As the federal government contends with tightening budgets, lean staffing and soaring citizen expectations, it faces a unique opportunity — and obligation — to modernize service delivery by investing in shared services. The notion of centralized provisioning might conjure up all sorts of challenges and issues; however, it is a proven avenue to lower costs, eliminate duplication and elevate service performance. While shared services isn’t the answer for all functions, we possess valuable learned lessons and survey feedback on shared services to create a powerful pathway to increase government effectiveness while lowering costs.

The federal government has demonstrated tangible benefits of shared services related to administrative systems. For example, between fiscal 2002 and 2015, consolidating payroll and HR systems generated more than $1 billion in cost savings and an additional $1 billion when 22 payroll systems were consolidated into four, according to the Government Accountability Office. A 2024 report published by the Federation of American Scientists noted that consolidating the payroll centers yielded cumulative savings exceeding $3.2 billion. Other measurable results include the General Services Administration’s fleet management program that consolidated more than 5,000 agency-owned vehicles on leasing, maintenance and administrative costs. Shared IT services have also expanded steadily, with the adoption of Login.gov, USAJOBS, and data center consolidation that saved over $2.8 billion, according to GAO and the Office of Management and Budget in 2020.

Why it matters — and why now

The federal government continues to advance priorities that improve citizen services while driving down costs as we enter the artificial intelligence era where AI, data and information are transforming industries, big data and human capabilities. Agencies are facing a pressing need to modernize IT systems, increase efficiencies by incorporating automation and AI, and increase cybersecurity. Without integrated business services, agencies will struggle to maintain infrastructure, secure their systems and modernize for the AI era. Consolidated IT investments, such as Login.gov and ID.me, have proven to provide stronger, more resilient platforms that enhance cybersecurity and protect mission-critical systems, provide standardized data and analytics and improve transparency.

Still, shared services must be implemented with care. Agencies need flexibility to select providers that best fit their mission-specific requirements. Focusing first on areas where agencies are already seeking solutions — such as accounting, fleet management and office space aligned by security requirements — offers a pragmatic path forward. Service providers must be held to strict performance standards, with service-level agreements ensuring that quality improves alongside efficiency. Equally important, strong leadership and coordination are necessary to sustain momentum.

Agencies like the Office of Personnel Management, GSA and Treasury, which have successfully acted as managing partners in the past, can provide the oversight and accountability required for long-term success. Rather than measuring Quality Service Management Offices (QSMOs) solely by their early momentum, their success should be understood in light of the current environment: smaller budgets, fewer staff and an increased focus on mission delivery. In this context, the adoption of integrated business services positions agencies for long-term gains.

Shared services provide the architecture for a more modern, efficient and mission-focused government. From payroll to fleet management to IT modernization, the federal government has demonstrated the value of this approach through billions of dollars in savings and significant performance improvements. With bipartisan policy support, proven blueprints and advances in shared platforms, the federal enterprise is well-positioned to expand shared services — carefully, collaboratively and with agency choice at its core. If pursued deliberately, shared services can become a cornerstone of fiscal responsibility and high-quality service delivery for the American people.

Erika Dinnie is the vice president of federal strategy and planning for MetTel. Before joining the company, Dinnie served as the General Services Administration’s associate chief information officer for digital infrastructure technologies for nearly 10 years, overseeing GSA’s IT infrastructure, systems, software and applications.

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