Administration’s Shared Services Push Starts In Familiar Place: Payroll

The administration’s big push on shared services will look familiar to many. But that’s by design, according to two officials leading the effort.

Shared services—a single agency managing systems for commons needs across government—was listed as one of the administration’s Cross-Agency Priority, or CAP goals, giving the initiative the weight of the White House and milestones to achieve.

Agencies already share some services, like fleet and property management, through programs offered by the General Services Administration. Most agencies also have their payroll managed by one of four agency shared service providers: GSA, Agriculture, Defense or Interior departments.

The administration is doubling down on sharing payroll services as part of the NewPay system, which will also cover work schedule and leave management. There are more than 108 work schedule systems used by federal agencies, with only half using systems provided through shared services providers, according to the solicitation for the NewPay contract.

GSA awarded a 10-year, $2.5 billion contract in September to teams led by Carahsoft and Grant Thornton. Those teams will work with the shared services providers to build relevant software-as-a-service payroll and scheduling systems and help agencies migrate to the new systems over time.

GSA officials expect the new method to lower payroll and scheduling costs by 75 percent governmentwide.

If this sounds familiar to past shared services initiatives, that’s because it is.

“We’re going to start with some of the things we’re already doing and elevate them, do them well and ensure agencies can actually understand what that success model looks like,” Suzette Kent, federal chief information officer, said during an event Thursday hosted by the Association of Government Accountants.

Kent was joined on the panel by GSA Administrator Emily Murphy, who agreed that an undertaking like shared services should begin with an area that everyone agrees on and where there are already lessons learned. One such lesson is how the slow drip of customization leads right back to a complex, disconnected system, as seen with government’s travel system.

“How do we avoid letting it turn into a bunch of different systems all over again? Every federal agency that I’m aware of uses the same travel management system. We all use a different version of it,” Murphy said. “We have over 40 different versions of that travel system, which means we can’t share data. We don’t actually have a shared service working, even though we all have the same software.”

Murphy, GSA and the CAP goal team hope to avoid that situation with the NewPay system while still ensuring individual agencies and offices get their unique requirements filled.

“It’s making sure … that we’ve got the focus on customer experience so that people don’t feel the need to go and build their own system on top of something to get what they need. And that they’re seeing the savings and the ability to reinvest in their mission,” she said.

Kent, who spent 27 years managing financial and payment system overhauls in the private sector, said the return on investment will be there, even if it’s not evident right away.

“Having worked with many private-sector companies and large, global companies that have gone through this journey, I am passionate about the value that comes out of it. But it doesn’t happen in six months, per se,” Kent said. “There will be early-stage value. But the longer-term value will come in increments.”

Beyond NewPay, Murphy said as an acquisition professional, she is looking forward to seeing a single contract writing system that could be used across government.