EXECUTIVE OFFICE OF THE PRESIDENT 

OFFICE OF MANAGEMENT AND BUDGET 

WASHINGTON, D. C. 20 503 

THE DIRECTOR May 4, 2016 

M-16-11 

S OF EXECUTIVE DEPARTMENTS AND AGENCIES 

FROM: 

SUBJECT: Improving Administrative Functions Through Shared Services 

The President, through his Management Agenda, is committed to creating a 21st Century 

Government that is more effective, efficient, supportive of economic growth, and fosters a 

culture of excellence in the Federal workforce. To that end, the Administration has launched 

various efforts to transform the delivery of common administrative services into a shared 

services model that will reduce duplication and redundancy and enable the government to 

redeploy funds to agency core mission activities. Focusing government resources on fewer 

systems and more standardized services will result in a more consistent and secure operating 

environment, while also improving both the quality and agility of administrative services. 

Administrative shared services are comprised ofthose activities that are common across 

all agencies and include functional areas such as financial management, human resources, 

acquisitions, and information technology. Currently, multiple shared service initiatives are 

managed independently within the Lines of Business (LOB)1 resulting in inconsistent guidance 

across functions. While each function operates in a unique environment with specific 

requirements and challenges, all LOBs would benefit from closer coordination and collaboration, 

supported by a more robust cross-functional governance model. A consistent enterprise-wide 

strategy to administrative shared services is a critical step in creating a more effective and 

efficient government. 

This memorandum builds on existing policies including the Federal Cloud Computing 

Strategy ofFebruary 8, 2011 ("Cloud First"), the Shared Services Strategy of May 2, 2012 

("Shared First"), OMB Memorandum M-13-02, Improving Acquisition through Strategic 

Sourcing, OMB Memorandum M-13-08, Improving Financial Systems Through Shared Services, 

the December 4, 2014, OMB Memorandum, Transforming the Marketplace: Simplifying 

Federal Procurement to Improve Performance, Drive Innovation, and Increase Savings, and 

1 Fonned in 2004, LOBs are cross-agency initiatives to defme, design, implement and monitor a set of common 

solutions for government-wide business functions, processes, or desired capabilities. Each LOB is governed by a 

Managing Partner who is designated as the lead organization responsible for managing the business requirements of 

their community. 

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implementation direction and guidance to shared service providers and customers on existing and 

future policy and business requirements (e.g., the HR LOB Business Reference Model). 3 

The LOB Managing Partners4 will continue supporting the LOB initiative by defining the 

processes and business rules associated with their respective business function; shaping existing 

or informing future policy by coordinating input from their respective stakeholder community 

and making recommendations to the appropriate policy authority; and by developing and 

managing a change management process for commonly used systems and/or services that 

ensures one Government voice of the user community. The USSM will assume responsibility 

for strategic management5 activities of shared services and will collaborate with respective LOB 

Managing Partners during the development of shared service implementation guidance. In 

addition, 120 days after the issuance of this memorandum, the USSM will develop a Concept of 

Operations (ConOps) for administrative shared services to be presented to the SSGB for 

approval. The ConOps will define the roles and responsibilities of all stakeholders in the shared 

service ecosystem. 

OMB's Office ofFederal Procurement Policy (OFPP) will develop a costing 

methodology that shall be used by all agencies as one part of a strategic assessment of 

marketplace alternatives that also include technical capability, past performance and other value 

factors. Consideration of all relevant costs and benefits in evaluating alternatives will help 

agencies make better management and investment decisions for administrative functions. 

Accordingly, OMB, USSM, and GWP As will work together to review guidance that has 

previously been issued to support agency development of business cases with the goal of 

identifying manageable practices that enable meaningful and efficient consideration of 

alternatives and use of shared service solutions whenever they make sense. In the meantime, 

agencies should continue to follow any specific government-wide policies currently in effect that 

have been issued by OMB, USSM, or GWP As regarding the consideration of shared services, 

such as OMB Memorandum M-13-08, addressing financial systems, or the HR LOB Exception 

Business Case. 6 

GSA's Office of Unified Shared Services Management (USSM) 

The USSM was established to oversee the current shared service ecosystem and provide a 

consistent long-term strategy for the expansion of administrative shared services. While each 

administrative function operates in an environment that offers unique requirements and 

challenges, there are commonalities that can be leveraged to benefit all LOBs. The USSM works 

3 The HR Business Reference Model (BRM) provides an end-to-end depiction of the HR business process that takes 

place at government agencies. 4 LOB Managing Partners include any future agencies designated by OMB to serve that role as well as agencies that 

were previously designated by OMB and can be found in Appendix B ofFY 2017 IT Budget- Capital Planning 

Guidance. 

5 Strategic management activities for shared services include activities such as managing the supply and demand in 

the marketplace, measuring success through common outcome-based performance measures, and ensuring 

implementation direction and guidance provided to existing or potential consumers align to Federal shared service 

policies. 

6 Refer to the May 18, 2007 OMB Memorandum, Competition Framework for Human Resources Management Line 

ofBusiness Migrations for additional information. 

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