The Back Office

by

Puzzle

I attended a recent meeting of federal agency budget analysts and came away elated (okay, it doesn’t take much).  The budget community is now actively engaged in collaborating across agencies!  Now this is significant.  The financial, audit, and personnel communities have been actively collaborating for years, but this is a big step for the budget community.

Why is this important for any President?

An important lesson from the 1990s was that the back office functions (sometimes called the business support operations) have to be able to collaborate across agency boundaries if policy makers want mission functions to effectively collaborate.  So if the President wants cross-agency attention on big national challenges, he or she has to ensure someone is tending to cross-agency efforts behind the scenes.

The classic example was the effort to have Defense and Veterans health care systems to co-locate and jointly deliver services to active military and retired veterans in the same location.  A pilot hospital out West was trumpeted as a success story, but when visited, there was a taped line across the hallway – one side delivered health care to the military, the other side delivered health care to veterans.  When asked why, it became clear that the back office functions were not integrated and that co-mingling services might actually endanger the health of the patients.  Why?  Well, the pharmaceutical codes, physician certifications, and medical protocols were different.  They could not jointly deliver medical services until they first integrated the back office functions.  The lesson: you need to align back office functions if you want mission-oriented functions aligned.  The Defense Department recognizes this and has invested heavily in attempts to integrate its 5,000 different business functions via its Business Transformation Agency.

About six years ago, the Office of Management and Budget (OMB) launched several efforts to begin to align selected back office functions across all federal agencies.  The driving motivation seemed to have been to reduce costs (initial estimates were $10 billion in savings), not necessarily increase collaboration.  A quick analysis had shown that multiple agencies were investing in the same systems for finance, personnel, etc.  The OMB mantra was “buy once, use many times.”  

Federal Enterprise Architecture.  The first effort was targeted at aligning technology and transaction processes. This effort is called the Federal Enterprise Architecture.  Its ambitious goal is to create a framework for government services that shows their interrelationships in ways that drive common standards, inform investments in systems, and leverage electronic delivery of services. 

Lines of Business.  The second major effort to align back office functions is the Lines of Business initiative.  This effort is attempting to: (a) develop common standards and processes in nine specific functional areas such as human capital, financial management, budget, and (b) offer shared services around those functional areas where cross-agency service delivery makes sense.  There is an obvious interrelationship with the Federal Enterprise Architecture effort.

Each of the Lines of Business initiatives has developed its own governance structure comprised of staff from across the government and each has its own executive “portfolio manager” and an agency-level “managing partner.”  So for example, the portfolio manager for the Budget Formulation and Execution Line of Business is in OMB and the program manager is in the Department of Education’s budget office.  The Budget Line of Effort has created a collaborative community across the government where members share best practices, work together on data calls from OMB, and are beginning to define and develop common processes via an invitation-only wiki that has more than 5,000 members.

These various collaborative communities are making amazing progress in knitting together back office functions across the government. This not only can save money by reducing duplication, but it has an important role in increasing mission-related collaboration.   However, collaborative networks like these tend to be fragile – they are often based on interpersonal relationships and goodwill.  These are put at risk in any change of Administration.  So a challenge for the next President is to make sure these efforts do not inadvertently stall out.

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