Apr 27 2012

How Adopting Shared Services Boosts Efficiency

Agencies get serious about eliminating IT redundancy.

No agency likes to give up control of its data and IT applications, but when the Army realized that sharing e-mail services offered by the Defense Information Systems Agency could save it $380 million over five years, the idea became a lot more palatable. Today, the military service is in the process of migrating thousands of individual e-mail servers and systems to a single enterprise e-mail application run by DISA.

“The fact is that enterprise services generally satisfy 90 percent of organizational requirements at 40 percent of the cost,” explains John Hale, chief of enterprise applications for DISA. “The question that every organization has had to ask themselves is: ‘Is that good enough?’ And given today’s budget realities, we’re finding that the answer is quickly shifting to ‘yes.’ ”

DISA’s enterprise e-mail system, based on Microsoft Exchange 2010, currently operates over the military’s Non-secure IP Router Network (NIPRNet). DISA will bring the system online over its Secret IP Router Network (SIPRNet) for classified data later this year. The system’s cloud infrastructure is built into self-contained installations at military bases across the United States that serve as failover points for each other.

The use of shared services by agencies is rising sharply, thanks to what Hale refers to as a “perfect storm” of driving factors, including advances in cloud, virtualization and mobile technology and an increasingly austere budget climate.

Many agencies have been pursuing and enabling shared services for years. These include the NASA Shared Services Center, which hosts mission support functions for all NASA users; and the Interior Department’s National Business Center, which provides financial services to Interior’s own bureaus and to other agencies. Interior is also building a center that will provide IT services to its customers. And before it tackled enterprise e-mail, DISA had success with Defense Connect Online, a consolidation of web-based conferencing applications. DISA is now moving forward with other consolidated offerings.

Shawn P. McCarthy, research director for IDC Government Insights, says another critical reason shared services are now becoming mainstream is because early adopters — especially of e-mail management and certain types of shared infrastructure — have realized concrete benefits. “The efforts that agencies have made so far seem to have had a positive return on investment, whether that’s hard numbers like cost savings or less tangible but still critical outcomes like improved citizen services or increased employee productivity,” he says.

Enabling More with Less

In December 2011, the Office of Management and Budget (OMB) put forth its “Shared First” initiative, mandating that agencies move at least two IT systems to a shared-services model by December 2012 and continue to search for ways to eliminate redundancy and consolidate IT within and across agencies.

Officials already involved in providing shared services laud the new initiative. Andrew Jackson, deputy assistant secretary for technology, information and business services at Interior, calls the directive “a fundamental shift in how government agencies think about how services are delivered.”

Agencies are exploring moving commodity IT functions, such as e-mail, document management, storage, network management, help desk and other support applications, to existing government shared-services providers or commercial cloud vendors.

Still other agencies may try to keep IT functions in-house and offer them to other government users. Michael Smith, executive director of the NASA Shared Services Center at Stennis Space Center in Mississippi, says that any decision to take on shared-services hosting, even if only for a single application, shouldn’t be taken lightly.

“You really have to make a commitment and make sure that any shared service is done in support of the mission and that the service is continually measured, benchmarked and improved,” Smith says. “That sounds simple, but those are key ingredients. If you try to do this in bits and pieces, you will end up sub-­optimizing the model.”


The number of different, largely redundant IT management systems that agencies had invested in by 2010 at a cost of $1.74 billion

Source: Office of Management and Budget

Agencies should look to other providers before deciding to keep an IT function in-house, Smith says. The NASA Shared Services Center has already migrated parts of its customer relationship management support functionality for web services to a commercial service provider and is exploring other vendors to host its metrics application. It’s also in the process of migrating its data center to a multi-agency shared data center that is run by NASA and used by other agencies.

“We’re basically saying that we like shared services so much that we’ll be a consumer of shared services,” Smith states, noting that NASA and other agencies are improving their internal capabilities by migrating to private clouds whenever possible and finding ways to consolidate even further across existing services.

Tough Sell

Moving to shared services offers numerous benefits, as the consolidation of IT systems and applications eventually leads to consolidation of data centers and elimination of redundant resources, enabling huge cost savings and efficiencies.

Such benefits, however, don’t always register with end users, says Hale, who notes that selling a shared-services model to change-resistant users has always been more difficult than actually implementing one, which is why he welcomes the OMB directive.

He describes it as the ultimate in top-down sponsorship as DISA continues to expand its menu of common capabilities, including web-based file sharing, unified communications and collaboration, and mobile-device provision and management.

“The whole issue that individual services and departments have with not owning the service and the data, getting them to trust us and take that first step, remains our biggest hurdle in moving to shared services. But the Shared First initiative helps show that the federal CIO is completely aligned with what we are doing with our enterprise services,” Hale says. “This will be a huge help as budgets continue to tighten and we start to make what is really a monumental shift toward the use of enterprise services.”

<p>Richard Newstead/Getty Images (laptop)</p>

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