Shelley Oldham, Capgemini - Shared Services - Achieving Success in Government

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  • 1. Shared Services – Achieving success in G Government • Date : May 12th 2010
  • 2. Agenda 1 The challenges of government into the future 2 Establishing who is the customer 3 Purchasing for the Shared Service Operation 4 Staffing and skilling the Shared Ser ice Operation Service 5 Strategies for overcoming the obstacles along the way 6 The role of governance to ensuring success Commercial in Confidence
  • 3. Shared Services At its most simplistic is to consolidate business processes and functions to achieve More outputs for less inputs In reality is far more complex than that In Government complexity increases due to............................... Commercial in Confidence
  • 4. Shared Services in Government is it real? Locally • NSW announces Super Ministries • WA implementing a cluster based approach • Vic implementing by functions • SA implementing a cluster based approach • ACT implemented single shared services function • QLD implemented by clusters Internationally • UK Department of Works and Pensions implements clusters • Scotland implements by functions • NLDS implements by functions • US implements Federally by Department and function Commercial in Confidence
  • 5. Agenda 1 The challenges of government into the future Commercial in Confidence
  • 6. Challenges for government Many governments operate using All expenditure and service legacy, bespoke systems that delivery is open to public require intimate historical scrutiny knowledge to retain and operate Interdepartmental and Senior executives with that Mix of Service interjurisdictional working and Legacy is a real Delivery history are in many cases close service delivery models are to retirement age constraint Models more complex Changes in old systems require Citizens expect that services intense effort and investment to can be obtained easily from implement even the simplest of one place and that they will policy changes modernise in line with their Translating this to politicians is access to new tec o og es e technologies challenging Leadership is consultative p Financial management act and Fi i l t t d Mandates from one leader are other instruments obstruct inter often distilled through departmental service delivery consultation prior to The crown is always indivisible implementation so with the best will in the world The public sector struggles to government struggles to fund change management or commercially service itself establish change agent leaders Leadership Legislation Many simple processes arise who can perform short term from legislation resulting in roles, stimulate change and complex systems changes move on Commercial in Confidence
  • 7. Government Department of the Future Commercial in Confidence
  • 8. Key Principles Focused on Smaller Citizen centric outcomes Provides capacity A self-improving to j i t join up system t government Set up to take a Flexible about Closer to system wide who delivers the Citizen view Commercial in Confidence
  • 9. Agenda 2 Who is the customer in the future and how do they want to be served? Commercial in Confidence
  • 10. Customers expect government to deliver: - independent of how they are structured Customers demand a new way Government Departments deliver this way Commercial in Confidence
  • 11. Servicing the customer requires........ Requires cross agency working Requires management of information across multiple channels Requires Government to integrate existing systems Commercial in Confidence
  • 12. Consolidating the back end in a Shared Service requires customer focus……… Models of relationship Management culture has to adapt A relationship oriented philosophy will focus on creating sustainable value through partnership across the Agencies relationship establish maintain optimise oriented relationship relationship relationship An ability to understand that relationships need to change from functional responsibility to customer relationship based and this requires a change of mentality in the former back-office functions. Philosophy customer fulfil satisfy anticipate customer customer customer It requires the development of identity, the education of all oriented demand expectations needs employees with customer contact and the tracking of value generated for the customer. As the A th scope of shared services extends f f h d i t d from market process generate create regional/functional, the reporting line becomes more oriented orders follow up identity critical as there are regional/functional lines of control and accountability are blurred. The right governance model should evolve as the business services model and offers Sustainability transaction success value mature. mature oriented oriented oriented Governance must drive customer focus Commercial in Confidence
  • 13. Government Shared Services Models Commercial in Confidence
  • 14. Business drivers and benefits determine the model Product Focus F Customer Focus Each model provides an emphasis Service Service Aggregator on a different business driver and Life Cycle Manager Industry Customer delivers a different mix of benefits Service Service Network Network Increasing Evolution from one model to another Degree of end to end value chain Service occurs as the nature of the business Network integration and the shared service matures Functional Shared Service Efficiency Service Consolidator Focus Increasing Degree of cross function integration Service Model Benefits Functional Service Service Industry Customer Service Shared Consolidator Network Service Service Aggregator Service Network Network Efficiency Service Consolidator and Service Aggregation are the most common Effectiveness Compliance models that are evolving across Speed to market Adaptability government Customer/Citizen Management People Management Commercial in Confidence
  • 15. Agenda 3 Purchasing for the Shared Service Operation Commercial in Confidence
  • 16. Procurement for Shared Services Procurement skills pre Shared Services drive single purchases for delivery of single services Procurement processes are sound Scale and complexity of requirements, not all parties can have a say Not all parties will be satisfied with the result The process must encourage industry participation align stakeholder participation, expectations and deliver outcomes quickly Commercial in Confidence
  • 17. Supplier value management models must focus on the nature of services and the criticality to service provision Supplier Value Management comprises four key Segmentation informs the appropriate supplier value considerations: management models Segmentation • Segmentation of the services and functions according to the business risk and supply market opportunity ment Orga Rela • Relationship and organisation integration within Developm ationship / supplier and Sh d S i organisation li d Shared Service i ti anisation Supplier Systems Bottleneck Strategic • Performance management frameworks and Bottleneck Strategic governance for the services Treasury Tax & Reporting convergence Convergys • Supplier development initiatives to ensure continuous Performance improvement Captive Finance Management Compliance These four components are underpinned by systems sk Business Risk Facilities Mgt and efficiency initiatives Business Ris TEC OH&S Timekeeper Legal Routine Routine Leverage Leverage Supplier Value Management Continuum Non Stock Procurement Strategic Sourcing Equity Alliances Non Stock TACTICAL BUYER/ STRATEGIC JOINT EQUITY JOINT CONTRACTS SOURCING PARTNERSHIP INVESTMENTS VENTURE ACQUISITION SUPPLIER Supplier Management Opportunity Supplier Management Opportunity Low Level of Integration and Mutual Value Creation High Supplier Value Management will be applied to all trading partners – whether suppliers or internal government agencies Commercial in Confidence
  • 18. Agenda 4 Staffing and skilling the Shared Ser ice Operation Service Commercial in Confidence
  • 19. Shared Service work is often project based Strategy & Service Delivery Planning Project Delivery (Ongoing operations & (Strategy Planning & (Project focussed activity) Support capabilities) Business Development) Activity A Time The life of a project as it passes within the Shared Services environment Commercial in Confidence
  • 20. Core skills of Shared Services • Stakeholder Management • Strategy and Planning • Programme Office • Project Implementation • Risk Management • Strategic S St t i Sourcing i • Procurement • Category Management • Technology implementation Commercial in Confidence
  • 21. Ca te 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 18.00 20.00 go ry M Pr Pr gt oj 17.8 ec oj t ec t * im M Bu pl gt em 8.5 sin es en s ta * Su tio pp n 6.0 St or ra t& te * g y EA & s 5.6 pl St an ak n in eh g o 4.9 Pr ld er og ra M gt IT m 4.9 m Op e s of & fic e Se 3.5 r to commencement of SS vi ce Pr Kn de oc ow l. le 2.7 27 ur e d IT m ge en M (s t gt y (te 2.0 st nd em Fi s er in n, in de sig g ) v 1.9 es n t& & go co v) m 1.9 an So al IT ur y tic (s cin g s y 1.9 st st em ra s te bu gy 1.7 ild & im pl Be ) 1.2 ne fit s M gt 1.0 Ri St sk ra M te Commercial in Confidence g gt ic 0.5 so ur cin g 0.2 Ratios of personnel within Government Department prior
  • 22. Agenda 5 Strategies for overcoming the obstacles along the way Commercial in Confidence
  • 23. The right performance measures lead to improved outcomes Baseline Baseline SSC Business Measures Model of Control Model of Control normalisation of error and rework rates overall efficiency and overall efficiency and normalisation of error and rework rates vision and strategies vision and strategies Effectiveness effectiveness Effectiveness portfolio of services portfolio of services SLA SLA CRM process CRM process dimensions of value creation dimensions of value creation objectives and services objectives and services performance briefing performance briefing Key Process Measures critical success factors critical success factors deliverables d li bl deliverables customer survey t customer survey 6- 8 for each process 6 8 ffor each process 6- h analytical dimensions analytical dimensions roles and responsibilities roles and responsibilities improvement opportunities improvement opportunities simple, relevant, simple, relevant, costing methodology costing methodology procedures procedures SLA refinements SLA refinements available, reliable available, reliable Tracking Tracking Benchmarking Benchmarking Continuous improvement and solution orientation are promoted, Pricing / Charging Pricing / Charging Billing Billing Discounts / Incentives Discounts / Incentives therefore sustaining achievements ncreased transparency Improved control • Comply with budget restrictions • Measurability of performance e.g. by • Clear and agreed definition of service defined key performance indicators (KPIs) quality levels to deliver • Achieve cost saving targets • Detect cost-intensive services and • Responsibilities of process clearly defined • Achieve defined efficiency potential improvements targets (e.g. process t t ( • Differentiated performance measurements • Comparability of delivered services for different service suppliers efficiency) • Early exposure of optimisation potentials • Enhanced planning reliability • Higher customer orientation of business unit • Faster reaction to identified to-be / as-is discrepancies p • General internal and external acceptance Commercial in Confidence
  • 24. Invest time in strategic conversations 1 CONVERSATION 1: Singular Goal What is the unifying message for staff, partners and customers? 2 CONVERSATION 2: Tangible Outcomes How will we know we have transformed and measure success? 3 CONVERSATION 3: Current Reality What is the baseline and the strengths upon which y can build? g p you 4 CONVERSATION 4: Imperatives to Act Drivers for Transformation: Cost, customer experience, culture 5 CONVERSATION 5: The Vision The characteristics and things you want people to remember 6 CONVERSATION 6: 7 CONVERSATION 7: 8 CONVERSATION 8: STRATEGIC THEMES ROADMAP GOVERNANCE/OP MODEL What is the logical l t i Wh t i th l i l clustering What are the projects/programs that will How will you govern and of ambitions shaping the deliver the Vision? oversee the Program? program? Commercial in Confidence
  • 25. Agenda 6 The role of governance to ensuring success Commercial in Confidence
  • 26. The case for Shared Services in Government is real Governance is challenging therefore one of the key considerations is Which governance structure allows for true customer supplier relationships to be developed? Which governance structure will satisfy the over arching legislative requirements? Service design requires considerable time and extensive stakeholder involvement and consultation Commercial in Confidence
  • 27. Establishing the business drivers drives the governance structure Consolidated Department C Independent Governance Corporate Governance Governance Reporting Structure Reporting Structure Reporting Structure Oversight Committee Corporate Director Operations Corporate SD1 SD2 SDn Shared Shared Consolidated Corporate Services Services Dept 1 Dept 2 Dept n Shared Services Centre Department centre centre + Minimises silos/ functional barriers + Customer proximity + Easier, if corporate contains most + Business unit and corporate p + Streamlined corporate p services today independent + Less business unit resistance + Business unit independent + Increased customer focus + Easier, if business units contain most + May be only acceptable structure in + High visibility services today some companies + Maybe only acceptable structure in + Services provided to whole business – Additional oversight committee g some companies p – Corporate silos/ p p potential barriers required – Business unit leadership still distracted – Major corporate customer service – Elements of business unit and from core responsibilities culture shift required corporate redesign required – Business unit and corporate services – Low customer proximity – Culture change required separate – Greater business unit resistance – Additional senior executive position – Senior executives distant from ownership The governance structure follows the service model, and may be a hybrid structure Commercial in Confidence