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Unleashing the Power of Shared Services

In tight budgets, agencies should pool resources on more than just back-office functions.

As agencies face persistent budget pressures, shared services are receiving renewed interest and scrutiny. Many government leaders are opening their minds to these strategies as a way to deliver services more efficiently -- and this is good news.

The potential for shared services is far greater than what exists today. Most efforts center on consolidating a single back-office function, such as human resources or finance, to serve the whole organization. The more innovative agencies have pulled together several of these support functions. But with imagination, federal leaders can move beyond these traditional models.

A new report, “Helping Government Deliver: Transforming Mission and Support Services” by the Partnership for Public Service and Deloitte, presents a vision in which agencies share not only support functions, but also mission-critical activities such as satellite mapping -- sharing not just within one department, but across many.

Some organizations already are moving in this direction, pushing beyond traditional shared services. Most notably, state and municipal governments that were hard hit by budget shortfalls several years ago, have some lessons to offer the federal sector.

  • NASA’s Shared Services Center in Mississippi. Officials moved beyond combining a single line of business to merge HR, information technology, finance and accounting offices in one location. The center provides 55 support services, including critical in-person services, such as retirement and survivor benefit counseling for employees. By focusing on top-notch customer service, the NSSC has managed to serve all 10 NASA centers with a 94 percent satisfaction rate, as indicated by the American Customer Satisfaction Index, compared with the 76 percent national average.
  • The Energy Department’s Environmental Management Consolidated Business Center. Charged with accelerating cleanup and closure of nuclear waste sites across the country, the center faced a serious challenge to its mission. Once people learned the site where they worked would eventually close, they left to find new employment -- leaving the center without the technical skills needed to shut down the site. The center combined support functions, such as contracting and HR, with mission-critical personnel, such as nuclear engineers and environmental scientists, to accelerate the cleanup and closure of former nuclear sites. The team has closed five contaminated sites since 2004.
  • The city of Charlotte and Mecklenburg County in North Carolina. As examples of innovation in service delivery, both entities started shared services organizations while also identifying areas where city and county services overlapped. They took the courageous step of crossing jurisdictional lines to share resources. Charlotte took the lead in vehicle maintenance and operations, police operations and management of call centers, while Mecklenburg County is responsible for managing parks and recreational facilities. The result is a seamless operation that serves citizens more efficiently.

These examples demonstrate how agencies can share resources more creatively -- within their own boundaries and across government. But it isn’t easy to drive this kind of fundamental change. It takes a clear and compelling business case, strong leadership and continual performance measurement to drive improvements.

Agencies that overcame challenges and transformed how certain functions and services are delivered were rewarded with improved operations, greater efficiency, cost savings and satisfied customers.

The Office of Management and Budget historically has been supportive of these efforts, but officials there will need to use a little more muscle and creativity to really change the way government does business. The agency will need to use a carrot, a stick and every other trick to overcome the entrenched, stovepiped business processes that dominate today.                                                  

Let’s hope this will be a component of the much-anticipated President’s Management Agenda.

Lara Shane is vice president of research and communications at the nonprofit Partnership for Public Service.

(Image via Lightspring/