace shared services, we can get the accountability right. Implementing shared services effectively forces us to define who supports whom, formalize those relationships, and look explicitly at the metrics for the support organization and the customer. Without accountability, we won’t get the savings.

I’ll illustrate with a private-sector example that went into the creation of E-Gov Travel, one of the federal government’s shared-services initiatives. A company had corporate travel arrangements with airlines similar to those available through the General Services Administration’s City Pairs program, although the company’s prices were not as good as the government’s.

If an employee bypassed the corporate contract, a program sent an e-mail message to management pointing out how much money could have been saved had the employee used the contract. The notification allowed managers to decide if the increased cost was justified and made them accountable for their decisions.

Shared services in that example delivered lower prices, and it allowed people to make fact-based choices.

Now think about how many processes within the federal government are broken. How many could be fixed if we got the accountability right?

Many processes involve customer/supplier relationships. Both parties have responsibilities. Acquisition people need a solid requirement from the program people; security professionals depend on users to protect passwords; and so on. Let’s get explicit about the responsibilities of both sides, and let’s get the metrics right.

Program folks, would you like to have more flexibility in dealing with the support people you know and love? Support people, would you gain from an explicit system that addresses what your customers need  to do to work effectively with you?


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