December 7, 2016

A Case for Embracing Shared Services

Icon showing a web of connected itemsKeeping track of an $81.5 billion IT portfolio across 26 agencies with staff spread throughout the nation and, in some cases, overseas, is hairy, to say the least. There are bound to be duplication of efforts, systems, and software.

For instance, the Office of Management and Budget (OMB) found that agencies paid between $450 and $1,300 for laptops with the same configuration. The Government Accountability Office (GAO) discovered that between 2008 and 2013, a trio of government departments invested a combined $321.25 million on duplicative efforts.

Recognizing the financial implications of this redundancy, the Federal Chief Information Officer (CIO), Tony Scott, is pushing agencies toward and a “Shared First” business model. Shared First is a strategic business model that seeks to identify and eliminate waste and duplication across agencies and improve cost efficiencies through shared commodity IT. Additionally, it puts more focus (thus resources) on core mission requirements rather than the administrative support needed to maintain these services.

Unfortunately, the value of shared federal services has not been fully realized among federal leaders. Recently, Federal News Radio conducted a survey of 197 federal CIOs, deputy CIOs, and other agency IT managers. When asked about their top priorities for 2017, migrating to a shared service for back office services (human resources or financial management) ranked on average 5.58 out of 12 — near the bottom of their list.

In the Federal Leaders Digital Insight Survey, federal leadership were surveyed about the adoption of digital technology at their agency. Of those surveyed, 72% agreed that digital technology has improved productivity at their agency. However, 62% of survey respondents cited an insufficient budget as the leading barrier to adopting new technology. A proven strategy to saving money on new technologies is to leverage shared services. The government knows this, as evidenced by the creation of the Unified Shared Services Management (USSM) and GSA’s opening of a shared service marketplace. Agencies should consider shared services as a solution to meet their IT objectives without breaking the bank.

TCG has seen firsthand the benefits of agencies using shared services to save costs on new technologies. Since 2000, TCG has saved taxpayers $384,932,474 by leveraging shared services for federal agencies and sharing the solutions we develop with other agencies or interest groups. For example:

  • We’ve saved time (thus money) on development costs since we are not building a system from scratch.
  • The financial burden to develop a new product is distributed among participating agencies so no one entity bears the full weight.
  • Licensing fees are reduced across government.
  • The burden (and cost) of operations and maintenance is mitigated.

For example, MAX.gov is a suite of integrated shared services that stimulated innovations in budget documentation, data visualization, and end user engagement across agencies. The suite of MAX applications facilitates data collections, survey distribution, data visualization, and collaboration all with a robust identity authentication service. MAX is currently used by 180 federal agencies. Using this shared service, participating agencies and taxpayers have saved a whopping $140 million in development costs.

The Department of Treasury’s Budget Formulation and Execution Manager (BFEM) is a shared service application for strategic planning, budget formulation and performance management services. The first iteration of BFEM cost $5 million to develop. BFEM is now used by 16 agencies to develop and manage their budget requests. Had each of those agencies created their own comparable financial management system, the cost to taxpayers would have been $80 million.

The value and utility of shared services are real and abundant. By considering and embracing shared services, agencies can meet their IT objectives and improve productivity without straining their budgets. Instead of worrying how to pay for administration of programs, federal leaders can focus on how to serve stakeholders with the money they’ve saved.