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GCN Home > 01/10/05 issue

Cost pressures speed back-office consolidations

By Wilson P. Dizard III, GCN Staff

Tight budgets will accelerate back-office systems consolidations this year. Several efforts are gaining traction as agencies look to reduce redundancies and cut costs by integrating systems.

But agencies face special risks when merging their finance, accounting, budgeting, travel and procurement operations, current and former government IT officials say. The projects are technically challenging and often call for IT managers to balance the agendas of several agencies within a department.

Back-office consolidations are “a straightforward way to gain efficiencies. Agencies can save money from avoiding the need to maintain and update redundant systems,” said Steve Kelman, a professor at Harvard University’s Kennedy School of Government.

Kelman, administrator of the Office of Federal Procurement Policy during the Clinton administration, noted that federal IT leaders confront several risks in such projects. “When agencies develop customized software, the systems may either not work or be too expensive.”

He said coordinating different systems across organizations within a department also poses problems, “but the bigger risk is to get more than one functional system to talk to another system.”

Several ambitious back-office projects at major agencies—including the Justice, Homeland Security and Transportation departments—are poised to reach major milestones this year.

Justice now uses six separate financial systems relying on different business processes and applications, CIO Vance Hitch said at a recent meeting sponsored by Input of Reston, Va.

“From a central Justice Department standpoint, it is very difficult for us to produce consolidated financial statements,” he said. “We have problems as we do the audits of the components each year because the systems are all different.”

Justice is launching the Unified Financial Management System and testing the Momentum Financials enterprise resource planning app from CGI-AMS, the operating arm of CGI Group Inc. of Montreal, to see if it is suitable.

Hitch predicted Justice would soon begin an acquisition to implement its consolidated financial system.

More news on related topics: E-Government, Web Strategies, COOP / Telework



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