Managing shared services
by David Zussman
The 14th annual GTEC conference October 23–25 will feature presentations about ways to make government operations more efficient and effective through the application of technology. The theme Enterprise Transition: Moving to Shared Services promises to raise some interesting questions about the challenges of achieving a complex delivery model that is high risk, with a large number of potential failure points. But it promises huge dollar savings if executed successfully. (See www.gtecweek.com/ottawa2006 for more details.)
Shared services, the consolidation of common corporate administrative systems across departments, often referred to as backoffice support functions, is designed to improve efficiency and effectiveness while lowering the overall cost of the function. This approach continues the ongoing examination of the appropriate management of government started more than 25 years ago as part of the New Public Management movement.
The current focus of shared services is on improving human resource transactions, financial and materiel services and IT services within government while Service Canada and similar provincial and municipal initiatives are designed to improve service to citizens.
The shared services initiative became a priority of the Treasury Board Secretariat and Public Works and Government Services Canada (PWGSC) when the government decided there were multi-billion dollar savings to be achieved by streamlining core administrative functions. Shared services is only a part of the ambitious and risky plan to refashion government operations such as real estate management, procurement, service to Canadians and shared services from the inside out by leveraging purchasing power and taking advantage of new developments in IT.
PWGSC developed an ambitious plan to save money by maximizing efficiencies and taking advantage of economies of scale while "doing these things in an open and transparent way to preserve confidence Canadians have in the integrity and fairness of the Government of Canada" – all in the context of "ensuring the government retains its visibility and presence in communities and regions, and that access to services is maintained or enhanced."
PWGSC has encountered some difficulties in meeting these objectives. First, the announcement of cost savings has placed extraordinary pressures on those responsible to deliver the savings in a very compressed time frame. Second, it has created a series of unintended consequences that have challenged the fundamental principles of visibility and access in the current procurement, regional development, technology enhancement and small business policies. In each of these areas there has been some pushback from private sector suppliers and other stakeholders.
Given the current (and, at times, highly publicized) problems encountered by PWGSC in meeting these objectives there might be some benefit in looking at some recent work being done in the United Kingdom. Last year, a series of Departmental Capability Reviews were launched by the Cabinet Secretary to assess "how well equipped departments are to meet these delivery objectives and to be ready for the challenges for tomorrow." Prime Minister Blair emphasized that the reviews' focus was on future needs rather than auditing past performances.
The reviews sought to answer four questions: Do departments have the right leadership capabilities? Do they know how well they are performing? Do they have the right skills to meet current and future challenges? And do they engage effectively with their stakeholders, partners and the public?
The review process, managed by the Prime Minister’s Office, included teams of experienced people from outside government and peer reviewers.
Key UK findings likely to be of interest to Canadians facing similar issues were:
1. There is a need to ensure that each department focuses on high-level strategy and managing performance before implementing major reforms
2. Managers need to look at different models of program delivery to ensure that the delivery model is the right one for their needs
3. Management should develop a more sophisticated understanding of what the public needs and wants, and
4. Well functioning departments ensure their staff have "the skills, equipment and leadership to deliver world class service" (see www.civilservice.gov.uk/capabilityreviews).
This first wave of British Capability Reports provides interesting practical managerial recommendations that take into account the significant challenges of managing organizations where large scale and the need for transparency magnify the complexity of the task. Some of their observations might help GTEC attendees sort out the challenges of ‘enterprise transition: moving to shared services’.
David Zussman holds the Jarislowsky Chair in Public Sector Management in the Faculty of Social Sciences and School of Management at the University of Ottawa (zussman@management.uottawa). For more on the Jarislowsky Chair see www3.management.uottawa.ca/jarislowsky.
