Tough times make shared services a necessity

Some agencies missed the deadline for coming up with acceptable unification plans, OMB officials say.

Financial conditions have made it essential for federal agencies to downsize information technology equipment and support by sharing those resources internally, White House officials said Thursday. Some agencies, however, have inadequate consolidation plans, they added.

By March 1, agencies were supposed to inform the Office of Management and Budget of at least two basic “commodity” information technology services -- such as e-mail and website management -- that will be brought under one office before year’s end.

“Some of the submissions were frankly things that had already been done, or things that we didn’t feel were the best opportunity” for saving money, Scott Bernard, federal chief enterprise architect with OMB, told contractors and government IT professionals from the Association for Federal Information Resources Management.

He said it will be a few more weeks before OMB has a record of this first set of shared services that are intended to excise duplicative operations from the government’s $79 billion IT bill.

The list, which will be published, is the first test of the Obama administration’s Shared First policy that was fleshed out in a May 2 memorandum. The administration holds that shared services save taxpayers money and simplify upgrades by tasking one entity with administering an IT function for an entire department, or even governmentwide.

The George W. Bush administration promoted the concept in 2004 under the moniker “lines of business,” and Obama officials say the new endeavor is an evolution of the Bush program, driven by a harsher economy. While the Bush administration concerned itself with lassoing services across agencies, the Obama administration is taking the measured approach of first consolidating certain technology support services within each agency.

“There’s a tremendous increase in emphasis on shared services opportunities,” Bernard said, adding shared services has been a part of every administration during his 30-year federal career. “This isn’t new and yet it’s imperative.”

The chiefs of every federal agency this summer will meet for an hour with OMB officials to analyze their entire inventory of IT projects and see where systems can be united. These PortfolioStat sessions are the tool that OMB will use to enforce shared services, officials said Thursday.

The consolidations are not mandatory, but are the “default planning approach” for IT acquisitions, Bernard said. Having to write up a formal justification for not choosing a shared service might be enough of a stick to compel agencies to act, he added.

By Aug. 31, departments must submit plans for transitioning all applicable commodity IT services within their agencies. The administration during the next year will focus largely on spurring departmentwide consolidations, rather than pulling services into governmentwide hubs, officials said.

Gradually, agencies will centralize more complex operations, such as geospatial information and federal health care systems, and outsource them to interagency offices. Some shared services will work similarly to cloud computing, where a third party shares its data center among many organizations for all sorts of jobs, from financial management to website hosting. Others may involve pooling non-Web-based IT such as help desks or physical infrastructure, Andrew McMahon, who is leading OMB’s PortfolioStat initiative, said in an interview at Thursday’s event.

Starting in April 2013, agencies must annually file descriptions of the IT services they expect to merge through fiscal 2017.

As with cloud computing, shared services has raised questions about whether reorganizing IT operations will cost federal employees their jobs. OMB officials on Thursday said the new undertaking will benefit personnel because they will be freed up to work on more mission-oriented services. Chief human capital officers will have a seat at the table during PortfolioStat sessions, they added.

Since the meetings have yet to occur and plans are not in place, no metrics are available to estimate cost savings, officials said. They noted, however, the Interior Department on its own volition predicted a $100 million funding reduction through initiating certain shared services. Interior’s February budget request to Congress anticipates avoiding those costs, annually, between 2016 and 2020 by unifying IT infrastructure, email, networks, mobile computing services and other IT operations across bureaus.