Federal IT Shared Services Strategy

Federal Agencies establish and deliver their own intra-agency IT shared services, but inter-agency IT shared services are called Lines of Business (LOBs) and are operated by a Managing Partner within a Federal Agency, after approval by OMB.  The basic roles in an IT shared service are Managing Partner, Supplier, and Customer:

• Managing Partner. The “Managing Partner” establishes and maintains an IT shared service with approval by agency leadership for intra-agency services, and also by OMB for inter-agency services. The Managing Partner organization, often referred to as the Program Management Office (PMO), develops, implements, and maintains financial and service models as well as contracts with Customers and Suppliers using strategic sourcing vehicles whenever practicable. The Managing Partner PMO is responsible for the success of the IT shared service, and reports using metrics developed by the Federal Agency for its own intra-agency IT shared services, and by the Federal CIO Council’s Shared Services Subcommittee for inter-agency LOBs. Managing Partners are also responsible for maintaining contracts with Customer agencies that allow the Customer agency to terminate the contract if specified levels of service are not maintained.
• Customer. The “Customer” is the Federal Agency or sub-organization that contracts with and pays a Managing Partner to receive an IT shared service. The Customer organization may be required to interact with a Supplier for the coordination of day-to-day service issues. The Managing Partner handles major contract issues and resolves escalation items with Suppliers.
• Supplier. The “Supplier” is a government or commercial organization that provides the actual IT shared service to Customers. Managing Partners contract with Suppliers using Federal-wide contract vehicles and strategic sourcing concepts whenever practicable. Statements of Work with Service Level Agreements are maintained between the Managing Partner and Suppliers that include metrics to track the quality of service to Customers, and list charges/expenditures.

Critical Success Factors

• Executive Support. Agency leadership must be solidly behind their IT shared service plan, or needed changes will not happen at the business unit, program, or system levels.
• Cultural Change. Refers to the need for agencies to move away from internally-centered, program-specific thinking, and move toward a paradigm of consuming and providing IT shared services with multiple groups whenever possible. “Loss of control” issues are central.
• Business Process Reengineering. Optimizing business processes is essential to move from stove-piped workflows to processes that work across the agency enterprise and beyond.
• Technology Enablement. Robust connectivity and the use of agile computing clouds are two of the primary technical elements that are key to the success of IT shared services. The modernization and convergence of voice, data, and video infrastructures, paralleled by advances in processing, storage, and standards will enable the functionality, scalability, security, and cost efficiency that will be required.
• Resource Realignment. Because agency budgets are often constrained while IT requirements continue to grow; financial and personnel resources must be moved away from duplicated programs, systems, and workflows to new shared approaches within and between agencies.
• Adoption Strategy. The agency’s IT Shared Service Plan needs to clearly state who is accountable, what the performance targets are, and how each transition will occur.
• Continuous Improvement. Managing Partners must continually seek opportunities to improve services and meet the needs of Customers and Suppliers. This requires ongoing scanning for best-of-breed approaches in the public and private sectors, and implementing those that make sense, in collaboration with Customers, Suppliers, and oversight groups.

“Widespread adoption of IT shared services will help create a Federal Government that is leaner, more agile, and more efficient”. To accomplish this, “Federal Agencies should focus on three things”:

Institutionalize a Shared-First Culture. Agency leaders must work with management, staff, and industry partners to create and cultivate a Shared-First orientation throughout the organization. This will involve changing historical ways of thinking about how business units and programs function – to move from independent silos of capability (some of which are duplicative) toward an integrated matrix of shared services that provide IT capabilities across the entire agency.

Begin with Commodity IT. Agency CIOs can accelerate the implementation of Shared-First concepts by focusing on commodity IT (defined in OMB M-11-29) and using the PortfolioStat process and agency-wide Enterprise Architecture to identify areas of waste and duplication. The consolidation of commodity IT will free-up funding for other areas where innovation is needed. OMB M-11-29 also gives the agency CIO authority over commodity IT resources.

Identify Providers and Delivery Models. Agencies should incorporate successful shared service business models from the public and private sector to use in intra-agency IT shared service delivery. A wide number of inter-agency services are available from existing Service Centers and LOBs. This includes the General Services Administration (GSA), the National Business Center (NBC), the National Finance Center (NFC), and OMB-approved LOBs in Financial Management, Human Resources Management, Geospatial Systems, Information Systems Security, Performance Management, and Budget Formulation/Execution. Each Service Center or LOB is located in an agency that has a Managing Partner organization to coordinate all aspects of service acquisition and delivery between Customer agencies and industry or government providers. Cost-benefit analyses that look out three to five years may show that outsourcing to an inter-agency shared service provider is the most cost-effective approach. Examples of this include commodity IT services for help desks, email, print management, website management, online collaboration services, and mobile/wireless services.