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John Smith works at XYZ agency as an office manager. Jill Doe works at XYZ agency as well as an auditor. John and Jill end up sitting next to each other for lunch at a conference their agency sent them both TDY to. As they get to know each other better the subject of their travel plans comes up. John says he is staying at the conference hotel paying 150% of the per diem. Jill states she was not allowed to go over per diem and is staying across town taking a taxi each day. John says he had to take a contract carrier to the conference and when they compare costs he discovers Jill took a penalty fare that cost half as much. John says when he gets back he will submit a paper voucher claim but Jill says she will use an automated system. As they leave the table, Jill says don’t forget to deduct the lunch that was provided today and John says what do you mean by deduct lunch?
John and Jill work for an agency that does not have centralized travel services. Although this story is fictitious, similar stories have been told by travelers who compare notes and find out although they work for the same agency they travel by different rules. Standardized and consistent policy is just one of the benefits of centralizing travel services. From working in a shared services arena over the last 15 years we have come to recognize significant benefits from centralization such as the following:
Back office efficiency – One example of this is the interface between the Electronic Travel System (ETS) to the financial system. Interfaces are costly and by moving to a centralized service all components can benefit from the development of one interface and one financial system. If financial systems are upgraded or changes to the interface are required, it only needs to be done one time.
Shared best practice – Once a best practice is identified it can be shared across the organization or customer base. Determining a system work-around is one example of this. Once the best method to perform a particular function is identified it can be shared with all system users.
Economy of scale – Fixed costs can be spread out across multiple customers or agency components. Costs for overhead, system testing, contract management and research and development are spread out over a larger base thus reducing costs for everyone.
Increased controls and process improvements - Internal controls will apply to all components served by the central service provider. Agencies that perform a yearly SSAE16 (previously known as SAS70) can develop internal controls that are consistently applied. Process improvements are a benefit to all.
Consistent Policy – As mentioned in the story above, inconsistent policy and practices only lead to traveler frustration and potentially unnecessary expenditures. As a Shared Service Provider we provide one travel policy guide to all customers that is updated as the Federal Travel Regulations are amended or best practices are identified. This guide allows for customers to identify areas they want to deviate from such as allowance for phone calls or number of miles from their Permanent Duty Station that are considered local travel. Customers can adopt this guide as their own and have it apply to all travelers.
In the early 1990′s the Bureau of Public Debt had two administrative offices. One that served the DC office and one that served the Parkersburg, WV office. Before the internet, when manual paper processing of travel was the norm, it made sense to have decentralized administrative support at each location. During the early 1990′s, administrative services were centralized in the Parkersburg, WV office providing remote support to employees still located in DC. The Bureau of the Public Debt recognized many benefits from centralizing administrative services. At this time the internet was just taking-off and it was recognized that this new way of communicating and sharing information could be used to provide services to other government agencies. Other government agencies could receive great administrative support and realize the same benefits that the Bureau of the Public Debt had received when they centralized their services.
On November 9, 2011 President Obama release Executive Order 13589 Promoting Efficient Spending which continues the administrative commitment to cut waste and promote efficient and effective spending. In line with Executive Order 13576 Delivering and Efficient, Effective and Accountable Government this new executive order calls for reducing the combined administrative costs by at least 20 percent from 2010 spending from several areas including travel. Agencies are now developing plans to comply with this order. Although this could result in less federal travel, there are also opportunities for agencies to look at all aspects of their travel including administration of their travel program. Centralizing the administration of travel can lead to traveling smarter which will allow agencies to reduce travel costs without reducing the number of trips. By looking at travel policy across the organization they can find ways to reduce costs. Policies such as requiring employees to ride together if driving to a TDY location, taking public transportation and not exceeding per diem for hotels can reduce overall travel spend.
Serving the last 15 years as a Shared Service Provider we have seen the benefit of consolidation and centralization. Many customers come to us with decentralized services and reap the benefits of centralizing their services when moving to a shared service center. As budgets are cut and the government looks for more ways to reduce costs, agencies will be looking at all their options. Decentralized services can be inefficient and expensive and with today’s technology it is no longer necessary.
By: Diana Bonnell
Disclaimer: The contents of this message are mine personally and do not reflect any position of the Government or my agency. Use of this equipment is consistent with the agency’s policy governing limited personal use.