Veterans Affairs entrepreneurs to enter new market

The Department of Veterans Affairs' Financial Services Center is expanding its business lines to stay competitive with other federal agencies that stay afloat by selling their services.

As a franchise fund initiative, the Financial Services Center (FSC) of the Department of Veterans Affairs in Austin, Texas, must make enough money to support itself from year to year by acting like a business.

"As a government entity that no longer gets appropriated funds, we must charge for our services," said Terry Riffel, project manager of the VA's Financial Services Administrative Offering. The Agriculture Department's National Finance Center and the Interior Department's National Business Center operate the same way.

The VA center's core offerings consist of payroll processing, financial accounting and reporting, and payment processing. But because new competition can always emerge, the center is making moves to expand its product line.

"We do offer accounting and payment services now but we're pretty limited by the VA's current systems," said David Kubacki, chief, strategic business development and oversight at the FSC. "We want to broaden our offering."

The center is putting together a three- to five-year marketing plan that it intends to have completed by late September of this year. In the business plan, the center will identify the financial support needs for small- to medium-sized agencies and how it intends to meet them. "That's where we feel the market is," Riffel said.

The FSC hopes to offer at least two new service lines to potential customers. Under one, known as "total service," FSC "would take care of all payment processing, accounts receivable and all of the financial accounting and reporting for an agency," Riffel said.

Under the second initiative, FSC would serve as an application service provider, allowing its customers simply to purchase access to its software. "We would provide help desk support as well," Riffel said.

The FSC is considering using Oracle Corp.'s Oracle Federal Financials enterprise resource planning software. The VA recently began a pilot program testing the Oracle software as the solution for the department's logistics and financial systems modernization, known as coreFLS.

Riffel said the center is working in conjunction with the VA to implement coreFLS. However, the FSC will procure its own solution that can be tailored more to the needs of small and medium size agencies, Riffel said.

Plus, while KPMG Consulting LLC is implementing coreFLS, the FSC has brought KPMG on board as a partner in its own operation. "KPMG will share in the risk and the revenue of this project," Riffel said.