The document discusses how shared services and information technologies are transforming private corporations and examines if public sectors could benefit from similar initiatives. It provides details on how shared services projects have delivered progress over 20 years by consolidating resources across businesses and countries. While originally focused on cost reductions, they now aim to add more value. The document also discusses key factors for successful transitions like having executive sponsors, change management processes, and redefining civil servant skills for new citizen-focused tasks.

1. Passing value on
Shared Services and Information Technologies are transforming the value added chain in major
private corporations. Would public sector take benefits from such projects to develop similar
initiatives in order to upgrade service levels and reduce expenses? Jean-Claude De Vera,
Chairman, and Lionel Fleury, CTO, of Biporis, (an international professional services company
dedicated to support functions) look into it
How Shared Services and IT
projects delivered progress and
are still challenging end-to-end
business processes performance
in private corporations?
In the early 80’s, pioneering companies
started to consolidate resources across
businesses and countries in the USA, in
the UK and then in continental Europe
and Asia. Such initiatives were driven
mainly by cost reductions objectives
allowed by process centralisation and
standardisation: one platform serving
multiple customers from an attractive
place (at that time second tier cities in
the USA or in the UK/ Ireland).
Best practices governance was limited
to contract delivery and issue resolution
between Shared Services Centres (SSC)
and Business Units (BU) Management,
so that we were in a Customer / Supplier
relationship much more than in a
proactive Business partnership.
Some projects were totally linked to
ERP roll out like SAP or Oracle, some
others were managed sequentially and
few productivity tools existed in the
market. So pioneers had to develop
their own solutions to monitor
and operate the processes (eg. like
scanning and workflows). Today
we are able to build on 20 years of
support function’s transformation and
sharing of best practices in Finance,
Human Resources, IT, Facilities
Services, Purchasing, or Legal.
As a matter of fact, we know that
each organisational target is heavily
dependant on:
Objectives: to set the right balance
between costs reductions (through
economy of scales and labour
arbitrage in transferring activities to
low costs places) and social impact
optimisation (capacity to redeploy
smoothly employees to new internal
or external positions) will influence
the Business Case and the targeted
Architecture (what will be delivered
locally, regionally or globally).
General Managers are expecting more
and more value added from the SSC in
addition to competitive services.
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Governance assumptions: to build a
partnering relationship, where the
BU’s are managing business growth
and profitability and fixing support
objectives, and Shared Services are
managing resources (eg. recruitment
and investments; locations selection;
sale and sourcing strategy;…).
Professional and IT skills: to assess
current capacities in order to retain
appropriate internal skills for the
targeted organisation as well as for
the transition, to redeploy others and
to add complementary functional and
IT resources from external providers
(select either professional peers or
consultants).
Locations: to integrate intensive use
of IT both for managing governance
relationship (eg. Key Performance
Indicators results against objectives
should be accessible in a data
warehouse; all issues to be captured
and traced up to resolution…) and
operating transactions (eg. Electronic
invoicing; Scanning and Workflows
for Business validation; Travel
& Expenses end-to-end system;
Automatic accounts reconciliations to
react by exceptions on discrepancies;
Letter of Credit management….).
Process industrialisation and
electronic communication tools are
reducing, but not eliminating, the
economical impact of the usage of
offshore platforms in Central Europe,
India and/or Mexico.
Secondly we can highlight some
transition and change management key
success factors:
Sponsoring: to get the support of an
executive committee member, either
the general or the functional or a BU
manager.
Steering committee: to build with
the sponsor a periodic committee
involving all managers concerned
by the transformation which will
address all issues like performance
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management, resources allocations
or rescheduling priorities, social
measures: Finance, HR, IT, Facilities,
Legal and Tax (structure and
invoicing rules).
Transition options: to select either
to transfer current activities to SSC
management like they are today
(lift and drop) or to consolidate,
reengineer and then transfer to a
SSC (fix and transfer). The first
option generates an earlier ownership
by the SSC and then optimisation of
current complexity when the second
one will take more time due to local
transformation and compromises
which may better fit the company's
culture.
Communication: to sustain continuous
and consistent updates on successes,
on issues and on their resolutions up
to implementation from management
team to the field and bottom up.
Finally we recommend to improve
continuously processes, which is
critical, to motivate partners in
challenging rules of the games and in
eliminating unnecessary tasks and to
investigate the combination of local
value added tasks (decision support and
performance monitoring) and of some
regional consolidation of transactions
(execution of recurring processes) may
be an ultimate model or the preparation
of future outsourcing contracts.
What comparable practices are
used or could be implemented in
public sector to enhance service
level and reduce costs through
eGovernment?
There is no reason why almost most
of public services functions could not
be re-engineered and/or consolidated
across administrations. With the same
objectives as in the private sector:
reduce costs by 20 to 30 per cent and
offer a better service through shared
facilities. Moreover, a specific objective
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can be a strong ahead-mover, helping
in finding political sponsors: a better
coverage (no ‘white-area’) of less-
populated regions.
Today, there are a lot of services
which are already accessible through
region- or nation-wide SSC: portals,
facilities call-centres, emergency
services, forms and legal texts
repositories, on-line tax declaration,
transportation services reservation,
etc. Their introduction relied on the
same key-success factors as in private
companies: re-engineering, sponsors,
project management and steering
committees, change-management,
communication and dematerialisation.
The only difference between private
and public sectors lies in a strong
political obligation: an equal-access to
public services. So, the introduction of
new forms of eGovernment must take
into account the possibility for each
citizen to access electronic services.
Today, less than 50 per cent of homes
are actually connected to the Internet
and probably less than the half are
experimented users. On the offer side,
this obligation implies also that any
service must be accessible nation-wide
to concerned users. Consequently, the
transformation costs are often increased
by the necessity to run both the old-
and the new process as long as 99 per
cent of users cannot access it. Obviously,
the time-scale is not the same in the
public sector and most of the key
performance indicators suffer from a
lack of references.
Anyway, the greatest challenge for
public bodies in the future will be to
manage the consequences of value-
added transfers in their organisation,
including the consequences of work
transfer to the citizens themselves:
typing in, selecting, answering,
capturing. This will require, of course,
a deep redefinition of the skills of civil
servants, not only by teaching them
computer usage or by reducing their
headcount but, above all, by assigning
them new tasks. Oriented towards
satisfaction of citizen’s needs, these new
tasks will be inescapably associated
with performance evaluations based on
service levels and, at the end, actual
costs of public services.
The greatest challenge for public bodies in the future
will be to manage the consequences of value-added
transfers in their organisation
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