CAMBRIDGE, Md. — Making lines of business efforts work is mostly a matter of planning ahead, according to panelists who spoke today at the Interagency Resources Management Conference.
"Big failures tend to be on the people side, the management side, and not on the technology side," said Larry Neff, deputy chief financial officer at the Transportation Department.
DOT runs a financial management shared-services center with the Government Accountability Office as its single largest user, and some smaller agencies are also signed on. The Financial Management Line of Business initiative is intended to concentrate financial management information technology services into a few agencies, which then provide the services to other agencies. The goal is to lower overall costs by reducing the duplication that comes when each agency runs its own financial management operation.
Smaller agencies have been the most eager users to sign up with the shared-services centers. Anton Porter, deputy CFO at the Federal Energy Regulatory Commission, said small agencies are hard-pressed to manage their own systems and welcome the help.
"They're very mission-oriented," he said. "What the shared-services model provides is the opportunity for the small agencies to focus strictly on mission."
Small agencies trying to run their own IT operations typically have little resilience, said John O'Connor, director of GAO's office of financial management.
-Michael Hardy, FCW.com
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Showing posts with label FERC. Show all posts
Showing posts with label FERC. Show all posts
Tuesday, April 15, 2008
Monday, August 13, 2007
Small in a big world
A tiny federal agency that provides grants to African enterprises and community organizations pays a shared-services provider to manage its financial transactions. The African Development Foundation has so few transactions that it could track them on a spreadsheet. Nevertheless, the micro-agency must comply with the same requirements for using certified financial management systems and internal controls as its super-sized siblings — the Defense and Homeland Security departments, for example.
The small foundation is among dozens of agencies that operate with staffs and budgets a fraction of those of the largest federal agencies. Think of them as the mom and pop stores of the federal government. Their size makes it difficult for them to meet the voluminous reporting and governance requirements established by Congress and the Office of Management and Budget, but they must play by the big boys’ rules.
Just as legislation affects all agencies regardless of size, the same is true when OMB issues a new policy. Small agencies must toe the line. Small-agency CIOs must be able to show OMB that their information technology spending produces the intended results and improves agency performance. They must produce documentation to show that their systems and data are secure, said Andrea Wuebker, an OMB spokeswoman.
Likewise, small-agency chief financial officers must accurately account for their resources and use internal controls to minimize waste and abuse.
To handle complex administrative functions and mandatory financial reporting requirements, many small agencies rely on shared-services providers, such as the Interior Department’s National Business Center, the Agriculture Department’s National Finance Center and the General Services Administration. Small agencies are ahead of big agencies in using shared-service providers because they can’t afford a big infrastructure, Forman said.
Shared-services providers offer small agencies the benefits of standardization in human resources, payroll and financial management transactions. That’s a major theme of OMB’s Financial Management Line of Business. OMB wants all agencies to move to public or private shared-services providers when they upgrade or acquire new financial systems.
For small agencies, however, shared-services also have a downside, Westfield said.
Small agencies have experienced continuous fee increases and added costs for system upgrades at the same time more agencies are using shared-services providers, he said.
Small agencies do share a common concern about IT governance as OMB presses forward with its Financial Management Line of Business, said Anton Porter, deputy CFO at the Federal Energy Regulatory Commission. Porter is also the small-agency liaison to the CFO Council.
Many small agencies that have already outsourced their financial management operations to public shared-services providers are in a quandary about how they would go about conducting competitions among public and private shared-services providers, Porter said. To prepare for the type of competitions that OMB and the General Services Administration require under the Line of Business rules, an agency would be in the awkward position of having to depend on its current shared-services provider to compile a list of requirements that would satisfy the agency’s business needs
-Mary Mosquera, FCW.com
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The small foundation is among dozens of agencies that operate with staffs and budgets a fraction of those of the largest federal agencies. Think of them as the mom and pop stores of the federal government. Their size makes it difficult for them to meet the voluminous reporting and governance requirements established by Congress and the Office of Management and Budget, but they must play by the big boys’ rules.
Just as legislation affects all agencies regardless of size, the same is true when OMB issues a new policy. Small agencies must toe the line. Small-agency CIOs must be able to show OMB that their information technology spending produces the intended results and improves agency performance. They must produce documentation to show that their systems and data are secure, said Andrea Wuebker, an OMB spokeswoman.
Likewise, small-agency chief financial officers must accurately account for their resources and use internal controls to minimize waste and abuse.
To handle complex administrative functions and mandatory financial reporting requirements, many small agencies rely on shared-services providers, such as the Interior Department’s National Business Center, the Agriculture Department’s National Finance Center and the General Services Administration. Small agencies are ahead of big agencies in using shared-service providers because they can’t afford a big infrastructure, Forman said.
Shared-services providers offer small agencies the benefits of standardization in human resources, payroll and financial management transactions. That’s a major theme of OMB’s Financial Management Line of Business. OMB wants all agencies to move to public or private shared-services providers when they upgrade or acquire new financial systems.
For small agencies, however, shared-services also have a downside, Westfield said.
Small agencies have experienced continuous fee increases and added costs for system upgrades at the same time more agencies are using shared-services providers, he said.
Small agencies do share a common concern about IT governance as OMB presses forward with its Financial Management Line of Business, said Anton Porter, deputy CFO at the Federal Energy Regulatory Commission. Porter is also the small-agency liaison to the CFO Council.
Many small agencies that have already outsourced their financial management operations to public shared-services providers are in a quandary about how they would go about conducting competitions among public and private shared-services providers, Porter said. To prepare for the type of competitions that OMB and the General Services Administration require under the Line of Business rules, an agency would be in the awkward position of having to depend on its current shared-services provider to compile a list of requirements that would satisfy the agency’s business needs
-Mary Mosquera, FCW.com
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Tuesday, February 20, 2007
The big issue for FM LOB
Small agencies see the benefits in shared services, but large agencies don’t want to give up their control
The Office of Management and Budget’s plan to turn agency financial management upside down has left many large agencies with motion sickness.
Large agencies shudder at the thought of outsiders performing their financial-management processes, and that fear is causing a delay in the across-the-board savings OMB has been hoping to achieve under the Financial Management Line of Business Consolidation effort.
“Hosting, that’s not scary. Someone else handling your business processes, that’s scary,” said Danny Harris, Education Department deputy chief financial officer and team leader of the Financial Systems Oversight Team for the CFO Council. “Nightmares of poor internal controls come to mind.”
At least five large agencies have justified not moving to one of the four public-sector shared-services providers or a private-sector vendor in the past few years. Their justifications centered on the fact that they were already implementing a new system or upgrading an existing one that meets the governmentwide financial requirements (see story, Leaders want reporting on same page, Page 8).
While large agencies have been tepid about using the FM LOB, small agencies are jumping on the shared-services-provider bandwagon in large numbers. And these smaller agencies may have something to teach their larger brethren when it comes to moving to SSPs.
Small agencies have been taking advantage of shared services for years, even before OMB initiated the Financial Management Line of Business, said Anton Porter, deputy CFO at the Federal Energy Regulatory Commission and liaison for small agencies to the CFO Council.
“If you are a large agency, you don’t see any real examples of a shared-services provider handling a large external customer that has a tremendous amount of volume and complexity in their financial-business processes,” Harris said.
And there really are no commercial providers that handle a large volume of federal financial business transactions, he said.
Despite the perception that shared-services providers cannot adequately handle large agencies’ business, the providers can indeed handle the volume of transactions, locations, number of dollars and the number of heavy users, said Doug Bourgeois, director of the Interior Department’s National Business Center, a financial-management and human resources shared-services provider. NBC, for example, is supporting Interior’s move to Financial Business Modernization System, including operations and services, he said.
OMB directed in the fiscal 2006 budget request that agencies migrate their core financial services to providers when they upgrade their financial-management systems.
OMB said that, to date, of the 25 CFO Act agencies, four have become SSPs and four have migrated to one of them, including the Environmental Protection Agency earlier this month (see story, Page 8). Currently, the Agriculture Department, Housing and Urban Development Department, and the Office of Personnel Management are in various phases of their FM LOB competitions, OMB said.
Over the next 10 years, OMB anticipates that two to three of the CFO Act agencies annually will compete to migrate to a shared-services provider.
The Federal Accountability for Tax Dollars Act of 2002 placed the same financial reporting requirements on small agencies as on large CFO Act agencies, including requirements for financial statements and use of a financial system that meets federal requirements.
For larger agencies, OMB and FSIO need to bolster the business case to move. Agencies have to have good financial, programmatic and management reasons to move, Harris said.
The likely scenario is that FM LOB will prove to be good for small agencies; some large agencies will come aboard, some will not, Bourgeois said.
“From a leadership standpoint, it may not be the right answer because economies of scale and effectiveness gains are not achieved until you migrate the service part,” he said. “The transactions and operations folks are where you get maximum effectiveness and efficiency gain for the government.”
- Mary Mosquera, GCN.com
READ MORE...
The Office of Management and Budget’s plan to turn agency financial management upside down has left many large agencies with motion sickness.
Large agencies shudder at the thought of outsiders performing their financial-management processes, and that fear is causing a delay in the across-the-board savings OMB has been hoping to achieve under the Financial Management Line of Business Consolidation effort.
“Hosting, that’s not scary. Someone else handling your business processes, that’s scary,” said Danny Harris, Education Department deputy chief financial officer and team leader of the Financial Systems Oversight Team for the CFO Council. “Nightmares of poor internal controls come to mind.”
At least five large agencies have justified not moving to one of the four public-sector shared-services providers or a private-sector vendor in the past few years. Their justifications centered on the fact that they were already implementing a new system or upgrading an existing one that meets the governmentwide financial requirements (see story, Leaders want reporting on same page, Page 8).
While large agencies have been tepid about using the FM LOB, small agencies are jumping on the shared-services-provider bandwagon in large numbers. And these smaller agencies may have something to teach their larger brethren when it comes to moving to SSPs.
Small agencies have been taking advantage of shared services for years, even before OMB initiated the Financial Management Line of Business, said Anton Porter, deputy CFO at the Federal Energy Regulatory Commission and liaison for small agencies to the CFO Council.
“If you are a large agency, you don’t see any real examples of a shared-services provider handling a large external customer that has a tremendous amount of volume and complexity in their financial-business processes,” Harris said.
And there really are no commercial providers that handle a large volume of federal financial business transactions, he said.
Despite the perception that shared-services providers cannot adequately handle large agencies’ business, the providers can indeed handle the volume of transactions, locations, number of dollars and the number of heavy users, said Doug Bourgeois, director of the Interior Department’s National Business Center, a financial-management and human resources shared-services provider. NBC, for example, is supporting Interior’s move to Financial Business Modernization System, including operations and services, he said.
OMB directed in the fiscal 2006 budget request that agencies migrate their core financial services to providers when they upgrade their financial-management systems.
OMB said that, to date, of the 25 CFO Act agencies, four have become SSPs and four have migrated to one of them, including the Environmental Protection Agency earlier this month (see story, Page 8). Currently, the Agriculture Department, Housing and Urban Development Department, and the Office of Personnel Management are in various phases of their FM LOB competitions, OMB said.
Over the next 10 years, OMB anticipates that two to three of the CFO Act agencies annually will compete to migrate to a shared-services provider.
The Federal Accountability for Tax Dollars Act of 2002 placed the same financial reporting requirements on small agencies as on large CFO Act agencies, including requirements for financial statements and use of a financial system that meets federal requirements.
For larger agencies, OMB and FSIO need to bolster the business case to move. Agencies have to have good financial, programmatic and management reasons to move, Harris said.
The likely scenario is that FM LOB will prove to be good for small agencies; some large agencies will come aboard, some will not, Bourgeois said.
“From a leadership standpoint, it may not be the right answer because economies of scale and effectiveness gains are not achieved until you migrate the service part,” he said. “The transactions and operations folks are where you get maximum effectiveness and efficiency gain for the government.”
- Mary Mosquera, GCN.com
READ MORE...
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