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7 Myths challenging shared service adoption

A candid survey of federal managers.

Overview

Although all federal agencies are operating under the 2012 Federal IT Shared Services Strategy which requires organizations to first look for existing systems and services before considering new IT investments, many misconceptions are limiting shared service adoption.

Government Business Council (GBC) research found that federal executives want shared services to increase efficiency and improve focus on agency mission. They are most interested in reducing redundancy, cutting costs and focusing on core competencies, with improving technical capabilities and increasing collaboration being secondary priorities.

The research also uncovered seven myths, which may be hindering the adoption of shared services. For example, some respondents consider that shared services are the same as outsourcing. Others worry that shared services lead to a loss of control, do not provide return on investment or lead to vendor lock-in.

For those agencies considering shared services, the GBC report recommends conducting thorough assessments before you decide to move a function to a shared service, making sure that interagency or service level agreements are specific, leveraging shared services for administrative functions and weighing the costs and benefits of outsourcing.

Background

All federal agencies are operating under the 2012 Federal IT Shared Services Strategy which requires organizations to first look for existing systems and services before considering new IT investments. Also known as “Shared-First,” the strategy has the following goals: improve return on investment, close productivity gaps and increase communications with stakeholders.

Though some federal agencies have made good progress in shared service adoption and at least nine federal shared service providers (FSSP) have sprung up across various lines of business, many misperceptions are limiting shared service adoption. Government Business Council (GBC) witnessed these widespread concerns in the federal community and sought to explore them through an in-depth research study.

To assess the perceptions, attitudes and experiences of federal executives regarding shared services, GBC surveyed a random sample of Government Executive online and print subscribers in July, 2013. The pool of 468 respondents included those of GS-11 through 15 grade levels in defense and civilian agencies. To follow up on this research effort, GBC conducted in-depth interviews with federal subject matter experts.

Analysis

Results from the GBC research indicate that federal executives want shared services to increase efficiency and improve focus on agency missions. The “Shared-First” strategy outlines many goals for federal shared services, but federal employees are most interested in reducing redundancy, cutting costs and focusing on core competencies. Improving technical capabilities and increasing collaboration are secondary priorities.

Survey respondents also indicated that administrative functions like payroll, IT and procurement are the most shared services. At least nine federal shared service providers (FSSP) offer services in six lines of business, but some functions are more likely to be shared than others. Nearly half of the federal shared service providers surveyed offer acquisition/procurement or information technology services.

The survey also uncovered seven myths that challenge the adoption of shared services:

  • Shared services are the same as outsourcing.

  • Shared services lead to a loss of control.

  • Shared services do not provide return on investment.

  • Shared services lead to vendor lock-in.

  • Agency missions are too unique to share services.

  • Shared services lead to job loss.

  • Shared services are not secure.

Of all the myths, those surveyed were most concerned about the relationship between shared services and outsourcing, with 60 percent of respondents feeling that shared services are the same as outsourcing. Job loss was the myth of least concern, with just 34 percent of respondents indicating that shared services lead to a loss of jobs.

Recommendations

When considering shared service adoption, the GBC report recommends agencies:

  • Conduct thorough assessments before deciding to move a function to a shared service. Many federal shared service providers conduct in-depth assessments with potential customers, but you can do your own too. In comparing cost, be sure to include fees paid for real estate, utilities and other factors in your final calculation.

  • Be specific in interagency or service level agreements. Interagency agreements should lay out the services that will be provided, the cost for those services and any indicators of performance.

  • Leverage shared services for administrative functions so you can focus on mission. Shared services were never intended to replace true mission-critical functions. Rather, shared services should be used for administrative functions, such as the six identified in the Federal IT Shared Services Strategy.

  • Weigh the costs and benefits of outsourcing. While outsourcing and shared services provide many of the same benefits, they are distinctly different approaches to achieving efficiency. In some cases, shared services deliver benefits that are not available in outsourcing arrangements. For example, shared services allow agencies to retain control over processes, security and confidentiality, quality, compliance requirements and outcomes.

Biggest Shared Service Myths for Federal Management—Infographic

Infographic decodes GBC research on Federal IT shared services strategies.

 

Download the full Infographic (JPG, 233KB)

For more information, please download the full report 7 Myths Challenging Shared Service Adoption.

View Additional Charts

Shared Services Leads to Loss of Control
Infographic decodes GBC research on Federal IT shared services strategies.

Shared Services is the Same as Outsourcing
Federal management retains more control over their environment than with traditional outsourcing.

Biggest Shared Service Myths for Federal Management: Same as Outsourcing

Shared Services are not Worth the Investment
Federal management can actually expect to save.

Agency Missions are too Unique to Share Services
Federal management spends less time on day-to-day tasks and focuses more on critical missions.

Webcast Replay—Podcast

Empowering Federal Management to Focus on Mission

As deadlines approach, federal agencies must decide whether to become shared service providers or to consolidate and use the services of another organization. For those agencies that opt to use another’s services, an essential first step is understanding the unique processes, procedures and requirements of the organization. Moving to shared services requires careful planning for the transition, and a strategically piloted implementation strategy that anticipates and prepares for challenges will produce the best results.

Shared services are rapidly becoming an imperative for many agencies—and for good reason. Federal Management users of shared services are better able to focus on their missions and core competencies, leaving the administrative and back-office functions to shared service providers.

Listen as Accenture Federal Services’ Elaine Beeman and Ron Ash explain more of the efficiencies shared services can bring at the federal, state and regional levels.

 

Download the podcast [Running time 52:10]
[WMV, 11.9MB]

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Download Audio Transcript [PDF, 186KB]

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