OMB prods agencies to merge HR, financial apps

• By Jason Miller
• Jan 08, 2004

To achieve consolidations, the administration vows to redirect fiscal 2005 funds

Agencies should be prepared to give up more money to governmentwide consolidation initiatives this year.

For the next 12 months, the Office of Management and Budget has set its sights on merging human resources systems and financial systems across government.

The reviews of fiscal 2005 budget documents that agencies received from the administration last month instructed CIOs to submit a list of human resources and financial systems that are in the planning or acquisition phases.

OMB wants to redirect redundant spending to support development of governmentwide standards and systems.

'These are some of the bigger issues beyond the [25] Quicksilver initiatives,' said Mark Forman, former OMB administrator for IT and e-government. 'OMB is moving forward with the lines of business consolidation work.'

These two requirements were among eight that OMB expects agencies to meet in 2004. One of the other requirements instructs agencies to sign fee-for-service agreements with the agencies managing the Recruitment One-Stop, E-Training, Grants.gov and Geospatial One-Stop projects.

Forman, who now is the executive vice president at consultant Cassatt Corp. of Menlo Park, Calif., said there is more than $2.6 billion in duplicative spending in the human resources and financial areas. In an analysis last summer, OMB found overlap in agencies' plans for 70 human resources systems worth $700 million and 120 financial systems worth $1.9 billion, Forman said.

Repeated requests to OMB for comment on the requirements went unanswered. Although the requirements do not become official until the president issues his 2005 budget proposal next month, it is highly unlikely OMB will change them since decisions at this point usually are firm, Forman said.

'This is not any different than what we saw with the e-government initiatives,' said an agency CIO who requested anonymity. 'We were looking at installing a new financial system, and I told my staff to be prepared for OMB to take the money.'

Giving up money

The CIO said the agency would give up a significant amount of money but wouldn't be sure how much until the budget and OMB's plans had been finalized.

'Our budget, like everyone's, is tight, so it will hurt,' the CIO said. 'But if it works, we will be able to save money, and that makes sense.'

Forman and agency executives said the result of this effort would be a handful of human resources and financial systems serving all of government. One official at a cabinet department said this likely would be similar to the E-Payroll project, through which the Office of Personnel Management is consolidating 22 payroll systems into four.

'The devil will be in the details,' one official said. 'This makes sense logically, but until they show success with E-Payroll and tell agencies how they will consolidate the systems, agencies will be wary.'

Forman, however, said chief human capital officers and some chief financial officers are excited about the opportunities.

'When OMB met with the human capital officers last summer, they didn't realize what other agencies were doing and how much savings they could use for other priorities if HR systems were merged,' he said. 'Working with CFOs may be a bit tougher because they are less likely to want to share.'