CAMBRIDGE, Md.— The Office of Management and Budget is finalizing a new directive to change federal financial management processes.

The goal is to make it easier for agencies to balance their books, and for vendors to provide software to help them do that.

Adam Goldberg, the executive architect for the Treasury Department, said this new guidance, which is about 30 days or so away from being finalized and made public, would update Circular A-127.

A-127 defines the processes and policies agencies should follow when managing their financial management systems. Goldberg said A-127 instructs agencies on how to meet the requirements based on which systems meet government requirements and testing.

Goldberg said Treasury, working as OMB’s implementation arm, changed the approach to determine the requirements of financial management systems.

“We took the 550 requirements that we were generating. Those were business input, system requirements, and reduced them to 60 output or outcome requirements,” Goldberg said Monday during a panel discussion on shared services at ACT-IAC’s Management of Change conference. “The first we have to do is begin to shift the mindset away from inputs to outcomes and begin to shift the community’s mind in that area. Again, I’m not buying requirements. I’m buying services.”

OMB last revised A-127 in January 2009, shortly before President Barack Obama took office.

Opportunities for new vendors

Goldberg said the Federal Financial Management Improvement Act calls for agencies to meet certain requirements in how they report financial data. The revised A-127 will tell agencies what the end results have to look like, rather than saying how or by what systems, and they can get there anyway they see fit.

He added this change likely will open the door to new vendors to provide shared services or partner with one of the four federal shared service providers for financial management.

“There was such a high-bar to reach to provide financial management software or services that it now will be lowered,” Goldberg said.

Additionally, Goldberg said Treasury is developing a product/service catalog for financial management services.

“We will at some level assign a price to every provider and service,” he said. “We will ask for some element of pricing for every product or service and the more people who use it, the lower the price. I imagine we will pilot the catalog with government shared-service providers first. We expect this to reduce our costs too.”

Goldberg said the catalog pilot should be in place by the end of the calendar year.

Easing transition to a SSP

All of these efforts build on OMB’s requirement from March for agencies to move to a shared service provider for financial management when it’s time to upgrade their systems.

Goldberg said reducing the number of requirements and focusing them on outcomes or outputs will make it easier to make the transition.

“One of the things that we learned as we’ve been looking at shared services is a practice that takes place with our federal shared service provider. They do something called discovery,” he said. “They sit down with their potential customer before they’ve actually awarded the final agreement and they work through the business needs with them to try to find out what things they can do and what things they can’t do. And for the things they can’t do, they find out why.”

Goldberg added the discussion or discovery process helps address any challenges or potential problems on the front end, as well as deal with unnecessary custom changes to the system.

While the memo focused on financial management services, agencies are seeing the value of shared services across the board.

Keith Trippie, the Homeland Security Department’s executive director of the Enterprise System Development Office, said the agency has invested in more than 10 IT shared services in the cloud, including email, test and development and collaboration tools.

But now DHS also is moving toward financial management and human resources shared services. He said the idea of using shared service providers is much easier now.

HR, financial management on tap at DHS

Trippie said the culture change is getting people to understand that buying shared services is like buying an airplane ticket: they don’t need to own the plane to get across country. They just have to worry about the end result, in this case getting to their destination.

“A great example where we agreed that shared services could be brought together to get an enterprise service was around HR,” Trippie said. “We started with thousands and thousands of requirements. A lot of people wanted to buy planes out there. And we finally rationalized it down to where the group, the community on the business side agreed, ‘We’ll just buy in plane ticket.’ So that was transformative in and of itself, but now we have to go look across the other communities.”

He said an award for the HR shared services, learning and performance management systems, could be made in the next 60-to-90 days.

As for DHS’ financial management system, Trippie said the desire to consolidate and use shared services is real this time.

DHS has tried two other times unsuccessfully to consolidate financial management systems under programs called Emerge2 and TASC, only to fail. The latest attempt was to bring the components, such as FEMA, which need new systems the most under other component systems that are in better shape.

“There are several shared services providers that are out there. The department has a bunch of legacy financial systems that we’ve been on,” Trippie said. “Culturally over the past year, we’ve moved the needle where most folks are saying ‘We will buy a shared service. We don’t have to build that. It’s not our core competency. It’s not how we want to do business.'”

An executive steering committee, led by the DHS chief financial officer and chief information officer, is leading the effort to move to a shared service for financial management. Trippie said there still is a lot of work that needs to be done including potentially an acquisition.

Looking internally for consolidation

Besides the governmentwide shared services, agencies, such as the Commerce Department, also are looking internally to create shared services.

Commerce has been out in front in consolidating commodity technology services.

Kirit Amin, the agency’s deputy CIO, said in the near term Commerce is setting up three shared services: email in the cloud, Web hosting and IT services desk.

“We are going to cloud email and we saw that NIST was already out there, going and getting a contract. We scaled on that and made it departmentwide and now we are going with the Microsoft 365 as a departmentwide initiative for email,” Amin said. “That shows how innovation, collaboration and how from a leadership standpoint you go scale something that is already there. It’s not really revolutionary. It is evolutionary. How do you go leverage what is happening out there across your enterprise?”

He added Commerce always is looking across the 12 bureaus for best practices and good ideas. He said when OMB came out with PortfolioStat version 2 that included a requirement for a strategic plan, headquarters looked around and decided NOAA’s was a good model and expanded it across the entire agency.

NOAA also awarded a contract last fall for its tier one help desk support, called the National Service Desk. It’s available for all components in Commerce to use and the more bureaus that use it, the lower the price.

Matchmaking for mobile

Agencies also are looking for help to find software that other agencies are already using.

Gwynne Kostin, the director of the Digital Services Innovation Center at the General Services Administration, said agencies are specifically looking for mobile apps that they can reuse.

“One of the things we work very hard on at the Digital Services Innovation Center is really, what I will call, almost matchmaking because if we could actually speed somebody’s mobile product’s time to market because they are using another agency’s statement of work or they actually have a set of good practices so they don’t actually have to have version one of their app [be] lousy, which happens sometimes,” she said. “They could actually leapfrog based on the experience of other agencies. They will get their product out faster and be able to do it using less resources.”

Kostin said about two dozen agencies have come to the innovation center for help whether it’s with contracting or terms of service agreements or existing software.

Additionally, the Digital Services Innovation Center last week released a code sharing catalog on GitHub. Agency developers can easily download and reuse the entire app fairly easily, Kostin said.

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