Sequestration pushing agencies toward shared services

As much pain as Washington's budget clampdown is causing, it is also encouraging agencies to look harder for ways to economize.

illustration dollar sign in vise

Sequestration is not just a source of pain for federal IT and financial leaders. It's changing the way they think about managing their agency operations, particularly information technology, in ways that could lead to long-term strategic changes, according to speakers at the 2013 Federal CIO-CFO Summit in Washington, D.C.

That rethinking is pushing technologies and services deeper into federal agencies that are pulling greater benefits from a continually shrinking pool of technology funding, they said. Shared services -- where one agency provides a service such as email, human resources applications or financial analysis to other agencies -- are offering federal IT managers, as well as financial officers, more efficient options.

Sequestration, however, has also played a role in advancing those services, they said, by forcing agencies to get a better handle on costs.

"Sequestration hasn't changed the partnership" between federal CIOs and CFOs, said Mark Easton, deputy chief financial officer at the Defense Department. "It has made budget constraints severe but it has also provided some real opportunities."

Those opportunities include the impetus to take a very close look at information systems, consolidation and new ways to get the same job done for less money, he said.

Defense Department CIO Teresa Takai expanded the point. "Sequestration has focused on how to reduce administrative costs, including IT costs. How do you do it without impacting the mission? DOD spent [funds] in a decentralized way for IT. That could mean a lot of redundancy. We have to work more closely with the CFO to understand where the money is."

The CIOs and CFOs at the conference said that shared services -- along with cloud computing and virtualization -- can help agencies eliminate redundancies and consolidate to better use limited resources. Casey Coleman, GSA CIO, said her agency is a provider of such services, naming travel and purchase cards and telecommunications services as examples of GSA services for other agencies.

GSA, however, is also setting up shared services internally in its IT department, bringing all IT capabilities into a single office, she said. According to Coleman, the consolidation involves four GSA IT offices that had their own support systems, including procurement and operations. The move will consolidate all of that, making resources more consistent, while adding transparency and allowing the agency to see across its internal IT portfolio more evenly, she said.

Additionally, Coleman said GSA has developed and is using an "IT Spend Tracker" capability that allows it to keep a tally of what devices and gear it has purchased, "not to stop spending, but to keep track of it." The capability, said Coleman, has been in use almost a year at the agency. The idea, she added, is to get a better idea of the economies of scale and analysis of where its IT money is going.

Although shared services can change how agencies use and track IT, its biggest impact, said Simon Szykman, CIO at the Commerce Department, is on an agency's culture and people. Consolidating data centers and moving capabilities elsewhere could mean a tough future for workers. Agencies should make contingency plans for the workers that will be affected by the adoption of shared services or other new capabilities.

In the end, Takai said, the mindset is not about the specific technology, but about taking advantage of what the technology can do.

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