Making a market for shared services

When Office of Management and Budget Controller Dave Mader announced the creation of a dedicated office to coordinate shared services across government in last year, he stressed the importance of baking that framework into government. "It needs to be codified somehow," Mader said at an October 2015 event. "It can't just be this merry band of zealots."

Nearly 15 months later, that codification remains a work in progress, but Mader and his fellow zealots are feeling good about the groundwork they've laid. And perhaps more importantly, they believe the business case for shared services is stronger than ever.

"If people don’t believe that there’s going to be continuing constraints on discretionary -- especially non-defense discretionary -- funding, then they must be living under a rock," said Ellen Herbst, the Commerce Department's chief financial officer and assistant secretary of administration, at a Dec. 7 FCW event on shared services. The money, she argued, simply isn't sufficient for agencies to each run their own support functions like HR, acquisition, IT infrastructure and financial management.

And on the people side, Herbst said, "We simply cannot find enough talented, experienced HR people, acquisition people, IT people -- and increasingly financial people, which used to be one of our deepest benches in the federal government." Shared services are the best way to take advantage of those limited resources.

Elizabeth Angerman, who heads the Office of Unified Shared Services at the General Services Administration, agreed. Shared services "leverage economies of skill," she said. 

The federal government "will never fit into a one-size fits all solution," Angerman said at the event. So her office's goal, she said, is to develop a true marketplace of shared services -- provided by agencies and private-sector firms alike -- that can "flex to accommodate the needs of customers."

The Federal Integrated Business Framework, which was announced in October, is intended to provide a foundation for that marketplace. Angerman said the framework, which has been developed by "managing partners" for various lines of business across government, will be "standard way that we will document not only the functional business capabilities we expect in each area, but also how these functional areas intersect."

For example, Angerman said a council of managing partners is currently working on both the requirements for software-as-a-service offerings, and a timeline for finalizing those requirements. The timeline is being presented next week, she said, though she declined to offer any estimates for the requirements themselves. 

"We as a government take a really long time to define our requirements," Angerman said. There's a desire to make that process faster and more agile, and "I think we can identify the right components with which to start."

For shared services to become truly codified, however, there needs to be broader buy-in -- from agencies, from industry providers, and from the next administration.

Agencies are generally open to the idea, Angerman said, so long as there is sufficient flexibility in meeting mission-specific needs. But industry needs more information before it can fully engage, she and Mader agreed.

While Angerman was clear that government wants to move toward subscription-based service models and "avoid the cost spike" that often comes with developing new systems, Mader acknowledged that "one of the tasks remaining is to look at the business model... how can you actually bring private sector capital into the equation?"

"For private firms to be interested," he said, "you need a lot more clarity."

President-elect Donald Trump's administration, meanwhile, remains the wild card. It's too early in the transition for briefings and discussions on shared services, Mader said, and an informal poll of 100-plus event attendees found that support from political leadership was the most common concern.

Mader stressed that shared services are not some new idea that should be pegged to President Barack Obama's team. The concept first started to get governmentwide traction in President George W. Bush's administration, he noted.

"Folks in the Bush administration set the foundation," he said. "Maybe what we’ve done is put the first floor on, but there’s a couple more floors that need to be built in this structure."

And Stephen Galvan, who also spoke at the event and was part of those Bush-era Office of Management and Budget efforts, predicted that shared services would resonate with the Trump administration. "I expect that anybody taking a business approach would look at these things in a very positive way," he said.