A recent blog (read it here) shows that working capital funds are growing at a faster rate than appropriated funds and suggests this represents a government-wide trend in centralizing administrative services. But is working capital the only way for government to centralize? Certainly not. Conversations between CEB and dozens of US federal government executives over the past 12 months have suggested agencies are experimenting with a number of different ‘centralizing’ options. Here are a few:
1. Technology Share—For a number of reasons, implementing new systems in government can be a challenge. The net result is that some agencies are simply more efficient than others at conducting the same task because they have the right tools to do so. Instead of trying to re-create those same systems in-house, some agencies are now simply asking to ‘rent space’ on those that are already up and running.
2. Co-Located Technology Share—This looks a lot like the Technology Share option, but staff from the agency that is renting space are physically located with the provider’s team and system. The benefit here is that staff can learn from their peers, but executives do not have to make as many formal changes to their function’s organization chart.
3. Centers of Excellence —Instead of renting space on a system, agencies fully outsource a specific transaction or administrative task to a peer organization (most commonly to a peer agency within the same Department). This enables functions, such as finance or HR, to become highly proficient at one particular task, and provide that task to a broader community in a more efficient way.
4. Department-Led Centralization—Backed by deep analysis and likely external benchmarking, Department leadership prioritizes areas for focused efficiencies. While recommendations can support any of the three methods outlined above, Department-led centralization often migrates more services to a centralized shared service center. In order to ensure success, these centers generally operate in a matrixed management structure and measure themselves against very tangible performance objectives.
5. Outsource within Government—Partially driven by supply and partially driven by demand, agencies are increasingly looking to outsource administrative services to other government entities. In these instances, the department might centralize services first via working capital and then outsource that service to an external provider, or agency executives may outsource directly to the provider. Some of the most common providers include the National Business Center, the National Finance Center, the Administrative Resource Center and the Program Support Center, to name a few.
Has your organization tried any of these? What do you think works best?