Building the Enterprise - Booz Allen Hamilton

BUILDING THETHE ENTERPRISENine Strategies for a More Integrated, Effective GovernmentAUGUST 2013BUILDING THE ENTERPRISEa

The Partnership for Public Service is a nonpartisan, nonprofit organization that works to revitalize the federal governmentby inspiring a new generation to serve and by transforming the way government works.Booz Allen Hamilton has been at the forefront of strategy and technology consulting for nearly a century. Today, BoozAllen is a leading provider of management consulting, technology, and engineering services to the US government indefense, intelligence, and civil markets, and to major corporations, institutions, and not-for-profit organizations. In thecommercial sector, the firm focuses on leveraging its existing expertise for clients in the financial services, healthcare,and energy markets, and to international clients in the Middle East. Booz Allen offers clients deep functional knowledgespanning consulting, mission operations, technology, and engineering—which it combines with specialized expertise inclients’ mission and domain areas to help solve their toughest problems.The firm’s management consulting heritage is the basis for its unique collaborative culture and operating model, enablingBooz Allen to anticipate needs and opportunities, rapidly deploy talent and resources, and deliver enduring results. Bycombining a consultant’s problem-solving orientation with deep technical knowledge and strong execution, Booz Allenhelps clients achieve success in their most critical missions—as evidenced by the firm’s many client relationships thatspan decades. Booz Allen helps shape thinking and prepare for future developments in areas of national importance,including cybersecurity, homeland security, healthcare, and information technology.Booz Allen is headquartered in McLean, Virginia, employs more than 23,000 people, and had revenue of $5.76 billionfor the 12 months ended March 31, 2013. For over a decade, Booz Allen’s high standing as a business and an employerhas been recognized by dozens of organizations and publications, including Fortune, Working Mother, G.I. Jobs, andDiversityInc. More information is available at www.boozallen.com. (NYSE: BAH)bPARTNERSHIP FOR PUBLIC SERVICE | BOOZ ALLEN HAMILTON

PREFACEWhen we launched this project one year ago, ourgoal was to define and articulate a set of reformsthat would help guide the presidentialmanagement agenda. We started by interviewing someof the smartest public management experts we know—seasoned practitioners and policy makers who have conceivedand implemented government reforms, scholarswho have studied and documented reform efforts foryears, and executives who are driving management innovationin the public and private sectors.It was immediately obvious that the task was goingto be complicated. Many good ideas were tested duringthe past two decades by the Clinton and Bush administrations.The Obama administration abandoned some andadopted others in whole or part, and in July 2013 recommittedto strengthening three pillars of its managementagenda—improved service delivery, reducing waste andsaving money, and increasing the transparency of governmentdata.While our experts offered a wide range of differingproposals for improving government operations, consensusemerged around two basic themes: one, that fiscal constraintsprovide both incentive and opportunity to findsmarter ways of doing the people’s business; two, that theproblems our nation faces—from national security to theeconomy to health care—are growing increasingly complexand cannot be solved by any individual agency. Mostchallenges today require the collective action of severalagencies and, in many instances, the engagement of local,state and international partners in the public and privatesectors. The problem is that our government is not set upto easily achieve such unity of effort and often has multipleagencies and programs acting separately to achievethe same or similar outcomes—a hindrance for both theemployees who must perform government missions andfunctions, as well as for those who depend on them.So the recommendations in this report focus on acentral premise: Our government must take a more coordinated,multiagency, whole-of-government approach—in other words, an enterprise approach—to the nation’smost difficult and enduring challenges.In times of crisis, Americans are very good at rallyingaround a desired outcome once it has been clearlydefined. Defeat the Nazis. Make sure war-torn Japan andEurope survive as democratic societies. Win the race tothe moon. Take care of the elderly. Clean the polluted airand water. Fight terrorism. Crises focus us and unify ourgovernment. Agencies collaborate and act as one. Government’sresources are marshaled and applied. But in theabsence of obvious, pressing crises, this unity of purposeand action is the exception rather than the rule. Giventhe nature of the challenges that our government and nationface, that must change. Our bottom line is that governmentmust approach its work as an enterprise everyday to tackle today’s critical challenges. Spur economicgrowth. Reduce joblessness. Fix education. Safeguardfood. Halt nuclear proliferation. Secure cyberspace.By taking a multiagency enterprise approach to thosechallenges, we can build on the progress of the past twodecades, improve the overall performance of the federalgovernment and, in so doing, restore the American public’strust and confidence in it.The outcome we seek is a federal government thatacts as a single, integrated enterprise—not a set of disconnectedagencies and programs—in taking on its biggestproblems.Max StierPresident and CEOPartnership for Public ServiceLloyd W. Howell Jr.Executive Vice PresidentBooz Allen HamiltonBUILDING THE ENTERPRISE 1

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THE CASE FOR ENTERPRISEWhen Superstorm Sandy wreaked havoc in themid-Atlantic region during the fall of 2012, theFederal Emergency Management Agency coordinateda massive federal response, drawing life-savingsupport services from the Department of Defense (DOD),help for utilities from the Department of Energy (DOE),housing assistance from the Department of Housing andUrban Development (HUD), medical teams from theDepartment of Health and Human Services (HHS) andmuch more.The response to the destructive hurricane demonstratedhow government can and must act collectivelyduring a crisis and incorporated the lessons learned frommissteps seven years earlier during Hurricane Katrina.Perhaps the most important of those lessons was theneed for a comprehensive management framework tounify federal, state, local and nongovernmental disasterresponse efforts. That framework was put in place, and itproved its worth in the aftermath of Sandy.But coming together as an enterprise only duringa crisis is not sufficient. Increasingly, the problems ourgovernment faces require that same sort of collective actionday in and day out. In other words, the remarkableinteragency collaboration we saw during Sandy mustbecome the rule rather than the exception. However, ittakes more than just a declaration to that effect. As welearned in the aftermath of Katrina, it takes managementrules, procedures and leadership to enable federal agenciesto work in a more unified and coordinated manner.Historically, the federal government has been structuredwith each department and agency having its ownmission. Today’s challenges rarely fit into nice, neat bureaucraticboxes. By virtue of its very structure, the federalgovernment does not often act as a single enterprisebut typically performs just the way it is organized—asseparate, largely independent agencies that do not integrateand leverage their resources and expertise towarda common end.Examples of such fragmentation are numerous. TheGovernment Accountability Office’s (GAO) 2013 updateof government operations that are considered to be highrisk cited the 15 agencies that have overlapping responsibilityfor administering our nation’s food safety laws. 1All have different officials in charge, different chains ofcommand, different budgets and different overseers inboth the executive and legislative branches, despite theirshared, common mission. It is a testament to their commitmentto that mission that it is performed so well, butimagine how much more efficiently and effectively itcould be accomplished (and how much safer our foodsupply would be) if the efforts of those 15 agencies weremore integrated and unified.The GAO also reported that HUD, the Departmentsof Commerce and Agriculture, and the Small BusinessAdministration operate 53 different economic developmentprograms for businesses in poor and disadvantagedareas. Yet these separate training, counseling, grantand loan programs seldom work in tandem to meet theneeds of entrepreneurs or taxpayers. These departmentsand agencies are attuned to their own missions, budgets,programs and different congressional authorization andappropriations committees even though they all have astake in a common goal. 2Overlap and redundancy are by no means limited to1 Government Accountability Office, High Risk Series, an Update, Feb.2013, 196–201.2 Government Accountability Office, 2012 Annual Report: Opportunitiesto Reduce Duplication, Overlap and Fragmentation, Achieve Savingsand Enhance Revenue, Feb. 2012, 52–61.BUILDING THE ENTERPRISE 3

cross-cutting mission areas. Theyalso occur with mission-supportfunctions, such as purchasing goodsand services and cutting payrollchecks. Suboptimal performance,duplication of effort, inefficiencyand wasted resources are the result.For example, agencies regularlypay too much for commodity purchasesbecause they fail to leveragethe combined buying power of thefederal enterprise. Thus, while manyagencies, such as the Department ofCommerce, have consolidated IThardware and software purchaseswithin their own ranks to save millionsof dollars, this same approachapplied across government couldsave hundreds of millions of dollars.Needless duplication and overlapalso abound in the government’shandling of security clearance backgroundinvestigations to determinesuitability for federal hiring. Multipleagencies have made separateand costly investments in electroniccase management and adjudicationsystems for background investigationsinstead of working together tocreate and use a shared system, accordingto the GAO. 3The president and the executivebranch must redouble their effortsto take a more holistic, enterpriseapproach to the multiagency missionsand functions of government.When we say that the federal governmentshould act more like an enterprise,we mean that it should betterintegrate and unify the efforts ofthe executive departments, agencies,bureaus and offices to achieve crosscuttinggoals, missions and functionsthat individual agencies cannot effectivelytackle on their own.While fully recognizing thatmany challenges require the participationof state, county and localgovernments as well as private organizationsand institutions and internationalpartners, we have chosen tolimit the boundaries of this report to3 Ibid. 79–83.“When we say that the federalgovernment should act morelike an enterprise, we meanthat it should better integrateand unify the efforts of theexecutive departments,agencies, bureaus and officesto achieve cross-cutting goals,missions and functions thatindividual agencies cannoteffectively tackle on their own.”focus specifically on the operation ofthe executive branch of the federalgovernment. However, the enterpriseapproach we advocate is justas necessary in tackling intergovernmentaland international challenges,and just as applicable.Taking the enterprise approachdoes not mean that government missionsand functions must be centralized.That approach has its ownset of bureaucratic problems. Norare we suggesting that current departmentaland agency missions beeliminated or that government bemassively reorganized. History hasshown that restructuring governmentis a politically charged, expensiveand time-consuming processthat often has unintended consequences.It typically fails to attackthe root causes of a particular issueand, most importantly, diverts attentionfrom solving problems thatnow mutate faster than any reorganizationcan match. We need an approachthat is as adaptive and flexibleas the challenges it is designedto overcome.The enterprise model describedthroughout this roadmap meets thisobjective. Unlike past managementreforms, it minimizes the need forlegislation or wholesale restructuring.However, it does require morethan interagency committees, councilsand task forces—the traditionalapproach when agencies are forcedto work together. It will require culturechange and commitment by seniorleaders, as well as investment inmanagement infrastructure.The president and the executivebranch can employ this new modelto address national public policygoals and cross-cutting federal missions,such as securing our nationand its borders, protecting our interestsabroad, ensuring food safety,sustaining economic growth and development,assuring a well-trainedand educated workforce, fosteringpublic health, facilitating internationaltrade and delivering social4 PARTNERSHIP FOR PUBLIC SERVICE | BOOZ ALLEN HAMILTON

services. Further, applying an enterpriseapproach will increase savings,result in substantial efficiencies andimprove outcomes in cross-governmentaladministrative functionssuch as the management of finances,human capital, information technology,procurement and real property.For example, HUD and the Departmentof Veterans Affairs (VA)have collaborated successfully on agoal of ending homelessness amongveterans by 2015. Under the directionof the departmental secretaries,teams have coordinated the use ofHUD vouchers for veterans to rentprivately owned housing and targetedVA services such as health care,mental health and substance abusetreatment, vocational assistance, andjob development and placement. Aninteragency team of executives fromVA and HUD leads the effort in tandem,providing the two departmentswith weekly updates on voucher use,along with detailed reports on thestatus and recent activity of everyveteran in the program. Both departmentshave cooperated to ensurethat resources are being properlydeployed and goals are being met.The homelessness initiativecame about because of the personalcommitment of two Cabinet secretaries,who sent a strong signalthat the issue was important, madeclear they wanted their staffs to collaborateand sustained their commitmentto dealing in an integratedway with multiple issues affectingveterans. The administration reportedthat the program has resulted ina 17.2 percent decline in veteranshomelessness from January 2009through January 2012, even in theface of difficult economic conditionsand a growing veterans population.We need to institutionalize thisapproach as a way of doing businessand make sure it is sustained and notdependent on the personality andgoodwill of Cabinet secretaries, whoafter several years may depart andleave cross-agency initiatives withouta champion.What we propose is not withoutprecedent or foundation. The seedsof an enterprise approach to governmentcan be found in the GovernmentPerformance and ResultsAct of 1993 (GPRA) and its progeny,the Government Performance andResults Modernization Act of 2010(GPRAMA). Together, these statutesprovide a basis for agencies to worktogether in a more coordinated andcross-cutting way.GPRA is a watershed law that forthe first time required agencies to setconcrete performance goals, developstrategic plans to achieve thosegoals, measure their performance“We need an approach thatis as adaptive and flexibleas the challenges it isdesigned to overcome.”against them, and report their progressto Congress. It also required theOffice of Management and Budget(OMB) to craft a government-wideperformance plan to provide a perspectiveacross agencies. OMB didso, issuing plans in 1998 and 1999 aspart of the federal budget process,but the initiative was subsequentlyabandoned. As one government expertnoted, the government-wideplan was “a document in search ofan audience” because “no one feltownership” in the executive branchor in Congress.Times have changed. GPRAMAlaid the foundation for an enterpriseapproach to government byrequiring the White House to identifyand establish a small number ofhigh-priority cross-agency policyand management goals (see followingpage) and to name goal leadersto coordinate the activities of themultiple programs and agencies thatmust work together to achieve commonobjectives.The good news is that agenciesand programs have set targets tomeet the overall cross-agency policygoals. These goals have includedenergy efficiency, job training andveterans’ career readiness, as well asmanagement initiatives such as reducingoverpayments and strategicsourcing. While progress has beenmade, initial outcomes have beenspotty. High-level administration attentionhas been missing, and absentthe necessary infrastructure to operationalizeand sustain that attention,the stove-piped nature of governmenthas remained fully intact.The administration now has agreat opportunity. Without the needfor additional legislation, it can makeenterprise government a reality byexpanding and institutionalizing it,giving it teeth through strong seniorleadership engagement and commitment,and creating a managementinfrastructure.BUILDING THE ENTERPRISE 5

The Obama administration’s cross-agency priority goalsAs required by the Government Performance and Results Modernization Act of 2010 (GPRAMA), the Obama administrationestablished 14 cross-agency priority goals requiring collaboration across government. Nine deal with policy initiatives and fivecenter on administrative and management issues.ExportsDouble U.S exports by the end of 2014.Entrepreneurship and Small BusinessIncrease federal services to entrepreneursand small businesses with an emphasis onstart-ups, growing firms and small markets.BroadbandAs part of expanding all broadbandcapabilities, ensure 4G broadband coveragefor 98 percent of Americans by 2016.Energy EfficiencyReduce energy demand.Job TrainingEnsure our country has one of the mostskilled workforces in the world by preparingtwo million workers with skills trainingby 2015 and improving the coordinationand delivery of job training services.Veterans Career ReadinessImprove career readiness of veterans.By September 30, 2013, increase thepercentage of eligible service memberswho will be served by career readinessand preparedness programs from 50to 90 percent in order to improve theircompetitiveness in the job market.Science, Technology, Engineering,and Math (STEM) EducationIn support of the president’s goal that theU.S. have the highest proportion of collegegraduates in the world by 2020, the federalgovernment will work with educationpartners to improve the quality of STEMeducation at all levels to help increase thenumber of well-prepared graduates withSTEM degrees by one-third over the next 10years, resulting in an additional one milliongraduates with degrees in STEM subjects.Real PropertyThe federal government will manage realproperty effectively to generate $3 billionin cost savings by the end of 2012.CybersecurityExecutive branch departments andagencies will achieve 95 percentimplementation of the administration’spriority cybersecurity capabilities by theend of fiscal 2014. These capabilities includestrong authentication, trusted Internetconnections and continuous monitoring.SustainabilityThe federal government will reduce itsdirect greenhouse gas emissions by28 percent and will reduce its indirectgreenhouse gas emissions by 13 percentby 2020 from a 2008 baseline.Closing Skills GapsClose critical skills gaps in thefederal workforce to improve missionperformance. By September 30, 2013,reduce by 50 percent the gaps forthree to five critical federal governmentoccupations or competencies, and closeadditional agency-specific high-riskoccupation and competency gaps.Improper PaymentsThe federal government will achievea payment accuracy rate of 97percent by the end of 2016.Strategic SourcingReduce the costs of acquiring commonproducts and services by agencies’ strategicsourcing of at least two new commoditiesor services in both 2013 and 2014 thatyield a savings of at least 10 percent.Data Center ConsolidationImprove information-technology servicedelivery, reduce waste and save $3 billionin taxpayer dollars by closing at least1,200 data centers by fiscal 2015.6 PARTNERSHIP FOR PUBLIC SERVICE | BOOZ ALLEN HAMILTON

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ENTERPRISE STRATEGIES TOMAKE OUR GOVERNMENT MOREEFFICIENT AND EFFECTIVEAdopting an enterprise framework will allowour government to achieve the results thatthe American people demand and positionit to tackle the major challenges facing thenation. It also will enable government tobetter husband its resources and reduce programmaticfragmentation and overlap. To that end, we have identifiednine overarching strategies that will provide the infrastructureand impetus to take the enterprise approachto scale and ensure that it is not seen or treated as the petproject of one administration and thus become the firstvictim of the next.In proposing these strategies, the Partnership forPublic Service and Booz Allen Hamilton consulted withmore than 50 current and former public officials, businessand labor leaders and academic experts to identifythose areas in most urgent need of reform. We built onmanagement initiatives of the current and past administrationsthat are working well and should be continuedand expanded. Our recommendations largely focus onwhat can be done by the executive branch without actionby Congress, although there are legislative changesthat could improve the effectiveness of the enterprise approachand that will be needed to make improvements inthe civil service.As one former federal leader bluntly stated, “No agencycan solve a complex problem by itself anymore. We’vemoved into a new era.” The Obama administration hastaken a first step toward enterprise government by establishinga limited number of interim cross-agency prioritygoals as directed by Congress under GPRAMA. The lawrequires the administration to update these goals when itsubmits its 2015 federal budget. However, we believe theWhite House should extend the enterprise approach toa broader array of cross-agency goals, missions and administrativefunctions, and invest in the infrastructurenecessary to ensure that this approach becomes the acceptednorm.8 PARTNERSHIP FOR PUBLIC SERVICE | BOOZ ALLEN HAMILTON

STRATEGY 6Manage information technologyas a true enterprise resourceSTRATEGY 5Establish anindependent officeof evaluation toassess enterpriseperformanceSTRATEGY 2Build portfolios ofprograms alignedagainst the enterpriseplan’s goalsSTRATEGY 9Build anenterprise civilservice systemSTRATEGY 1Develop an enterprise performance planwith senior-level commitment to drivecross-agency goals and missionsSTRATEGY 7Take sharedservices toscaleSTRATEGY 4Develop careerenterprise executivesto lead cross-cuttingmissions and functionsSTRATEGY 3Designate andempower enterprisegoal leadersSTRATEGY 8Adopt an enterprise approach to theacquisition of goods and servicesBUILDING THE ENTERPRISE 9

STRATEGY 1DEVELOP AN ENTERPRISEPERFORMANCE PLAN WITHSENIOR-LEVEL COMMITMENTTO DRIVE CROSS-AGENCYGOALS AND MISSIONSNow that the administration has pilotedthe initial set of cross-agencypriority goals required by GPRAMA,it is time for the president to institutionalizethe enterprise model andtake it to scale.We recommend that he start bydeveloping—and, more importantly,publicly committing to—a strategicenterprise performance plan. Thiscomprehensive, government-wideblueprint will identify the broadarray of missions and functions (includingthe top presidential priorities)that can best be achieved by thewhole-of-government enterprise. Itwill set outcome- and time-basedgoals for enterprise missions andfunctions. As discussed in strategies2 and 3, it will put the necessaryinfrastructure and accountabilitymechanisms in place to increase thelikelihood those targets are achieved.As noted earlier, this won’t bethe first time a strategic enterpriseperformance plan has been attempted.The first attempt in 1998under GPRA got good marks fromGAO, but nonetheless failed in partbecause there was no presidentialcommitment and no one was incharge of making sure the plan wasimplemented.The plan should be organizedaround enterprise goals to includethe program and policy priorities ofthe president, such as reducing theunemployment rate of veterans. Italso should include enduring missionsand functions, such as assuringthe safety of the nation’s food supply,that are no less important butthat have come to be expected bythe American people and should notrequire presidential attention to ensuresuccess or necessarily changealong with administrations.Each enterprise goal shouldhave a balanced scorecard of quantitativeand qualitative performanceobjectives that commit the agenciesinvolved to tangible individual andenterprise outputs and outcomes.And each goal and set of performanceobjectives should be specific,measurable, assignable, realistic andtime limited. Here again, the administrationhas laid a solid foundationfor what we propose: It already poststhe current GPRAMA cross-agencypolicy and management goals on thePerformance.gov website.Many experts we consulted arguedthat the president’s budgetalready serves as the primary blueprintfor administration priorities,eliminating the need for a strategicenterprise performance plan. However,the budget is and always willbe organized by department andagency—in other words, accordingto the government’s stovepipes—anddoesn’t effectively communicatepresidential priorities to stakeholders.Agency-specific performanceplans won’t do the trick, either,though they have matured duringthe two decades since GPRA becamelaw. Neither addresses cross-agencymissions and functions and thereforecannot substitute for an enterpriseperformance plan focusing onmatters requiring collective agencyactivity, and clarifying each actor’srole in the achievement of the goals.This approach will begin to addressthe fragmentation, overlap and duplicationof federal programs and activitiesand, more importantly, serveas a blueprint for more effectivecross-agency collaboration on thosechallenges that are truly enterprisein nature.The strategic enterprise performanceplan must be owned bythe president and the Cabinet, withthe specifics of its development andimplementation a natural job for thePresident’s Management Council(PMC). And as a public expressionof commitment, the enterprise planshould be included in the president’sannual budget submission. Inthe budget, the enterprise performanceplan will orient the executivebranch, Congress and the public toan approach that better connectsagency and government-wide coststo enterprise results.The PMC, chaired by OMB’sdeputy director for management,comprises the chief operating officersof the executive departmentsand agencies (typically deputy secretariesand deputy administrators),plus the heads of central managementagencies, such as the Office ofPersonnel Management (OPM) andthe General Services Administration(GSA). First established in theClinton administration, the PMCtraditionally has served as a coordinatingbody, undertaking relativelyfew government-wide initiatives.It works with other councils,such as the Chief Financial OfficersCouncil and the Performance ImprovementCouncil, and overseesthe President’s Management AdvisoryBoard, a group of private-sectorchief executive officers appointed bythe president to recommend strategiesfor implementing best businesspractices in government.The time has come for the PMCto take more visible charge of the enterprise.It is ideally suited to developthe enterprise performance plan, supportedby staff, and to propose its goals,outcomes and timetables to the Cabinetand, ultimately, to the president,for ratification and endorsement.10 PARTNERSHIP FOR PUBLIC SERVICE | BOOZ ALLEN HAMILTON

“The strategic enterpriseperformance plan must beowned by the presidentand the Cabinet, with thespecifics of its developmentand implementation a naturaljob for the President’sManagement Council.In addition, the PMC must playa central role in the plan’s execution.It must hold officials, includingsome in its own ranks, accountablefor turning the various componentsinto reality through regular and rigorousperformance reviews for eachcross-agency priority, mission andmanagement function. Today agenciescontributing to the president’scross-agency priority goals are primarilyfocused on their own programsand initiatives. The plan, withthe PMC as the executing entity, canbring an enterprise focus.By taking this approach, theWhite House, the PMC and OMBwill send an unmistakable signalthat interagency collaboration onenterprise goals must become standardoperating procedure and thatagencies will be held accountablefor acting in the interests of the largerfederal enterprise. What’s neededis complete buy-in from top federalpolitical and career leadership, notjust a directive from the managementwing of OMB. •STRATEGY 2BUILD PORTFOLIOS OF PROGRAMSALIGNED AGAINST THEENTERPRISE PLAN’S GOALS”The PMC’s strategic enterprise performanceplan must align and integrateall of the programs that contributeto a particular goal, taking aportfolio approach to that alignment.Such an approach forces a holisticview of the goal’s constituent programsand their associated resources.Thus, the portfolio approach willunify the efforts of all the agenciesthat own those programs.This involves more than justinventorying the contributing programs,as is being done today witheach of the administration’s crossagencypriority goals. A portfolioapproach to each enterprise goalshould take those inventories to thenext level, setting the stage for trueintegration. The relative resource investments,risks and results of eachof the various programs in a portfolioshould be considered and analyzedtogether, and compared in terms oftheir respective contribution to theenterprise goal and its qualitativeand quantitative outcome measures.Each portfolio should spell out thecommon responsibilities of theagencies and departments involvedand include the personnel and otherresources needed to achieve the outcomesof the enterprise goal. Someprograms will be more costly thanothers, but their individual resultsmay contribute more to the largergoal. Other programs may be moreefficient, achieving better value forthe dollar, but their impact on thelarger goal may be far less apparent.The portfolio approach will illuminatethe strengths and weaknessesof existing programs andidentify duplication as well as gaps.Portfolios of programs, not individualprograms, will become the organizationalapproach to collectivelyachieve enterprise results.The state of Maryland is usingthis approach to tackle the goalof reducing pollution in the ChesapeakeBay, an effort that involves responsibilitiesfrom multiple departments,agencies and programs. Thetasks, roles, accomplishments andshortcomings of each of the agenciesand programs are grouped togetheron Maryland BayStat, a website thatprovides for the assessment, coordinationand reporting of the restorationeffort. Each month, the governorand the various departmentaland agency heads meet to assessprogress and chart their next steps.For a portfolio-based approachto be effective, the officials who arebeing held accountable for achievingenterprise goals must be able andwilling to independently assess theprograms and resources available toBUILDING THE ENTERPRISE 11

“The portfolio approach willilluminate the strengthsand weaknesses of existingprograms and identifyduplication as well as gaps.achieve it, determine their effectiveness,and be empowered to recommendchanges to the PMC, OMB andthe White House (see Strategy 3).Those leaders, in turn, must be willingto back the integration of programsand help in overcoming institutionaland jurisdictional barriersand other vested interests to furtherthe common mission objectives.Here’s an example of an enterprisegoal and its accompanyingprogram portfolio, drawn from theGAO’s March 2013 list of duplicativeand overlapping programs. Thegoal—reducing the scourge of illegaldrugs—is supported by a host offederal drug abuse prevention andtreatment programs fragmentedacross 15 federal agencies. Of the 76programs, 59 showed evidence ofoverlap. Even more telling is the lackSTRATEGY 3DESIGNATE AND EMPOWERENTERPRISE GOAL LEADERS”of integration and alignment. 4Drug prevention and treatmentare supposed to be coordinated bythe Office of National Drug ControlPolicy (ONDCP) and could serve asa model of the enterprise approach.But the GAO observed that ONDCPhas not conducted a systematic assessmentof prevention and treatmentprograms to determine theextent to which they overlap andwhere opportunities exist to pursuecoordination strategies to more efficientlyuse limited resources. Thus,while a portfolio-based approach isnecessary to executing the enterpriseperformance plan, it is not sufficient.It also takes leadership. •4 Government Accountability Office, Officeof National Drug Control Policy: Office CouldBetter Identify Opportunities to Increase ProgramCoordination, March 2013.Performance plans and portfoliosare important tools to define enterpriseobjectives, but it is strongleadership that will truly move theenterprise. Successful execution ofan enterprise performance plan dependson the designation of experiencedsenior officials to serve asenterprise goal leaders. As a formerCabinet member told us, “There area lot of great plans out there, but ifyou don’t have the right people toimplement them, they’re not goingto get done.”Executive leadership is crucialand, with rare exception, it mustbe focused and full time. The administration’srecent effort to betterintegrate the various agencies overseeingthe export of sensitive technologiesprovides an object lesson inthis regard. Despite an initial pushfrom several Cabinet secretaries andcommitment from the White House,the effort has floundered. Whileinitial steps were taken to improveoversight and streamline the interagencyprocess, the status quo remainsfirmly in place, and the systemis still plagued by poor coordinationand inefficiencies. The GAO concludedthat the agencies involveddid not work collectively in a unifiedway, and it faulted the Obamaadministration for not assigning responsibilityto one agency or leaderfor addressing the challenges of theentire portfolio of export controlprograms.Enterprise goal leaders musthave the skills and savvy—as wellas the gravitas—to lead multiagencyinitiatives or missions andcoordinate interagency teams. Ourrecommendation builds upon thecurrent GPRAMA construct. Underthat framework, the president hasdesignated goal leaders for each ofthe cross-agency priority goals, andthose goal leaders are responsiblefor establishing governance councilsand reporting on progress. However,we would go further, providinggoal leaders with sufficient bureaucraticmuscle over their programportfolios.Specifically, enterprise goalleaders must be expected and encouragedto take a holistic view oftheir portfolios, independently assessthe portfolio’s constituent programsand provide hard-hitting,honest-broker recommendationsthrough the PMC to OMB and, insome cases, to the president onwhich programs should be contin-12 PARTNERSHIP FOR PUBLIC SERVICE | BOOZ ALLEN HAMILTON

cross-agency goal leaders have managedto make progress even thoughthey have other major responsibilitiesand no staff support. We can’tchange the fact that some enterprisegoal leaders will have other jobs, butthey can be allocated staff to overseeand coordinate the portfolio, includingsenior career executives to serveas their deputies. Without staff support,goal leaders will be at themercy of the programs they oversee.That said, we do not advocate theallocation of new staff resources tosupport goal leaders. Rather, staffwould be drawn from the managementof the portfolio’s constituentprograms.These levers notwithstanding,enterprise goal leaders still willneed to build consensus among theagency and program executives intheir portfolios, as well as other keystakeholders, on common objectives,strategies, performance and outcomemetrics. HUD and DOE tookthat approach in 2009, agreeing onhow they would jointly coordinatethe use of stimulus funding to improveenergy efficiency of existinghomes. That agreement was documentedin a written memorandumof understanding signed by the twoCabinet secretaries, with each department’srole, responsibilitiesand obligations spelled out in detail.Agreeing on mutual expectations, aswell as setting ground rules for makingand enforcing decisions and resolvingdisputes, preempts conflictand makes interagency collaborationfar more likely. As one federalofficial said, it is critical to set up asystem to “communicate, coordinateand compromise.” •STRATEGY 4DEVELOP CAREER ENTERPRISEEXECUTIVES TO LEAD CROSS-CUTTING MISSIONS AND FUNCTIONSThe successful federal enterprisecannot depend on just Cabinet andsub-Cabinet appointees to lead it.To be sure, we expect that the presidentwill appoint his most trustedCabinet secretaries and sub-Cabinetofficials to lead presidential prioritiesincluded in the enterprise performanceplan. However, there areonly so many of those appointees togo around. If the concept of enterpriseis ever to get to scale, career“Senior career executivesmust be developed with anenterprise perspective andthe ability to demonstrate theenterprise leadership skills.”executives will have to be utilized.Some may be called upon to serveas the day-to-day deputies of Cabinet-levelgoal leaders, whose officialresponsibilities preclude full-timefocus. Other career executives maybe asked to do even more, taking directcharge of cross-cutting missionareas and support functions.Are today’s career executivesup to it? Enterprise executives, withinteragency experience and government-widefocus, are exactly whathad been envisioned when the federalSenior Executive Service (SES)was created 35 years ago. However,that vision has never become a reality.With few exceptions, today’ssenior executives are agency-centricin experience and orientation, as organizationallystovepiped as the governmentthey serve. Most have remainedin the same agency for theirentire careers, promoted for theirtechnical skills and never movedacross or out of that organization tobroaden their experience or expertise.The result: Few are equipped tolead the enterprise.This must change if the conceptof enterprise is to succeed. Seniorcareer executives must be developedwith an enterprise perspectiveand the ability to demonstrate theenterprise leadership skills enumeratedearlier. This development mustbegin before senior executive statusis awarded. The intelligence agenciesoffer an example. Following thetragedy of 9/11 and revelations aboutthe lack of communication amongthe intelligence agencies, the communitynow requires all executivecandidates to complete one or moreinteragency assignments of at least ayear in duration, as well as specifictraining in interagency leadershipbefore they can be promoted to se-14 PARTNERSHIP FOR PUBLIC SERVICE | BOOZ ALLEN HAMILTON

“It’s very difficult to deal withthe problems if you don’t knowwhich programs are workingwell and which ones are not.”nior ranks. In effect, the intelligenceagencies require a sixth enterpriseleadership Executive Core Qualification,in addition to the five nowmandated by OPM for promotioninto the SES.We believe OPM should makeinteragency or intergovernmentalexperience and enterprise leadershipcompetencies mandatory inorder to be selected for the SES.Doing so will take more than just apolicy declaration. This will requirean enabling infrastructure to brokerinteragency assignments. It alsowill require an enterprise executiveperformance appraisal system toensure consistent treatment of candidatesas they move from agency toagency, a policy OPM has just institutedfor all of government. In addition,SES candidate developmentprograms need to be far more robustand far more enterprise-focusedthan today.Perhaps the most importantenabling mechanism would be theestablishment of an Enterprise ExecutiveResources Board (EERB) todevelop and manage government’smost senior leadership talent. Todayevery agency has its own ExecutiveResources Board (ERB) chaired by asenior appointee such as the deputysecretary or equivalent, comprisingthe agency’s top political and careerexecutives and responsible for developingand selecting SES membersand assigning them to key agencyleadership positions. Given theagency-centric focus of ERBs, it’s nowonder there is no interagency executivemobility. The only enterpriseelement of the current senior executivedevelopment and selection processis an OPM qualifications reviewof all new SES members to ensurethey meet the five mandatory corequalifications.The executive resources boardmodel can be applied at the enterpriselevel. The White House shouldestablish an EERB chaired by OMB’sdeputy director for management,comprising PMC members, OPM’sdirector and some of government’smost respected former career executives.Their job would be to identify,evaluate and assign a select numberof career SES members for enterpriseposts, such as deputies to Cabinet-or sub-Cabinet-level enterprisegoal leaders, or goal leaders in theirown right. Not every SES memberwould qualify—the elite pool managedby the EERB would be limitedto those with interagency experienceand demonstrated enterpriseleadership skills. Those in the poolwould compete for prestigious enterpriseleadership positions.Enterprise executives drawnfrom career SES ranks, as well asthose selected from outside government,would serve five-year-termpresidential appointments, be compensatedat critical pay levels andhave performance contracts withthe PMC. At the conclusion of theirterms, enterprise executives withcareer SES status could remain intheir current enterprise executivepositions, be assigned to other suchpositions or return to career SES positionsin their home agencies. Allof these actions would be overseenby the EERB, but administered byOPM executive resources staff. TheEERB also would monitor the benchof enterprise-qualified senior executivesand even aspiring SES candidates(GS-14s and -15s) to ensurethat there is an adequate pipeline oftalent to fill enterprise positions asthey turn over. •STRATEGY 5ESTABLISH AN INDEPENDENTOFFICE OF EVALUATION TO ASSESSENTERPRISE PERFORMANCEGoal leaders and enterprise executivesmust be able to rigorously evaluatetheir portfolios of programs,determining which ones are workingand which are not. However, twodecades after the advent of GPRA,the federal government is strugglingto measure program performance.Government programs and governmentofficials tend to focus on thebudget or the numbers of peopleserved, but they are much less likelyto try to link those measures to realworldoutcomes.BUILDING THE ENTERPRISE 15

For example, it is easy to documenthow much money is budgetedfor a particular job training program,how many training classes that moneybuys, the number of people whoapply for and complete classes andeven the number who get jobs. However,it is difficult to determine causeand effect, that is whether traineesgot jobs as a result of the program.We recommend the establishmentof an Office of Evaluation, independentof agencies, within theExecutive Office of the President orOMB, to conduct rigorous performanceassessments that will determineif programs are meeting theirgoals. This information will assistenterprise goal leaders, the PMCand OMB in making judgments onprogram effectiveness and on waysto make improvements. As one governmentofficial observed, “Whathas struck me is how few programevaluations are really done. Thereare 47 employment training programsand only four have had anyevaluations. There are some 18 foodand nutrition programs and onlythree of them have had any substantiveevaluations. It’s very difficult todeal with the problems if you don’tknow which programs are workingwell and which ones are not.”The evaluation office should bepositioned, staffed and funded totake full advantage of today’s revolutionof big data, with access to thegovernment’s vast data resourcesand an analytic staff of the best andbrightest evaluators.The office must be positionedto evaluate the portfolios of relatedprograms, rather than just one ortwo in isolation, and make judgmentson how they contribute collectivelyand separately to a particularoutcome to provide goal leaderswith informed assessments.Since evaluation of governmentprograms can easily become ensnaredin politics, the office must beled by a respected career executiveon a seven-year term and administrativelyfirewalled from outsideinfluence. Only then can it help goalleaders make hard calls.In keeping with objectives oftransparency and public accountability,the office should provideaccess to full performance data onportfolios and their programs onthe Performance.gov website, unlessclassified or containing personallyidentifiable information. The missionof the assessment office won’tbe easy. One interviewee noted thatassessing and measuring whetherprograms are producing results willtake “relentless, sometimes evenruthless, follow-through.”To get the attention of departmentand agency officials accountablefor programs, the evaluationoffice should issue program scorecardsto make the results of theevaluations clear and impactful. TheGeorge W. Bush administration useda scorecard to measure agency progressand effectiveness in each of itsfive management reform areas. Oneinterviewee noted that PresidentBush regularly asked Cabinet membersabout their red, green or yellowstatus on the scorecard. “I don’tknow how much he knew aboutit, or how much the Cabinet headsknew about it, but they knew theydidn’t want to be red or yellow. It gotpeople’s attention.” The system usedeasily understood stoplight ratings—green for success, yellow for mixedresults and red for unsatisfactory. •The five strategies recommended so far focus on improvingthe effectiveness of departments and agencies asthey confront today’s cross-cutting mission challenges.The enterprise approach also will produce order-of-magnitudeimprovements in efficiency by compelling agenciesto integrate across the resource base of the governmentas a whole. By treating commonly purchasedgoods and services as elements of a federal commons,rather than agency property, the enterprise approachwill accelerate nascent efforts to reduce duplication. Theenterprise will leverage economies of scale and provideor procure better, cheaper common goods and servicesranging from email and data storage to personnel andpayroll support, and almost everything in between. Theapproach also will rebuild the civil service as a more cohesiveand agile corps. The following are strategies to accomplishthese goals.16 PARTNERSHIP FOR PUBLIC SERVICE | BOOZ ALLEN HAMILTON

STRATEGY 6MANAGE INFORMATION TECHNOLOGYAS A TRUE ENTERPRISE RESOURCEInformation technology services areamong the most common services ingovernment. Every agency providesa range of them, from email and datastorage to desktop support and serverfarms. Most recently, agencieshave begun deploying cloud-basedapplications to support everythingfrom time-keeping to supply-chainmanagement. With few exceptions,these services follow the traditionalstovepiped model of government,with each agency approaching andduplicating them separately. Thissituation represents a perfect opportunityto achieve real efficienciesby taking an interagency, enterpriseapproach to common IT services.Today the government spendsroughly $80 billion annually on IT—$55 billion of it on operating andmaintaining existing systems, therest on buying and developing systems.Duplication is rampant andopportunities for enterprise savingsare huge.The Obama administration hasdirected all federal chief informationofficers to take a shared approachto providing IT resources. The CIOCouncil’s Federal Information TechnologyShared Service Strategy, issuedMay 2, 2012, directs agencies to“move from independent silos of capability(some of which are duplicative)toward an integrated matrix ofshared services that provide IT capabilitiesacross the entire agency.” 7The administration also has directedagency chief operating officersto lead annual IT portfolio reviews,known as “PortfolioStats,” to shoreup or end those that are performing7 Executive Office of the President, FederalInformation Technology Shared ServicesStrategy (Washington, DC, May 2, 2012);http://whitehouse.gov/sites/default/files/omb/assets/egov_docs/shared_services_strategy.pdf. Last accessed Jul. 26, 2013.poorly and eliminate those that areduplicative or not well aligned withagency missions or business functions.The process was designed toachieve a savings of 10 percent in ITcosts for each agency, 5 percent ofwhich could be given back to agenciesto reinvest in citizen-facing,cybersecurity or employee engagementprojects, according to FederalCIO Steven VanRoekel.The administration’s sharedservices strategy directs agenciesto begin by consolidating commodityIT services such as help desks,email, print and website management,online collaboration and mobile/wirelessservices, and providingthem as shared services withinagencies. Then, agencies are to expandthe shared-first approach fromcommodity IT to mission-supportIT used in government-wide functions,such as financial and recordsmanagement. When a business case,including a cost comparison, showsit makes sense to outsource to across-agency IT shared service provider,agencies are expected to do sorather than standing up or continuingagency-specific systems.This plan for cross-agencyshared IT services is a move in theright direction, but it needs to bemore aggressively pursued. Thefocus on enhancing IT capabilityshould be expanded into a portfolioapproach to all IT resources acrossthe federal enterprise, not just withinagencies.We recommend that the federalchief information officer and theCIO Council give more power andcohesion to these cross-agency effortsby leading the developmentand execution of a true enterpriseinformation technology strategy asan initiative under the enterpriseperformance plan described in Strategy1. This strategy should bundleIT shared services into portfolios(for example, an email portfolio or acloud portfolio) and designate goalleaders to maximize each portfolio’senterprise value, functionality, efficiencyand effectiveness.This does not necessarily requirea monolithic approach. But itdoes mean that IT, including physicalassets such as data centers andserver farms, will be consideredenterprise or whole-government assets,not the property of individual“This [administration’s] planfor cross-agency shared ITservices is a move in the rightdirection, but it needs to bemore aggressively pursued.”BUILDING THE ENTERPRISE 17

agencies. Such enterprise IT servicescould be supported by a multiyearfunding mechanism to ensurethat agency customers have a voiceand a choice in the services and providersavailable.The advantages of an enterpriseIT approach are especially apparentwhen it comes to data centersand the cloud. Faced with a proliferationof underutilized agency datacenters, the administration in 2010announced a Federal Data CenterConsolidation Initiative calling forclosure of 1,200, or 40 percent, ofthe federal government’s 3,133 datacenters by the end of 2015. The initiativedirected agencies to increaseutilization to 60 percent in the centersthat remain. By the end of fiscal2012, 500 centers had been closed.Even more savings and efficienciescould be achieved by consolidatingdata center capacity and increasingutilization across the federal enterprise,not just within agencies.An enterprise approach to cloudcomputing also can yield comparableefficiencies. In 2010, the WhiteHouse required agencies to adopt acloud-first policy when consideringnew information technology acquisitions.It required agencies to moveIT data storage and applicationsfrom their local servers to networksof remote servers hosted on the Internet,known as cloud computing.But as with data centers, the focushas involved individual agenciesmoving information to the cloudrather than multiple agencies sharingthe same cloud computing resources.The enterprise potential ofcloud computing is significant.For example, the 17 agenciesof the intelligence community areconsidering ways to break their ITsilos and operate a single, ultra-securecloud for the entire community,with CIA and the National SecurityAgency (NSA) as central providers.The National Geospatial—IntelligenceAgency and the Defense IntelligenceAgency are expected to providedesktop services, while the NSAis expected to be a central repositoryfor computing applications. Thisinteragency initiative, if embracedby the community, could reduce ITspending through elimination of redundantacquisition, operations andmaintenance costs.Under the central coordinationof the Office of the Director of NationalIntelligence, the intelligencecommunity also deployed a common,classified email system across17 agencies and six Cabinet departments.Similar interagency enterpriseapproaches are not just possible,but imperative, for many if notmost common IT services.We applaud and support administrationinitiatives so far toconsolidate IT within agencies. Butthese initiatives need coherenceand greater emphasis to expand toan interagency approach. With theright platform, management structureand funding, the services andfunctions included in the administration’sefforts be could be providedacross agencies. •STRATEGY 7TAKE SHARED SERVICES TO SCALE“The original promise of sharedservices providers has notbeen met … Now it is timeto realize that promise.”While an enterprise approach to ITservices is a positive step in and ofitself, it has the added advantage ofproviding the interagency IT infrastructureto support shared personnel,financial management and othermission-support services. Thisenables the expansion of sharedservices from purely back-officetransaction processing to more sophisticatedservices. In so doing, thefederal government could finally realizethe full potential of the Bushadministration’s functional Linesof Business (LoB) initiative, underwhich federal organizations provideadministrative services for a fee toother agencies.The first sets of LoBs were establishedby OMB in 2004, focusingon business systems common to allagencies, such as payroll, personnelaction processing and basic accounting.OMB required agenciesto conduct a cost-benefit analysis oftheir various support functions. If itshowed that outsourcing a supportfunction to one of the interagencyshared services providers was costeffective,then the agency was ex-18 PARTNERSHIP FOR PUBLIC SERVICE | BOOZ ALLEN HAMILTON

pected to take that step. 8By 2009, almost all federalpayroll services were consolidatedamong four government-wideshared services providers, and OPMnamed five interagency providersfor personnel services. Today OMBapprovedinteragency shared servicesproviders include the InteriorDepartment’s Business Center, theAgriculture Department’s NationalFinance Center and seven others.These providers offer shared servicesfor budget formulation andexecution, geospatial data, informationsystems security and financialand grants management, in additionto personnel and payroll services.For the most part, LoB sharedservices providers have focused onleveraging common business systemssuch as human resources andfinancial management to provideinteragency customers with back-officeand transaction-processing support.This includes such core administrativeservices as cutting payrollchecks and processing promotionactions, posting debits and creditsto an agency’s operating ledger andtracking procurement contracts.The original promise of sharedservices providers has not been met.The vision was that they would assumeeven more of the government’scommon administrative workload,including labor-intensive functionssuch as the interaction between amanager and a personnel specialistbefore a promotion decision is madeand processed. Now it is time to realizethat promise.Additional enterprise efficienciesare possible. For example, theAir Force has consolidated many ofits personnel support services foractive-duty and reserve militarymembers as well as civilian employees,using a sophisticated combinationof online self-service applica-8 CIO Council, Federal Shared Services ImplementationGuide (Washington, DC, April 16,2013).tions, automated voice-responsesystems and live personnel specialiststo provide near full-time coveragefor the department’s worldwideforce of nearly 500,000.The Internal Revenue Service’sAgency Wide Shared Services organizationprovides similar consolidatedpersonnel services, such as staffing,labor and employee relations, forits nationally deployed workforce ofmore than 100,000. If such servicescan be provided on this scale withincomplex, diverse and geographicallydispersed agencies, they can be providedas an enterprise portfolio to allagencies.The DOD’s more than three millionmilitary and civilian personnelare paid through a single integratedpayroll system. Its 800,000 civiliansare covered by a single humanresources information system. 9 Yetcivilian employees still are servedby more than 100 separate personneloffices, each providing similarservices under almost the same personnelrules using a common humanresources information system.This situation is ripe for consolidation.And the Pentagon could offerthe service on an enterprise basis toother agencies.The other HR shared servicesproviders, such as the Treasury Departmentand the National FinanceCenter, can and should follow thissame path. They already providetransaction-level support to multipleagencies and could build uponthat success to offer additional personnelservices to their interagencycustomers at significant savings,such as drafting job applications.Personnel services are not theonly area ripe for an enterprise ap-9 Department of Defense, Fiscal 2013 BudgetEstimates, Defense Human Resources Activity(Washington, D.C., Feb. 2012), http://comptroller.defense.gov/defbudget/fy2013/budget_justification/pdfs/01_Operation_and_Maintenance/O_M_VOL_1_PARTS/O_M_VOL_1_BASE_PARTS/DHRA_OP-5.pdf. Lastaccessed Jul. 26, 2013.proach. The Obama administrationhas issued a shared-first policy forfinancial services information technologysystems. On March 25, 2013,former OMB Comptroller DannyWerfel directed all agencies to useone of the approved shared servicesfinancial management providers tomodernize their core accountingsystems.According to Werfel, “the cost,quality and performance of federalfinancial systems can be improved byfocusing government resources onfewer, more standardized solutionsthat are implemented and operatedby more experienced staff.” Sharedservices provided using standardizedfinancial systems will reducethe risks of large, lengthy financialmanagement system implementationsand make federal financesmore accurate and more transparent,Werfel said. OMB also plans toensure that financial shared servicescenters use common standards andrequirements so agencies retainthe flexibility to migrate amongproviders.This is exactly the sort of enterpriseapproach to shared servicesthat is needed—leveraging commonfunctional requirements, businesssystems and IT infrastructure toprovide mission support in multipleagencies. Indeed, these effortsshould be expanded under the auspicesof an enterprise goal leaderfor each of the LoB portfolios, withthose goal leaders charged to takethem to the next level of enterpriseefficiency and effectiveness. •BUILDING THE ENTERPRISE 19

STRATEGY 8ADOPT AN ENTERPRISEAPPROACH TO THE ACQUISITIONOF GOODS AND SERVICESHistorically, the federal governmenthas taken a decentralized, agencycentricapproach to buying goodsthat practically every organizationneeds. In short, the government hasnot taken full advantage of its collectivepurchasing power to get the bestdeal for the taxpayer.Here’s a graphic example: Buyingindividually, agencies spendmore than $500 million a year oncleaning products through nearly4,000 contracts with 1,200 differentvendors. One agency paid $32 for acase of paper towels, while anotherpaid $61 for the exact same product. 10Why shouldn’t every agency knowabout and take advantage of thelower price? This is what enterprisestrategic sourcing is all about—agenciesusing their collective buyingpower to drive down the prices theypay for common goods and services.Here, too, there is good news.Beginning with the Bush administrationand continuing under PresidentObama, the federal governmenthas begun to take a more strategicapproach to sourcing. However, ithas focused on consolidating acquisitionstrategies and contracts at thedepartment level, rather than acrossthe federal enterprise. We advocatethe latter. The government, underthe leadership of the Office of FederalProcurement Policy (OFPP)and GSA, should rapidly expand thescope of enterprise strategic sourcing,employing goal leaders, portfoliosand cross-cutting accountability.Already, GSA has implemented a10 Dan Tangherlini, “GSA to Launch 10Strategic Sourcing Initiatives,” GSA Blog,Jan. 10, 2013, http://gsablogs.gsa.gov/gsablog/2013/01/10/gsa-to-launch-10-strategic-sourcing-initiatives. Last accessedJul. 26, 2013.Federal Strategic Sourcing Initiative.It currently covers four categoriesof common products and services:office supplies, domestic parcel delivery,print management and wirelesstelecommunications services.Through the initiative, agencieshave saved more than $200 millionon office supplies since July 2010. Infiscal 2011, the domestic parcel deliveryservices program saved morethan $31 million over what agencieswere paying separately for the sameservices.GSA plans to add 10 strategicsourcing categories through 2015.To give this effort even more impetus,OMB last year created a leadershipcouncil to expand the initiativeand directed each agency to name astrategic sourcing official and sourceat least two new products a year in2013 and 2014. This council has beencharged with identifying five newcommodities and services a yearthrough fiscal 2014, along with executiveagents to develop the contracts.This is fine as far as it goes, butit is a cautious approach. To movestrategic sourcing from being a bestpractice to a mandate, the presidentshould designate the head of OFPPas the federal chief acquisition officer(CAO) with administrative authorityequivalent to the federal CIO.The federal CAO should develop andexecute a comprehensive enterpriseacquisition strategy. That strategyshould include goals for responsiblyexpanding enterprise-wide strategicsourcing for common goods and services,consolidating multiple-awardcontracts, making prices transparentand increasing share-in-savings contractingwhere appropriate. Achievingthese goals will drive down theprices and improve the quality of themyriad goods and services the governmentbuys. The EERB, in consultationwith the CAO, also shoulddesignate enterprise goal leaders foreach of these initiatives.The enterprise acquisition strategyshould greatly enhance the federalgovernment’s enormous buyingpower. It should consolidate the government’sdemand for commodities,such as cleaning products, to obtainmassive quantity discounts.For goods and services thataren’t amenable to strategic sourcing,government still can take anenterprise approach by making theresults of all transactions availableto all government buyers and sellers.“The government has not takenfull advantage of its collectivepurchasing power to get thebest deal for the taxpayer.”20 PARTNERSHIP FOR PUBLIC SERVICE | BOOZ ALLEN HAMILTON

And it’s not just pricing informationthat is valuable.For many years, agencies onlyhad access to other agencies’ procurementdata through the FederalProcurement Data System andUSASpending.gov. They can findonly high-level information, suchas total amounts spent on contracts,contract type, the name and locationof vendors and ordering officers.More granular information, such asthe labor costs embedded in a particularservice contract, is far moreuseful but difficult to find. Agenciesrarely share the details beyond whatis publicly available so that otherscan take advantage of their lessonslearned. Though some of the informationis proprietary, much can beshared.For example, GSA could create agovernment-wide collaboration siteidentifying upcoming solicitationsand existing agency blanket purchaseagreements so other agenciescould see whether an item or serviceSTRATEGY 9BUILD AN ENTERPRISECIVIL SERVICE SYSTEMThe proposals outlined thus far revolvearound a common theme: leadingand managing the whole of governmentas an integrated enterprisewith a cross-cutting strategy, managementinfrastructure and leadership.But none of these strategieswill be successful without also takingan enterprise approach to managinggovernment’s most importantresource—its people. This requiresthe federal civil service to be rebuilt,modernized and better integrated toconfront cross-agency program andpolicy priorities.Today’s federal civil service systemis obsolete. Its major componentswere last retooled more thanfour decades ago. The civil servicealready has been, or is in the processof being, procured by anotheragency.These improvements are movingin the right direction, but theycould be driven faster and morecomprehensively under the directionof an enterprise goal leader andteam charged with lifting the veil onprices, costs, successful negotiationstrategies and other procurementtechniques across all agencies.Strategic sourcing, expandeduse of multiple-award contracts,procurement and pricing transparencyall can be applied at the departmentor agency level for positiveeffect. But for tens of thousands ofcommonly purchased goods and services,they work best and save moremoney when they are applied acrossthe enterprise. Without a government-wideCAO and enterprise goalleaders to drive these strategies, theyare not likely to happen rapidly orcomprehensively. •today reflects the needs and characteristicsof the last century’s governmentwork and workforce, not thoserequired for today’s complex, interagencychallenges.A revitalized and revamped civilservice system should ensure thatfederal agencies can attract, motivateand retain skilled, energizedand engaged employees who can bedeployed where needed to supportthe enterprise without compromisingcore civil service principles thathave defined the American civil servicesince its inception—merit, politicalneutrality, veterans preference,due process, collective bargainingand non-discrimination. These valuesare inviolable and should guideand govern every federal agency.The system should be based onstate-of-the-art human capital practices,with a market-sensitive compensationsystem, recruiting andhiring practices in line with today’scareer patterns and a reward systemthat reinforces high performance.The current system, codified inTitle 5 of the U.S. Code, is federal inname only. As it has aged, agenciesboth large and small have brokenfrom its ranks, cutting their owndeals with Congress for personnelflexibilities to further their uniquemissions. The list is long, rangingfrom DOD and the Department ofHomeland Security—which havenot fully used the flexibilities theywere given—to the Internal RevenueService, the 17-agency intelligencecommunity and the agencies thatoversee the banking and financialservices industries. The result is abalkanized system of “haves”—agencieswhose human capital systemshave been exempted from generalcivil service rules—and “have-nots,”those still mired in laws and rulesfirst established in 1949. Employeesworking in “have-not” agencies cannottransfer to “have” agencies withoutcompeting, even at the seniorexecutive level.Significant changes are neededif we expect the federal governmentto act as an enterprise. This doesn’tmean a system that mandates onesize-fits-allrules or forces the “have”agencies back in the box. Rather, itmeans taking advantage of the lessonslearned by agencies that havebroken free from Title 5 to developa civil service system up to the challengesof 21st-century government.The Partnership for Public Serviceand Booz Allen Hamilton willrelease a detailed framework forthis new enterprise civil servicesystem later this year, but given itsimportance to our overall enterprisestrategy, its basic architecture andapproach are worth describing here.Upon adopting the core anchor-BUILDING THE ENTERPRISE 21

ing principles, we would constructa set of common policies and practicesthat are so fundamental thatthey, too, should cover every federalagency, regardless of mission or circumstance—forexample, a commonbut modernized job classificationsystem to ensure generally equal payfor equal work across agencies anda common, market-based compensationregime tied to that classificationstructure to ensure parity withthe U.S. labor market. A commonsenior executive corps—today thereas many as seven—would foster interagencymobility and the developmentand deployment of the cadreof leaders so critical to enterprisegovernment.The enterprise civil service systemwe propose is not rigid. There istoo much variety—in statutory base,size and scope, mission, constituencyand budget—across the federalenterprise to force lockstep uniformity.Instead, it would balance commonalityat the core with built-inagency flexibility. Thus, agencieswould be given considerable discretion—moreso than today’s rules allow—totailor elements of the commonstructure to meet their ownunique needs so long as they staytrue to the system’s foundational elementsand parameters.For example, we would permitagencies to customize salary ratesfor mission-critical occupations,promotion and career patterns, performancemanagement policies anda host of other workplace practices.Consistent with today’s demonstrationauthority, we would affordagencies the authority to customizeeven components that are intendedto be common across the enterprise,subject to collective bargainingwhere required. An agency wouldearn approval to operate a customizedsystem by demonstrating highmission performance, includingemployee engagement and high internalintegrity, as well as by showingthat it has the human capital andleadership capacity necessary to operateresponsibly outside the lines.This autonomy would have to be periodicallyreexamined and renewed.Such a civil service systemwould improve the ability of theenterprise to recruit and retain ournation’s best and brightest talent.Nonetheless, much would dependon the substance of the human capitalpolicies. And if there is one lessonwe have learned over the decades“The civil service today reflectsthe needs and characteristics ofthe last century’s governmentwork and workforce, not thoserequired for today’s complex,interagency challenges.since the last time the civil servicesystem was modernized, it is the importanceof strategic human capitalplanning.Thus, OPM should devise anenterprise strategic human capitalplan with consultation from enterprisegoal leaders and ratified by thePMC. The plan would have two primarypurposes. First, it would lookinto the near- and medium-term futureto address critical, cross-cuttinghuman capital challenges affectingmost agencies—for example, recruitingand retaining talent in cybersecurityand science, technology, engineeringand math.The second purpose would be tocontinuously assess the enterpriseefficacy of human capital policiesand strategies. This rarely is donetoday.OPM evaluates individual departmentsand agencies, mostly froma compliance standpoint. But it hasnot stepped back to evaluate froma whole-of-government perspectiveregarding how well the GeneralSchedule classification systemstacks up against state-of-the-artprivate-sector practices, the effectsof pay freezes on retention or thevalue of tuition loan repayment onrecruiting talent. Such comparisonslargely have been left to the GAO orthe Merit Systems Protection Board.Both do a credible job, but their studiesrarely translate into action.This would change under anenterprise strategic human capitalplanning process that regularlyconsiders such issues, assesses theirimpact on the ability of agencies andenterprise goal leaders to recruitand retain talent, and proposes andputs into effect medium- and longtermsteps to address human capitalneeds. •”22 PARTNERSHIP FOR PUBLIC SERVICE | BOOZ ALLEN HAMILTON

CONCLUSIONOn July 8, 2013, President Obama told his Cabinetto develop an “aggressive management agenda… that delivers a smarter, more innovative andmore accountable government for its citizens.”The president said he wants this agenda to build onhis first-term objectives: the delivery of services that citizensexpect in smarter, faster and better ways; identificationof new ways to reduce waste and save taxpayers’money; and an increase in transparency by opening hugeamounts of government data to the American people.We wholeheartedly agree with these goals, but believethe administration has the opportunity to go evenfurther by embracing the strategies in this report. Thepresident could accomplish all he has outlined and a greatdeal more by taking a coordinated enterprise-wide approachto managing government missions and internaloperations rather than relying on the narrow programandagency-centric framework now in place.In fact, the Obama administration is pursuing manyelements of it already. The Government Performance andResults Modernization Act of 2010 provided a foundationfor moving government in this direction, and the administrationhas named goal leaders who are implementing aseries of cross-agency priority goals. OMB and GSA arespearheading an expansion of strategic sourcing, and thefederal CIO and CIO Council are helping agencies findeconomies and efficiencies through shared services andresources.What remains is to join these disparate efforts into theaggressive agenda the president seeks and to drive themto full-scale execution. President Obama and his managementteam can accomplish this by making enterprisegovernment the focal point of management reform. Thiswill take sustained attention, enthusiastic evangelism,powerful leadership and unity of purpose. Though muchof what we recommend is within the power of the executivebranch to attain, truly achieving enterprise governmentwill take coordination and consultation with thosemembers of Congress who value and support improvedgovernment performance and some legislative changes.The success of this management agenda depends onthe care, dedication, talent, expertise and evidence employedin crafting the enterprise performance plan thatis at its core. Drafting it must be the top priority of thePresident’s Management Council and a key accomplishmentof the Cabinet and White House staff. Enterprisegovernment cannot endure unless the president and themanagement council name a cadre of excellent, capableand intrepid goal leaders. And they cannot overcome thestovepipes of current agency structure without a willing,well-prepared, mobile and modernized civil service.These are not small changes. They will not beachieved without collaboration and contention. Yet theyare unavoidably necessary lest we fail in effectively performinggovernment’s critical missions. No single agencycan accomplish any one of them alone, especially in thisera of austerity.BUILDING THE ENTERPRISE 23

AGENCY AND SUBAGENCY NAME OF PROGRAM PROGRAM TYPEDepartment of Education 21st Century Community Learning Centers N/ASafe and Supportive SchoolsSave Schools/Healthy StudentsN/APreventionExecutive Office of the PresidentOffice of National Drug Control Policy Anti-Doping Activities PreventionHigh Intensity Drug Trafficking AreasYouth Drug Prevention Media ProgramN/APreventionFederal JudiciaryAdministrative Office of the U.S. Courts Court Ordered Substance Abuse Testing and Treatment TreatmentDepartment of Health and Human ServicesHealth Resources andServices AdministrationHealth Center ProgramRyan White HIV/AIDSN/AN/AIndian Health Service Urban Indian Health Program Title V 4-in-1 grants Prevention and treatmentSubstance Abuse and Mental HealthServices Administration (SAMHSA)Alcohol and Substance Abuse Self Determination ContractsMethamphetamine and Suicide Prevention InitiativeYouth Regional Treatment CentersTele-Behavioral Health ActivitiesAccess to RecoveryAssertive Adolescent and Family TreatmentCapacity Building InitiativeCenter for the Application of Prevention TechnologiesCommunity-Based Coalition Enhancement GrantsDrug Free Communities Mentoring ProgramDrug Free Communities Support ProgramEx-Offender ReentryFetal Alcohol Spectrum Disorders Centers for ExcellenceGrants to Serve Young Children and FamiliesAffected by MethamphetamineHistorically Black Colleges and Universities GrantHomeless Grants for the Benefit of Homeless IndividualsMinority AIDS Initiative Targeted Capacity ExpansionMinority HIV PreventionNational Adult Oriented Media Public Service CampaignNative American Center for ExcellencePrevention and treatmentPrevention and treatmentPrevention and treatmentPrevention and treatmentTreatmentPrevention and treatmentPreventionPreventionPreventionPreventionPreventionTreatmentPreventionPrevention and treatmentN/ATreatmentPrevention and treatmentPreventionPreventionPreventionBUILDING THE ENTERPRISE 25

AGENCY AND SUBAGENCY NAME OF PROGRAM PROGRAM TYPESAMHSA (cont.) Partnership for Success PreventionDepartment of Housing andUrban DevelopmentDepartment of LaborPhysician Clinical Support System Project-BuprenorphinePhysician Clinical Support System Project-OpioidResidential Treatment for Pregnant and Post-Partum WomenReady to RespondRecovery Community Services ProgramScreening, Brief Intervention and Referral toTreatment-Medical Schools/ResidencyState Screening, Brief Intervention and Referral to TreatmentStrategic Prevention Framework State Incentive GrantsSubstance Abuse Prevention and Treatment Block GrantTargeted Capacity Expansion General Grants to Expand CareCoordination Using Health Information TechnologyTargeted Capacity Expansion General Technology Assisted CareTreatment Drug Courts-AdultsTreatment Drug Courts-JuvenileTreatment Drug Courts-Adult (Joint with theBureau of Justice Assistance)Treatment Drug Courts-Juvenile (Joint with the Officeof Juvenile Justice and Delinquency Prevention)Underage Drinking Prevention Education InitiativeEmergency Solutions GrantsSupportive Housing ProgramHousing Opportunities for Persons with AIDSN/AN/APrevention and treatmentPreventionTreatmentN/APrevention and treatmentPreventionPrevention and treatmentN/ATreatmentTreatmentTreatmentTreatmentTreatmentPreventionN/AN/AN/AEmployment Training Administration Job Corps N/ADepartment of Veterans AffairsVeterans Health Administration Substance Use Disorder Outpatient Program TreatmentSubstance Use Disorder Residential ProgramTreatmentSource: “Office of National Drug Control Policy: Office Could Better Identify Opportunities to Increase Program Coordination,” GAO-13-333, March26, 2013, http://www.gao.gov/products/GAO-13-333. Last accessed Jul. 26, 2013.26 PARTNERSHIP FOR PUBLIC SERVICE | BOOZ ALLEN HAMILTON

APPENDIX BCONTRIBUTORSAdmiral Thad AllenExecutive Vice President, Booz Allen HamiltonFormer Commandant, U.S. Coast GuardJohn BerryFormer DirectorOffice of Personnel ManagementJonathan BreulFormer Executive DirectorIBM Center for the Business of GovernmentLisa BrownFormer Executive DirectorOffice of Management and BudgetDustin BrownActing Associate Director for Performanceand Personnel ManagementOffice of Management and BudgetTom DavisFormer U.S. Representative, VirginiaEd DeSeveSenior Fellow, James MacGregor Burns Academyof Leadership, University of MarylandFormer Deputy Director, Office of Management and BudgetFrank DiGiammarinoDirector, Innovation and Global Expansion, WorldWide Public Sector, Amazon.comFormer Senior Advisor, Office of StrategicEngagement, White HouseGene DodaroComptroller GeneralU.S. Government Accountability OfficeW. Scott GouldFormer Deputy SecretaryU.S. Department of Veterans AffairsStephen GoldsmithDaniel Paul Professor of Government, JohnF. Kennedy School of GovernmentFormer Mayor of IndianapolisTodd FisherGlobal Chief Administrative OfficerKKR & Co., L.P.Leon FuerthExecutive Director, The Project on Forward EngagementThe George Washington UniversityFrank HodsollPresident, Resource Center for Cultural EngagementFormer Chairman, National Endowment for the ArtsKenneth JusterManaging DirectorWarburg PincusDon KettlDean, School of Public PolicyUniversity of MarylandJohn KoskinenDirector, Board of Directors, The AES CorporationFormer Non-Executive Chairman, Freddie MacVivek KundraExecutive Vice President of Emerging Markets, Salesforce.com, Inc.Former Federal Chief Information OfficerChris MihmManaging Director for Strategic IssuesU.S. Government Accountability OfficeElizabeth McGrathDeputy Chief Management OfficerU.S. Department of DefenseShelley MetzenbaumFounding President, Volcker AllianceFormer Associate Director for Performance and PersonnelManagement, Office of Management and BudgetTom MonahanCEOCorporate Executive BoardSue MyrickFormer U.S. Representative, North CarolinaSean O’KeefeChairman and Chief Executive Officer, EADS North AmericaFormer Administrator, National Aeronauticsand Space AdministrationPaul PosnerDirector, Center on the Public Service, George Mason UniversityFormer Managing Director, U.S. Government Accountability OfficeSteven PrestonFormer SecretaryU.S. Department of Housing and Urban DevelopmentFranklin Raines, IIIFormer Chairman and CEOFannie MaeBUILDING THE ENTERPRISE 27

Charles RossottiFormer CommissionerInternal Revenue ServiceLynn ScarlettVisiting Scholar and Co-Director, Center for Managementof Ecological Wealth, Resources for the FutureFormer Deputy Secretary, U.S. Department of InteriorHannah SistareFormer Executive DirectorVolcker CommissionMatt SonnesynDirector of ResearchBusiness RoundtableDan TangherliniAdministratorGeneral Services AdministrationDavid WalkerPresident and CEO, Comeback InitiativeFormer Comptroller General, U.S.Government Accountability OfficeDarrell WestVice President and Director, Governance StudiesThe Brookings InstitutionDanny WerfelActing Commissioner, Internal Revenue ServiceFormer Controller, Office of Management and BudgetSteve VanRoekelU.S. Chief Information Officer and Administrator,Office of Electronic GovernmentActing Deputy Director for ManagementOffice of Management and BudgetBooz Allen HamiltonRon Sanders, Vice PresidentDave Mader, Senior Vice PresidentMike Isman, Vice PresidentGordon Heddell, Senior Executive AdvisorJohn Cataneo, Senior AssociateChris Long, PrincipalPartnership for Public ServiceLara Shane, Vice President for Research and CommunicationsMax Stier, President and CEOSally Jaggar, Project Lead and Strategic AdvisorSeth Melling, Associate ManagerBob Cohen, Writer/EditorBevin Johnston, Creative DirectorAnne Laurent, Senior Program Manager28 PARTNERSHIP FOR PUBLIC SERVICE | BOOZ ALLEN HAMILTON

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