Shared services becoming new normal in financial modernization
When it comes to saving money, shared services providers are the new "it" thing. As part of the special report, Rise of the Money People, Federal News Radio get...
By Sean McCalley
Federal News Radio
In terms of financial management modernization, the new name of the game is shared services.
The Office of Management and Budget made that clear last month when it issued a new policy mandating agencies use a federal shared-services provider when they update their financial systems.
As agencies update their financial systems, too often they build costly agency-specific systems from the ground up.
Federal shared-services providers on the other hand, such as the Interior Business Center, attempt to leverage economies of scale and efficiencies both within the Interior Department and for outside agency customers.
“Federal agencies are coming to us because they need to save money,” said Joseph Ward, director of the IBC, during an interview on target=”blank”>Rise of the Money People. “They’re also coming to us because they see the value in taking those services to a shared services provider.”
Ward said this allows agencies to focus more on their core missions.
The Interior Business Center is born 
Over the past 30 years, the National Business Center honed its own business model in order to better provide for the agencies it served. That process continues today. While interviewing to become
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It’s a cost-driven approach to honing the IBC that eliminates administrative and financial distractions. Ward says those distractions normally add up to generate wasted tax dollars.
This is a philosophy the IBC tries to pass on to the Interior Department and the 150 agencies for which it provides shared services.
Some of the IBC’s biggest “success stories” include:
- Civilian housing management — IBC is the only shared services provider involved in civilian housing management. It helps agencies like the National Park Service, Bureau of Indian Affairs and U.S. Fish and Wildlife Service set rental rates, manage their housing inventory and produce tenant leasing documents. The IBC’s Quarters program started in the 1980s.
- 340 percent improved efficiency of the Interior Department’s payroll system, which helps the agency save $29 million every year
- Helped the Fish and Wildlife Service consolidate its payment processing system
The Interior Business Center also provides the IT acquisition support to streamline cloud adoption and collaboration services.
Building an interagency ecosystem of shared services
IBC’s shared services include human resource management, financial management, and acquisition services. Besides the Interior Department it’s available to help 150 other agencies. But many of those agencies can still be reluctant to accept the help.
“The small to medium sized federal agencies, I think, generally speaking, they’re coming to us as willing participants in the party,” said Ward. “When it comes to the larger federal agencies, I think cultural change with large agencies is more of an issue.”
He says sometimes the agencies are blind to the benefits a shared service provider can offer. “They feel like they’re losing turf and they may be giving up something. And they may not look at the long-term benefits,” he said.
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