Survey shows support, with reservations, for shared services

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Shared services aren't getting rave reviews, and that's scaring potential users.

Although government customers acknowledge the benefits of moving to shared financial services, they need more positive communication to take the leap, according to a survey of 229 shared service providers (SSPs) and customers at all levels of government and industry.

It's not that users are panning shared services (though the Department of Housing and Urban Development's inspector general recently said rushing into shared financial services can lead to ledger errors and budget pain). Instead, the survey, released Oct. 27 and conducted by the Association of Government Accountants and LMI Research Institute, found that most users were "satisfied but not enthusiastic" about shared services.

Only 13 percent of respondents said they weren't planning to use shared services, down from 35 percent the previous year. Among federal respondents, the figure was a mere 10 percent.

But some concerns accompany agencies' plans to move to shared services.

Although SSPs were sure of the cost benefits they could bring -- 88 percent said moving to a shared financial services model would lead to lower costs, and the other 12 percent said costs would stay the same -- users were less confident. Fifteen percent of respondents (and 14 percent of current SSP users) said they expected costs to rise in a shared financial services model, and 21 percent of respondents said they weren't sure what to expect.

Respondents were concerned about the costs of cleaning up data and creating system interfaces during a shared services transition, and 42 percent said cost savings might be lost to the expense of setting up systems to handle exceptions or "shadow" SSP activities.

They also said they wanted responsive customer service from SSPs and the ability to generate their own financial reports.

Some respondents said the market should play a role in shared services, and SSPs should be free to enter or exit the marketplace. To achieve that flexibility, migration between SSPs must be streamlined.

In May 2014, the Office of Management and Budget recognized four financial SSPs for feds: the Agriculture Department's National Finance Center, the Interior Department's Interior Business Center, the Transportation Department's Enterprise Services Center and the Treasury Department's Administrative Resource Center.

And this month, OMB announced the creation of a Unified Shared Services Management organization within the General Services Administration under the leadership of Elizabeth Angerman, director of Treasury's Office of Financial Innovation and Transformation.

Several respondents to the AGA/LMI survey expressed doubts about whether the federal SSPs are up to the task of taking on large, complex customers.

Above all, current users tended to recognize the efficiency gains associated with shared services but pointed out that mix-ups and errors could haunt projects.

LMI and AGA said the solutions are plenty of planning and communication.

"Communication is important everywhere, but in accounting, especially, it's about using the right words the right way," LMI Senior Consultant Carol Christian said. "'Commitment' and 'obligation,' for example, may mean the same thing to many people, but in accounting, they are different transactions. They can't be used interchangeably. When going through highly technical implementations, conversation is good, but only when everyone is speaking the same language."

Until that communication improves, some experts believe it will take legislation to accelerate the adoption of shared services.

About the Author

Zach Noble is a former FCW staff writer.


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