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Presentation winning strategies for shared services in the public sector
 

Presentation winning strategies for shared services in the public sector

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Phil Searle, Founder and CEO of Chazey Partners, shared his view on what it takes shared services to be successful in the public sector. In this presentation, he has also highlighted the very ...

Phil Searle, Founder and CEO of Chazey Partners, shared his view on what it takes shared services to be successful in the public sector. In this presentation, he has also highlighted the very essential basics of shared services and analyzed the lessons that he has learned through the years' of implementation in the public sector.

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    Presentation winning strategies for shared services in the public sector Presentation winning strategies for shared services in the public sector Presentation Transcript

    • The Path to the Operational Excellence in the Public Sector: Unveiling the Winning Strategies for Successful Shared Services SSON SHARED SERVICES & PROCESS IMPROVEMENT FOR HIGHER EDUCATION, HEALTHCARE AND GOVERNMENT Thursday, November 14th 2013 San Diego, California ©Chazey Partners 2013 North America | Latin America | Europe | Middle East | Africa | Asia 1
    • Agenda Chazey Partners Profile What Exactly is Shared Services? Some General Trends in Shared Services Why Shared Services in the Public Sector? Maturity of Shared Services in the Private and Public Sectors Examples of Shared Services in the Public Sector in the last few years Specific Challenges for Shared Services in the Public Sector Shared Services key trends and best practices in the Public Sector Critical Success Factors Winning Strategies for Successful Shared Services in the Public Sector North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 2
    • ©Chazey Partners 2013 North America | Latin America | Europe | Middle East | Africa | Asia 3
    • Who We Are Chazey Partners is a specialist advisory/consulting business, that brings together a unique wealth of expertise in implementing and operating world class business support and Shared Services Organizations (SSOs) around the globe We pride ourselves in having built, operated and turned around some of the world’s most highly commended and ground breaking Shared Service organizations We have operationally and as consultants delivered numerous programmes globally, over the last 20 years, in the US, Canada, Latin America, UK, Ireland, Continental Europe, India, Singapore, Australia and China, amongst others We provide advice, guidance, support and implementation expertise, covering strategy setting, business case production, programme management, outsourcing assessment, implementation, process optimization, technology enablement, training and change management North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 4
    • Who We Have Worked With OUR CLIENTS … NUIG ©Chazey Partners 2013 North America | Latin America | Europe | Middle East | Africa | Asia 5
    • ©Chazey Partners 2013 North America | Latin America | Europe | Middle East | Africa | Asia 6
    • WHAT EXACTLY IS SHARED SERVICES? Shared Services …is the organisation that provides non-core Services to the “business”, employing a specialist team, geographically unconstrained, and focusing on the requirements of the internal customer/client. This involves a philosophy and approach totally unlike traditional “corporate”-driven centralisation. The goal of Shared Services is to provide high quality, non-core, but mission critical, services (which can include both repetitive common processes and more specialized professional services) to the business at lower cost and more efficiently than the business could otherwise provide for itself. Shared Services achieves cost savings and higher quality of service by leveraging organizational re-alignment, economies of scale, technology, lower cost locations, standardized end-to-end processes and best practice. North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 7
    • North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 8
    • Some General Trends in Shared Services (1/2) Shared Services Concept started in mid 1980’s. Concept initially driven by private sector multinationals Shared Services and Outsourcing initiatives typically result in “cost savings of 20% to 50% on processes in scope (HfS-PWC report June 2012) "In today's business environment, nine out of every ten enterprises have shared services and 97 percent manage outsourcing relationships". (HfSPWC report June 2012) Mainly Finance driven early on in Europe/HR driven in North America Multi-process Shared Services much more a reality today North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 9
    • Some General Trends in Shared Services (2/2) Internal and external borders are crumbling, “the new borderless” business environment means growth is not limited by physical borders. (The Hackett Group Press Release, January 29, 2013) Evolution to a Global Business Services model (The Hackett Group, 2012 survey of SSON members) “Moving up the value chain” evolving away from a focus on transaction processing and data input toward more strategic activities More prevalent today in midsized companies and businesses, not confined to larger multi-nationals Captive v Outsource, On-shore v Near-shore v Off-shore North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 10
    • North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 11
    • WHY SHARED SERVICES IN THE PUBLIC SECTOR? (1/3) Why not? Has worked well in the Private Sector for 25+ years, and is also working in the Public Sector today. Significant funding issues today … everywhere. Shared Services can deliver potential “triple benefit” of efficiency/effectiveness/control The same basic challenges and significant opportunities around implementing Shared Services in the Private Sector are also there in the Public Sector….but need to be adapted and applied differently. Cost savings from the “back office” can be used to fund core and front line services. North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 12
    • WHY SHARED SERVICES IN THE PUBLIC SECTOR? (2/3) When thinking about the possibilities for shared services in the public sector remember that the scope across the “back office” is very significant. This is just the same as in the private sector. In terms of the public sector (and it is just the same in the private sector) one needs to determine what needs to be physically close to the internal “customer” or “client” vs what can be done remotely. Need to think about who your “client” is – internal and external. Also need to think about “citizens” as key stakeholders. Although public sector adoption of shared services has grown, the results achieved do not yet approach those in the private sector North America | Latin America | Europe | Middle East &Asia-Pacific | Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 13
    • WHY SHARED SERVICES IN THE PUBLIC SECTOR? (3/3) While the private sector has embraced shared services over the past 20 years plus, the public sector has, until recently, been slower to do the same. The budget issues in the public sector are global in nature. As an example Canada's population, as in many other “developed” countries, has an aging population that requires increased health care, as well as public expectations to improve the efficiency of the National Health system. US, France, UK and many other European counties as well are seeing spiraling health care costs. Shared services is increasingly being seen as part of the solution to the new socio-economic challenges such as the impact of an ageing population, increased international competition, and a more difficult economic environment. North America | Latin America | Europe | Middle East &Asia-Pacific | Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 14
    • North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 15
    • Shared Service Maturity at a Country/Regional Level Maturity of Shared Service Centers 10 9 8 Maturity Index 7 6 Private 5 Public 4 3 2 1 0 US Canada UK Europe Latin America North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 16
    • Shared Service Maturity at a Country Level Maturity of Shared Service Centers 10 9 8 Maturity Index 7 6 5 Private 4 Public 3 2 1 0 North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 17
    • North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 18
    • Examples of Shared Services In The Public Sector In The Last Few Years (1/7) In the United States the President’s Management Agenda directs federal agencies to fulfil goals with maximum efficiency. The US office of Management and Budget (OMB) issue directives advised turning to shared services to meet those directives. The US Department of Heath and Human Services (DHHS) Shared Services “Program Support Center” (PSC) provides support services to all components of the U.S. Department of Health and Human Services (HHS) and other Federal government agencies worldwide. PSC has a broad range of 44 services and products The Interior Business Center of the Department of the Interior is a federal shared services provider for the Department of the Interior and other federal agencies. Service offerings include Acquisition Services, Customer Support Center, Financial Management, HR, Indirect Cost Rate negotiations with nonfederal entities, and IT Services North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 19
    • Examples of Shared Services In The Public Sector In The Last Few Years (2/7) The U.S. Department of Agriculture’s National Finance Center (NFC) in New Orleans, La., is an OPM-approved shared services center that provides payroll and human resources services to more than 655,000 Federal civilian employees in 172 Federal agencies. Australia and New Zealand have Shared Services operating at the federal and local government levels. Auckland Health Board consolidated back office functions that supports major hospitals. UC Berkeley administration division began in 2008 to move to a shared service model for HR, and successfully opened its center on July 1, 2010. The center serves 3,000 clients across 3 major divisions. UC Berkeley approved a project in 2012 to implement shared services for Finance, Research, and IT. North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 20
    • Examples of Shared Services In The Public Sector In The Last Few Years (3/7) UK Home Office and the UK Ministry of Justice are saving budget through their Shared Service Programs. The Home Office has reported savings of £13m per annum and Ministry of Justice reports £20m per annum. In the UK up to 40% of local authorities (in 2011) were bringing forward their plans to move to a shared model. More than 220 UK Councils have been involved in shared services over the past 5 years, resulting in over £156m ($234m) of efficiency savings, according to the Public Policy exchange (February 2013). US large Federal Agencies that have either completed or are in the process of creating shared services include the United States Post Office and NASA. NASA SSC has five lines of business: Finance, HR, Procurement, IT and Agency Support. The NASA SSC paid off its initial investment of $35 million in 3 years and has ongoing projects to save $20 million annually, $209 million cumulatively by 2015. North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 21
    • Examples of Shared Services In The Public Sector In The Last Few Years (4/7) The Government of Ontario launched its IT transformation initiative in 1998. It reports that at maturity it saves $100 million annually, representing 10% of the total IT spending, and between 20–25% of IT infrastructure spending. The Government of Australia has developed a data center strategy to consolidate data centers, which support over a hundred agencies, from 2010 to 2025. Anticipates avoiding $1 billion in future costs The Government in Ireland is actively pursuing Shared Services for the Public Sector, as outlined in its Public Sector Reform White Paper, November 2011 North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 22
    • Examples of Shared Services In The Public Sector In The Last Few Years (5/7) UCPath in the University System in California is rolling out an HR shared service center in Riverside, CA, to provide HR services (payroll, benefits, HR and academic personnel solution) for all 190,000 UC employees. Completed its design phase on December 15, 2012. Ohio’s Department of Education, the Ohio Office of Budget and Management, issued an action plan for schools and government called “Beyond Boundaries” in June, 2012. It lists 10 recommendations to encourage shared services among units of governments. It was reported in an article in the Columbus Dispatch, June 14th 2012, that nearly $1 Billion in savings have already been realized by 51 collaborative efforts involving schools and governments across Ohio. North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 23
    • Examples of Shared Services In The Public Sector In The Last Few Years (6/7) Shared Services Canada (SSC) was created on August 4, 2011 to provide email, data center and network services to 43 federal agencies. SSC will manage approximately one-third of the Canadian federal government's IT budget and 95% of its IT infrastructure spending. Health Shared Services Saskatoon (3S Health) was created in April 2012 to provide province-wide shared services for employee benefits, procurement, payroll, scheduling and laundry services. The organization is projecting $32.5 million savings in 2012/13. UK Cabinet Office announced in March 2013 that it had entered into a contract with a BPO partner to operate the first Independent Shared Service Centre on behalf of the UK Government. This is a result of their Next Generation Shared Services Strategic Plan published in Dec 2012, which outlined how departments will share functions such as HR, procurement, finance and payroll to deliver potential savings of between £400m and £600m per year in administration costs. North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 24
    • Examples of Shared Services In The Public Sector In The Last Few Years (7/7) Six London councils: Barking & Dagenham, Brent, Lambeth, Lewisham, Havering and Croydon announced they plan to implement shared services for HR, finance, payroll, pensions and procurement in 2013. The councils expect to save £18m ($27m) over the first four years of the project. (ComputerWeekly.com, August 2012) National Health Services (NHS) Scotland started the roll out of a single shared services platform for finance across its 22 health boards in 2012.(SharedServicesLink.com, August 2012) Columbia called for proposals in 2012 to assist with the design and implementation of shared services strategies in public administration. It is also looking at plans to implement “Government Online”. North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 25
    • North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 26
    • Some Specific Challenges in the Public Sector (1/2) “Shared Services” not yet well understood. Sometimes linked with outsourcing. Sometimes with privatization. Often, there can be real “politics” involved Involves “doing something different”, and some in “leadership positions” may be cautious about impacting the status quo. Investment funding can be more difficult to come by, especially in these economic times. May require non-traditional funding techniques Decision making and change has historically been slower in the public sector North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 27
    • Some Specific Challenges in the Public Sector (2/2) Public sector may not want to consider offshoring or business process outsourcing as a potential part of the solution, due to fear of losing local jobs and control. How to actually fund shared services can also be a challenge The tenure of elected officials can be a “short” one, but is this that different to the Private Sector? Technology (or lack of) can be a limiting factor. Public sector often restricted by very manual processes and lots of paperwork. But interestingly spend on technology seems very high (Hackett). Herein therefore also lies part of the opportunity! North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 28
    • North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 29
    • Critical Success Factors  Service orientation in place  Structured way of dealing with customers  Customer satisfaction levels understood  SPAs in place  Reality versus perception  Account management Customers Critical Success Factors Technology        ERP implemented Document Scanning Solution Workflow Automated Payments Elimination of Side Systems Self services tools Automated Score Cards  Processes documented  Standardized, controlled & repeatable activity  Recharging methodology  Benchmarking capability – internal/external  Metrics: (i) Control Based (ii) Efficiency & Effectiveness Processes People      Skilled Leadership in place – do not compromise on competencies Team shape & stability – process shaped/spans of control/staff – perm v temps Team members – culture, values & behavioral competencies assessed Team morale, reward & retention Working environment conducive to team working North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 30
    • North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 31
    • Winning Strategies 1) Senior level Executive sponsorship is key. Make sure that key executives understand and support the roll-out. 2) It is really important to distinguish between “solutions” vs “quick fixes”. 3) Distinguish between “wants” vs “needs”. It is the requirement – i.e. the “need” - that is ultimately important. Not the “want” to perhaps simply replicate current processes. 4) Proper base-lining and a clear business case is very important. 5) Do not underestimate the change management required for any such initiative, including a turnaround. 6) Consider a multi-faceted communication and advisory approach. 7) Carry out regular communication with all relevant stakeholders. 8) Assign your best resources and people to the project. Make sure they are available. North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 32
    • Winning Strategies 9) Remember, an ERP system is an “enterprise” system for use by the business. It is not a technology solution owned, or to be used exclusively, by the IT department. 10) Generating and supporting a culture of innovation and continuous improvement is vital. 11) Follow the “80/20 rule for Shared Services ERP” when deciding whether to use “vanilla” ERP functionality. If your core ERP can provide you with 80% of the functionality that you require as standard then you should go with this every time. 12) Have regular, meaningful Steering Committee meetings of key stakeholders. This should be an active Committee and not just a chore to get through unscathed every week. 13) Remember that training is key. 14) A robust KPIs, Measures & Metrics Framework should be in place North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 33
    • Winning Strategies 15) Try to cleanse the data as much as possible before each main cut-over or clean-up. The quality and volume of data should be worked on early in the project and not left to the last minute. 16) Engage targeted expert outside help. Neither abdicate responsibility for the project to a third party consulting firm nor try to do the whole thing “on the cheap”. 17) Make sure your team includes regional and local expertise and be prepared to travel to meet and work with users. 18) Remember always that the project does not end with “Go Live”. There needs to be adequate support post go-live and also continual training and re-training. 19) Keep working towards your goals and be relentless in pursuit of them. Shared Services initiatives are a significant commitment both in terms of resources and energy. North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 34
    • North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 35
    • Thank You Phil Searle Founder and CEO Chazey Partners Office: +1 408 402 3008 Mobile: +1 408 460 0785 philsearle@chazeypartners.com Grant Farrell Managing Director Chazey Partners, US Office: +1 866 337 4699 Mobile: +1 408 767 1285 grantfarrell@chazeypartners.com Chas Moore Managing Director Chazey Partners, Canada Office: +1 855 692 629 ext 201 Mobile: +1 250 469 4168 chasmoore@chazeypartners.com Robert Towle Director - East Coast Chazey Partners, US Office: +1 866 337 4699 Mobile: +1 862 812 7851 roberttowle@chazeypartners.com North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 36
    • Contact Us www.ChazeyPartners.com North America | Latin America | Europe | Middle East & Africa | Asia-Pacific North America | Latin America | Europe | Middle East | Africa | Asia ©Chazey Partners 2013 37