How Agencies Use Shared Services to Improve Efficiency

By now, most federal employees have at least a basic understanding of shared services — a business model that consolidates support services to boost efficiency and reduce costs.

Although some in government thought that shared services was a passing trend, the recent Office of Management and Budget memo on shrinking government makes it clear that the push toward shared services is going to continue and intensify under the Trump administration. That’s why federal leaders need to consider how best to embrace it.

Shared services was a main topic of conversation at the 2017 CFO/CIO Summit in Washington, D.C., this month, and guests heard from a number of C-suite executives about the benefits, challenges and best practices involved in making the transition to a shared services model.

Glen Davidson, Executive Director of Enterprise Services at the Commerce Department, started the conversation by talking about what drives agencies toward shared services. When he first began working with the department, he noticed that many of the business models being used were inadequate and unsustainable. He would constantly hear managers complain, “I cannot hire, I cannot buy, my computers don’t work, and I can’t operate. We need to do something different.”

This meant that Davidson needed to bring in a fresh vision for how to improve the business model for his agency, and he and his team decided that a shared services migration was necessary. For Commerce, the two keys to making this transition succeed were creating an appetite for change within the organization and a strong end-state vision that would drive transformation. Although he faced numerous challenges along the way, he was able to use the vision to overcome obstacles, create more efficient business processes, improve customer service and devote more resources to advancing the mission.

Identifying a need and vision is critical, but Laurie Park, Deputy Assistant Secretary of Finance at the Veterans Affairs Department, added that agency buy-in and a commitment to success are also necessary. “Shared services works, but it involves a strong commitment to relationships and thinking about people,” Park said.

This means that leaders who want to enact transformations must first develop support within their organization, and then they must commit to maintaining an open dialogue with providers. By communicating with internal and external stakeholders, agency leaders can break down organizational resistance, learn about how to best navigate the transitions, and overcome the obstacles preventing success.

Victoria Wassmer, Acting Deputy Administrator of the Federal Aviation Administration, reiterated Davidson and Park’s assessment by noting that developing trust and a clear vision were paramount to a shared services transition. She credited FAA’s migration with helping the organization survive the 2013 Sequester, and she sees ample opportunities for agencies to transition to shared services during the Trump administration.

Like Davidson and Park, Wassmer also noticed a number of hurdles when implementing shared services. But the key to overcoming the challenges was building strong relationships — inside and outside of the organizations — and focusing on how more efficient business processes advance the mission. During the process, Wassmer was able to assure her stakeholders through customer commitments that they would have the same level of service for a lower cost. In the end, Wassmer’s team delivered, and they were able to save the FAA $65 million annually.

Budgets are continuing to tighten and the new administration is looking to reform business processes. Migrating to a shared services model is an effective way for agencies to save money, increase efficiency, and streamline financial management, acquisition and other processes. Although agencies may face challenges along the way, by focusing on your end state vision and building strong relationships, agency leaders can transform how they serve internal and external customers.