Shared services now: A common-sense step toward 21st century government

What if there was a common sense way to save $50 billion per year in taxpayer dollars by streamlining and modernizing the federal bureaucracy – with no adverse impacts on critical missions or programs?  What if modernization also enhanced government performance, transparency, accountability and cyber security?  Would our political leaders be capable of putting aside partisan differences and agreeing to a no-brainer that’s good for government and taxpayers, and would help bring our archaic government into the 21st century?

A coalition of business and government reform leaders believes it’s time to accelerate shared services in government. “Shared services” is a business model for managing common administrative services such as personnel, financial management, purchasing and IT services. Rather than every agency owning and operating its own full-service back office, agencies pool resources and purchase common services from third party providers with high capacity platforms and capabilities to serve multiple customers more cost-effectively than individual agencies can serve themselves. After decades of use around the world, shared services are the default delivery model in large enterprises almost everywhere except the federal government.

{mosads}The government has dabbled in shared services for decades. Every administration from Ronald Reagan through Barack Obama – three Republican and two Democratic – has tried to implement them, but progress has been sluggish and discontinuous. The leading federal success story to date has been payroll – but it took 26 years to consolidate from dozens of agency-specific platforms to today’s four government-wide platforms.  The government has estimated cumulative savings of $1.6 Billion to date – but we’ve only begun to scratch the surface of the full potential across the entire federal back office. This glacial pace of progress is failing to meet new and rapidly evolving 21st century challenges and imposes an unacceptable opportunity cost on a nation with chronic budget deficits, a staggering $18 trillion national debt and under-resourced critical missions.

Fully implemented shared services could produce the most significant modernization and restructuring of the federal bureaucracy since World War II with enormous cost savings and other important benefits. Accenture has identified 200 agencies that spend $125 billion per year on self-service back offices; nearly $50 billion per year could be saved by eliminating duplication and improving efficiency across this wasteful landscape. Streamlining and right-sizing the federal back office would enable improved focus and allocation of resources on front-line activities and help reduce risk of core mission failures. The quality of services to agencies and employees would improve through competition among best-of-breed providers and free choice by agency consumers.  Better services would provide a morale boost to federal employees who are poorly served by underperforming home grown services.  Enhanced transparency, accountability and a more secure cyber business environment would result from eliminating hundreds of antiquated, substandard, high-risk platforms and concentrating business transactions on fewer, higher-power, fully compliant ones.

Congress has a key role to play in making shared services a reality. The scope of change envisioned is too heavy a lift for the executive branch alone — the administration needs a partner with skin in the game at the other end of Pennsylvania Avenue. The absence of Congressional leadership and a legislative mandate to drive modernization on a continuous and sustainable path has been a critical missing success factor to date. As noted by U.S. Comptroller General Gene Dodaro, “Successful management reforms in the Federal Government need to have legislative underpinnings so they have permanence and consistency over time, no matter who’s in the White House or who’s leading departments and agencies.”   

The time is ripe for bipartisan action. “Cloud” technologies are creating increasing opportunities to drive commercial-like commodity transactions to shared services.  The Obama administration has identified shared services as a 21st century government initiative in its 2016 budget, and placed strong advocates in key agencies to drive progress forward.  Industry associations and good government groups are rallying around a future vision of a robust, public-private marketplace driving shared services to increasingly higher states of performance, cost-savings, customer satisfaction and accountability. A majority of federal executives in a recent Association of Government Accountants survey expressed support for just such a marketplace. 

Large scale transformation is a hard work, high reward proposition. Modernizing business platforms is the easy part.  Driving change through a resistant bureaucracy will be harder — but it’s not rocket science.  It’s been done successfully all over the world.  It will take strong, sustained, bipartisan leadership, tough decision-making and patience since benefits won’t accrue overnight.  With support from a growing community of industry and good government leaders, the Shared Services Leadership Coalition has been launched to show the way. It’s time to move our government into the 21st century and the first step needs to be taken by Congress.

Marshall is founder and CEO of the Shared Services Leadership Coalition, a Virginia-based non-profit organization supported by the information technology and consulting industries and the public administration academic and practitioner community.  Learn more about SSLC at SharedServicesNow.Org.

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