What is Shared Services?
Posted on: December 10, 2015

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Overview of Shared Services

Shared services is more than just a simple consolidation of back office functions.  Rather, it is a holistic business reengineering transformation across an enterprise or region to streamline organizational functions, reduce overhead costs and free up personnel to focus on higher priority tasks. Shared services providers use service level agreements and chargeback models to support customer agencies with information technology, human resources, financial management, acquisition and leasing functions.

In May 2014, the Office of Management and Budget (OMB) updated its federal shared services guidance for government agencies. The shared services initiative focuses on utilizing high-quality, high-value services among federal agencies to reduce redundancies, cut costs, increase efficiencies, and improve customer service.  OMB designated four agencies as the top shared services providers for other components and departments conducting financial systems modernizations.

Industry Challenges

Federal organizations are faced with numerous challenges that thwart the successful assessment, planning and/or implementation of successful shared services transitions.  Some of the key issues include:

  • Lack of strategic vision among top leadership
  • Difficulty managing the transition effectively
  • Absence of advice from shared services experts
  • Poor understanding of existing providers and most feasible options
  • Implementation plan not customized to the agency

Operating Models

When transitioning to shared services, it is essential that federal agencies examine their organizational needs, existing systems and internal structures in order to determine the most appropriate operating model.  Additional considerations include ideal governance, customer service management and technology frameworks.

Geographical Model

Agencies that align with this model consolidate all shared business functions across the enterprise within a single location.  Advantages include extensive economies of scale, streamlined processes and consistent customer service.  Requires a high level of effort and change management planning to implement.



Functional Model

When workforce expertise is concentrated in certain geographical areas, shared services providers create functional centers of excellence based in these regions.  Benefits consist of high performing and specialized staff conducting a selection of services.  Requires a medium to high level of effort and change management to implement.


Geographical Model

Agencies with established regional customer networks and governance structures may lean towards a geographical model to suit existing demands.  In this model, services are shared based on location and may be transitioned in the future into the centralized model.  Requires a medium level of effort and change management to implement compared to the centralized model.


Z Street Consulting Solutions

Z Street Consulting supports the planning, resourcing, implementation, and optimization of shared services delivery models for clients by utilizing technology and the implementation of leading practices to achieve organizational cost savings for non-core, but mission-critical, services. Our professionals aid the analysis of alternatives and program management office activities to enable clients to:

  • Realize economies of scale.
  • Standardize end-to-end processes.
  • Successfully conduct organizational realignments.

Public sector organizations are faced with numerous challenges in assessing, planning and implementing a successful shared services transition.  Z Street Consulting assists clients in addressing these challenges in order to identify industry trends, assess organizational needs and present leadership with options on the shared services models and vendors that best apply to their workflows and workforce.

  • Benchmarking and Best Practices Research
  • Feasibility Assessments
  • Functional Requirements Gathering and Analysis
  • System Demonstration Planning
  • Program Management and Status Reporting
  • Communication and Stakeholder Engagement Strategy Development
  • Business Case Analysis
  • Change Management Planning and Execution
  • Policy Development
  • Continuous Process Improvement