Trump administration’s push for shared services should start by looking at Commerce

The Commerce Department conducted 73 separate cyber penetration tests last year. Each of the bureaus in the department basically did their own thing with minimal coordination at the headquarters level.

“We have a budget initiative to create an enterprisewide penetration testing service,” said Rod Turk, Commerce’s acting chief information officer and chief information security officer at the April 6 Intel Security Summit in Arlington, Virginia. “It has not been approved yet, but we think we can consolidate these efforts.”

This is the perfect example of why Commerce is one of the leading agencies around shared services and could be a model for the rest of government.

Glenn Davidson, Commerce’s executive director of enterprise services, said earlier in the week that Commerce will be the first agency to move to shared services for all back-office functions — human resources, financial management, technology and procurement.

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“When I first came in, we had a qualitative business case or a case for change that was largely built on understanding what was working and what wasn’t working today among our mission support functions, and then more importantly what was the customer satisfaction in that,” Davidson said at the Power Players Summit, sponsored by FCW, in Washington, D.C. “It was very clear that there was a huge breakdown in some of these functional areas. It’s largely because, for the last 20 years, we’ve underinvested in mission support organization, in technology, people and process.”

Davidson said over the last 18 months, he led an effort to capture the total cost of ownership for all of the back-office functions, did a comparative analysis of public and private sector companies and detailed what it would cost for people, process and technology to improve these administrative services.

“There was an upfront investment and it would take some time to ultimately recover these costs,” he said. “We demonstrated that at least by year three or four, we would have fully recovered costs of our implementation and we would begin to see significant savings.”

And the timing couldn’t be more perfect for Commerce. Multiple sources in and out of the government have said the Trump administration is talking about shared administrative services quite a bit in management conversations. Industry sources say shared services came up during the budget discussions with agencies as an important approach to saving money.

“There is just as much focus on performance, but it’s also now about cost savings and cost avoidance. What this administration has demonstrated to me, if you look at a couple of pronouncements out of the White House, one of them relates to reorganizing government where there is a discussion around eliminating redundancies as well as perhaps driving efficiencies and effectiveness within programs. There is a second pronouncement, it’s the White House memorandum establishing the White House Office for American Innovation, again it’s talking about operational efficiencies and effectiveness,” Davidson said. “If you read between the lines there, it suggests that shared services is going to play a very important role in those objectives’ achievement. If you go one step further and look at the blueprint for the fiscal 2018 budget, if you study that you will also see there is an opportunity here —it’s not a dictate to shared services, per se — but you can tell that we have to find a way to improve the performance of government overall.”

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The move to shared services has struggled over the years, whether it was the Lines of Business initiative under the President George W. Bush administration, or the focus on financial management systems over the last years during the President Barack Obama administration.

The Trump administration has two things going for it. First, there are more examples of success, such as Commerce, and secondly, the progress around governance and process by the Unified Shared Service Management (USSM) Office at the General Services Administration.

The USSM announced in December it was moving to a “as-a-service” approach for financial management and human resources. This is one approach to addressing the need for usually a large infusion of funding to begin the transition.

USSM also developed the modernization and migration management (M3) framework and created a playbook for agencies in August as the first steps toward the as-a-service model.

Both of these efforts put the Trump administration in a better place than the last two administrations started from. The big question is whether the White House decides to mandate these moves or follow the last two administrations’ efforts to let the transitions happen when appropriate.

But at the same time, it’s a bit of a head-scratcher as to why the administration wants to cut the 2018 funding for the Homeland Security Department to move to a financial management shared service provider.

The administration said in March that DHS would lose $41 million toward its Financial Systems Modernization program, a shared services effort affiliated with the Interior Department’s Interior Business Center, which is supposed to develop financial management systems for DHS.

This sends a bad signal to the rest of the government. Even if DHS needs to change its approach, by just stripping the funding from the agency, the administration’s message to the rest of the government becomes confusing around shared services.

As for Commerce, its model is worth considering for expansion across government.

Davidson said the department migrated to the Treasury Department’s HR Connect platform. The agency now is working with industry to create the technology for its IT service center.

“We are not going to own and operate that. It’s going to be in the cloud. It’s case management, so I’ll have a single ticketing system. It’s a knowledge management, so I’ll have a single source of truth. It’s automated workflow. It’s telephony, so at the end of the day, all of this will be provided to us so we can begin to deliver a better service going forward,” Davidson said. “We don’t own and operate it, we own data relate to it.”

The hope is that successes at places such as Commerce can create both confidence in the rationale to use shared services and momentum across government to find better ways to modernize IT systems and serve the mission areas.

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