Shared Services: What It Is and Why It Can Work

Sharing is usually a good idea. For example, if I had a huge sandwich and you were hungry, I’d share it and our common problem of being hungry would be solved. The same concept can be applied to shared services in the federal government. If I had payroll software to pay my employees and you needed to pay yours, too, we could share the software and get it all done, right? Simply put, shared services allow maximizing return on investment (ROI) of federal Information Technology (IT). Shared services refer to using a service by one part of an organization when that service has been utilized previously by more than one part of the organization. It allows doing more with less. Shared services can improve cost effectiveness and transparency of services across the government. Some people may say shared services is another form of service oriented architecture (SOA) development but I believe it is broader and focuses more on value and reducing duplication. Shared services are performed by both people and systems and although SOA is mostly talked about in the IT domain, it applies to technology and people. Shared services are similar to collaboration, which might take place between different organizations. Shared services can streamline duplicate resources and contain the rising cost of systems.

According to the “Practical Guide for Developing Enterprise Architecture (EA)” published by the CIO Council in 2001, EA establishes the agency-wide road map to achieve a mission with an efficient IT environment. I see a definite link between shared services and enterprise architecture. In fact, a disciplined approach to EA can drive identification and implementation of shared services.

Earlier Work

Sharing services is not a new concept. The private sector has been moving toward shared services since the beginning of the 1980s. During Y2K many organizations focused on enterprise resource planning (ERP) in human resources by integrating internal facilities, technologies, and processes such as payroll and benefits administration. I recall in 1998, while leading a large ERP project in the financial sector in addition to meeting Y2k compliance, the focus was to eliminate duplicate systems and consolidate resources. Similarly at the state level many organizations have created shared services strategic plans to improve quality and decrease the cost of health care. In fact, I recently supported a project at the state where they are using shared services for health information exchange solutions in a pay-as-you-go model for patient records.

Federal Strategy

The public sector has taken note of the benefits derived in the private sector. The Draft Shared Services Strategy by OMB in December 2011 provides federal agencies with guidance on the identification, implementation, and operation of shared services for commodity, support, and mission IT functions. The strategy is part of IT Reform of the “25-Point Implementation Plan to Reform Federal Information Technology Management.” The “Shared Services Strategy” provides a phased approach consisting of agency implementation activities that build upon one another, beginning with intra-agency commodity IT, moving to inter-agency commodity and support IT, and culminating with improvements in mission IT. While the final shared services will be out in few months, already it has started the thought process for the agencies and focus groups are now in place to transition two commodity services by December 31, 2012. And this is just the beginning. I believe the commodity IT is a low hanging fruit but the real gain will be moving to mission focus areas such as geospatial services for Department of Defense. This will really encourage agency collaboration and efficiency. This can spawn a whole new way to provide services to citizens and will have the most impact.

To the Future

Looking ahead, the Future First initiative by the Federal CIO will encourage the government to plan for the future. Future First is meant to establish a modular, lightweight ability to engineer and deliver on this promise.

Since the ratification of the Constitution the U.S. government has evolved. At the end of George Washington’s presidency in 1797 the federal government spending represented about 2 percent of the U.S. economy and now it represents more than 20 percent. It remains to be seen how the shared services will affect the future but there is a great potential. I believe a mandate to publish shared service plans as well as periodic performance reports will make it work. By focusing on the mission area, the use of technologies can become more efficient to help the government do its job and serve its citizens.

This work is not a product of the U.S. government or the Environmental Protection Agency, and the author is not doing this work in his government capacity. The views expressed are those of the author only and do not necessarily represent those of the United States or the United States Environmental Protection Agency.


Sunday, April, 1, 2012
Shared Services: What It Is and Why It Can Work
Tags: Shared Services


Posted By Param Soni, Chief Architect, Environmental Protection Agency
Sharing is usually a good idea. For example, if I had a huge sandwich and you were hungry, I’d share it and our common problem of being hungry would be solved. The same concept can be applied to shared services in the federal government. If I had payroll software to pay my employees and you needed to pay yours, too, we could share the software and get it all done, right? Simply put, shared services allow maximizing return on investment (ROI) of federal Information Technology (IT). Shared services refer to using a service by one part of an organization when that service has been utilized previously by more than one part of the organization. It allows doing more with less. Shared services can improve cost effectiveness and transparency of services across the government. Some people may say shared services is another form of service oriented architecture (SOA) development but I believe it is broader and focuses more on value and reducing duplication. Shared services are performed by both people and systems and although SOA is mostly talked about in the IT domain, it applies to technology and people. Shared services are similar to collaboration, which might take place between different organizations. Shared services can streamline duplicate resources and contain the rising cost of systems. According to the “Practical Guide for Developing Enterprise Architecture (EA)” published by the CIO Council in 2001, EA establishes the agency-wide road map to achieve a mission with an efficient IT environment. I see a definite link between shared services and enterprise architecture. In fact, a disciplined approach to EA can drive identification and implementation of shared services. *Earlier Work* Sharing services is not a new concept. The private sector has been moving toward shared services since the beginning of the 1980s. During Y2K many organizations focused on enterprise resource planning (ERP) in human resources by integrating internal facilities, technologies, and processes such as payroll and benefits administration. I recall in 1998, while leading a large ERP project in the financial sector in addition to meeting Y2k compliance, the focus was to eliminate duplicate systems and consolidate resources. Similarly at the state level many organizations have created shared services strategic plans to improve quality and decrease the cost of health care. In fact, I recently supported a project at the state where they are using shared services for health information exchange solutions in a pay-as-you-go model for patient records. *Federal Strategy* The public sector has taken note of the benefits derived in the private sector. The Draft Shared Services Strategy by OMB in December 2011 provides federal agencies with guidance on the identification, implementation, and operation of shared services for commodity, support, and mission IT functions. The strategy is part of IT Reform of the “25-Point Implementation Plan to Reform Federal Information Technology Management.” The “Shared Services Strategy” provides a phased approach consisting of agency implementation activities that build upon one another, beginning with intra-agency commodity IT, moving to inter-agency commodity and support IT, and culminating with improvements in mission IT. While the final shared services will be out in few months, already it has started the thought process for the agencies and focus groups are now in place to transition two commodity services by December 31, 2012. And this is just the beginning. I believe the commodity IT is a low hanging fruit but the real gain will be moving to mission focus areas such as geospatial services for Department of Defense. This will really encourage agency collaboration and efficiency. This can spawn a whole new way to provide services to citizens and will have the most impact. *To the Future* Looking ahead, the Future First initiative by the Federal CIO will encourage the government to plan for the future. Future First is meant to establish a modular, lightweight ability to engineer and deliver on this promise. Since the ratification of the Constitution the U.S. government has evolved. At the end of George Washington’s presidency in 1797 the federal government spending represented about 2 percent of the U.S. economy and now it represents more than 20 percent. It remains to be seen how the shared services will affect the future but there is a great potential. I believe a mandate to publish shared service plans as well as periodic performance reports will make it work. By focusing on the mission area, the use of technologies can become more efficient to help the government do its job and serve its citizens. This work is not a product of the U.S. government or the Environmental Protection Agency, and the author is not doing this work in his government capacity. The views expressed are those of the author only and do not necessarily represent those of the United States or the United States Environmental Protection Agency.