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FCW : January 2015
In these days of discord and dissen- sion, there is at least one thing the right and left sides of the political spectrum can agree on: Federal agen- cies should share services. The push to do so, which first took form as the Lines of Business initia- tive under President George W. Bush, has reignited under President Barack Obama’s “shared first” policy. And the government’s struggles to cut costs have generated new energy for the approach. The Obama administration has par- ticularly focused on sharing technol- ogy-centric services. His shared-first policy and the 2012 Federal IT Shared Services Strategy expressly targeted opportunities to thin the federal IT portfolio. As a result, the CIO Council has been home to much of the intellec- tual firepower and research into best practices, including the 2013 imple- mentation guide on how to move to shared services. The 2012 strategy directed agencies to begin migrating their tech systems by targeting so-called commodity ser- vices used by many or most agencies. They include components commonly thought of as commodities — such as data centers, networks, desktop com- puters, mobile devices, email and the like. But those services also include business systems for finance, human resources, and asset and customer relationship management. In March 2013, the Office of Man- agement and Budget directed agen- cies to move financial management to shared-services providers rather than modernize their own systems. The goal was to consolidate 46 IT systems under four federal shared- services providers named in May: the Administrative Resource Center at the Treasury Department’s Bureau of the Fiscal Service, the Agriculture Department’s National Finance Cen- ter (NFC), the Interior Department’s Interior Business Center (IBC) and the Enterprise Services Center at the Fed- eral Aviation Administration. The financial management initia- tive, run by Treasury’s Office of Finan- cial Innovation and Transformation (FIT), offers a catalog of providers, a transition process flow and other support. In many ways, FIT is following the playbook of the only successful large-scale shared-services initiative so far: the consolidation of payroll processing from 26 systems govern- mentwide in 2002 to four in 2009 — at NFC, IBC, the Defense Finance and Accounting Service, and the General Services Administration’s National Payroll Branch. An exercise in change management CIOs and their teams can learn from the payroll consolidation as they focus on transferring other IT systems to shared-services providers. Not surprisingly but very important- ly, the payroll initiative’s chief lesson is that moving to shared services is an exercise in change management. Its success hinges on engaging employ- ees at every level — from executives to those who deliver the service to be shared. A former leader of the payroll effort said it succeeded — and saved an esti- mated $1.6 billion to date — by mak- ing performance transparent, holding leaders personally accountable, hav- ing active governance and a healthy debate, and taking special care to reassign employees and elevate the work they do. Tim Young, who ran the payroll initiative as deputy administrator for e-government and IT at OMB under then-President George W. Bush, said the president made management improvement a priority and held Cabi- net secretaries personally responsible for it. That accountability crystallized The key to successfully sharing IT services BY KYMM Mc CABE AND ANNE LAURENT Take a lesson from payroll systems consolidation, the only large-scale success so far, and focus on people, not systems 28 January 2015 FCW.COM AcquisitionMatters 0115fcw_028-030.indd 28 1/7/15 9:20 AM
November and December 2014