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Executive Briefing Series: SHARED SERVICES

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Government Rethinks Shared Services in Cloud Era BY TOM TEMIN


major shift in thinking has taken place among federal technology executives when it comes to shared services. The idea of multiple agencies using a common facility for functions they share goes back many years. Indeed, several departments have operated shared service data centers for decades, offering payroll and other financial-related applications.

What’s different now is the explosion of cloud services, accompanied by myriad software services commercial cloud vendors offer. These range from platformas-a-service (PaaS) to shared applications. Cloud has therefore expanded the choices available to agencies. It has also affected the analyses agency tech staffs must conduct pursuant to shared services.

Executive Briefing Series: Shared Services

PANEL OF EXPERTS Marlon Andrews, Deputy Chief Information Officer, National Archives and Records Administration Beth Angerman, Executive Director, Unified Shared Services Management, U.S. General Services Administration Greg Bateman, Managing Director, Federal Industry Ecosystem, Microsoft Guy Cavallo, Deputy Chief Information Officer, Small Business Administration Joe Klimavicz, Chief Information Officer, Department of Justice John Nemoto, Vice President, CGI Brad Wintermute, Deputy Chief Information Officer, Food and Drug Administration

Agencies are, in fact, expanding their notions of shared services, the benefits shared services accrue, and ways of acquiring them. Data centers operated by departments, such as the Agriculture Department’s National Finance Center, remain an important part of the shared services mix. But the market has expanded greatly beyond that model.

At a recent panel discussion convened by Federal News Radio, shared services experts from government and industry discussed the current state of shared services and where the industry and agency strategies are headed.

It’s All About the Outcomes Beth Angerman is executive director for unified shared services management at the General Services Administration. She pointed out the Trump administration has picked up the shared services ball from the previous two administrations. The intention is “obviously to get economies of scale for the government and really figuring out what is truly common among us.” Getting those economies should encompass capacity represented by industry, using a model of shared risk, Angerman said.

Duplicative systems, even within agencies and departments, and the “special snowflake mentality” have been part of the federal IT scene and remain so, according to Greg Bateman, the managing director for Microsoft’s federal industry ecosystem. He said one example is the Navy and its four enterprise resource planning (ERP) systems.

Executive Briefing Series: Shared Services

Now, Bateman said, “the advent of cloud has changed some of the barriers to shared services solutions.” The GSA’s FedRAMP program for certifying the security provided by commercial clouds has helped. He urged the government to define common standards for functional processes that agencies could share. As an example, he cited the process for permanent change of duty station. That is, moving people to new locations. The existence of standard regulations for moving people has spurred at least one vendor to create a SaaS shared service solution, Bateman said. He added EPA, Energy, Treasury and NASA are customers of a vendor that published such a cloud-deployed application.

How a Large Department Shares Services Exploration of new cloud products and rethinking of their own shared services strategies: federal agencies are doing both.

Long-time federal technologist Joe Klimavicz, currently the CIO at the Justice Department, has become an outspoken champion of shared services. He defined shared services broadly as functionality, capability, or solutions common to more than one organization. “It could be government operated or vendor-industry managed and owned; it could be cloud based, or even a shared contract,” Klimavicz said. At Justice, he said, “we’re trying get to as many managed services as possible.” His model is to build a shared solution once, with industry providing what Klimavicz

called financially-backed service level agreements (SLAs) “with the right metrics that give me transparency and insight into how that service is performing.” He sees shared services not in financial terms alone, but also as a route to better business processes and, ultimately, higher performing agencies. Justice also provides a model for how to get to that level of shared services. Klimavicz said the DOJ’s council of 22 component CIOs reviews technical proposals the council

might want to proceed with. The CIOs require proposals to fit the department’s technical reference architecture. In one instance, two slightly different solutions arrived from the department’s infrastructure and cybersecurity committees. The two ideas were resolved in a third, hybrid solution everyone could agree on. Klimavicz said to date, Justice has calculated cost avoidance of $310 million through shared services. Reduction of DOJ data centers from 110 to 32 has helped. DOJ has nearly two dozen agencies using its cybersecurity services. A single departmentwide cloud email system will be completed in 2018, and a financial management system in 2019, Klimavicz said.

In short, at the department level, the mass exists to establish shared services using a variety of models, including commercial cloud.

Bureau and Indie Agency Challenges By contrast, bureau level or smaller independent agencies tend to seek out services to share, rather than establish them like the Justice Department. One example is the Food and Drug Administration, where Deputy CIO Brad Wintermute said the operating divisions of Health and Human Services try to identify common services to be provided at the departmental level. He said cybersecurity and authentication top the list. On the

Executive Briefing Series: Shared Services

authentication front, he’s looking for a solution that extends to the food and drug industries that interact with FDA systems. Wintermute said it’s also an area with lots of potential for sharing with other HHS operating divisions such as the National Institutes of Health and the Centers for Medicare and Medicaid Services.

Wintermute said he sees potential in shared application development, which might be more difficult to establish as a shared service. At the National Archives and Records Administration, Deputy CIO Marlon Andrews said the idea of shared services started out as a way of sharing the cost of solutions with agencies having similar archiving, preservation and records management missions, such as the Library of Congress. “We look at other agencies that already have things in place and look to how we can share their resources,” Anderson said. He said he’s also actively looking at commercial cloud services to lower costs.

When he arrived at the Small Business Administration in January, Deputy CIO Guy Cavallo found an agency still using Windows XP and therefore badly in need of modernization. Ultimately, he said, SBA opted to basically move all of its computing resources to the commercial cloud and get out of the data center business.

Cavallo also cited two homegrown identity management systems that were old, insecure, and that existing staff could not update. He said he’s looking to GSA’s project to replace them. “We do not want to be in the identity creation business,” he said.

Executive Briefing Series: Shared Services

Cloud as Route to Modernization The idea of cloud shared services as a modernization strategy is appearing across the government, according to John Nemoto, vice president of systems integrator CGI. He leads the hybrid cloud and modernization practice for CGI Federal. Nemoto said in the private sector, customers commonly adapt their business processes, data models and security models to work with software-as-aservice (SaaS) applications as developed by vendors. Historically, government, is unique, he said, and is often unable to completely adapt to these commercial models.

But that stance is starting to shift in the need to modernize and the availability of SaaS products. Nemoto said he’s seeing a growing number of federal customers really looking at shared services as a model for pushing IT modernization and digital transformation. “So rather than looking at shared services application by application,” he said, “they’re conducting portfolio analyses, looking at groupings of applications to see what fits together from a data structure and security standpoint.”

FDA’s Wintermute underscored that by pointing out how his and other agencies are creating application programming interfaces to their data so it can be used in multiple applications.

GSA’s Angerman said agencies need to more carefully define their data standards to make better use of APIs. She pointed to the GSA’s

Federal Integrated Business Framework, a methodology for defining standards for functions such as records management, human capital and finance in terms of outcomes and the data structures they require. All of this, she said, combined with carefully crafted use cases, can bring industry SaaS offerings and federal requirements closer together. “Our hypothesis is that for mission support functions we can go as far in the cloud stack as software,” Angerman said. Getting to commercial shared software, as opposed to purely platform-as-a-service, required answering two questions, she said. “What is the gap between what federal government needs and what these true SaaS products offer? Can they be configured to meet government uniqueness?”

Otherwise, Angerman said, “I will go back to the CIO council and say, ‘Guys, you’re going to have to agree to a common way to do these 10 things, because the technology won’t allow you to do it differently anymore.’” DOJ’s Klimavicz pointed out, some federal uniquenesses, and their resulting complexities, are beyond CIOs’ or GSA’s control. For example, more than 100 hiring authorities, each with their own rules and procedures, exist in the federal government. Plus there are governance issues for who has authority over a shared service, and moving money among agencies to pay for them. Another challenge, according to Angerman, lies in pricing. Agencies tend to start small in shared services, but pricing models favor scale and bulk. She said the financial issue underscores the need to do the upfront

Executive Briefing Series: Shared Services

analysis to arrive at the small subset of requirements that really are unique to government. Those can be reworked over time, but the rest can go to commercial shared services in the meantime. She said agencies need to avoid the trap of paying for new unique-to-government software that’s touted as a commercial shared service simply because it’s sold in a cloud SaaS model rather than through traditional on-premise licensing. Similarly, she said shared contracts won’t produce much in the way of savings if each agency brings task orders loaded with unique “blue button and green button needs.” Angerman said this where an intervening layer of functional service management “that has to help control the special snowflakes, really helps manage customers into a standard set of choices and helps them adopt the standard set of processes the technology actually offers.” Tom Temin is a Washington freelance writer with 40 years in business-to-business journalism. E-mail him at

Federal News Radio e-Book: Shared Services  

A series of tech-oriented e-books published by Hubbard Radio

Federal News Radio e-Book: Shared Services  

A series of tech-oriented e-books published by Hubbard Radio