Overcoming complexity, driving value through service delivery transformation

This is the second in a two-part series on a new approach to back-office service delivery from shared services to service delivery transformation. Read part one here.

At the heart of service delivery transformation is the goal of not simply migrating services into a single provider, but rather finding the best option for each service, regardless of where that option resides – government, commercial, or a mix of both.

Many federal shared services projects have evolved into overly ambitious endeavors that aim to address the specific service needs of everyone affected. This is especially so with enterprise resource planning (ERP) projects that integrate the management of an agency’s core business processes for tracking and managing resources.

The result is that many projects get overloaded with requirements and technical challenges, leading to increased costs, delays and underperformance. This complexity also can take a heavy toll on a new system’s users, who must learn and adapt to dramatically different technologies, processes and, sometimes, job functions. Planners should remain mindful that a key aspiration for any modernization initiative should be to simplify, not complicate, the lives of those affected by it.

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Agencies could help avoid these problems by keeping a disciplined check on their modernization ambitions. Much of today’s commercial off-the-shelf technology—whether delivered from the cloud as a service or installed on premises—is quite robust and configurable in most cases right out of the box. These proven, commercially-offered solutions can reduce risks and lead-times. They also tend to have focused more time and attention on intuitive user interfaces, training tools and documentation than can be provided in the course of underfunded and behind-schedule custom projects.

And as described in our last article, many service options are increasingly offered in the form of software-as-a-service (SaaS), which means agencies can choose modern, best-in-class services for far less capital expenditure. Additionally, time-tested and vetted commercial SaaS offerings tend to carry lower cybersecurity risk. SaaS vendors also assume technology maintenance, refresh, and security responsibilities, so agency staffs are free to focus more on mission-critical tasks.

Essential to avoiding unnecessary complexity is clarity about which capability requirements are truly unique. Standardized services may serve much of an agency’s needs as most backroom activities are fairly routine even at agencies with very distinctive missions. When capability gaps do arise, agencies can address those gaps with innovative solutions, such as automation technologies, blockchain technology, robotics, artificial intelligence, and others. By keeping complexity and customization to a minimum, agencies could potentially reduce program risk, their IT infrastructure footprint, and long-term costs.

The value challenge: Keeping it at the enterprise level

Change programs aimed at backroom activities—such as human capital, financial management, acquisition and other mission support services—can be expected to have enterprisewide impacts for good or ill. Yet many federal shared services and IT modernization projects are managed by the most relevant line executive within the agency hierarchy, such as a chief information officer (CIO), a CFO or chief human capital officer (CHCO). Employing a department-wide strategy and roadmap can more effectively realize maximum value from an investment in service delivery transformation across all functions.

Modernizing mission support services is best led at the enterprise level in order to deliver impact that is truly transformational and deliver maximum value. One way to do that is for strategy formulation and accountability for service delivery transformation projects to occur at the deputy secretary/chief operating officer (COO) level. This approach can help ensure that projects enjoy the focus, priority and enterprise-wide commitment needed.

However, it is also critical that mission leadership and the relevant CXO-level executives are in close collaboration from the beginning to help ensure mission value is maximized. Rolling everything to only the highest levels of leadership can unintentionally contribute to the propensity to generate overly ambitious and overly complex solutions described earlier. By ensuring the involvement of mission leadership and relevant CXO-level executives, project governance both on the agency side and the vendor side will likely be stronger and more effective. The result will likely be projects that deliver greater value and efficiencies to the enterprise as a whole.

There is wide consensus that consolidating and modernizing back-end mission-support services across federal agencies has great potential to cut costs and improve services. But the federal shared services model needs to evolve to realize significant economic and service delivery value.  By shifting the focus to designing a holistic delivery model, created in part through sourcing analysis that considers best-in-class options, and enabled through leadership at the department level, federal agencies can better position themselves for mission success with a back-office that delivers value.

Dave Mader is the chief strategy officer for civilian federal government practice and Jennifer J. Walcott is a principal and federal service delivery transformation leader for Deloitte Consulting.