Why agencies need a blueprint for shared IT services

Does your office have a long-term strategy in place for shared IT services? Will you have such a plan in place by the end of this year? Coming up with a strategy for how federal departments and agencies will tap shared services is an important element — Point 6, to be precise — of federal CIO Vivek Kundra's high-profile 25-point plan for federal IT reform.

According to the reform plan, agencies must research tactics for applying shared services and craft a blueprint by the end of December. 

Each of the plan's 25 points has an assigned owner, and Kundra himself is the owner of this one. The CIO Council will coordinate the planning for the move to shared services, and each agency's CIO will be responsible for a set of action items at his or her agency. The tasks are clear and fairly hard-nosed. Retire your IT systems if the same solution is available — in a more efficient and cost-effective manner — from another agency. 

For IT shops and supervising financial officers, planning includes conducting a return on investment analysis. Even if an agency must pay to use another agency's service, the ROI often will show that a shared environment is a better deal.

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And if you're moving complex resources, such as databases or enterprise applications, the effort might require tracing dozens or even hundreds of application programming interfaces and connected system resources. Code might need to be rewritten.  Significant development money might need to be spent upfront to achieve promised savings a few years later.

Despite those challenges, many IT offices agree that the most critical systems to maintain and protect are the ones that are essential to their agency's primary mission. For example, the Agriculture Department collects vast amounts of crop data, maintains internal tools to analyze that information, and issues reports and forecasts. No other agency provides that specific service, and it takes dedicated computing resources.

There are thousands of other examples, from the Census Bureau's statistical systems to the Social Service Administration's benefits management platform. Most organizations will never outsource critical mission systems. But retiring systems that are not part of the core mission can free resources — human, computer and budget — for more important tasks.

Consolidate around lines of business

It's clear that government shared-services centers are growing around specific lines of business. Any shared-services strategy should take that into account. lines of business have been looming in the background of federal IT budgets for at least six years. To receive funding from the Office of Management and Budget, agencies must link every IT program to a specific LOB.

That budgeting requirement illuminates how agencies spend money on federal IT systems. OMB tracks nearly 50 LOBs. Not all are great candidates for shared services, but roughly half have significant similarities across multiple departments or agencies.

That list of potential shared LOBs includes:

• Health.
• Homeland security.
• Supply chain management.
• Transportation.
• Financial management.
• Human resources management.
• Environmental management.
• Intelligence operations.
• Planning and budgeting.
• Disaster management.
• Community and social services.
• Law enforcement.
• Administrative management.
• Education.
• Economic development.
• Natural resources.
• Public affairs.
• Communication.
• Correctional activities.
• Internal risk management and mitigation.
• Litigation and judicial activities.
• Energy.
• Revenue collection.
• Security management.
• Workforce management.

In other cases, shared services can be application-specific rather than based on an LOB. Examples include hosting for e-mail, Web servers, call centers or help desks or issuing badges or parking stickers for government facilities.

When creating a shared-services blueprint, agencies should first identify which systems are critical to their core mission and which are not. The next step is understanding the range of IT services available at other agencies and talking to those service providers about how much they would charge to provide an IT solution. The meat of an organization's shared-services blueprint includes an ROI analysis and project management plan to show what systems will move to a services provider and what resources an agency must dedicate to reconfigure existing systems to plug into a new provider.

After you create such a plan, you will have met your requirements for Point 6 of the 25-point Plan. The next phase is execution, which starts next year.

The lure of shared services is strong, but it's a multistep process. By moving toward standardization, agencies can minimize software customization. And once systems are standardized, computing resources can be treated like a commodity and obtained from multiple resources. From there, agencies can focus on core systems, and the downsized organization might actually become an expert in providing specific resources that other agencies need, which could lead to new, highly focused growth.