Lessons of shared services
by Glen Orsak
The Government of Canada has made a commitment to examine and introduce shared service approaches for delivering corporate administrative services in the areas of finance, human resources and materiel management.
The implementation of a shared services model would transform the way in which these services are delivered in the future, leveraging common processes and tools and capitalizing on economies of scale. The value proposition for implementing shared services lies not only in improvements to the services themselves, but also in how a common service model can better enable improvements in program delivery and services to citizens – improving overall government performance.
Governments across the country and around the world are fundamentally rethinking how they serve their citizens. While Canada is in the preliminary stages of its introduction of shared corporate administrative services, other jurisdictions have ventured down the shared services path and are offering insights into overcoming challenges and implementing best practices.
At the recent 2006 Government Performance Forum, hosted by Deloitte in collaboration with Canadian Government Executive and APEX, government executives from across Canada assembled to gain insights into how government can enhance the potential success of its shared services initiative by adopting some of the lessons learned in the UK, where the implementation of corporate administrative shared services is also well underway.
Michael Herron, the program director for the HR and Finance Shared Services Centre at the Department for Transport in the UK, shared his experiences from concept inception to implementation. He described how the large and diverse UK Department for Transport developed a compelling shared model for providing back-office services and indicated that strong leadership and direction has been the key to success. He cautioned his Canadian counterparts, as they embark on a similar journey, about the risk of debating for too long the whether and why and advised on the need to focus on the strategic benefits that will inevitably accrue over time to the program delivery operations of government. Herron compared the efforts used today to justify the implementation of shared services models around the world to similar efforts over a decade ago to justify deployment of desktop computers. While the initial arguments that justified desktop deployment were based on office automation efficiencies, the ultimate benefits of the desktop computer phenomenon have little to do with the original justification. The benefits materializing in his department from implementing shared services are similarly dwarfing the original ideas that justified the initiative in the first place. He also discussed the methods used in the UK to avoid scope creep that can easily cripple a shared services project.
Implementing shared services within the public sector has some unique challenges. Sheila Pringle, a director with Deloitte in the UK who specializes in implementing shared service solutions with the firm’s public sector clients around the world, pointed out the challenges that can thwart success in public sector initiatives to implement shared service solutions – an over-emphasis on consensus-driven decision-making, analysis paralysis, the politics of governance, longer payback times and resistance to accept leadership from the centre.
Based on her experience, successful delivery requires strong senior management engagement and support, maximizing stakeholder involvement, benchmarking performance early, using service level agreements, asking your customers, involving your customers, and taking a process view in the design. She also pointed out that to transform back-office services and truly achieve performance improvements it takes more than just implementing shared services and solutions. The end-to-end process view is essential to ensure that organizations do not simply centralize existing processes.
Bruce Deacon, Assistant Secretary of the Government of Canada’s Corporate Administrative Shared Services (CASS) initiative, explained that the window of opportunity for shared services transformation is ‘now’. The federal government’s plan for corporate administrative shared services implementation would be a step-by-step process with a five to seven year time horizon. The plan would start with a limited number of departments and agencies and a defined scope, and then add both organizations and services over time.
Many questions were raised, however, about the details and business model of the CASS initiative. Deacon was able to address the governance structure for the initiative, the approach envisioned to measure service quality, and the implications of offering optional services versus creating a monopoly service provider. He also described how shared services will fundamentally transform the service delivery model for corporate services, enabling these functions to focus more on value-added responsibilities by reducing the time spent on transactional activities.
Much can be gained when efforts are made to share lessons from others who have embarked on a similar journey. The leaders of the federal government’s CASS initiative, together with executive colleagues from across government, embraced with energy and interest, the ideas that flowed from across the pond at the Government Performance Forum. These ideas should hopefully save the initiative from some of the pitfalls experienced by others and instill confidence in its leaders that the path has already been successfully traveled.
Glen Orsak is a consulting partner in the Ottawa office of Deloitte and is the leader of the firm’s Federal Strategy and Operations Practice.
