Table of contents


Vision

Mission

Values

Best Practices

Formal Communications

Business Outcomes

Governance

Performance Measurement

Cross-Indemnification

Negotiation

Incentives

Exit Strategies

Termination Cost Limitations

Service Level Agreements

Service Level Targets

Roles

Responsibilities

Measurement

Reporting

Notification

Feedback

Monitoring

Improvement

Satisfaction

Input

Agility

Exit Strategy

Interoperability

Open Standards

Switching Costs

Period of Performance

Time to Value

Step 1: Inventory, Assessment & Benchmarking

Task 1.1: Analysis Team

Task 1.2: Architectural Review

Task 1.3: Requirements Analysis

Task 1.4: Cost Estimation

Task 1.5: Functions

Task 1.6: Cost Breakdown

Task 1.7: Decoupling

Task 1.8: Readiness Checklist

Step 2: Shared Services Identification

Task 2.1: Market Research Team

Task 2.2: Federal Shared Services Catalog

Task 2.3: Shared Service Development

Task 2.4: Cost Model

Step 3: Service Provider Comparison

Step 4: Decision Making

Step 5: Funding Approach

Step 6: IAs & SLAs

Step 7: Post-Deployment Operations & Management



StrategicPlan

Federal Shared Services Implementation Guide

This Federal Shared Services Implementation Guide provides information and guidance on the provisioning and consumption of shared services in the U.S. Federal Government. The guide provides agencies with a high level process and key considerations for defining, establishing, and implementing interagency shared services to help achieve organizational goals, improve performance, increase return on investment, and promote innovation. It includes specific steps that should be considered for identifying shared services candidates, making the business case, examining potential funding models, using agency agreements, and discusses some of the key challenges that should be expected along the way. In addition, the guide addresses shared services roles and responsibilities; the creation, governance, funding and implementation of shared services through associated lines of business (LOBs); and the use of the new, online, Federal Shared Services Catalog – Uncle Sam’s List. https://max.gov/unclesamslist/

Shared Services offer agencies the ability to improve their stewardship of taxpayer funds, while enabling them to become more effective in delivering their administrative and core mission services. Interagency shared services are capabilities that Federal agency leaders should embrace. Successful implementation of shared services is dependent on many factors. One key factor is a concerted collaboration and agreement from the agency leadership team –specifically the CFO, CAO and CIO –to guide implementation efforts and combat organizational inertia.

Source:
https://cio.gov/wp-content/uploads/downloads/2013/04/CIOC-Federal-Shared-Services-Implementation-Guide.pdf

Start: 2013-04-16 End: Publication Date: 2013-04-18

Submitter:

First name: Owen

Last name: Ambur

Email Address: Owen.Ambur@verizon.net

Organization:

Name: CIO Council

Acronym: CIOC

Stakeholder(s):

Shared Services Subcommittee: This document was produced by the Shared Services Subcommittee of the Federal Chief Information Officer Council (CIOC). The following individuals contributed to the development of this guide.

Joseph Klimavicz: CIO, Co-Chair, NOAA

Maureen Jones: Associate CIO, Co-Chair, DOT

John Larsen: Enterprise Architect, Co-Chair, FAA

Charles Santangelo: Senior IT Policy Advisor, DHS

Sandy Barsky: Subcommittee Member, GSA

Mark Dronfeld: Subcommittee Member, ED

Dorine Andrews: Subcommittee Member, Peace Corps

Kevin Garrison: Subcommittee Member, DOD

Gilbert Hawk: Subcommittee Member, USDA

Gail Kalbfleisch: Subcommittee Member, HHS

Tom Kireilis: Subcommittee Member, GSA

Rick Lauderdale: Subcommittee Member, DOE

James Maas: Subcommittee Member, DOE

Bo Peeler: Subcommittee Member, FAA

Andy Schoenbach: Subcommittee Member, OMB

Susan Stepanski: Subcommittee Member, DOI

Philip Wenger: Subcommittee Member, OMB

Susannah Schiller: Subcommittee Member, NIST

Mary Forbes: Subcommittee Member, HHS

CXOs: The Implementation Guide is intended to provide CXOs, business analysts, program managers, and architects with guidance to help their agencies shift to a shared service environment. This document also provides reference information for Federal agencies seeking to establish new lines of business and interagency shared services.

Gusiness Analysts

Program Managers

Architects

Executive Branch Organizations of the U.S. Federal Government: Audience for this Guide -- This guide is intended for use by all Executive Branch organizations of the U.S. Federal Government (e.g., executive departments, subordinate agencies, bureaus and independent and small agencies). As an important tool for use by this community, the information provided in this guide will help agencies to: * Improve awareness of available shared services to Federal departments, agencies and bureaus; * Increase the adoption rate of shared services across the Federal environment; and * Advance the number of shared services available to the Federal community. Key audience members for this guide include C-Level executives, senior executive services members, and all other members of the agency leadership as they work together toward a common goal of achieving the benefits of shared services implementation. In addition, members of an organization’s budget, finance, capital planning, portfolio investment management, business program leadership and IT teams all have responsibilities in helping their organization adopt shared services.

C-Level Executives

Senior Executive Services Members

Agency Leaders

Budget Leaders

Finance Leaders

Capital Planning Leaders

Portfolio Investment Management Leaders

Business Program Leaders

IT Teams

Vision

Mission

To guide agency leadership teams through the implementation of shared services as they navigate through the complex array of issues encountered while moving to a shared services environment.

Values

Best Practices: Agreement Best Practices -- Below are some best practices to consider when drafting an agreement. In addition, guidance on how to negotiate an IAA is provided by the Financial Management Service.

Formal Communications: Formalize Communications –The IAA should include processes and structure for regular ongoing, emergency and priority alerts and escalation paths to be established.

Business Outcomes: Service Definition and Delivery – Define the expected business outcome of the services first, and then set the SLA. See “Service Level Management” for more details.

Governance: Governance and Performance Measurement –State contractually the frequency of service level reporting, at least on a monthly basis depending on the service. Inquire about the use of online dashboards the supplier may offer to manage and track service delivery in near-real time.

Performance Measurement

Cross-Indemnification: Liability – Consider cross-indemnification while insisting that the service provider provide all reasonable due diligence according to a set of industry standards (COBIT, ITIL, ISO, or other standards), and state that by not performing due diligence and adhering to an agreed-upon standard that the service provider may be open to liability.

Negotiation: Negotiate Incentives and Penalties –The provider should be driven to meet the established customer expectations and even exceed it by adopting the performance based pricing criteria. If performance of the service provider exceeds expectations, then incentives should be given; conversely, appropriate penalties should be imposed if objectives are consistently missed. One strategy for penalties and incentives in SLAs is for the service provider to put the penalty into a “bank” if there is an issue. As long as the provider makes a determined effort and meets the SLA within an agreed-upon time limit (depending on the severity of the lapse and criticality of the service), the client absolves the provider of the penalty.

Incentives

Exit Strategies: Ensure a Return Path – In case things do not occur according to expectations, make sure there’s an exit strategy. Remember, the service provider’s reputation is at stake and they will work with the consumer to fix problems. See Step 7 for additional details.

Termination Cost Limitations: Termination Costs – Limiting the amount of termination costs that will be paid is an incentive for the outsourced supplier to make the deal work and satisfy the customer in the initial transition years.

Service Level Agreements: A separate but related document is the service level agreement (SLA). The SLA defines the performance measures the provider agrees to provide. Service levels are derived from Customer/Partner Agency requirements and need to match the service provider’s capabilities. The SLA is part of an overall service management approach and serves as a consistent interface to the business for all service and performance related issues. The SLA is typically incorporated by reference in the IAA. This helps to ensure that the service levels defined are part of the business arrangement between the shared service provider and customers. Service level management entails several best practices that the service provider should have in place, including:

Service Level Targets: *  Establishing and maintaining SLAs that document service level targets as well as roles and responsibilities of the service provider and the Customer/Partner Agency;

Roles

Responsibilities

Measurement: *  Measuring, reporting and notifications on service performance vs. agreed service levels, and on service workload characteristics such as number of Customer/Partner Agencies, volume and resource utilization;

Reporting

Notification

Feedback: * Providing feedback on reasons and details of actions to be taken to prevent recurrence (e.g., in case where service level targets are not met);

Monitoring: * Monitoring and improving Customer/Partner Agency satisfaction with the services that are provided; and

Improvement

Satisfaction

Input: * Providing inputs into service improvement plans. Service Level Management strives to establish and enhance relationships and communication between the shared service provider and the Customer/Partner Agencies.

Agility: Preventing Service Provider Lock-in -- A key element for agencies to consider when planning and implementing shared services is the ability to remain agile. Agility enables agencies to prevent service provider lock-in and to be able to move to other shared service providers within a reasonable amount of time and expense.

Exit Strategy: Ensure Agreements Facilitate Agility and Exit Strategy -- Agencies should consider several factors in order to remain agile when implementing externally provisioned shared services in their organization:

Interoperability: Interoperability – A key challenge for shared services is ensuring interoperability from the outset. This is needed to help prevent incompatibilities and guide providers and Customer/Partner Agencies on how to fit IT systems and business applications together and facilitate communication and interoperability between components across the disparate Customer/Partner Agency community. Well-architected designs that result in platform independent reusable components that take advantage of service oriented architectures (SOA), modular business applications, and web services that use eXtensible Markup Language (XML) are critical to help ensure that shared services meet initial Customer/Partner Agency requirements, and enable consumers to both grow their business processes and make them extractable from a specific provider.

Open Standards: When adopting a new shared service, determine whether a proprietary-based or open standards-based solution should be purchased. While it may be difficult in some situations to obtain an open standards-based solution, Customer/Partner Agencies should be aware that open standards increase their agility in moving to other providers. Open standard and constructs such as XML, or open source software, provide levels of agility that help agencies make shared services implementations more agile.

Switching Costs: Understand and document the switching costs involved in moving from one provider to another. Related questions that agencies should address include: * Is the existing shared service provider contractually obligated to support the new service provider? * Is the Customer or Partner Agency able to extract their data with little to no cost? * Is the data destroyed according to defined to standards?

Period of Performance: When establishing a base period of performance (POP) in an IAA or contract with a shared service provider, a shorter base period enables the Customer/Partner Agency to limit the mandatory amount of time before that Customer/Partner Agency can move to a new provider. A shorter base POP anticipates that if there are issues with performance in the first year, the Customer/Partner Agency is able to move without expending additional time and funding with a provider that is not meeting expectations.

Time to Value: Moving an agency to transition to a new shared service provider may be a time consuming effort. It is recommended that agencies use Federal Strategic Sourcing Initiative (FSSI) agreements and GWACs that are identified in the Shared Services Catalog. These contracts provide fast access to already awarded procurement vehicles and enable agencies to take less time and fewer acquisition steps versus a full and open competition by individual agencies. In addition, agencies should use standardized Contract Line Item Numbers (CLINs) and have an accurate view of their commodity IT inventory in order to be able to properly scope shared services efforts.


Goal Step 1: Inventory, Assessment & Benchmarking

Inventory, Assess and Benchmark Internal Functions and Services

Objective(s):

Task 1.1: Analysis Team

Task 1.2: Architectural Review

Task 1.3: Requirements Analysis

Task 1.4: Cost Estimation

Task 1.5: Functions

Task 1.6: Cost Breakdown

Task 1.7: Decoupling

Task 1.8: Readiness Checklist


Other Information:

Federal organizations have many opportunities to implement shared services. This task focuses on determining the best set of candidate services to consider for potential migration to shared services. Each agency should have an existing inventory of applications and systems mapped to functions and processes as part of their enterprise architecture. Agencies should start with this list to identify the gaps and redundancies in capabilities to identify shared services candidates.

Objective Task 1.1: Analysis Team

Create an analysis team consisting of agency business, technology management and subject matter experts (SMEs) to build participation and consensus.

Stakeholder(s):

Business Experts

Technology Management Experts

Subject Matter Experts (SMEs)

Objective Task 1.2: Architectural Review

Review the organization’s business and technology architectures to identify opportunities to improve service delivery quality and/or reduce cost structures in existing services.

Other Information:

Identify specific data and process flows used in the agency and/or business unit(s). The degree to which a shared service is compatible with internal processes and data flows will dictate the effort needed to transition to shared services. Large mismatches between the shared service and internal processes/data indicate significant change management issues will need to be addressed before the shared service can be implemented successfully.

Objective Task 1.3: Requirements Analysis

Document what is required and what is not.

Other Information:

This will involve listing business functions, their supporting systems and applications and talking with their owners, sponsors and users. Key areas to consider include: * Redundant systems and applications; * Business processes that are manual or paper driven or only partially automated; * Old systems that are due for replacement or redevelopment for reasons such as functionality enhancement, expansion to meet increased usage, or new architectural platforms; and * Unmet needs or new mandates.

Objective Task 1.4: Cost Estimation

Estimate the costs to provide the existing service internally (Figure 5) for the selected legacy functions or services.

Other Information:

Cost savings will be a significant driver, but not the only factor, in the decision to transition to a shared service. Other factors that may be considered include quality of service, redirection of resources to core mission activities, enabling additional functionality and capabilities, more efficient processes, and improvement to management information and decision-making capabilities. If actual data is not available, the best possible estimates should be used. This step should take days or weeks, at most, to complete. Both IT and agency business unit costs should be included. This is especially important for candidate legacy services that currently do not employ technology automation. Include the human resources costs (e.g., for Federalemployees and contractors) that exist in both the business and IT organizations.

Objective Task 1.5: Functions

Identify the major functions (e.g., capabilities) of the current and candidate services and processes.

Other Information:

The list should address required as well as desired functionality, and include processing, servicing, data ownership, security, work flow and like requirements. Create a function and features checklist and initial Statement of Work (SOW) for evaluating shared service providers.

Objective Task 1.6: Cost Breakdown

Translate costs into per transaction or annual per user costs.

Other Information:

This may provide a baseline for comparisons to similar systems in smaller or larger agencies or shared services.

Objective Task 1.7: Decoupling

Decouple components.

Other Information:

If the service and supporting system is extensive and involves several integrated components, attempt to decouple the components. Decoupling identifies integration points and makes a modular approach possible reducing risk exposure. Review the costing information. Determine the estimated cost of each component, if possible, and translate those costs into per transaction or annual peruser costs.

Objective Task 1.8: Readiness Checklist

Create a change readiness evaluation checklist to assess your organization’s readiness to transition from today’s environment to a shared services solution.

Other Information:

Research and document the answers to checklist questions such as the following:  Does a sponsor or champion exist on the business side who is willing to lead the transition? What is their level of involvement and commitment? * Are there multiple user groups or business areas impacted by the transition? * Is the organization ready to give up the “we are unique” point of view? * Is there agency leadership to push organization sub-units to get onboard? * Have users been involved in considering the change? * Have specific resistance issues and concerns been documented? * Do technical resources exist to plan and execute the transition; and if not, how can they be obtained? * What are the annual costs for each function being considered (e.g., per person, per transaction or fixed fee)? * Has funding been committed (or is it available) to cover the transition costs? * What is required of the vendor or third party to ensure a successful transition to the shared service? * Does a strategic communication plan exist to ensure that participants and other stakeholders are engaged in the process?


Goal Step 2: Shared Services Identification

Identify Potential Shared Services Providers/OMB’s Shared Service Catalog

Objective(s):

Task 2.1: Market Research Team

Task 2.2: Federal Shared Services Catalog

Task 2.3: Shared Service Development

Task 2.4: Cost Model


Other Information:

The CIOC and OMB provide the Federal community with a Shared Services Catalog (see Figure 6) that documents approved interagency shared services. The catalog also provides a mechanism for agencies to research, locate, and engage with service providers when considering shared services transition. The catalog is the central location for Federalemployees to use to identify existing interagency shared services providers in Commodity IT, Support, and Mission related shared services. Federal organizations should compare their internal shared service offerings and assessments of internally supported functions and services with the service catalog offerings to determine which internal functions and services may be viable candidates for migration to interagency shared services. The results of the search should be a “short list” of potential service providers. Specific activities within this stepinclude:

Objective Task 2.1: Market Research Team

Create a customer/user team to conduct market research.

Other Information:

Cultural resistance to the transition may be overcome by including stakeholders in the decision making process. The team’s buy-in to the endeavor will make the change easier.

Objective Task 2.2: Federal Shared Services Catalog

Conduct market research by using the Federal Shared Services Catalog – Uncle Sam’s List to locate and contact shared service providers that align with your prioritized list of candidate opportunities for transition.

Other Information:

Meet with each shared service provider to understand the capabilities and functionality of their services and then evaluate their capabilities against the set of requirements, functions, processes and criteria that was created in Step 1. Track each provider’s ability to meet the required and desired services and service levels.

Objective Task 2.3: Shared Service Development

If a shared service does not exist in the shared service catalog, contact shared service providers to see if they would be willing to develop one.

Objective Task 2.4: Cost Model

Create or obtain a shared service cost model (see Figure 7) for each potential provider that meets the requirements of your candidate system.


Goal Step 3: Service Provider Comparison

Compare Internal Services vs. Shared Services Providers

Objective(s):



Other Information:

The selection of the best value shared service is guided by, among other criteria, a comparison of internal legacy service costs to those of the potential shared services (see Figure 8) and the performance quality they deliver to end users. In the transition year(s), costs may be higherdue to the support of two services- legacy and shared. However,in the out years, cost savings should accumulate. The resulting cost comparison forms the financial basis of a business case to inform the leadership team on whether or not to proceed with a shared service. Other aspects of the business case include strategic alignment, qualitative value such as cost avoidance, improved management information, quality of service and risk analysis. Ultimately, the shared services that agencies implement to support the execution of their missions are based upon their own unique business model, culture, organizational structure, and risk tolerance. The business case should address what, when, and how to move business capability and its delivery into the shared services environment.

Objective


Goal Step 4: Decision Making

Make the Investment Decision

Objective(s):



Other Information:

Using the results of the function and features checklist, change readiness evaluation checklist, and legacy and shared service pricing comparison and analysis, the organization’s leadership team determines whether or not to proceed with the transition to a shared service. If a decision to transition to a shared service is made, then formalize a project team and proceed with developing a project plan and negotiating the Service Level Agreement (SLA) and/or Interagency Agreement (IAA). Both business and IT staff should participate in this effort. If the decision is made not to transition to a shared service, then document the rationale for not proceeding or for deferring the transition.

Objective


Goal Step 5: Funding Approach

Determine Funding Approach

Objective(s):



Other Information:

There are several methods that consuming agencies may use to fund shared services. These methods are determined in part by the type of service being procured and the provider’s offering. This section offers a brief explanation of those methods and risks to consider.

Objective


Goal Step 6: IAs & SLAs

Establish Interagency Agreements and Service Level Agreements

Objective(s):



Objective


Goal Step 7: Post-Deployment Operations & Management

Ensure the long-term success of the transition and achieve the benefits identified in the business case.

Objective(s):



Other Information:

Once a process, capability and supporting system(s) have transitioned to a shared services provider, agency ownership and management of the service does not end. Active daily management from a contractual and performance perspective must still be maintained. Agencies need to remain actively engaged with the service provider to ensure the long-term success of the transition and achieve the benefits identified in the business case. This section contains some best practices to consider for postdeployment operations management. Remember to decommission the legacy systems and interfaces that are now provided by the operationalized shared service.

Objective

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