Enterprise Services Blog Risks and Rewards: Shared Services for Government

Risks and Rewards: Shared Services for Government

  • January 9, 2017

By Diana Zavala

The shared services model has had a great deal of momentum in both commercial and public sector enterprises, with an end goal to reduce cost and improve services by consolidating business operations that were previously replicated in multiple parts of the same organization. Within our federal government, the General Services Administration (GSA) recently decided to outsource the human resources function as a shared service and has published a playbook for modernization and migration management centering on shared services as an approach.  As the U.S. government expands into implementing a shared services model, what risks and benefits should be weighed in their adoption?

Address Costs of Technology Refresh

One goal of shared services is to reduce cost.  However, many implementations have failed to realize initial cost reductions because the adoption planners had not fully considered the time, schedule and expense of change required across people, process and technology.  When the Canadian government consolidated their IT systems into a shared services model, the original business case did not account for a technology refresh that was a standard part of the IT lifecycle.  Although organizations affected by the program were to gain savings by streamlining and use those savings to refresh technology, they were also being asked to pay more for the same level (or less) of service. There is also a temptation to maintain and not shut down old systems, leaving redundancies and exceptions that impact cost and cloud the requirements for shared services.

Plan for Interoperability and Data Integration

When systems are migrated to a shared services model, there is a danger that data becomes segmented rather than connected.  An organization requires integrated data to support not only operations, but innovation for business value, productivity, compliance and, in the commercial world, competitive advantage. Interoperability among systems must be considered so that customer-facing digital processes can effectively hook to back-end processes.

Focus on Security to Reduce Risk

Security must be contemplated in as shared services approach.  Some would argue that consolidation through shared services centralizes and reduces the number of systems available to target.  Is there a risk of vulnerability when there is greater adoption of shared services across government?  The federal government is proposing a centralized organization to address cyber threats which would enable greater focus on closing gaps in shared systems.

An advantage of implementing shared services is that they provide a common, standardized and simplified infrastructure to support operations.  These improvements are at the heart of cost reduction and improved services. A shared service approach allows agencies to focus on vital core mission services helping to drive organizational alignment, employee engagement and focus on the “customer.”

Shared services can also be a viable choice for IT systems modernization which saves an organization from the burden of countless distributed and expensive legacy modernizations.  Commercial enterprises have used shared services to speed their organizational transformations, recognizing the benefit of nearly instantaneous policy changes.   For government agencies, such a change could foster greater agility by streamlining processes and ultimately benefitting citizens.  Ensuring a complete business case for transformation and addressing key areas such as security and interoperability minimizes risk in order to realize the goals of the shared service program.  Well-managed risk may help reap the rewards for shared services.

Learn more about our solutions for the U.S. Public Sector at: www.hpe.com/gov/transformation

Diana is part of a collaborative team of HPE U.S. Public Sector subject matter experts who understand how to use technology to improve the way government operates. Other team members include Judy Douglas, Client Industry Executive; Michael Donovan, Distinguished Technologist; Dan Gilbert, Public Sector Strategist; and Bryan Coapstick, Director, Mobile Innovation.


About the Author
Diana Zavala, Director, Analytics and Data Management Practice, U.S. Public Sector. Diana works closely with many federal, state and local entities to define and deliver unique analytics and information solutions to support mission and business objectives. She has over thirty years of government and commercial experience in business technology enablement solutions, and holds an M.S. in organizational communication from the State University of New York (SUNY) at Buffalo.