Skip to Main Content
Access your saved content
Are you prepared for the new directive?
The US government currently spends $8.4 billion supporting financial management systems across 200 agencies and 55,000 employees. To reduce redundancies and create efficiencies, the Office of Management and Budget recently issued a memorandum (OMB M-13-08) requiring that executive agencies move to shared services when modernizing their financial management systems.
The efficiencies gained from adopting shared services are not only expected to result in cost savings, but also to provide additional capital for investing in innovation and mission-critical strategies.
These benefits will extend to individual agencies as well. With the right approach, agency leaders can leverage shared services to manage their operations more effectively, serve their customers and provide value to citizens. To achieve these benefits, strong leaders need to manage both shared services selection and implementation using best practices.
Accenture drew from its experience in working on more than 500 shared services projects to deliver nearly $1 billion in savings annually to develop the best practices for agency leaders outlined in this article.
The federal government is relying on shared services to help create efficiencies and improve service levels across all agencies. Since 2012, the Federal IT Shared Services Strategy has expected agency leaders to consider shared services before investing in new technology resources. OMB M-13-08 is simply the latest step in the process.
The Treasury’s Office of Financial Innovation and Transformation (FIT) will provide recommendations to the OMB on whether agency systems strategies and modernization requests align with the government’s shared services approach. It will evaluate agency proposals to become a Federal Shared Services Provider (FSSP) based on a mix of criteria that indicate proven shared services capability.
In addition to evaluating FSSPs, FIT will also develop two shared services—a centralized receivables collections application and an e-invoice program for debt collection. The two programs are expected to create cost savings of up to $800 million a year.
When best practices are followed, the return on investment can be significant. For example, Accenture worked with one federal agency to use shared services for its finance functions. As a result, the agency saved more than $71 million and achieved a 16 to 18 percent reduction in costs.
Another example of a Federal shared services success story is in the area of payroll. Many years ago, a mandate was put in place stating that all federal agencies had to move to one of four predetermined Federal payroll providers. Every agency moved to a provider and experienced change management pain at the time. Looking back, this was a greatly successful migration that has significantly decreased the cost of payroll and transaction payroll costs as well as increased the efficiency of year-end W2 processing.
Shared services also help CFOs and other senior financial leaders to become more strategic business partners. With individual systems in place, leaders often have to focus on routine operations and daily transaction processing. Shared services allow these leaders to turn low-impact tasks over to another party, freeing them to provide more strategic guidance to their agency.
Agency leaders can most successfully choose and implement shared services by taking advantage of the following best practices:
Position and develop strong leadership.Select a strong leader that can sustain executive support and remain focused on the imperatives outlined in the business case.
Build a strong business case.Develop critical elements, including the vision, objectives, business strategy, budget and governance.
Identify the full budgetary requirements from the beginning.Plan for the full set of costs from the beginning to ensure the project is properly funded. Include expenses such as real estate, labor estimates and utilities in your calculation.
Establish the portfolio and scope of services.Define the responsibilities of the customer and the service provider. Establish detailed service-level agreements, performance metrics and a service management framework.
Plan change management in detail.Address key elements such as organization structure, workforce alignment and culture in your change management plan. Build in strategies and tools for creating a high-performance culture that values service excellence and improvement.
October 22, 2013
Skip Footer Links