Shared Services in the Federal Government:

Getting the Lay of the Land

Workshop 55June 2, 2016

Shared Services is a way of organizing service delivery to optimize the delivery of cost-effective, flexible, reliable services to ALL “clients.”

SharedServicesModel

CentralizedModel

DistributedModel

Service / Responsiveness

Scale

& E

ffic

ien

cy

Distributed• Distributed control

• Focus on responsiveness

• Location driven

Shared Services• Shared control• Balances responsiveness & efficiency• SLA driven

Centralized• Centralized control• Focus on consolidation• Cost driven

What is Shared Services?

2

How is Shared Services different from other organization structures?

3

Decentralized

Processes run

autonomously by

departments

Different systems per

department

Unique departments

processes

Focus on responsiveness

Work originates in the

department

No service level

agreements

Non-performance based

Processes run autonomously

by departments

One common system

platform (i.e., ERP)

Processes standardized to

support common system

Focus on responsiveness

Work originates in the

department

No service level agreements

Non-performance based

Enterprise

Stand alone organization

One common system

platform (i.e., ERP)

Processes standardized to

support common system,

efficiency and customer

service

Focus on customer service

Work originates from the

customer

Managed service delivery

through clear Service Level

Agreement’s

Performance driven culture

Shared Services

Consolidation of functions

within a single department

One common system

platform (i.e., legacy or

ERP)

Processes standardized to

support common system

and central organization

Focus on control

Work originates from the

center

No service level agreements

Control driven targets (non-

performance based)

Centralized

Department

DepartmentDepts.

Departments

DepartmentDepts.

Depts.

Depts.

Department Department DepartmentDepartment

Department

24 CFO Act Agencies Except DoD

Core HR (systems)

Target Scope (Agencies & Systems)

Approach to Assessing Marketplace Demand

4

Financial ManagementPayroll

Systems

Core HR (systems)

Refresh Timeline Factors• Software Version• End of Contracted Support• System-Host Network Information

$4B38%

$3.1B99% 77%

FY 2014 SpendShared Services

The future of the Administrative Shared Services

Key considerations …

• “Good government”,specifically economies of scale, leveraging proven solutions and reducing duplicative investments

• Current and future consumer benefit and protection

• Provider entrepreneurship and innovation

… determined functional rankings and initial focus

AcquisitionFinancial management

Human resources

Information technology

Travel

Property management (personal and real)

Grants

Relocation

Budget formulationPrinting and publishing

Guaranteed loansDirect loans

Occupational healthMail

Insurance

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

Area of initial focus Other areas considered

* - GSA USSM Slide presented on Mar 2016.5

FY16 FY17 FY18 FY19 FY20 FY21 FY22

-DHS-TSA/USCG-GSA-Lift & Shift -DOJ-Internal -DOL

-Commerce-VA-DHS-Cube-Education

-OPM-DHS-FEMA-DHS-ICE-NSF

-NRC-USAID-SBA-EPA

-State-DHS-USSS-DHS-FLETC-DHS-CBP-NASA-Education-FSA

-HHS-Interior-FBMS-SSA-IRS-Energy-USPTO

Tier 3

Tier 2

Tier 4

Tier 1

• Assessed Current State at Bureau Level (Consolidations vs Shared Services Migrations)

Tier Description Playbook Timeline

1 On-Going Migrations Phase 3-4 0 Years

2 FY17 Funding Requested Phase 1-3 1-3 Years

3 Shared Services Migration advisable (Benchmarking, FedStat, etc) 3-5 Years

4 Agencies recently modernized, no near term refresh 5+ Years

Assessment Criteria

Marketplace Demand – Financial Management

6

OMB established Operating model for

Administrative Shared Services

Advisory

Authority via IAA

SLAs

President’sManagement

Council

Government-wide Administrative Function Policy Agencies (GWPA)

(Treasury, OPM, GSA)OMB

Shared Services

Policy Officer(SSPO)

External Stakeholders

Government-wide Administrative Shared Services Consumers(includes shared service provider home agencies)

Unified Shared Services Management (USSM)

Organization

Providers as Determined by USSM(e.g., FSSPs, Centers of Excellence, Category Management, Private Sector Service Contracts)

Shared ServicesGovernance Board

(SSGB)OMB, Government-wide Administrative Function

Policy Agencies, CxO Councils, Consumers, SSP Home Agencies

OMB Management Offices

(E-Gov, OFFM, OFPP, OPPM)

USSM Director

Consumer Councils(HR, FM, others)

M&O Oversight

M&O Management

M&O Delivery

Independent of

M&O

* - GSA USSM Slide presented on Mar 2016.7

USCG Key Events

Alternative Analysis – January 2012

SSP versus In-house Decision – November 2012

Business Case Analysis – July 2013

Discovery Process - “Go/No-Go” – August 2014

Treasury Approval – August 2014

Inter Agency Agreement – September 2014

Conference Room Pilot – January 2015

Configuration – January/February 2016

Interfaces (17) – February – April 2016

Planned Implementation Date – October 2017 8

Project Phases

Discovery Phase

SME Requirements Meetings

Functional Requirements Listing

Requirements Traceability Matrix (RTM)

GAP Analysis

RICE-W

ARB Approval to move forward

Global Configuration Phase

Agency Scenarios (DNDO/TSA/USCG)

SME Meetings/Kick-Off Meeting

CRP Scripts

CRP Execution

Global Configuration Setups

DNDO/TSA/USCG Implementation Phases

End to End Testing

- Full Req’ts Testing

- RICE-W Testing

Reports

Interfaces

Conversion (Data)

Extensions

Workflow

- Training & Deployment

9

USCG Considerations

• FSSP Capacity/Experience

(Software/Hardware, CM, UAM, Training, Customer Service)

• Project Governance

• Role as Service Provider (DNDO/TSA) vs FSSP Roles

• Challenges:

New Accounting Line / DHS Common Approp Structure

Data Clean-up / Migration

Change Management

10

Enable continuous improvement

Integrated & repeatable processes

Reduced workload for staff

Reduce IT integration and maintenance

costs

• Single, comprehensive suite of applications covering all key functional areas (Finance, HR, Supply chain, Procurement, etc.)

• Rich functionality for a variety of self-service tasks

• Pre-built, workflow across various functional areas

• Delivers complete process solution (e.g. Procure to Pay, Order to Cash, etc.)

• Daily business intelligence

• Pre-built reports and dashboards by user roles and responsibility

Rich Functionality of Shared Services

Slide: 11

Slide: 12

Where We Are Going…Traditional Shared Services

How do we reorganize…

to get economies of scale…

to drive cost savings and efficiency?

How do we take economies of scale…

and use analytics, automation, & augmentation

to drive efficiency & create new value?

Focus investments towards strengthening the foundation and surroundings

FM Strategy Approach

Slide: 13

Process and Information Technology Financial Improvement and Audit Readiness Initiatives Directly Support Audit

Critical 2-Year Initiatives/Requirements

Universe of Transactions

Procurement and Financial Processes and Data – PPBE Standards

Cash Accountability, Direct Treasury Disbursing

Intragovernmental Transactions, G-Invoicing

Other Audit Readiness Critical Items – Property, Journal Vouchers and Sensitive Activities Guidance

DATA Act

SFIS/SLOA/USSGL Compliance

FM Focus Areas FY 16-17

Slide: 14

FM IT Current Roadmap

Slide: 16

Stage Cr it ica l In it iat ivesTechnology

EnablersBus iness

Outcomes

SFIS/SLOA/USSGL

Journal Vouchers

Sensitive Activities

Guidance

Audit Ready IT

Environment/Reduce

Legacy Systems

Universe of Transactions

Intergovernmental

Transactions

Property

FBWT – Cash

Accountability

Management

Enablers/Lever s

Optimized and

Leveraged ERPs

Shared

Services

Governance

Strengthen the

Foundation

Standard

Transaction

Broker

Business

Analytics

Standard

Transaction

BrokerStrengthen the

Surroundings

Build for the

Future

Risk Management

Policy

Budget and Investment

Outreach

Focus on Financial Improvement and Audit Readiness to achieve an

affordable and sustainable audit environment

• Stewardship and Public

Trust through

Transparency

• Audit Sustainment

• Strengthened Mission

Capabilities

• Improved Financial

Data Quality for

Decision Making

• Informed and

Productive Workforce

• Affordable FM

Environment

DATA Act

PPBE Standards

FY17 FM Initiative Focus Areas

Slide: 17

Slide: 18

President’s Management Agenda

Slide: 19

Efficiency and Value

Slide: 20

Benchmarking

Slide: 21

FM Marketplace Governance

Defense Finance and Accounting ServiceDFAS: DoD Shared Service Provider

Ms. Rosie Tinsley

Director, Strategy, Policy and Requirements

June 2, 2016

About DFAS……

DoD’s finance and accounting Shared Service Provider.

23

Our Value Proposition

Streamlined Operations:• Reduced Costs• Sites• Systems• Employees

1994 Budget*DoD: $391.1 BillionDFAS: $2.7 Billion

2016 Budget*DoD: $580.0 BillionDFAS: $1.4 Billion

*FY16 constant year dollars

Performance• Consistently Demonstrated• Independently Assessed

Voice of the Customer• Proactive Engagement with Military

Services and Defense Agencies• Considerate of Department Priorities

24

Magnitude of Operations

Made 5.7 million

travel payments

Paid 11.5 million

commercial invoices

Disbursed $572 billion

Accounted for

1,270 active DoD

appropriations

Maintained 228.6million General Ledger accounts

Managed $772 billion in Military Retirement and Health Benefits

Funds

Managed $18.3 billion in accounts

receivables

Managed Foreign Military Sales cases

valued at $424 billion

Processed

150.2 million pay

transactions

Mission Areas

• Accounting

Civilian Pay

Contract Pay

Disbursing

• Debt and Claims

Departmental Reporting

• Garnishments

Military Pay

• Retired and Annuitant Pay

• Transportation Pay

• Travel Pay

Trust Funds

• Vendor Pay

Independent SSAE16/Audit Opinion

~6.3 Million Payroll Customers

25

Shared Services Best Practices

Economies of Scale

Agreed-Upon Service Levels

Standardization of Processes

Common Technology Platform

Core Mission Focus

Compliance/ Auditability

Decision-Support

Flexibility

Scalability

26

Customer Service Emphasis……

Customers can now upload their travel

voucher and supporting documents online.

Travel Voucher Direct

askDFAS Tax

Statement Reissue

Modules

Military members can

now securely submit W-2

and 1099R reissue

requests online.

eTutorials

Customers and DFAS employees

can access step-by-step videos

on key processes to get answers

to their questions.

Unit Commander Finance

Report (UCFR) Web Tool

Defense Military Pay Office employees

can now electronically validate and certify

entitlement changes for soldiers.

27

Looking Forward: Our Service Provider Focus

Support customers in achieving and sustaining favorable financial statement audits• Audit strategies, accounting principles, and internal control

toolsets • Effective business and system internal controls

Modernize processes and technologies that achieve cost efficiencies • Integrated solutions • Standard business processes and common technology

platforms

Continued productivity and customer service improvements as a competitive shared service provider• First class customer service• Performance metrics and reporting

28