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Feds Embrace Private Sector for Outsourced Shared Services

Taking its cue from successes in the private sector, the U.S. federal government has strongly embraced the concept of shared services, including outsourced shared services, in a drive to simplify IT management—and save billions in taxpayer dollars.

In 2002, President George W. Bush issued the President's Management Agenda, which mandates that all federal agencies explore new ways to fulfill their mission with maximum efficiency. To that end, Linda Combs, controller at the U.S. Office of Management and Budget, declared in a 2006 directive that federal agencies "must consider pursuing hosting and application management shared services."

Now, two federal organizations are implementing Oracle On Demand solutions.

"The federal government is finally seeing the benefit of shared services and is fully committed to moving agencies into this type of environment," says Cindy Schwimer, Oracle's executive director of Public Sector Solutions and former controller and chief financial officer of the Office of Justice Programs, U.S. Department of Justice.

"Why have multiple IT shops managing software when one will suffice?" Schwimer adds. "Oracle On Demand allows agencies to spend limited resources on the mission of the agency and save taxpayer dollars at the same time."

Looking to Private Sector Models

With its myriad agencies and multiple legacy systems, the federal government hopes to achieve the kind of success experienced by private enterprises. With an aggressive acquisition strategy, a North American banking powerhouse found itself trying to wrangle 41 legal entities with a dizzying array of technological solutions. After turning to Oracle On Demand, the company was able to quickly implement a single end-to-end, enterprise-wide procurement system—the first element in a larger shared services strategy.

"Federal agencies rival Fortune 500 companies in both size and business complexity," says Schwimer. "If Pepsi Cola International and GE rely on Oracle On Demand, why not federal agencies?"

Why Oracle?

Long a trusted provider of technology to the federal government, Oracle is uniquely poised to deliver federal shared services solutions.

Oracle's state-of-the-art Austin Data Center has won a Tier IV rating from the Uptime Institute, meaning it provides multiple redundancy measures in the event of a catastrophic event—a vital capability in order to meet stringent federal government requirements. Oracle also received JD Powers certification for outstanding customer service—the first such certification for a software company.

Now Oracle has built and operates a dedicated Federal Zone inside the Austin Data Center. Housed in a specially constructed metal enclosure and encompassing a separate, independent network built specifically to meet federal government standards for data security, the first government customer installations within the Federal Zone are expected to win federal certification and accreditation in the summer of 2007.

The result will be a total solution—from Oracle applications through complete IT infrastructure to outsourced shared services—built specifically for federal agencies.

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