Agencies save by sharing back-office jobs

Like siblings who are growing up, federal agencies are learning how to share with each other.

Instead of performing back-office functions--accounting, invoicing and running call centers--on their own, agencies are pooling resources and sharing the same providers for those services, according to a new report from Accenture, a consulting firm that counts the government as one of its clients.

The company surveyed 143 government executives in the United States, Europe, Asia and Africa, and found that two-thirds already had implemented this money-saving strategy, known as shared services. Another 28 percent planned to implement shared services in the next three years.

"If you can implement shared services properly, you can do more work with fewer people," said David A. Wilson, a partner in Accenture's Global Government operating group and an author of the report. Shared services, which became popular in the private sector a decade ago, can save 20 to 40 percent of service costs, he said.

The Bush administration has advocated the use of shared services. The president's 2006 budget proposal listed agencies eligible to provide services to others. They include the Interior Department, General Services Administration and Transportation Department for financial management, and the Agriculture and Treasury departments for human resources management.

"Upon migration to common, governmentwide solutions, agencies will shut down existing systems-which will not only save money, but also make available resources for agencies to better focus on achieving their missions," stated the budget proposal.

Wilson is quick to point out that shared services does not necessarily mean outsourcing, although the two are often confused, partly because the private sector frequently outsources back-office functions. In fact, fear of employee and union pressure was cited as the biggest challenge by executives considering shared services.

Accenture's survey found that 47 percent of executives relied solely on in-house employees in their shared services, and most of the rest used a combination of in-house and contracted employees.

"The majority of the advantages of shared services can be gained whether you're using in-house labor or whether you're outsourcing," he said.

Shared services does require fewer employees, however, and that is one way the strategy saves money. Wilson said agencies can either retrain back-office workers to perform different tasks, or can slim down their workforce through attrition, which will pick up as baby boomers retire.

Users of government programs also benefit from shared services, he said. New York City, for example, combined call centers for everything from dog catchers to trash pickup into one call center with one number, 311.

The Government Accountability Office has pointed to difficulty in the regulation of interagency contracting, which is related to shared services because it also involves agencies sharing contracts for services. One concern is that because one agency is providing the service and another is using it, there is no clear line of responsibility for errors or fraud.

Wilson said he is not worried about accountability because an executive manager is responsible for the shared services center, and it is not ignored as merely a back-office function. "The executive management has only one goal and one objective, so there is more responsibility," he said.

Placing all the transactions in one place also allows an easier calculation of error rates and performance-based rewards for employees, he said.