On my last blog – “E PLURIBUS UNUM – A Government Transformation Journey“, I mention within the context of Government Transformation several aspects and ways to approach that journey. As promised, I am now proceeding to share my view in one of the most important pillars on the transformation road.
Trying to find out a way to illustrate today’s topic, I came across one famous motto from Alexandre Dumas – “All for one and one for all, United we stand, divided we fall“. What a better way to describe the Share Service Center’s concept!
Over time, we have had different ways and directions to approach the Government agility, going from the 60s and 70s centralization into a more decentralized manner, to the 80s and 90s creating full and independent control over the Government area, aiming for agility and speed. There was evidence that on one hand, this was effective, but on the other hand, it was also totally redundant in the overall Government Framework high impact on the budget consumption, hard to justify to Citizens.
Facing the world economic and financial crisis, was time to re-think that approach and find out about the introduction of synergies on the Government’s operations, initiatives and strategic goals. Thus, SHARE become na important word leading to Shared Services as a popular approach for Governments under the financial pressure.
The road to Share
It is important, before jumping into the re-structuring road to shared services, to understand the available experiences and go through the learned lessons. Typically, we have seen two ways to approach this re-structuring. One being the bottom-up approach in which, at a specific organization’s level, key areas or initiatives are built in and frame themselves immediately under the concept of partnerships. And the other being top-down where directives can be impose from higher Government levels.
Despite the model chosen, we can fall into different structures: a pure in-sourcing team, led by one of the involved parties or resulting into a new dedicated team, joint-ventures, public-private-partnerships or the full outsourcing model.
Independent of the model, the importance is on how to implement ensuring conditions for success, achieving better service, reducing redundancies and having a positive impact on costs.
Taking a quick look into existing examples, we can find out interesting comments, such as the one from Australian Public Service Commission in 2013, stating that “There are plenty of examples….where a good idea that is not well implemented leads to increased costs and/or poorer service standards”.
There are several examples where the initial goals had not been achieved, e.g.projects in the UK transport and research funding sectors which exceeded their start-up budgets; difficulties in The Netherlands, Queensland and Western Australia led to programs being canceled midway through implementation. In addition, a recent survey of US public agencies found nearly half failed to achieve any savings, with a quarter reporting cost increases.
I mentioned in my last blog about Government transformation journey that one of the key factors for the success is the commitment and sponsorship of the Government through the political levels and most important find leaders with the right skills-set to manage acres Government institutions.
Having these pre-conditions established is one of the first and most important steps to avoid typical challenges that lead to some shared services initiatives failures.
Looking quickly at those situations, I can highlight the resistance from staff to the change process, losing autonomy and processes control, resulting sometimes in “shadow” work with creation of parallel tasks. Recently, I read an article about a survey done with CFO’s on the adoption of shared services, which reflects exactly the fear of losing control and “open door” to this kind of “shadow” approach.
The rush on the change process without the full analysis over the replaced targets is another reason for resistance, which worsens when the full ROI was not yet achieved over replaced systems. The lack of agreement between parties can result in extra costs and time delays.
Specialized areas and services incorporated into the shared services roadmap can drive the organization into loss of service quality meaning that, potentially, not all areas are eligible for the share services or at least should be processed on a phased approach whit the right knowledge transfer and service level agreements definition.
All these situations drove us into a learning curve supported by many different shared services initiatives.
The term “shared services” emerged in the private sector during the 1980s, initially for Treasury and Accounting. In Government, it first appeared at state level in Australia and Canada in the 1990s. These reforms expanded after 2000, and found flavor elsewhere, including in public healthcare in the UK and New Zealand, and local governments. Interest also grew at the national level, starting with information systems in the USA, but expanding into other functions in a variety of countries.
Taking a snapshot of existing experiences we can highlight here some below:
In my opinion, there is an important learn lesson above all others, that is to go through the preparation and upfront work, defining scope of potential shared services.
There is common agreement over the traditional “corporate services” areas where real synergies arise immediately. These are Finance, Procurement, Human Resources, Information Technology, Real State and Legal Services.
Other areas related to Citizen Services or coordination of Emergency Services become, these days, top of the list for Governments’ priorities requiring a new Setup model, technology adoption and cross agency environments.
A good example of these priorities can be found in Estonia, where the Government enabled Citizen services with more than 600 e-services. This was achieved with a strong Government senior-level sponsorship.
Another example is the shared service center for IT in Canada, having proper dedicated funding together with strong executive support.
Having all the scenarios in front of us, the failures and the successes we can frame the set of conditions for the success of the shared services adoption as follows:
– Sponsorship from Government political or Senior levels
– Funding allocation
– Skilled dedicated staff
– Strong change management Setup
– Clear governance model of work
– Upfront definition of Service Level Agreements
– Definition of boundaries on services
With the achievement of these pre-conditions, we can then go through the truly shared services achievements and standardize the usage and adoption. We can find a good example of this in the UK local governments levels (www.local.gov.uk/shared-services-map).
Hampshire County Council is another best of breed example (www3.hants.gov.uk/itservices/its-services/services-shared-services.htm) and finally one extra example from my own country where the Government created their own organization – eSPap – Shared Service entity for all Government, with strong achievements, highlighted in this presentation (http://s3-eu-west-1.amazonaws.com/deloitte-conf-2015/presentations/deloitte-ssc2016-day-one-breakout6-espap-building-a-shared-service-organization-in-the-public-sector.pdf)
In a nutshell, looking at the shared Services Center model, despite the examples where failures are reported and using them as the starting base, my opinion is that this is the approach, not only, for corporate services, but most importantly, for front office services. This provides a true engagement between Citizens and their Governments. Granting that at any point of interaction with Government institutions all information becomes available centrally. At the same level, granting that when needed all Government and private Agencies will work smoothly in situations of emergency.
Having all the conditions described in place we can then ask, what is the best technology and architecture to support the adoption within this Digital Age?
After having dedicated my first blog “E Pluribus Unum – A Government Transformation Journey” framing the expectations and after leaving here my point of view about Shared Service Center, I am planning for the part three to expose my view on how technology can enable the transformation supported by solutions and examples.