Treasury begins shared services quest to educate, integrate

The Office of Financial Innovation and Transformation issued two RFIs in the last few weeks. One announced an industry day for May 21, and the other is looking ...

The Treasury Department’s Office of Financial Innovation and Transformation is starting to put the bigger pieces of the shared services puzzle in place.

It started by approving four shared service providers — one new one and three current providers — on May 2. Now OFIT is on an education and data quest.

The office issued two requests for information to industry in the past few weeks, including one to begin telling industry about the role contractors will play in this governmentwide initiative.

One RFI , issued May 7, announced an industry day on May 21 where all four shared service providers — the departments of Agriculture, Interior, Transportation and Treasury — will present current capabilities and those they would like to have in the future.

OFIT also wants to gather market research on private sector solutions and capabilities that could be of assistance to OFIT (in its oversight role), the FSSPs (in their service provider role) and customers or prospective customers) in 11 different areas, including optimizing shared services, assisting in customer migrations and identifying alternative contract approaches such as share-in- savings or public-private partnerships.

Then on May 22, OFIT will host an agency day so potential customer agencies can learn about the shared services offerings and ask questions about the initiative.

Data interfaces are hard, expensive

The second RFI is focused on data management.

“One of the RFIs we put out is maybe there is a government-wide way we can move data around easier than building all of these interfaces because interfaces cost a lot of money and, once you build it and you want to move, you have to build it again,” said Beth Angerman, director of OFIT, during a panel discussion on shared services Wednesday at the Government Performance Summit in Washington, which was sponsored by the Performance Institute and the Association of Government Accountants. “So how do we be more proactive in moving data so you can move it across those providers in human resources or procurement, if you want to.”

The April 18 RFI asks vendors for insights into “the development and implementation of a shared data transfer capability (e.g., enterprise bus) to facilitate the interaction and communication between mutually interacting software applications. Software applications may include financial systems, procurement systems, e-invoicing systems, inventory systems, or other mixed systems. These software applications may or may not be owned and operated by the federal government.”

Responses to the RFI are due May 16.

The RFIs are more pieces to this financial management shared services puzzle.

Treasury, which is leading this administration effort, is trying to get data and information out to the agencies so they really get what’s expected of them and what they can expect.

At the conference, audience members sought answers about how the initiative works, and the RFIs and several other document or data releases over the next two weeks are part of those answers.

Angerman says the OFIT will post those documents on its website.

“We are going to publish all of the providers’ applications, the actual application itself, so most of the content they provided as part of their response,” she said. “We’re going to publish all of the FAME documentation … so the process agencies go through and the artifacts that would be required at every different stage. We are working on case studies for some of the experiences that we’ve already had so the cabinet level agencies and the providers already are working with and some of the lessons they’ve learned along the way. So that will all be available the end of this month.”

4 steps to decide

Angerman said FAME stands for the FIT Agency Modernization Process and is a four- step process to help agencies decide if they are ready to move.

The first step is for agencies to determine if they are in need of a financial management system upgrade in the first place. OFIT is putting decision models in place to help agencies with that research.

The second phase looks at who the providers are, whether they have the capacity to bring on another agency and what the provider’s needs are.

The third is creating expectations around service level agreements and meeting the demands of both parties through a shared governance process.

“FIT is working right now with the community as part of the President’s Management Agenda to identify performance metrics that are relevant to CFOs as they make decisions on their business,” Angerman said. “In addition to that, we have to have the providers capture the same metrics so we can compare. We need to be doing this efficiently and if we’re not, we need to look for areas of improvement. That’s the mechanism we are going to poll the providers to ensure they continue to deliver customer service to the expectations of the customers.”

The fourth phase of FAME is private sector engagement. Angerman said the role of the private sector is changing because it has to change, which also is why the RFIs are an important piece to this puzzle.

The question of whether the four shared service providers could keep up with the demands of new and current customers came up during the panel.

It’s one of several questions OMB and Treasury still needs to answer before this initiative can really take off.

Serious challenges ahead for SSPs

Joe Ward, the director of the Interior Business Center, one of the four shared service providers, said OFIT is trying to address several of these questions, but there are no specifics yet.

“Based on our current business model, there is a risk that the service to your existing customer may slip a little, maybe a lot in some cases. Just being honest,” he said. “With the current rules we have to adhere to, essentially what happens is you can’t bring on new people until that interagency agreement is signed for implementation. So what you have to do is you have to shift resources to try to maintain some semblance of taking care of your existing customers while bringing on this huge 600-pound gorilla. It’s not unique to the Interior Business Center. It’s pretty much the way it is.”

Ward said the IBC is trying to make sure it has enough employees with expertise in accounting or project management to keep the service levels as high as possible.

But Ward called it “extremely challenging.”

Ward said the IBC is talking with the Homeland Security Department right now about bringing some of those components on. Meanwhile, Treasury is talking to the Department of Housing and Urban Development, and Transportation is talking to Commerce.

The four shared service providers could expand to five in the coming year or two. Bill McCabe, the CFO of the Department of Health and Human Service’s program support center, said his organization is upgrading its Oracle offering and will apply to be a shared service provider when that’s complete.

In the meantime, all three of the discussions between current shared service providers and customer agencies are still in the early stages. But they are realizing long-standing barriers still need to be addressed.

Mark Reger, the acting deputy controller at OMB, who is on detail from Treasury, said part of the way OMB and Treasury chose these four agencies is because they have a five-year business plan that addresses many of these issues.

“How you can take on large entities? How you could gear up? How you can modernize your software more timely on a regular basis to serve people better? How you could form strategic partnerships with industry so that you could provide the services agencies need?” Reger said. “Are we anticipating that shared service centers are going to swallow agencies whole, ad nauseam and real quick? No. This is a philosophical change over a long period of time. No one is asking anyone to move until your core financial system needs a significant refresh. It’s moving along its life cycle and needs to change.”

He added there will be a big learning curve especially around what the shared services need to do to be ready to handle a large agency and how the customer agency needs to understand most of their requirements are not unique.

Reger offered an example of the learning curve. He said when HUD started its discovery phase with Transportation, it had a few hundred items where the processes was different. After a few weeks of discussions, the two agencies got it down to 13.

Reger said a lot less customization means less risks to both agencies.

OFIT’s Angerman said her office also can help mediate disagreements or impasses to ensure the marriage between the two parties works.


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