Federal shared services -- is the third time the charm?

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When Dave Mader, the Office of Management and Budget's acting deputy director for management, recently announced a new governance structure for the federal shared services initiative, it was understandably a déjà vu moment for those who've been involved in the effort over the years. This announcement, while a significant and positive step forward, marks the third time a new entity has been formed to oversee the implementation of shared services and encourage agencies to migrate to one of the federal shared service providers.

What wasn't announced, however, was any resolution of the critical issues surrounding shared services: standardization, transparent cost and service comparisons, or how shared services will be funded. (There was a hint that something could make it into the Fiscal Year 2017 budget).  No new providers were named to increase the supply side of the shared services equation, nor were any additional agencies identified who will be migrating to a shared service provider.

What was unveiled, essentially, was the transfer of shared services oversight from the Treasury Department to the General Services Administration, along with a comprehensive oversight structure which formally incorporates many of the key players -- OMB, GSA, OPM, the various C suite councils (CFOs, CIOs, PIOs, etc.), SSP providers, and their host agencies. The new organization at GSA, called the Unified Shared Services Management Office, will be tasked with executing the governance board's strategy.

This latest iteration of a management structure was a recognition that the current, bifurcated oversight of shared services, now split between Treasury and OMB's Office of Federal Financial Management, was not up to the task. Both organizations have myriad other responsibilities, and nothing approaching the staff resources necessary to manage a major, government-wide shared services effort. In addition, the move out of Treasury to GSA is logical in that the last two attempts to implement effective oversight were creatures of Treasury -- the Office of Financial Innovation and Transformation and its predecessor, the Financial Systems Integration Office. The shared services initiative has never fit comfortably within Treasury's mission.

The latest move puts oversight and focus in one organization: the Unified Shared Services Management Office in GSA's Office of Government-Wide Policy. It took six months of intensive effort, a not-insignificant achievement in the context of the federal government. And GSA makes sense as the focus broadens from financial systems to the reality that other significant systems are also inherently involved, such as procurement, payroll and grants management, which GSA currently supports to varying degrees. GSA Administrator Denise Turner Roth celebrated the move as an opportunity to leverage staff from other areas, such as procurement, to enhance the effort.

Staffed with "10-15 [people], with contractor support," the office will find itself saddled with what Mader termed an "incredibly aggressive plan" to address the list of outstanding issues. The challenge for Beth Angerman, who is being detailed from her current position at Treasury to lead the new office, will be to turn the plans into results. Her initial tasks, detailed in Mader's aggressive schedule, include setting up shop, formalizing the interaction among all the groups involved in policy and oversight, and producing work products such as an FSSP Playbook.

How fast this group can begin its work, and how quickly it can offer the support requisite to the tasks it faces, will determine whether the change will have lasting impact in the face of a presidential transition, when many of the current key executives will likely ride off into the sunset. Expectations have been raised, and the shared services initiative is gaining momentum, as agencies are legitimately looking at ways to more effectively manage their administrative functions.

Mader and the executive team who stitched together this management structure for shared services deserve a great deal of credit. While the October 22 announcement did not offer resolution to many of the issues facing the shared services initiative, it was essentially a decision -- a correct one -- that a better model for making decisions, and a better way of doing business is needed.  It's a fitting adjustment, as it is reflects the basic premise behind the shared service initiative: doing the business of government better.

About the Author

Jim Taylor, former CFO at the U.S. Department of Labor, is Managing Director in Grant Thornton's Public Sector Practice and leads the firm's Federal Shared Services initiatives.


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