Opening the Aperture and Leveraging New and Emerging Shared Services

Blog Co-Author: Karin O'Leary, Shared Services Fellow, IBM Center for The Business of Government

The American Council of Technology and Industry Advisory Council (ACT-IAC) and the Shared Leadership Coalition (SSLC) recently collaborated on a series of roundtable discussions on key topics related to Shared Services. IBM hosted a session on how best to advance new shared services or new elements of existing services. A summary of this roundtable session follows, based on outcomes presented at the Shared Services Summit on March 21, 2023.

Given the evolution of shared services over time, how might the government work with industry to explore potential new shared services, such as travel, employee relocation, learning management, data insights, and other focus areas, which might offer unrealized potential or quick wins to gain customer acceptance in agencies and build momentum for broader implementation efforts?   Government representatives from DHS, OPM, GSA, NASA, USDA, DEA, and VA addressed a number of issues related to this question, with key points below following a summary set of overarching success factors.

Summary -- Keys to Success

• Identify providers with a shared services mindset and shared services operating model; to avoid heavy customization, inability to implement updates, limited growth, and scalability.
• Introduce AI with the right governance model to make sure that humans review and validate results to address risks of bias.
• Accelerate transition to shared services by enabling customer input up front – human centered design to define the services, and customer advisory feedback loops for recipients of services.
• Establish an inventory of available micro-services across the Federal Government. For example, some agencies perform hundreds of employee relocations a year and other agencies only perform a handful. An inventory could connect these agencies, with service exchange via a cost recovery model.
• Share holistically through open ecosystems that can bring together partners in delivering services in an orchestrated way. 
• Establishing sound governance, with defined requirements for partners to enter the shared services marketplace and bring new innovative solutions to the market.
• Engagement in platforms to share information, such as ACT-IAC, SSLC, and NAPA, where government, industry, academia come together to share best practices and lessons learned.

Specific Observations

Does this definition still represent the evolving state of Federal shared services?  The Federal CIO Council has defined shared services as, “a business or mission function provided for consumption by multiple organizations within or between Federal agencies to efficiently aggregate resources and systems to improve the quality, timeliness, and cost effectiveness of service delivery to reduce administrative burdens and increase collaboration, allowing more time to focus on core mission functions.”  Suggestions for a revised definition include:

• Add language about the need to constantly reinvest in a shared service to make the offering better.
• Change the term “customers” to “stakeholder,” to denote a broader set of partners involved in the offering – not only end users but also congressional oversight, policy officials, and functions within an agency that are critical to the offering’s success (procurement, program office, security, etc.).
• Focus on transforming to shared services business models through more modern technology services, so that offerings and business models can keep pace with rapid technological changes to deliver outcomes.
• Regarding “quality, timeliness, and cost effectiveness,” answer “for who?” Quantify the short term and long term – is it for an entire agency, a component, or the entire Federal Government -- who is the service primarily focused on driving value towards? In promoting consumption of standardized services, providers must have a clear understanding of who and what they serve.
• Make the case for efficient and effective benefits of a shared service. For example, business process reengineering through leveraging shared services.

Where do you see things going in the future for shared services?         

• Common tools underpinning all shared services, such as login.gov, content management solution, workflow solution, micro-services that can be shared across platforms.
• Automation for grants management since there are multiple systems across the Federal government. Leverage the Federal Audit Clearinghouse for grants.
• Data utilization and connectivity across platforms to make interoperable, whether in terms of common micro services and solutions, data standards, or APIs. For example:
  • gov is a standalone platform that incorporates six or seven major systems.
  • gov is a website supporting waivers for Federal acquisition that ties into Sam.gov but it's still standalone. MadeinAmerica.gov also supports financial assistance waivers which relate to the grants process.
• Travel and learning management.
• HR and payroll – expand value to employee and manager interaction; time entry and approval; streamlining HR actions, such as benefits selection.
• Supply chain as a shared service – “control tower” data governance, though first would have to digitalize
• eRulemaking, expand through APIs directly pulling all the data out for their own – such as Bloomberg, academic source material, etc. -- need standard principles of transparency and access.
• Records management – every agency needs this as records needs to be retained for a certain number of years and then archived. A cross cutting service could include content management and workflow to create efficiencies across domains.

What readily available innovation exists to propel effectiveness in delivering targeted outcomes and optimizing return on investments?

• Innovate in areas like workflow automation or data analytics, and make these tools available for other agencies, which drives broad convergence. Share holistically as opposed to narrowly targeting to a particular shared service. More use of open ecosystems to bring partners together around delivering services in an orchestrated way. 
• Automate processes drive costs down and improve the customer experience.
• Use AI for certain activities involving massive amounts of data. For regulations, this could include reviewing public comments on rules, reconciling inconsistencies across rules, identifying provisions in need of an update, and even developing first drafts of rulemaking language. Would still need humans to review and validate language, evaluate data sets for accuracy and train models.
• Address AI risk of bias in data sets through an effective data governance model that ensures humans review and validate results. For Chat Bots, must have standard processes in place.
• Roll out new services in areas like threat intelligence and email security to address certain cybersecurity needs in the agencies.

What are barriers and opportunities for achieving government and shared services efficiencies, economies of scale, and benefits of specialization?

• Dedicate resources for modernization.
• Understand the many top-down requirements and help day to day projects move forward. Simply knowing where activities are performed well can help achieve greater adoption.
• Promote funding of modern technology solutions through a strong business case and greater flexibility in resource allocation in the short term, including a cost recovery model for micro-services; and a shared services operating model in the long term that addresses challenges like heavy customization, inability to implement updates, limited growth, and scalability.
• Develop better forecasting for who will use the QSMO marketplaces based on better communication of available solutions, perhaps via a platform as a catalog of catalogs.
• Leverage various councils, such as the Chief Information Officers Council, Chief Data Officers Council, and Chief Human Capital Officers Council, to share information on best practices and effective offerings. However, organizations that are not members of these Councils are doing innovative things to learn from.
• Build a solid performance management framework for shared services to apply standards and expectations to commercial vendors and Federal providers delivering mandated services.
• Address cross-boundary issues – such as the need to link HR under CHCO with payroll systems often run by CFO.
• Consider a capability-based or functionality-based approach to shared services such as business analytics, RPA, intelligence, research, etc., -- common capabilities can exist across an entire organization. Too often services are built by line of business, but automation can exist across an agency.

What role does customer-centric design play in an organization’s ability to achieve effective outcomes?

• Better understand the actual needs of agencies, and then connect them to services and solutions in the marketplace. Bring in human-centered design up front by finding out how customers want to receive services and what kinds of services are most important and of most value. (Regarding human centered design, see this Center report.
• Engage operational staff to address technical issues and build a better product through design, testing, and review. Give overworked and under-resourced staff the time to drive solutions that address real pain points for the primary customer.
• Focus on smaller, more targeted efforts to connect with agencies about their needs and resources, in a way that gets them interacting with the marketplace more broadly. How can provider services and solutions help achieve agency goals? What can providers do to help agencies get ready to absorb a new product or service? 
• Expand interaction with users for designing future shared services. Customer interaction occurs at least three times: 1) before making a decision, 2) while building a service, and 3) when the service is delivered. Focus on the getting more input into first bucket before prioritizing investments.

Existing shared services; are there opportunities for organic growth?

• Numerous legacy functions exist in government. For example, e-Rulemaking was set up in the 1990s.
• GSA is all about shared services, and not everything is on a technology platform.
  • The Federal Acquisition Service is a shared service example providing assisted acquisitions, an organic shared service.
  • The Public Building Service – is a shared service for real estate in government.
• HR and payroll: improve employee and manager experience through things like self-service that can redefine service delivery models work in an agency -- everyday things like time entry and approval, streamlining HR actions, and enhancing the employee experience around selecting and enrolling in benefits every year.
• Shared Services Canada is a central enterprise that offers services on behalf of all agencies, and could serve as a model to grow existing services in the US.

New shared services such as automation, supply chain, etc., are QSMOs the right model? Should a new marketplace be established, with cross- sector competition?

• QSMOs provide an effective model for governance
• Need additional horizonal processes for sharing across shared service domains, with greater collaboration in areas such as microservices like mail management, Permanent Change of Station (PCS), training to go overseas, etc. – could use a cost recovery model to enable sharing.
• GSA’s Office of Shared Solutions and Performance Improvement (OSSPI) brings QSMOs together to share information.
• Some shared services may not need a new QSMO, such as those that already have mature agency customers.
• Some shared services primarily focus on areas outside a technology, such as fleet management or acquisition – in these cases a tiered framework can help map out key players and matrix governance.

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