Cost increases from the Interior Department's National Business Center led the U.S. Equal Employment Opportunity Commission to turn to a commercial cloud provider for financial management services.
Cost increases significantly above initial estimates provided by an inter-agency agreement with the Interior Department’s National Business Center led the U.S. Equal Employment Opportunity Commission to turn to a commercial cloud provider for financial management services.
EEOC picked Global Computer Enterprises to provide comprehensive federal financial management services after relying for years on the National Business Center for support services. As an interagency shared-services provider, NBC offers federal agencies access to government financial management systems, human resources packages, acquisition automation and other enterprise services.
The new five-year contract with GCE, which has a base period of 20 months with four one-year options, is worth up to $10 million if all options are exercised, according to GCE executives.
EEOC had to bring the operation and maintenance expenses associated with the agency’s financial management system under control, said Jeff Smith, EEOC’s chief financial officer.
“We were being presented with cost budget proposals for operations and maintenance from the National Business Center that exceeded increases of 25 percent per year,” Smith said. That was simply unsustainable with a budget in which 72 percent goes to payroll, he said.
Plus, the Shared Services Provider agreement with NBC was set to expire in fiscal 2012, so the EEOC had to make a decision about what to do with its financial management services anyway, he said.
In June 2010, Office of Management and Budget policy changes for financial management systems freed small agencies from relying solely on federal shared providers for their financial services. As a result, EEOC opened up competition for financial management services to the private sector.
GCE’s success in moving the Department of Labor’s aging financial management system to a cloud-based environment based on Oracle Financial software was an important factor during the request for proposal process as EEOC looked for examples of GCE’s past performance. GCE helped Labor migrate to the cloud in 18 months for $10 million.
“This is not something we would have undertaken without some other agency having done it with this vendor,” Smith said.
The move is EEOC’s first foray into cloud computing, said CIO Kimberly Hancher, noting that small agencies like EEOC are also required to move three applications to the cloud within 18 months as part of the Obama administration’s cloud-first policy.
“We are going to call this solution the Financial Cloud System,” Hancher said.
GCE will convert data from a system based on CGI Group Inc.’s Momentum Plus software to the company’s Oracle Financials-based system that will be provided as a software-as-a-service offering to EEOC, which has a geographically distributed workforce, Hancher said.
“Preliminary numbers suggest we are going to save 40 percent a year that would have been our operations and maintenance cost in future years,” Smith said.
However, Smith emphasized that this 40 percent savings cannot be attributed just to moving to the cloud but rather as a bundling of all of the services that GCE will offer. Those will include future upgrades, hosting, technical support, help desk, business process transactions -- such as vendors sending invoices directly to the contractor -- travel payments and accounts receivables, he noted.
EEOC is also satisfied with GCE’s stance on data ownership and security, two major areas of concern for agencies considering the move to the cloud.
“We are very comfortable that this is our data, we own it,” Smith said. If at the end of the contract someone else happens to win, EEOC owns the data, he said, adding that the agency is very comfortable with GCE’s security structure as well.
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