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Tuesday, May 16, 2006

‘Teeth and consequences’

Agencies warm to outsourcing, but also must understand the challenges that go with choice

While some agencies consider the move to centers of excellence under the Office of Management and Budget’s lines of business initiatives for human resources and financial management, others are finding the private sector a viable alternative.

The Small Business Administration, for example, was ahead of the game when, nearly three years ago, it turned over the back-office functions of its financial management system to Corio Inc. (since then bought by IBM Corp.). The move not only saved the agency money, it also freed SBA workers to focus on the agency’s mission.

“SBA’s entire focus is toward delivering mission-specific results, and hosting a data center for our financial management doesn’t really fit with that,” said Stephen Galvan, SBA’s chief of staff and chief operating officer.

Under the Lines of Business initiatives, OMB encourages agencies to sign up with agency centers of excellence or their private sector counterparts for back-office functions, such as human resources and financial management, that are common to all government agencies.

But the administration wants agencies to consider all options as they perform their due diligence.

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