Understand from four perspectives on what it takes for Shared Services to be successful in the public sector. We had interviewed four leading practitioners respectively from Horizon Health Network, University of California, Berkeley Lab and Chazey Partners, who had shared their real-life experience about the challenges and the key successful factors of driving transformation and Shared Services initiatives in the public sector environment. Read more in here: http://bit.ly/1j03uyy
2. 1
Customers of Public entities, both citizens and businesses today have higher
expectations of service levels and expect a positive customer experience along
with better returns on the taxes they pay. To address this, the public sector has
been striving to implement and optimize Shared Services approaches to achieve
a better consolidated back-office operation. While the comments of
‘Government is late to the party of Shared Services’ are still on-going, we are
seeing a number of great case studies in North America.
To support the event of ‘Shared Services & Process Improvement for Higher
Education, Healthcare & Government 2013’ in San Diego, Chazey Partners has
interviewed four practitioners in the public sector and put together this
roundtable report on what it takes for shared services to be successful in the
public sector.
PERSPECTIVES:
Wade Crosson, HR Shared Service Center Manager, Berkeley Lab
Andrea Seymour, COO, Horizon Health Network
Grant Farrell, Managing Director USA, Chazey Partners
Jim Leedy, Executive Director UCPath Center, University of California
TOPICS:
What Role Should Shared Services Play? ……………………………………………………. 2
Why Has the Public Sector Been Slow to Adopt Shared Services? ………………. 3
What Are The Keys to Successful Shared Services? …………………………………….. 5
What Makes the Public Sector Unique? ……………………………………………………… 7
Chazey Partners Practitioners’ Corner │ Public Sector Practice
3. 2
WHAT ROLE SHOULD SHARED SERVICES PLAY?
Andrea Seymour
COO, Horizon Health Network
“Government typically has fragmented services with a large amount of
duplication, inconsistent practice, and inefficient use of resources. Shared
Services allows you to shift decentralized delivery services into a single
organization, introducing consistency of services, single policies, and improving
the implementation of those single policies. It creates a vast amount of
opportunity to optimize resources, reduce overall headcount cost, achieve
better ROI and improve public services.”
Grant Farrell
Managing Director USA, Chazey Partners
“The global recession has put significant pressure on public organizations to
provide better service with a reduced budget. Customers of Public Bodies, both
citizens and businesses, today have higher expectations of service levels and
expect a positive customer experience along with better returns on the taxes
they pay. To address this, the public sector must find ways of improving the
efficiency and effectiveness of its service delivery. Adopting a Shared Services
model can streamline processes, drive efficiency, reduce waste, push down costs
and improve public service delivery to customers, both citizens and businesses.”
Wade Crosson
HR Shared Service Center Manager, Berkeley Lab
“Shared Services could be considered a forward-thinking approach to how
business can be done differently (more effective and efficiently) in the public
sector, which results in a better consolidated back office operation and
deployment of more up-to-date technologies. Secondly, leveraging economies of
scale, Shared Services helps Public Sector organizations perform more with less
in response to budget concerns.”
Jim Leedy
Executive Director UCPath Center, University of California
“Shared Services should be viewed as an enabler to allow the Public Sector to
perform many of their administrative functions in a more efficient model than is
currently in existence today. In addition to the improvements in efficiency,
Shared Service Centers over the longer term operate in a more cost effective
manner, which allows the Public Sector to spend their scarce resources more
wisely.”
Chazey Partners Practitioners’ Corner │ Public Sector Practice
4. 3
WHY HAS THE RATE OF ADOPTION BEEN SLOW?
Andrea Seymour
COO, Horizon Health Network
“There are a number of reasons that prevent the Public Sector from operating
like a business. The first one is the political cycle. For example, in Canada, the
Government Election cycle is every four years. However, the time invested in
setting up Shared Services is typically longer than a political cycle. Therefore, it is
even more critical for the Public Sector than the Private Sector to establish
Shared Services with a clear roadmap and ROI in order to get traction and
sustain its operation.
The second reason is the complex and sophisticated systems of accountability,
leadership and reporting structures in the Public Sector. Having multiple decision
makers slows down the levels of leadership agreement and engagement.
Therefore, it is often difficult to have a unified voice or agreement from the top
as local autonomy can be impacted by a shared service approach.”
Grant Farrell
Managing Director USA, Chazey Partners
“Shared service adoption in Canada and the US has taken place at different
paces. Canada is in a different position than most other countries in that it has
more mature Shared Services in the public sector than in the private sector. I
think this is much to do with the innovation that there is in the public sector in
Canada. This combined with the relative lack of bureaucracy in Canada making it
easier to make decisions and follow them through.
However in the US, until the financial crisis of 2008 adoption of Shared Services
in the public sector was patchy at best. Once budgets were tightened following
the crisis of 2008 public sector bodies suffered budget cuts and had to look to
ways to do more for less. Standardization, elimination of waste, reduction in
duplication of effort was all necessary in order to drive efficiency savings. Shared
Services which was gathering momentum in the private sector was viewed as a
solution. Public sector bodies that are often viewed as resistant to change could
benefit from the experiences of the private sector.”
Continued >>
Chazey Partners Practitioners’ Corner │ Public Sector Practice
5. 4
Wade Crosson
HR Shared Service Center Manager, Berkeley Lab
“There are a number of reasons for this. The first is cost. It takes an investment
in technology and resources to reshape the work, which is extremely difficult
to justify with public funds in the Public Sector. This requires diligence to
demonstrate the return on investment. Secondly, lack of internal resources
with required skill sets to perform transformation. The third point is that there
is an inherent skepticism about corporate approaches to running business in
the government sector. Last but not least, it is challenging in the public sector
to reallocate resources, restructure organization, and redefine roles for longer
term employees. These challenges need to be addressed to respond to the fast
evolving skill sets required in the new service delivery model.”
Jim Leedy
Executive Director UCPath Center, University of California
“The Public Sector usually has a very high degree of governance which can be
an inhibitor to moving forward with new initiatives. Within the Public Sector,
Higher Education is typically a very collaborative environment that can lead to
longer decision making timeframes. Process convergence is also typically much
more difficult to achieve in higher education due to the autonomy that many
locations have historically had in running their business. And finally, Shared
Services may also be viewed as a threat to jobs within the various functional
groups being impacted and may lead to longer periods of evaluation.”
Chazey Partners Practitioners’ Corner │ Public Sector Practice
6. 5
WHAT ARE THE KEYS TO SUCCESS?
Grant Farrell
Managing Director USA, Chazey Partners
“The cornerstone of successful Shared Services is a robust Customer Relationship
Management Framework supported by a strong governance structure. With good
governance in place the right people will be doing the job which will ensure the
process run smoothly. By implementing the correct technology combined with the
right people and efficient processes the customer will have a positive experience.”
Wade Crosson
HR Shared Service Center Manager, Berkeley Lab
“Executive leadership support and buy-in are clearly critical for the
implementation of Shared Services, which involves a great amount of change
management and service delivery model transformation. Investment in
technology also plays a key role. Taking my organization as an example, we are a
research institution, investment in the research side has historically outweighed
investment of technology on the administrative and operational support side. It
took a concerted effort to develop a strong business case to invest in cutting-edge
technology solutions to meet changing business needs. We are now in the process
of replacing our core HR system, which is a significant investment for us. However,
it is going to strengthen our HR services delivery to meet the new demands.
What’s more, it is equally key to address the skills transformation needed from
the staff who are going to deliver services in the new model.”
Jim Leedy
Executive Director UCPath Center, University of California
“The change management effort involved in projects of this nature is huge. In
order for Shared Services to be successful, there needs to be a strong level of
Executive Sponsorship and a very well defined and agreed upon scope of services
for the Shared Service Center.
In order for Shared Services to be successful in the public sector it should be based
upon a Customer Relationship Model, which has embedded in it several key
factors. These include (but are not limited to) Service Partnership Agreements,
Key Performance Indicators/Metrics, a culture based on continuous process
improvement, and an engagement model with the customer that supports ease of
issue escalation and performance issue resolution.”
Chazey Partners Practitioners’ Corner │ Public Sector Practice
7. 6
Andrea Seymour
COO, Horizon Health Network
“In my view, there are 5 critical success factors for shared services in the Public
Sector. First: Top-down leadership. Without substantive commitment,
intentionality and support from the top, shared services initiatives will struggle.
Second: Solid vision with an achievable and realistic plan. That means integrating
internal resources and knowledge with external expertise and capability. When I
worked on shared services project for The Government of New Brunswick (GNB), I
had worked with two external consultancy firms, one of which was Chazey
Partners who brought us external specialized skill to do knowledge transfer.
Third: True collaborative transformation approach. That means engaging the
community involved in decisions that affect go forward approach. Without
collaboration, the shared services team will come to an agreement with service
recipients on the mechanics but will undoubtedly run into roadblocks on
implementation. Strong change management and relationship building mitigate
the impact of those roadblocks and contribute to a smoother and more
harmonious implementation. The key words, as they relate to shared services
implementation in the Public Service, are really transparency and collaboration.
Fourth: Collocating your people. It is difficult to do but to achieve consistency of
processes, you have to move people out of where they are in order to build and
sustain new processes and assure adherence to a single set of policies. Collocating
people gives you a chance to leverage resource utilization, and create Economies
of Scale through process standardization and consistent policy and procedure
application. We were fortunate to have Chazey Partners as our partner who were
instrumental in helping us to develop and implement a solid approach towards
the changing of reporting lines and structures.
Fifth: Strong project management philosophy and model. It is critical to create a
Shared Services project environment with common language, repeatable
processes, and structured methodology and approach across multiple functions
and organizational levels. Taking the GNB project as an example, we were a
project team of 5 who set up 5 shared services streams introducing 4
technologies and affecting 28 departments and agencies, over a three year
period. The services introduced include AP, Payroll, IT services, IT infrastructure,
and Print Optimization. Solid project management was critical to our success.”
Chazey Partners Practitioners’ Corner │ Public Sector Practice
8. 7
WHAT MAKES THE PUBLIC SECTOR UNIQUE?
Andrea Seymour
COO, Horizon Health Network
“In the public sector, the drivers and external factors are different. There are
different decision making cycles due to the bureaucratic structure and the political
cycle. In addition, recognition, influence and collaboration are requirements when
establishing a shared services centre in the public sector. Our perception of public
sector SS organizations is that they are mandated, driven from the top down to
contribute to the bottom line. For instance, in the Government of New Brunswick,
we were mandated to achieve our saving with no layoff of staff, and no
mandatory relocation of staff between communities. We were able to use
attrition to achieve 30% cost reduction in Account Payable, and a 25% headcount
reduction on payroll, but had to do this through natural attrition of department
staff.”
Grant Farrell
Managing Director USA, Chazey Partners
“The overall goal of improving efficiency and offering a better customer
experience at a lower cost is the same for both the Private and Public Sectors.
With the public sector we have to be aware of constraints that are outside our
control (e.g. legislation). Public Sector transformation tends to take longer as the
decision making process is more drawn out than the Private Sector.”
Wade Crosson
HR Shared Service Center Manager, Berkeley Lab
“We must be nimble, flexible, and responsive to the needs of the customer. There
needs to be a balance point between the old way of doing things and the ideal
future state. In our experience we have a difficult time making drastic changes,
which drives us to do a phased implementation and focus on incremental
progress. It is also important to apply CRM concepts to understand customer
requirements and reconcile the difference between what customers want vs.
what they truly need.”
Jim Leedy
Executive Director UCPath Center, University of California
“When moving forward with Shared Services in the Public Sector, one must be
aware of the governance model (in higher education), customer segmentation,
and the multitude of diverse business processes which may be impacted by your
project. Ensure that a voice of the customer mechanism exists for your project
and that there is a clear understanding of who makes decisions. Never
underestimate the amount of change management effort required to achieve
business transformation and standardization of processes.”
Chazey Partners Practitioners’ Corner │ Public Sector Practice
9. 8
For more articles about the Public Sector Practices
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About Chazey Partners
Chazey Partners is a practitioners-led global management advisory business. We bring together a unique wealth
of experience empowering our clients to strive for world class excellence through Business Transformation,
Shared Services & Outsourcing, Technology Enablement, Process Enhancement and Corporate Strategy
Optimization. We pride ourselves in having built, operated and turned around some of the world's most highly
commended and ground breaking Shared Services Organizations, and for implementing many highly successful
multi-sourced (shared services and outsourced) delivery solutions. Over the last 20 years, we have delivered
numerous programmes globally, in the US, Canada, UK, Continental Europe, Ireland, India, Eastern Europe, South
America, Singapore, Australia, China, Middle-East and Africa. Our experience covers both Private and Public
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Chazey Partners Practitioners’ Corner │ Public Sector Practice
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