I’m skeptical of Tim Rund’s proposal for using “shared services” to cut federal spending:
As the national debt clock spins towards the flashing red zone of 20 trillion dollars — a level greater than our gross domestic product — policymakers will need to find serious solutions to balance the nation’s books. The challenge ahead is one that will only be solved with a combination of policy changes, novel practices, and specific reform initiatives conducted over time. Fortunately, a handful of promising options are starting to emerge, which may help to broadly reduce federal expenditures and serve as catalysts for institutional change in government planning and execution.
One of these options is Shared Services — an increasingly attractive and sensible concept that is gaining interest in both the executive branch and Congress. Shared services is basically an administrative service designed to meet common, standardized requirements of multiple agencies with delivery of those services by third-party providers (public or private), often in the areas of information technology, business processes, or labor components. Though not entirely new, the idea of shared services in government is particularly timely and valuable now, given the pressing need to cut costs and reduce waste wherever we can. Beyond the obvious fiscal advantages, shared services also represents a data-driven, targeted, and fact-informed approach to reducing unnecessary government duplication, agency stove-piping, and other counter-productive inefficiencies that too often mark the operations of government. Shared services is not simply a way to save money, but a way to get government to work better for its citizens.
for three reasons. First, isn’t that exactly what the GSA is supposed to do? He doesn’t mention the GSA once in his op-ed. Is he unaware of what it does? Does he think its role should be expanded? Does he think it isn’t doing its job?
Second, the state of Illinois consolidates shared services under Central Management Services. I don’t believe its track record would show that it has saved money. In information technology terms it’s between one and two decades behind where most large companies are these days. IMO that’s no accident but inherent to the procurement and policy approaches inherent to government at all levels.
Third, a fundamental principle of optimization theory is that your best target for optimization is where there’s the most to optimize. In the federal government that’s health care spending, Social Security, military spending, and interest on the debt. Everything else is small potatoes in relative terms but all three of those are political hot potatoes.
Yeah, I’m very skeptical. There’s also a problem of scale bureaucratic power and prerogative.
When I worked for the Feds I was a small cog in the largest Microsoft Exchange network on the planet and much of that had been centralized. It became a case of the cart leading the horse.
My observations from watching the state from the dirt floor is that compartmentalized versus shared services is an evergreen dispute. The argument against is usually that an agency has specific needs (which is why the legislature created them in the first place) and should be given the ability to shape its policy and systems for those needs. If the services are ultimately to be filled by third-party providers, I’m not sure the benefits are all they are made out to be.
One of the issues, and this might just be Illinois, is whether the centralized services then get “billed” to the specialized agency using them. In such cases, the specialized agency may simply forego the services, just as it would forego employing outside consultants, as long as possible in order to balance its own budget.