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Federal Agencies Devise Shared Services Plans

The Office of Management and Budget is requiring federal agencies to tap into a more efficient IT delivery model.

InformationWeek Government - June 11, 2012
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The Shared Services Mandate

In early May, federal CIO Steven VanRoekel launched an ambitious government-wide initiative--the Federal IT Shared Services Strategy--to address Uncle Sam's two biggest tech challenges: tight funding and outdated tools. The strategy aims to help agencies reduce what they spend on redundant IT systems and services and plow that money back into new technologies and tech-enabled innovations.

"We need to push across the federal government, look at opportunities where there's rampant duplication, and maniacally go in and strip those down into single instances," VanRoekel said at InformationWeek's Government IT Leadership Forum in Washington on May 3, one day after the release of the Shared Services Strategy. "That will give us investment capital to innovate, to spend on mission, to pour back into the system, and free up people to put them on more important tasks."

The opportunities for efficiency and economies of scale are huge. The feds spend close to $80 billion annually on IT, and the Office of Management and Budget, in a review of 7,000 federal IT projects, discovered "many redundancies and billions of dollars in potential savings." In the area of supply chain management, for example, the OMB identified 759 planned projects valued at $3.3 billion.

The Shared Services Strategy fits under the umbrella of a concept called "shared first" that VanRoekel introduced last October, just two months after succeeding Vivek Kundra as federal CIO. VanRoekel wants agency CIOs to break out of the old habit of deploying software and servers every time they have a new requirement and instead make increased use of shared IT platforms. The OMB's goals include improving return on investment, boosting the productivity of federal workers and agencies, and increasing communications and collaboration among service providers, customers, and other stakeholders.

VanRoekel had signaled that the government would be moving in this direction. Even before the formal strategy was released in May, agencies were asked to identify at least two services per agency to consolidate. The published strategy goes a step further by requiring agencies to provide the OMB with their specific consolidation plans by August and to move two services to a shared environment by the end of this year.

The OMB defines a shared service as "an IT function that is provided for consumption by multiple organizations within or between federal agencies," and it groups them into three buckets: commodity IT (e.g., content management, infrastructure, email), support IT (HR, records management), and mission IT (geospatial, Federal Health Architecture).

The Shared Services Strategy focuses initially on commodity IT and recommends cloud services as a means to that end. While the OMB sees the potential for sharing IT services across agencies, VanRoekel said the immediate payoff will come from doing so within agencies. "Our lowest-hanging fruit is optimizing an agency by itself," VanRoekel said. "We can save billions of dollars by just going in and getting these agencies tuned."

Email will be a natural starting point. VanRoekel offers the example of the Department of Agriculture, which replaced 21 email systems with a single cloud-based email service from Microsoft for its 120,000 employees and contractors. In doing so, the USDA says it reduced its email costs from $24 per mailbox to $8 per mailbox.

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