shared services horizons of value -...
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Shared Services Horizons of Value
Leadership Lessons on Accelerating Transformation to High Performance
A report from the 2009 Shared Services Summit at Harvard Kennedy School
“There are risks and costs to a program of action.
But they are far less than the long-range risks and
costs of comfortable inaction.”
President John F. Kennedy
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• MissionCommand:“T-minusnineminutesandcounting,hatchclose,accessarmretractandcrewfallback.”
• ShuttleCaptain:“Securedandready.”• MissionCommand:“T-minussevenminutes.Auxiliary
powerunitsengage.”• ShuttleCaptain:“GOXventarmretracted.”• MissionCommand:“T-minusoneminuteand
counting—initializesuppressionsystem.”• ShuttleCaptain:“Flowtorainbirdsisonandgood.”• MissionCommand:“You’regoformainignitionstart.”• ShuttleCaptain:“Mainignitionstart—sounds
beautiful.”• MissionControl:“Shuttleyouaregoforlaunchat
T-minusfivesecondsandcounting.”• ShuttleCaptain:“Lookinggoodtogo.Let’sroll.”• MissionControl:“Five,four,three,two,one...Youare
goforlaunch.”• ShuttleCaptain:“Launching—noseupandwe’re
clear—solidandgolden.”• MissionControl:“Godspeedandseeyousoon.”
Theshuttleroarsintoorbit—amarvelofhuman,naturalandtechnicalmightpullingawayfromearthatmorethan7,000meterspersecond—readytoexploretheuniversefornewideasandsolutionstohumankind’schallenges.
Foralloftheenergy,technicalprowess,engineeringandsheergritrequiredtolaunchashuttleintospace,NationalAeronauticsandSpaceAdministration(NASA)officialssaythere’sanotherkeyenableroftheirprogram:sharedservices.“ThebottomlineforNASAis,ifwe’regoingtogettotheMoonandMarsandreallygobeyondthespaceshuttle,we’vegottoimprovemanagementofNASA’sresources.Andthatmeansbothonthetechnicalsideaswellasthebusinesssupportside,”saysRichardArbuthnot,ExecutiveDirectorofNASASharedServices.“Forustocontinueflyingtheshuttle,logicallyretireitanddevelopthenext-generationlaunchvehicle,we’vegottogetsmarterinhowweoperate.Sharedservicesisoneofthenewoperatingmodelswe’veimplementedtotryandfreeupresourcesonthebusiness-supportsideofNASAandredirectthoseresourcestodirectlysupportNASA’smissiontopioneerthefutureinspaceexploration,scientificdiscoveryandaeronauticsresearch.”
Theefforthasgarneredevenbetterresultsthanexpected.Uponlaunchingthesharedservicesprogramin2006,NASAofficialsestimatedasavingsof$6millionto$8millionayear.In2008,sharedservicessavedtheagency$16million.Currentconservativeestimatesprojectannualsavingsof$12millionto$16million—adoublingoforiginalprojections.“Costcontainmentishugeforusbecausethemorewecansaveontheadministrativeside,themorewecanpushresourcestotheNASAmission—andthat’swhywe’rehere,”Richardsays.
Worldwide,publicserviceleadersandorganizationssuchasNASAaremovingtosharedservicestohelpthemachievetheirmission.Let’stakealookathowsharedservicescangrowanorganization’scapacitytodeliver,howprogressiveleadersaremovingforwardonsharedservices,andwhatyoucandopropelyourorganizationintothefuture.
T he Space Shuttle Discovery is poised on the launch
pad, absorbing the warmth of the Florida sun and
the hope of the people waiting for it to takeoff.
Sevenastronautsarestrapped-in,readyforamissionthey’ve
beenplanningandtrainingformostoftheirlives.Anticipation
growsasthecountdownprogresses:
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TableofContentsIntroduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
SharedServices—ALeadershipIssue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
TheLongView—HorizonsofSharedServicesValue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
EconomicsofSharedServices:MovingtheCapacityCurve. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
HorizonOne:Visioning
California. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
HorizonTwo:Launching
Ohio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
SharedServicesTransformation:TheAdaptiveChallenge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
HorizonThree:Growing
Illinois . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
HorizonFour:Transforming
Ontario. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
SmartMoves:AGlimpseintotheFutureofSharedServices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46
Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
AcknowledgementsandCredits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
Thisdocumentwasdevelopedfromthe2009SharedServicesSummitheldatHarvardKennedySchoolandisintendedsolelyforthebasisofdiscussionandlearning.Thecontentandcasesarenotintendedtoserveasendorsements,sourcesofprimarydata,orillustrationsofeffectiveorineffectivemanagement.Copyright©2009byLeadershipforaNetworkedWorld.AllHarvardphotosandcontentisCopyright©2009byHarvardUniversity.
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“Ultimately, your primary job as a leader is to nurture the culture your organization needs to have to get the job done...”
AmyEdmondson,HarvardBusinessSchool
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Creatingvalueintheseturbulenttimesisadefiningchallengeforpublicserviceleaders.Grapplingwiththeeconomicdownturn,youmayhavealreadybeenforcedtomakepainfulchoicesaboutprogramandservicecuts—allwhileconstituentsaredemandingmoreservices,transparency,accountabilityandvaluefromgovernment.Buttoday’scost-containmentmeasurescannotbebuiltonone-offtacticsforimmediaterelief.Theymustbedrivenbystructuralandefficiencyimprovementsthatenablesustainableinnovationforthelong-term.Adownturnofthismagnituderequiresanewmindset,notjustaretreadoftraditionalresponses.
Forward-thinkingexecutivesrealizethatmeetingthesenewdemandsandcreatingever-higherpublicvaluerequiresimprovedperformanceinboththefrontandbackoffices—andincreasingly,they’readoptingsharedservicesastheengineforthistransformation.Yetbuildingandgrowingasharedservicesenterprisepresentssubstantialleadershipchallengesinthecurrenttumultuousenvironment.
Tohelpaddressthesechallenges,Harvard’sLeadershipforaNetworkedWorldProgramandAccenturedevelopedauniqueresearchprogramtotrackandevaluatethegrowthofsharedservicesenterprisesworldwide.KnowledgeharvestedfromthateffortwassupplementedinJune2009,whentheyconvenedsharedservicesseniorleadersforthe2009 Shared Services in the Public Sector Summit: Accelerating Transformation to High Performance.Consensusheldthatsharedservicescanincreaseefficiencies,elevatetheeffectivenessofprocessesandprograms,andyieldproductivitygains—yetultimatelyleadersarelookingtosharedservicesastheengineforrealtransformation.
Movingalonganever-increasingtrajectoryofvaluegenerationwithsharedservicesisthusthecentralchargeforpublicserviceleaders.Tofacilitatethis,theLeadershipforaNetworkedWorldProgramdevelopedamaturitymodelreferredtoas“SharedServicesHorizonsofValue”:
Introduction
Tohelpyouprogressthroughthehorizons,theLeadershipforaNetworkedWorldProgramandAccenturearepleasedtopresent“HorizonsofValue:LeadershipLessonsonTransformingPublicServicethroughSharedServices.”ThispapercouplesinsightsfromtheSummitwithcase-basednarrativesonexecutivesinCalifornia,Ohio,IllinoisandOntario.Asyou’lllearnfromtheirexperiences,progressisfeasible,butrequiressoundstrategy,judgmentandleadershiptocreatetheenvironmentforsuccess.
Transforming: Thesharedservicesenterpriseisatscaleandhasgrownbeyondtransactionalservicestoprovideinnova-tion-drivingstrategiesandvalue-addedservices.
Growing:Thesharedservicesenterprisehasoperationalexperience,isactivelyextendingandscaling-upitsservicesanddevelopingincrementalinnovationstoitsserviceportfolio.
Launching: Thesharedservicesinitiativehasabusinessplanandgovernanceinplace,isimplementingservicesandformingahigh-performanceoperation.
Visioning:Thesharedservicesleadershipisactivelyassess-ingthepotentialandfeasibilityofdeployingasharedservicesstart-up,andiscreatingafoundationforgovernanceandabusinessplan.
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Shared Services — A Leadership IssueOneofthefirstthingsseniorexecutivesaskinregardtosharedservicesis:WhyshouldIbeinvolved?Isn’tthisageneralback-officemanagementissueorsomethingIcandelegatetotechnologists?Toanswerthis,weneedtounderstandtheroleofthemodernpublicserviceleader,whythechallengesaremoredifficulttodayandhowsharedservicesplaysintothatmix.
Firstandforemost,leadersofapublicorganizationmuststrive to maximize public value — with public valuedefined as the measure of how effective and efficienttheorganizationisinachievingthemissionmandatedbycitizens and the authorizing legislature.ThemanagerialunderstandingofpublicstrategyandvaluecreationwasinpartdevelopedatHarvardKennedySchoolbyProfessorMarkMooreandisvisuallyrepresentedbythe“strategictriangle.1”
In this model the leadership focus is directed to threedimensions: the mission, sources of legitimacy andsupportandoperationalcapacity.
• Mission Value: The “mission value” peak capturestheintendedpurposeandmissionoftheorganization.Thisisakintothemarketneedthattheorganizationisfulfillinginaselectmarketorsocialsectorandshouldbemeasuredbyoutcomesresultingfromservices2.Inordertostayviable,theorganizationhastoconsistentlymeetthisneed.Themissionpermeatestheentireorganizationandshoulddrivetheformalvaluechainofstructure,processes,inputs,outputsandoutcomes.Overtimetheorganizationwillhavetoadaptitsmissionandoutcomestostayinsyncwithitsenvironment.
• Legitimacy and Support: The“legitimacyandsupport”peakrepresentstheauthorizingenvironmentwithinthesector.Similartotheforcethecapitalmarketsimposeonprivateorganizations,authorizingenvironments(mostnotablylegislatures)wantpublicorganizationstocreatevaluethatishigherthanitsmarginalcosttosocietyanditsopportunitycostofcapital.Legitimacyandsupportisoftenmeasuredinnationalandregionalgovernmentsbyhowmuch“buy-in”isobservedbykeystakeholdersandlegislators.
• Operational Capacity: The“operationalcapacity”peakrepresentstheorganization’speopleandculture,managementandoperationalprocesses,capitalandtechnologyandongoinglearningthatenableittoproduceinthemostefficientandeffectivemanner.Theoperationalcapacitydimensioniswheremanyoftheorganization’sbottom-linemeasuresarederived,aswellasmeasuresofhumancapitalrecruitmentandretention,organizationallearningandknowledgemanagement.
Balancingandoptimizingthestrategictriangleistheroleofapublicserviceleader.Fromthevalue-generationperspective,mostofthedirectleveragealeaderhasisinimprovingtheoperationalcapacityoftheorganization.Thus,questionsapublicserviceleadershouldcontinuallyaskare:Ismyorganizationachievingitsmissionanddeliveringvaluedoutcomes?Arewecapableofdeliveringonbotheffectivenessandefficiency?Whatinnovationswillgrowmyorganization’scapacitytomaximizepublicvalue?Andfromanenterprise-wideview:Aretheorganizationsundermypurviewfocusingontheircorecapacities?HowcanIgainefficienciesacrossorganizationsinordertohavemoreresourcesforcitizenservices?
Aspublicserviceleadersaskcapacity-orientedquestionstheyrealizethatachievingresultsrequiresanenterprise-wideview,politicalandorganizationalinfluenceandcoordinationandcooperationacrossmultiplestakeholdergroups—fromthehighestexecutives,tolegislativebodiesandpartnerstoeverylevelofemployee.Soimprovingthecapacityofapublicserviceorganizationthroughmethodssuchassharedservicesisnotonlyaleadershipissue—itisafront-burnerleadershipissue.
Public Value CreationStrategic Triangle
Mission Value
Legitimacy&
Support
OperationalCapacity
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The Leadership Imperative — Elevating the Capacity to Deliver As public service leaders look for methods to increasetheircapacitytodeliver,theyfindthattraditionalanswersarenotfeasibleintoday’senvironment.Cuttingprogramsis usually counterproductive; raising taxes, borrowingmoney and implementing new fees requires legislativewrangling; the tactical fixes espoused over the pastdecade(budgetshifting,servicedeferment,streamlining,etc.)havereachedtheirlimits.
Furtherdrivingthisimperativetoproducemorewithless is the colliding trends of citizen and constituentdemands and demographics with long-term economicindicators. Constituents across the age spectrum aredemanding more from government. Older citizens, forexample,areconsumingpublicservicesatanincreasingrate, and the swelling number of retirees will impactnotonlygovernment’semployeebasebutalsotheleveland scope of services government provides. Youngerconstituentsareforcingmajorchangesupongovernmentservices by expecting service levels comparable toconsumer-focusedprivatecompanies,andwithfeaturessuchaspersonalizedandinteractiveservices,convenientaccessand24/7customerservice.Everyoneisdemandinghigher levels of governmental transparency andaccountability.
Publicserviceorganizationscannotlooktoeconomicgrowth for a band-aid either, as theUnited States andmostwestern nations are just now entering this phaseof protracted demand and retracted resources. Mosteconomists agree that long-term economic growth willbeataratelowerthananytimesinceWorldWarIIandthatincreasesinproductivitymustoffsetthislowgrowthrate.Yetthereisreasontopersevere:arecentstudy3byMcKinsey&Companyshowedthatraisingproductivityby1.4percentayearintheUSandby1.6percentinGermanywouldlettheirgovernmentssustaincurrentlevelsofpublicservicesandsocialprogramswithoutadditionaltaxesorborrowing.AMcKinseyanalysisoftheUSBureauofLaborStatisticsestimatesthatafiveto15percentincreaseinproductivitycouldsavetheUS$104billionto$312billionannually.
Whileincreasingproductivityisnecessary,productivitygainsalonecannotmeetthedemandsimposedbyconstituents—publicserviceorganizationsneedmorecapacitytoproducevaluedoutcomes.Thusthenewleadershipimperativeisproducingbetteroutcomesatareducedcosttotaxpayers.Andthisrequireshigherproductivityalongwithincreasedcapacityforservicedelivery.
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Shared Services — Meeting the New Performance ImperativeIncreasingly,forward-thinkingleadersaregravitatingtowardasharedservicesbusinessmodelasawaytoaddressthecapacity-buildingimperativeandtomovetowardamorecitizen-centered,outcome-oriented,accountableandefficientpublicservicedeliverysystem.
“Sharedservicesoffersanewwayforward,”saysDavidWilson,Accenture’sManagingDirector,CanadaandUSStateandLocalGovernment.“Asharedservicesoperatingmodelisamethodoforderingworksothatbusinessprocessesandthepeoplewhodothoseprocessesarebroughttogetherinanewandmoreefficientandeffectiveway.It’srelyingoneconomiesofscaleandallowingworkerstospecializeinprocessingthosetransactionsquicklyandeffectively.Thisdrivesdowncostandenablestheorganizationtotransfercostsfrombackofficebusinessprocessestoprogramsthatreallyimpactconstituentsandtheindividualcitizen.”
Sharedservicesbydefinitionistheconsolidationofadministrativeand/orsupportfunctions(suchasfinanceandaccounting,informationtechnology,procurement,humanresources,etc.)fromseveraldepartmentsoragenciesintoasingleautonomousorganizationwhosemissionistoprovidetheconsolidatedservicesaseffectivelyandefficientlyaspossible.Unlikecentralizedmodels,sharedservicesorganizationsaretypicallyresponsibleforprovidingservicestoanagreedlevelandreportingonserviceeffectiveness.Successfulpublicsharedservicesmodelsenabledepartmentsandagenciestofocusontheircorebusinessandcustomerneedsandfreeupresourcesinordertoimprovecitizen-facingpoliciesandservices.
Sharedservicesdrivestothecoreofthecapacityimperative(formoreontheeconomicsofsharedservicesseepage8)inthatitgenerates:
• Increased Operational Efficiency: Sharedservicesstandardizesandoptimizesbusinessandoperationalprocesses—yieldinggreateroutputfromresourcesandsavingsinadministrativeandtechnicalcosts.
• Increased Operational Effectiveness:Sharedservicesdrivesimprovementinmanagementprocessesandperformancemanagementtechniquesforemployees—spurringinnovationinservicedevelopmentanddelivery.
• Improved Resource Allocation:Sharedservicessavingscanberepurposedtofront-officeprogramdevelopmentandinnovationinservicedelivery—creatingalignmentwithandorientingtheenterprisearoundoutcomes.
• Renewed Public Value:Sharedservicesleadstointer-organizationandintra-organizationvaluecreation—helpingallagenciestoachievetheirmissionandtherebysecuringtheauthorizing(legislativebodiesandpublicsentiment)environment.
Asmeetingthecapacityimperativethroughsharedservicesbecomesthefront-burnerleadershipissue,howarepublicserviceexecutivesresponding?
A shared services business model comprises four defining characteristics:
• Sharedservicesconsolidatesfront-officeservices(suchaslicensing,benefitsadministration,taxcollection,etc.),administrativeand/orsupportfunctions(suchasfinanceandaccounting,informationtechnology,procurement,humanresources,etc.)fromseveraldepartmentsoragenciesintoasingleautonomousorganizationwhosemissionistoprovidetheconsolidatedservicesaseffectivelyandefficientlyaspossible.
• Sharedservicesdiffersfromcentralizedservicesinthattheautonomyoftheorganizationandthedegreeofownershipandgovernancebycustomersmakeitmoremarketdrivenandattunedtocustomerneedsandmarket-widebestpractices.
• Sharedservicescombinesthescaleefficienciesofcentralizationwiththesuperiorcustomerservice,customizationandfocusassociatedwithdecentralization,andcaneffectivelycompetewiththebestthemarketplacecanofferinserviceexpertise,efficiencyandeffectiveness.
• Sharedservicesmodelsenabledepartmentsandagenciestofocusontheircorebusinessandcustomerneedsandfreeresourcestodevelopcitizen-facingpolicies,programsandservicesanddevelopaclient-centered,outcome-oriented,accountableandefficientservicedeliverysystem.
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Economics of Shared Services: Moving the Capacity CurveAlong-standingthorninthesideofgovernmentleadersismanagingthecapacitytodeliverservicesbymakingtradeoffsbetweenefficiencyandeffectivenessintheproductionofservices.Managershistoricallyhadtwobroadoptionsforoptimizingthis“productionfunction.”Theycouldpullresources(capitalandlabor)inandfocusonmaximizingefficientproductionthroughstandardizationofprocessesandtechnologiesanddirectcentralcontrol—butthislimitedflexibilityandresponsivenessattheagencylevel.Alternatively,theycouldpushresourcesoutandprovideextensivecustomizationandlocalcontrolofproductiontoagencies—yetthisoptionignoredvolumeefficiencies,producedduplicationandraisedoverallcoststotaxpayers.Itwasalose-loseproposition.
Now the game has changed. The combination ofinnovations in information technology and innovations inmanagementandoperatingprocesseshascreatedanewlevelofoptimization—oneinwhichoverallcapacityhasgrown.Theseinnovationsinterrelateandinclude:
• Management Processes: The activities through whichan organization creates policy and strategic directionand coordinates and controls the operating processesthat execute strategy have advanced to simultaneouslyaccommodateflexibility,innovationandcontrol.
• Operating Processes: The series of activities that formhowanorganizationdesigns,produces,markets,deliversandsupportsitsserviceshavebeensubjectedtocollectiveknowledge(suchastimeandmotionstudies)andarenowabletobedonefasterandleaner.
• Information Technology: The hardware, software andnetworksthatenableanorganizationtocreate,storeanduseinformationinallitsformshaveadvancedtoapointwhere management and operations/operating processescanbestreamlined,integratedandsynchronizedoveranydistance.
Underpinningtheaboveinnovationsarecontinualadvancesthatmakecollaborationandcoordinationmoreefficient(Metcalfe’sLaw)andthatmakeinformationprocessingmorepowerful(Moore’sLaw).Collectively,thisenablesmoregranularstandardssothatstandardizedsystemscansupportcustomizablesolutions.Standardsneednolongermean“onesizefitsall.”Informationinfrastructurecannowsharethedataandprocessingneededtocustomizeagencyandcitizenservicesefficientlyandeffectivelyinreal-time.Thishasfundamentallychangedtheequationandshiftedthecapacitycurveupandtotherightasmanagerscangainbothefficiency(lowunitcosts)andeffectiveness(highquality)bymovingtonewand/orbetterproductionmethods.
SharedServicescanamplifytheeffectsofthisnewcapacitycurvebyextendingittotheagenciesandpartnersthatcompriseagovernmentalarea.Thisamplificationisbasedonincreasingthereturnonlabor(throughspecializationofmanagementandoperationalprocesses)andincreasingthereturnoncapital(throughhigherutilizationfromthevolumeofproduction).Thetotalpotentialforincreasedcapacitydependsonhowextensivelyintegratedthesharedservicesmodelisandthebreadthanddepthofservicesshared.Governmentsthatadoptthesenewmodelsofdoingbusinesswillbebetterabletomeetsocietaldemandsforimprovedservicesandlowercoststhrough:
• GreaterReturnstoScale—governmentcanproducemorewithaconstantproportionofinputs,i.e.,“Wecandomorewiththesameamountofresources.”
• GreaterEconomiesofScale—governmentcanproducemorewheninputproportionsarevariable,i.e.,“Wecandoubleouroutputwithlessthanadoublingofcost.”
• GreaterEconomiesofScope—governmentoutputsbyasingleentityaregreaterthanoutputsthatcouldbeachievedbytwodifferentagencieseachproducingontheirown,i.e.,“Wecanshareexpertiseandprocessestogetmoreforless.”
Insum,harnessingnewfoundcapacitywithinasharedservicesenterpriseandextendingitenterprise-wideincreasesthecapacityforhighperformanceandsubsequentlyincreasespublicvalue.Managingforefficiencyandeffectivenessisnowawin-winpropositionforpublicsectorleaders.
Effectiveness: High QualityE
ffic
ien
cy: L
ow C
ost
New Production Possibilities = Increased Capacity
New Production Tradeoff
Old Production Tradeoff
Innovation in Management, Operations and Information and Communication Technologies
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How are Public Leaders Responding? Researchcompiledfrommorethan100executiveswhoattendedtheSharedServicesSummitshowthatwhileallareaddressingsharedservices,theirlevelofexperiencevariesbroadly.CategorizedintermsoftheSharedServicesHorizonsofValue,53percentareintheVisioningphase,33percentinLaunching,9percentinGrowingand5percentinTransforming.Whilethisshowsgreatprogressinthetractionofsharedservices,italsorevealsthere’sroomfordramaticincreasesinbothmaturityandvaluegenerationinthepublicsector.
Additionally,resultsfromAccenture’s2009SharedServicesinthePublicSectorSurveyshowthatwhilepublicserviceleadersareembracingsharedservicesatamuchhigherratethanbefore,classicpublicsectorchallengesstillstandinthewayofprogress.Asampleofresultsfromthesurveyispresentedonsubsequentpagesandillustratesthesechallengesandopportunities.
Collectively,datafromtheAccenturesurveyandfromattendeesoftheSharedServicesSummitdemonstratethatthepublicservicesectorisatacriticaltippingpoint.Manyorganizationshavetakenstepsintosharedservices—andmanymorewillbeenteringthearenawithinthenextthreeyears—lookingforreductionofcostsandincreasesinproductivityaswellasfrontofficeperformanceimprovement.
Yetthedataalsoshowthatleadersareacutelyawareofthechallengesinherentinthepublicsector.Movingforwardrequirescommitmenttoanewvisionofthefutureandadefthandatknittingtogetherthepolitics,changemanagementandfundingthreadsthatsharedservicesrequires.
Sohowshouldpublicserviceleadersturnsharedservicespromisesintoreality?Andhowshouldleadersenvision,launch,growandtransformpublicvaluethroughsharedservices?
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What are your biggest challenges in deploying shared services? [Not a barrier = 1 / A very significant barrier = 5]
n Insufficientfundingtoimplement=3.89
n Changeresistanceamongemployees=3.50
n Lackofcooperation/consensusbetweendepartments=3.46
n Shiftingagendas/goals/targets=3.22
n Lackofdataanalyticsandinsightstofacilitatedecisionmaking=3.13
current planned top �ve challenge
3.89
3.50
3.46
3.22
3.13
What are your top-five drivers of shared services?
n Reducecoststhroughsimplificationandstandardization=94%
n Greaterstandardizationofprocesses=76%
n Increaseproductivity=74%
n Increaseservicequalitytocustomers=63%
n Improvecitizensatisfaction=48%(tiedwithFacilitatethedeploymentoftechnologyandplatforms)
current planned top �ve challenge
If shared services is planned but not implemented yet, when do you anticipate the effort to begin?
n Withinthenextyear=47%
n Withintwotothreeyears=41%
n Morethanfiveyears=0
n Noplansatthistime=12%
41%
47%
12%
current planned top �ve challenge
What is your current shared services status?
n Weareutilizingsharedserviceswithinourorganization=24%
n Weareutilizingsharedserviceswithinourorganizationandofferingservicestootherdepartments/agenciesoutsideourorganization=40%
n Weareacustomerofasharedservicesorganization=9%
n Wedonotutilizesharedservices=27% 40%
27% 24%
9%
0
20
40
60
80
100
A Snapshot: Taking Action on Shared Services
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ServiceCategory CurrentService FutureService
Informationdeliveryandaccess(e.g.portals/onestopshops) 67% 27%EligibilityManagement 21 30LicensingandPermits 23 33ServiceDeliveryandCaseManagement 28 39ServiceIntegration 31 30
AccountsPayable 51 27AccountsReceivable 41 27Billing 33 30Collections 34 21CreditManagement 31 21FixedAssetsAccounting 46 30GeneralLedger 62 18InteragencyAccounting 51 15OrderManagement/Entry 33 24ReturnsProcessing 18 18TravelandExpenseReimbursement 54 24
BenefitsAdministration 56 27HRAdministration 64 24PayrollProcessing 74 21Safety 36 15Staffing 54 9TimeandLeaveProcessing 59 33TrainingandEducation 56 24
ApplicationMaintenance&Development 56 33DataCenterOperations 67 24DesktopSupport 46 27Hardware&SoftwareAcquisition 62 30EnterpriseITHelpDesk&Support 59 30Telecommunications 67 18RecordsArchiving 44 33DisasterRecovery 51 39EmailConsolidation 56 30
Receiving 26 18RequisitionProcessing/PurchasingSupport 51 27StrategicSourcing 39 33
FacilitiesManagement 46 15FleetManagement 28 21Legal 41 12Marketing 18 15RealEstate 33 9Security 39 18
FrontO
ffice
(Citizen-facing)
Services
FinancialServices
Hum
anResource
Services
Inform
ationTechnology
Services
Procurem
ent
Service
sGeneral
Services
If you are operating shared services, what functions are currently offered? If not currently offered, are you planning to offer the service in the future?
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“The world has changed and the possibilities are heightened - the time is now.”
JerryMechling,HarvardKennedySchool
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When Teri Takai opened the door to her office the sun had yet to come up — but it had been a long day already. The morning
news team squawked about California’s dire financial situation and the governor’s office was asking for ideas on how to close the budget gap.HereyesglancedfromthelightsofthestatecapitoltothecommutersstreamingintoSacramentoonInterstate80inthedistance.Theglimmeroftheheadlightsgaveherpause.It’saboutthem,shethought,thepeoplewhoworkhardeverydaytogrowtheirbusinesses,providefortheirfamiliesandbuildtheircommunities.Theyrelyonmetogetthisright.Nevermindthestaggeringdeficitorthemassivebureaucracyorthedecisionsofpastadministrations.Thisiswhatpublicserviceisallabout—makingthetoughdecisionstosecureabetterfutureforthepeopleofCalifornia.Asthesunstartedtoriseshesmiled.Today’sanewday,timetofixsomethings.
FromthetimeAmericansfirsttraveledwest,Californiahasdrawnthecreatorsandthebuilders—andareputationforindependencethatbecameahallmarkoftheculture.ThisCalifornia“DNA”hasprovidedthenationandtheworldwitharicharrayofsocialandtechnologicaladvances—andthe“letathousandflowersbloom”mindsetwillagainplayapivotalroleasCaliforniavisionssharedservicesinitsfuture.CaliforniahasalwaysbeenabellwetherforchangingconditionsinnotonlytheUnitedStatesbutalsothedevelopedworld.AndwhatweseeinCaliforniaisrapidlychangingdemographics,growingandfragmentedconstituentdemandsandexpectationsandnearly50percentofpublicsectoremployeesretiringinthenext10years.Compoundingthesechallengesareprojectedlong-termdeclinesintaxrevenuesandhighercostsofdebtinthecapitalmarkets.It’senoughtomakeeventhetoughestgovernorshiverabit.
Teri Takai Chief Information Officer and Cabinet Member, State of California
Current Shared Services Status: Visioning
Teri Takai was appointed by Governor Arnold Schwarzenegger as Chief Information Officer for the State of California. As a member of the Governor’s cabinet, she advises him on the strategic management and direction of information technology resources as the state works to modernize and transform the way agencies do business with citizens. Prior to her appointment, Teri was Chief Information Officer for the State of Michigan where she transformed the state’s information technology units into one centralized organization that served 19 agencies and more than 1,700 employees. Previously, Teri held executive positions at Ford Motor Company, EDS and Federal-Mogul Corporation.
California
HORIZON ONE Visioning
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Acting on the impending situation in government, The CaliforniaPerformance Review workgroup was commissioned by Gov. ArnoldSchwarzenegger in 2004 to restructure, reorganize and reform stategovernment to make it more responsive to the needs of its citizens andbusiness community.The review provided directives for executive branchreorganization, program performance, improved services and productivityandacquisitionreform.Thegroupdeterminedthatacriticalenablerforallof these areas should be shared services. Knowing he needed a capableleaderwiththebonafidesofchange-makerandITexpert,in2007GovernorSchwarzenegger recruited Teri Takai to California and charged her withaligningthestate’sinformationtechnologyinfrastructureandpolicieswiththevisionofwhereCalifornianeedstogo.“Myjobistoworkdirectlywiththegovernortoensurethestate’sinformationtechnologyhelpsagenciesachievetheir strategicandprogrammatic initiativesanddo it in themostefficientway,”saysTeri,nowstateCIOandCabinetMember.“Andpartofthatmixiscreatingavisionforwhatcanbeaccomplishedwithsharedservices.”
Thekeystepsinthevisioningprocessaresecuringvalueandsponsorship,developinga strategicplanandpreparing for implementationandchange.Ultimately,whenTeribriefsthegovernoronthesharedservicesinitiativesheneedstoknowtheanswertothefollowingquestion:What’stheupsideandcanwemakeithappen?
Let’stakealookathowthisisworkinginCaliforniaandwhatothershavedonetomovetheirvisionforsharedservicesforward.
Securing Sponsorship and ValueLikerunningforpoliticaloffice,planningforsharedservicesisessentiallyapersuasioncampaign.The leaderofthesharedservices initiative is largelymakingacasefortransformation—andinsodoingconvertingpeopletoanewvisionforthefuture.Andlikeanorganizationalturnaround,theleadersmustconvincepeoplethattheorganizationtrulycannotsustainthecurrentmodelofbusiness—or,at thevery least—thatsubstantialchangesarerequirediftheorganizationistomeetfuturedemands.Persuasionmustthenbechanneledintoresolveandsponsorshipfromkeyseniorexecutiveswhowillalsobeengagedingoverningtheinitiative.
Muchofthepersuasioninvolvesfacilitatingcooperationbetweencentralandlocalinstitutionsassharedservicesoftengeneratessomeoppositionfromlocaloperatorswhofearlosingstatusorcontrol,orfromthosewhodisagreethatchangeisrequired(“We’llneverrecapturethesavings,sowhydoit?”).Supportforsharedserviceswon’tbeeffectiveunlessthosewithauthorityunderstandthebusinesscaseandarepreparedtotoleratesomediscomfortthroughthetransitionperiodandpossiblybeyond.Criticalearlyworkinvolvestouchingbasewithstakeholders(legislativeaswellasexecutive),communicatingthevisionandbusinesscaseandlearningaboutunderlyinginterestswhileprobingforandassemblingsupport.Willthebenefitsofsharedservicesbeenoughtoholdthecoalitiontogether?Wherewilltheproblemsandoppositionlikelyarise,andhowmighttheybehandled?Politicalmobilizationtypicallyrequiresutilizingone-on-oneprivatemeetingsandpublicsessionstoverifyandsolidifysupport.
ForTeri,akeyelementinaddressingconcernsandgainingexecutivesupportistoengagethegovernor,agencyheadsandkeystakeholdersearlyinordertoincorporatetheirviewsandideas.Thegoalsofsharedservicesshouldalsobecloselytiedtothevisionandmissionofthegovernorandthecabinet-levelagencies—andhelpthemseehowsharedservicescanenablemoreeffectivenessonthe“frontlines”andnotjustinthe“backoffice.”“Historically,sharedservicesingovernmenthavecomenotfromserviceagenciesbutfromcontrolagencies,”Teriexplains.“Becauseofthis,sharedservicesareoftenseennotasanopportunitytoprovidebetterservice,butasabottle-neck.Soit’scriticaltopaintthe
Horizon One: VisioningAtthislevelexecutivesaresecuringtheinitialsupportforexploringsharedservices.Thefocusoftheirworkisonassessingthevalueandfeasibilityofsharedservicesanddevelopingprojectionsonvaluegeneration.Supportingtheprojectionsisarobustassessmentofpre-sharedservicescostsandbenchmarkingbothinternallyandexternallyinordertounderstandtheopportunitiesfordecreasedcostsandincreasedperformance.Syncingwiththeassessedvalueisastrategicplanandgovernanceframeworkthatensureshigh-performanceservicedelivery.Ultimately,thegoalistoclearlyarticulateavaluepropositionandproduceasoundstrategyandbusinessplanwithsupportandsponsorshipfromseniorexecutivesandkeypoliticalfigures.
Key competencies at this horizon include:
• SecuringValueandSponsorship• DevelopingaStrategicPlan• PreparingforImplementation
andChange
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pictureofthenewcapabilitiessharedservicescanbring.FromanITperspective,itgivesyouafocalpointtochangethepolicydiscussionaroundwhatyoucandowithasharedservicesorganization.So,youcantalkaboutmovingtoamorecitizen-centricmodelbecauseyou’reoperatingonanenterpriselevel.”
Connectingsharedservicestoagilityinachievingcitizenoutcomeshelpstodrivehomethepointthatsharedservicesisaboutcapacitydevelopmentratherthanlimitation.“Whenyouhaveacultureveryfixatedonindependenceandcontrolit’sdifficulttogetpeopletoagreeonwhatcanbesharedandwhowillrunthings,”Terisays.“Thisplaysoutasreluctancefororganizationstobuy-inandmakesitparamounttofocusongainingexecutivesponsorshipandsupport.Generallyspeaking,therearetwotypesofbuy-in.Thefirstistop-down,wherethegovernormakesitcleartheinitiativealignswiththeadministration’sgoals.Thesecondistoworkwithindividualorganizationsinvolved.Usuallythefirsttypeofbuy-inprecedesandisnecessaryforthesecond.Onceyouputthemtogether,youhaveacoalitionthatcanmakethecaseforchange.”
IntheVisioningHorizon,there’sasymbioticnaturetogainingsupportandsecuringvalue—ittakesexecutivesponsorshipandpoliticalcovertododeepassessmentofthevaluethatcouldbegeneratedviasharedservices—andasvalueisdeterminedandcommunicated,thattranslatestoever-increasingbuy-inandmomentum.Let’stakealookathowthatpotentialvalueisassessed.
Analyzing the Current State
“Assessingvalueisacriticalpartofthesharedservicesjourneyasitsetspeople’sexpectationsandtheirlevelofengagement.Youhavetowearalotofhats—changeagent,analyst,financier,projectmanager,etc.—andyouhavetomakealloftheroundstoensurethateveryonehasastakeintheinitiative,”Terisays.
Akeyearlystepingettingcomfortablewithassessingvalueiscreatingconfidenceinboththeprocessandtheresultsofthevisioningandassessment—becausefortransparencyingovernment(fromthestakeholderperspective)theprocessofmakingadecisionisoftenjustasimportantasthedecisionitself.Keytofindingthiscomfortandtrustlevelisaskingtherightquestions:Whatbenchmarkingcomparisonsareneededtocomparethepresentoperationsmodeltoonetobeusedinthefuture?Willunitcostsandotherperformancemeasuresimprove?Willtheexpectedimprovementsbeenoughtorepaytheinvestments(botheconomicandnon-economic)?Havetheplanningassumptionsbeentestedforfeasibility?Howlikelyandsubstantialarethedownsiderisks?Willthenewmodelbesustainablefinanciallyandoperationally?Hastheplanningbeensufficientlycomprehensive(majorelementspresent)andrigorous(majorsourcesofevidenceandexpertiseconsulted)?
Thecentralpurposeinassessingvalueistodevelopacompleteandaccurateviewofwhatthecurrentpracticesandcostsareenterprise-wide.Thisformsabaselineofunderstandingonthe“currentstateofthings”andhowmuchimprovementcouldbegenerated.InastatewithalargeandindependentsetofgovernmentorganizationslikeCalifornia,thechallengeisfiguringoutwheretostart.SomustTeriandherteamofanalystsrentacarandvisiteachagencyinCaliforniatodoanassessment?Notexactly—what’simportantisfindingperformancebaselinesacrosskeycategoriesofbusinessprocessesandbenchmarkingthoseagainstbestpracticesinothergovernmentsandacrosssectors.BecauseofthesizeandcomplexityofCaliforniagovernment,thepracticalapproachfora“currentstateanalysis”istoscantheCaliforniaagencies(andboards)toidentifyandclustercommonbusinessprocessesandperformanalysisoncostsrelatedtothoseclusters.
Inalllikelihood,therewillbemorethanoneclustertolookatandalargescopeofservicesthatcouldbedeliveredviasharedservices—sosegmentingbyservicetypeandclustersandchoosingtherightspliceforasharedservicesportfolioiscriticalforbothbuy-inandstart-upsuccess.Therearethreebroadcategoriesofservicesinthepublicsectorwhichhavepotentialtobedeliveredviaasharedservicesmodel:
• Transaction Services:Primarily,theseservicessupportoperationsandincludetelecommunications,informationsystems,accountspayableandreceivable,back-endhumanresourceprocesses,etc.Mostoftheseprocessesandservicesareroutine,canbestandardizedandconsolidatedandareprimefordeliveryviaasharedservicesmodel.
• Program Services: Generally,theseservicesaremanagerialinnatureandaredesignedtosupportanddeliveragency-specificprograms(suchaslicensing,benefitsestimationanddelivery,taxcollection,regulatoryservices,etc.)andsupportservicessuchaslegal,procurement,fleetmanagementandfacilities.Thisisamixedbagwhenitcomesto
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deliveringviasharedservices,butdependingonthelevelofstandardization,someoftheseservicescanbemigratedtoasharedservicesenterpriseasthesharedservicesorganizationmatures.
• Policy Services: Thesetypesofservicesandtheirunderlyingprocessesaremostlyexpertise-basedandincludeprocessesandmechanismsfordevelopingmicropolicy,organizationalplanning,resourceallocationandbudgetingandhumanresourceplanning.Mostoftheseservicesandprocessesarebetterleftattheagencylevel—especiallyduringasharedservicesstart-up.Butaswe’llsee,maturesharedservicesenterprisesareabletoeffectivelyprovidesomeoftheseservices.
Asacaseinpoint,Californiahasthreetaxcollectionagencies—theBoardofEqualization,theFranchiseTaxBoardandtheEmploymentDevelopmentDepartment.Thetransactionalprocessesandunderpinningtechnologiesoftheseorganizationscouldpotentiallybestandardizedandconsolidatedintoasharedservicescenter.Furthermore,creating
centersofexcellencefortheprogramservicesacrosstheseagenciescouldpotentiallydriveefficiencyintaxcollectionthroughsharedaccesstoconstituentsandfastercycletimes.
Asanotherexample,Californiansandcountlessin/out-of-statebusinessesareforcedtotransactpaymentsforstateproductsandservicesinamanualform,suchascurrency,check,moneyorder,ortraveler’scheck,becausemoststateentitiesarenotsetuptoacceptelectronicpayments.Thisresultsinadelayofrevenuetothestateaswellasunnecessarycostsduetoinefficienciestoboththepersonandthegovernment.Tofixthis,astatewideprocesstoaccommodateelectronicpaymentsforallstatepurchasescouldbedeveloped,andasinglewebportalcouldbedeployedasasharedservice—savingagenciesandconstituentsmoneyandtime.
Conversely,California’sStateandConsumerServicesagencyoverseesthelicensingandinvestigationofadiversegroupofprofessionsviaseparateprograms(e.g.doctors,automechanics,apprentices,embalmers).
Althoughinvestigationisacommonprocessacrossthelicensingofthesegroups,implementingasharedservicemaybedifficultbecauseeachconstituent-groupmustbeconvincedthatthepolicyandprogramservicesthroughouttheinvestigationprocessareessentiallythesameamongthemandthatthespecificsoftheirprogramsdon’tchangetheprocesses.
Analysissuchasthisservestwovaluablepurposes:First,itenablestheCaliforniateamtounderstandthedegreetowhichbusinessprocessesarecurrentlystandardizedandalignedsothatwithasmallamountofconfiguringtheycouldbestagedintheneartermforsharedservices.Second,itshowsthelevelofreengineeringrequiredtooptimizeandstandardizeprocesseswhethertheprocessesstayattheagencyorarestagedfordeliveryviasharedservicesinthefuture.Combiningthesetwoprovidesoverallinsightintoprocessreengineeringandmigrationovertimeandhowrelatedpolicy,programandtransactionservicesintegratewiththesharedservicesbusinessplan.
Asthisclusteringandsetofprocessesisknown,analysiscanbedoneontheircostandperformance.Thisisatechnicalprocess(betterlefttoatechnicalpaper),butbroadlyincludesunderstandingtheend-to-endcostofaselectbusinessprocess—includinganalysisofthenumberofemployeesandhand-offsrequiredfortheprocess,totalcycletime(timeandmotion),throughput(whatpercentoftimeisactuallyproductivetime),technologycost,etc.Oncethisdataisknown,itcanbefactoredintothe“trueandtotal”costofdeliveringtheprocessandcanformabaseline.ComparisonscannowberunagainstbestpracticesinotherstategovernmentsorsectorstoanswerthequestionofhowmuchmoreorlessitcostsCaliforniatoperformaselectprocesscomparedwithOhioorMinnesotaortheU.S.PostalServiceorWalmart.
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OnceTeriandherteamhaveadeepunderstandingofthebusinessprocessesthatcouldeffectivelybesourcedwithinastatewidesharedservicesenterprise,analysiscanbeconductedalongtwoprimaryarbitragelevers—theportfolioofservicesoffered(efficienciesderivedfromscopeandscale)andtheresources(efficienciesderivedfromperformanceandlocationofworkforce)neededtodelivertheportfolioinahigh-performancemanner.Byrunningscenariosandcreatingmodelsofvariouslevelsofservicedeliverywithintheportfolioofservicesoffered,aforecastofinvestmentandreturncanbecalculated.Theresultingfinancialprojectionsandpro-formastatementscanthenbeutilizedtodevelopstrategyandtocreateaframeworkforgovernance.
Finalizingandcommunicatingtheresultsoftheassessmentworkiscriticaltosecuringtheauthorizingenvironment(stakeholders,legislature,unionsandcitizengroups)andgeneratingresolvetomoveforward.Providedthattheassessmentworkwasdonethoroughlyandtransparently,inmostcasesthenumberswillspeakforthemselves.Packagingthatestimatedvalueandconditionalresolveintheformofastrategicplanisthenextstepforward.
Developing a Strategic PlanFromaleadershipperspective,ifthesermonishowsharedservicescanenablethemission,thescripturetobackitupisawell-developedstrategicplan.Broadly,thesharedservicesstrategyistheorganization’sgoalsandobjectives,customermixandtheserviceportfoliodeliveredtothosecustomers.Theunderlyingbusinessplaniscomposedofthetacticalelementsnecessarytomeetstrategicgoalsandgeneratedesiredoutcomes.(Asharedservicesorganizationisessentiallyastart-upbusiness,andassuchthetechnicalstepsfromoperations,budgeting,hiring,systems,rollout,etc,todevelopinganexecutableplanaremany—andvitallyimportant.Foracontemporaryandin-depthsetofresourcesonproducingabusinessplanpleaseseeAccenture.com/sharedservices.)Makingaclearlinkandleapfromthevisioninglanguageof“hereareallthewayswecancreatevalue”tothepragmaticlanguageof“andhere’sthestep-by-stepplantogetitdone”isadifficultbutneededstepintheVisioningHorizon.
“Alltheassessmentwork,thesponsorshipwork,governancedesign—itallcomesfullcirclewhenwelookatcreatingandfinancingthefuturesharedservices,”Terisays.“It’swheretherubberhitstheroad.InCalifornia,itwillallhavetobepackagedtogether.I’llneedtheservicemix,theorganizationandthefundingstreamstobeclearlylaidoutandofclearvalue.Andeveryonewillhavetohavesomeskininthegame—theagencies,thelegislature,andtheunions—everyone,ifwewanttomakethishappen.”“Makingithappen”fromtheleadershipcontextisgettingtheservicemix,governanceandfundingonpaperandinprocess.
Firming Up the Service Portfolio Mix
Strategysetsthevalueandmissionofthesharedservicesoperation,theservicestobeprovidedandthecustomerswhowillbeservicedinitially.Thestrategyalsoreaffirmstheestimatesonvaluecreationandclearlylaysoutthemeasuresofthatvalue.Thus,thecoreofthestrategicplanistheservicemixthatthesharedservicesorganizationwillprovide.The
Probing for Feasibility
Across-cuttingthreadinalloftheassessmentworkisprobingforthefeasibilityofassumptionsandideas.Aleaderhastosystematicallylookforpolitical,socialandtechnicalchallengesthatwillhinderprogress.TheLeadershipforaNetworkedWorldProgramisoftencalledontohelpseniorexecutivesplanforinnovationandreform,andinmostcases,a“feasibilityfilter”willbeappliedtohelptheleadersfindfocus.Themeasuresusedareinvolvement,value,confusion,andconflictanddescribedas:
• Involvement:Howmuchtimeandeffortpresentlygoestothisactivity?Istheagencycurrentlylookingforhelpwithprocesses?Withlowinvolvement,theoptionclaimsverylittletimeorattention;withhighinvolvement,virtuallyeveryoneisthinkingaboutit.
• Value(orReward):Howmuchvalueandreturnwillcomefromtheinitiativeatthelocallevel?Fromtheagency’sperspective—ifweputeffortintosharedservices,willwegetvaluebackfromit?
• Confusion:Thelevelofdifficultyofgettingthosewhomustacttoknowwhattodo.Withlowconfusion,everyoneknowswhattodoandhowtodoit;withhighconfusion,manypeopledon’tknowwhattodoorhow,andit’shardtoeducatethem.
• Conflict:Thedifficultyofgettingthosewhomustacttowanttodoso.Withlowconflict,everyoneneededtosupporttheoptionwantstodoso;withhighconflict,manythinktheoptionisnotintheirinterestandformadifficult-to-overcomeopposition.
Whetherbyaformalsurveyoraback-of-the-napkinanalysis,workingthroughafeasibilitylenswillhelpaleadergatherwhereshewillrunintothemostorleastresistancerelativetothepotentialvalueandwhatshecandotoincreasefeasibilityandultimatelydeliverasuccessfulinnovation.
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overridingworkitemindevelopingthestrategyforthesharedservicesinitiativeisworkingwithstakeholderstofirmupandchoosetheportfoliothatwillbepresentedaspartoftheplan.It’simperativeatthisstagetohavethehighestlevelofagreementpossible,astheportfoliodecisionsetsthewheelsinmotionfordesigningandfinancingtheoperationanddeterminesthedownstreamlaunchconditions.Therearetwobroadquestionsthatleadershipandstakeholdersshouldaskwhendeterminingtheportfolio:
1. Whatdowecollectivelythinkwillprovidethemostvalue?Intheassessmentstage,acomprehensiveestimateofsavingswasdevelopedbylookingenterprise-wideatservicesandprocessesanddeterminingwhichcouldbeeffectivelyofferedfromasharedservicesorganization.Inthestrategydevelopmentstage,leadershipissittingatthetablewithagenciesandstakeholdersandnegotiatingoverthislisttofindagreementonwhichserviceswillbeputintotheportfolio.Whatthesharedservicesleadershipneedstofocusonhereisselectingtheservicesthathavetheclearestvalueandtheclearestpathtoimplementation.Thecustomeragencyneedstofocusonselectingservicesthatwillprovidethemostagilitywiththeleastdisruption.
2. Whatserviceswillgiveusthebiggestchanceofsuccess?Beyondthevalueissueisthemorecomplicatedsetofissuesaroundprobabilityofsuccessandfeasibility.Whatleadershipneedstoconsiderisgiventhepoliticalenvironmentandtheorganizationaldynamicsatplay,whatserviceswoulddrivethemostvaluewiththeleastamountofdissonance.Thisrequiresbothinsightandforesightasyouhavetoprojectthereactionattheagencyleveltochangesinprocesses,movementofstaffandthedegreeofconflictthiswillcause.Essentially,leadershipisputtingallthecardsonthetable,anddeterminingwhichfightsareworthhaving.
Thissoundsimposing,butmostsharedservicesorganizationshaveworkedthroughthisissuesuccessfully.Forexample,asleadersoftheOhioSharedServiceshelddiscussionswithkeyofficialsandagencyleaders,theydecidedagainstofferingalargeportfolioofservicesandinsteadoptedforastrategyofaveryspecificfinancialtransactionserviceportfolioandmatcheditwithasmall,moreagileandhigh-touchdeliverymodelandgovernanceframework.Inaddition,theymadeagencyparticipationvoluntary—spurringbothaneedandcapacityforahigh-performanceorganizationaldesign.
Thekeyleadershipinsightistochooseyourportfolioofserviceswisely.Theportfolioshouldbebroadenoughtoachievebenefitsbutnottoolargeandcomplexthatstart-upandoperationswouldprovedifficult.Oncethisprocessiscompleted,allpartiescanmoveforwardwithonevoiceandwithgreaterresolve.Thisresolvecanthenbetranslatedintoaframeworkforgovernance,andinparticular,thealignmentofstrategyandgovernance.
Aligning Governance and Strategy
Governanceinthesharedservicescontextistheformalstructureandmethodsthatbringthesharedservicesenterpriseanditscustomerstogetherinordertosecureresources,makeresourceallocationdecisions,strategizeregardingongoingservicelevelsandrefinethelong-termsharedservicesbusinessmodel.Inbetweenthevisioningandlaunchingphasesofsharedservices,governancealsoactsasgluetoengagecustomersandstakeholdersandensurelong-termcommitment.Solidgovernanceisalsoneededpriortodevelopingabusinessplaninordertoensurebuy-inandsupport.
TheVisioningHorizonisalsoanopportunetimetodiscusswithstakeholdersandcustomerstheroleofgovernanceandengagethemindesigningit.Whatisimportantisthatthesharedservicescustomersunderstandtheyhaveadirectroleinmeasuringserviceandoutcomesandthattheyunderstandhowtoengagetheprocess.Teriexpresseswhythisalignmentissoimportant:“Essentially,it’sallaboutownershipandcollectivelyoptimizingtheservice,soit’spivotaltojointlydevelopandunderstandtheofferings,expectations,requirementsandcapabilities—andfocusonwhatismostimportanttothecustomer.Talkingthisthroughwithstakeholderssuchasagencyheadsprovidesanopportunitytolearnwhattheagencyreallyneedsandhowtheythinkaboutservice.Theseconversationscanalsobuildasenseoftrustandgenerateasenseofbuy-inasthemessagecanbeconveyedthata‘serviceorganization’isbeingcreatedratherthana‘controlorganization.’”
Inaction,governancestructuresandfacilitatesthedecisionsthatensurevalueaccruesinanequitableandtransparentwaytoallthecustomersandstakeholders.Italsobringsthesharedservicesenterpriseanditscustomerstogetherinordertosecureresources,makeresourceallocationdecisions,strategizeregardingongoingservicelevelsandrefinethelong-termsharedservicesbusinessmodel.Whiletheactualgovernanceframeworkvariesinimplementation,the
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tacticsremainmostlythesameandincludeensuringrepresentationfromeachcustomerandfromselectstakeholdersandprovidingthemtheabilityandrightstomakedecisionsandaffectdirection.Forexample,theOhiosharedservicesgovernancestructurewasdesignedtoensurealignmentbetweenthesharedservicecenter,theOfficeofBudgetandManagementandallpartneringagenciesaswellastodriveconsistentend-to-endprocessimprovementandinnovationcriticaltocreatingstatewidevalue.Executivesfromallthreesegmentssitonastrategiccommittee,whichtackleslong-termpartnershipissues;amanagerialcommittee,whichreviewsservicedelivery,accountabilityandmeasurement;andvariousoperationalcommitteesthatincludeperformancemanagement,continuousimprovementandtraininganddevelopmentworkinggroups.
Together,thestrategyandgovernancestructureisakeycomponenttosuccessfullylaunchingsharedservices.AccordingtoAaronErickson,DirectorofOhioSharedServices,workingoutthisalignmentwascriticalingettingkeyexecutivestoparticipateintheproject.Aaronexplains:“Theagencieshadlittleincentivetotakeonanotherprojectwhentheywereinsurvivalmodeandtryingtokeepprogramsafloat.Theprojecttakestimeandresourcesawayfromtheagencies’otherprogramssothekeytosolvingthisproblemwastoconvincetheOfficeofBudgetandManagementthatweneedtoletagenciesthatparticipatekeepallthesavings,justaskthatthesavingsbewell-documented.Iftheprojectwasgoingtotakethesavingsorreducetheagency’soverallbudget,Iamnotsurethatwewouldhavethelevelofparticipationweneed.Nowagenciescanrecouptheirsavingsandmovethefundsdirectlytocitizen-facingprograms.It’sawinforeveryone.”
TheVisioningHorizon is the time to deeply engage stakeholders and customers in designing the overall form ofgovernance.Whatisimportantisthatthesharedservicescustomersunderstandthattheyhaveadirectroleindesigningandmeasuringserviceandoutcomesandthat theyunderstandhowtoengagetheprocess.Andaswewill seenext,governanceisalsointegraltotheprocessoffinancingthesharedservicesorganization.
Financing the Organization
Whenaskedwhatthemostchallengingaspectofstartingsharedservicesis,executivesusuallyplace“fundingthestart-up” in the top three— right up with “employeeresistance to change” and “lack of cooperation amongstakeholders.” This is logical as a start-up operation isfinancially intensivetobuildaswellasrununtilbreak-even.Yeteven in these turbulenteconomic times therearemethodstoincreaseyourabilitytoraisecapital.
There are three general ways of securing financingfor the shared services launch. The first is throughthe legislative branch of government via general fundappropriation or a bonding bill. The second method isto pool resources across agencies and partners to formaninvestmentpool.Thethirdisahybrid,inwhichbothlegislative and executive branch funding mechanismsaretapped.Giventhegeneraleconomicclimate inmostregionsoftheworldthelatter“boot-strapping”methodismostprevalent—yetitcanbethemostdifficultasitrequiresagencycustomerstoreallocatefundsthathavetraditionallybeenintheirbudgets.
Aswe’llseeintheLaunchingHorizon,combiningmultiplefundingsourceswasthepathOhiotookinfinancingitssharedserviceslaunch.Yeteventhatwaschallenging,asAaronpointsout:“Wehadfourdifferentfundingsourcesforouroperation.Ithinkitistherightwaytoapproachtheprojectingovernment;inOhioforsure,becausegetting$40millioningeneralfundsfromthelegislaturewasunlikely,ifnotimpossible,particularlyinthiseconomicclimate.Getting$5millionto$10millionchunksthroughdifferentfundingsourceswastheonlywaywecouldhavefundedsharedservices.”
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Anothermethodincreasinglybeingusedistoattachasharedservicesinitiativetoacomplimentaryinitiative.Commonexamplesofthisarewhenagovernmentembarksonawide-ranging“reform”initiativeoramajoragencyconsolidationeffort.Inthesescenarios,thereisgenerallyabudgetinplayandthecasecanbemadethatsharedservicesisintegraltothereform.Similartothisisattachingtoamajorenterprise-wideinitiativesuchasanEnterpriseResourcePlanning(ERP)project.ThismakessenseinlargegovernmentsandespeciallywhencombinedwithstreamliningandreengineeringeffortsasthesynergybetweenERPandsharedservicesishigh.ThismaybethepathCaliforniafollowsasthestatehasyettoimplementanERPstatewide.
Abigmistakesharedservicesleadershavemadeisgoingintomeetingsatthelegislatureorwithpartnersandsayingsomethingalongthelinesof,“Ineedallthismoneynowandyou’llseeareturninsevenyears.”Thatkindofrequestdoesn’tmakeitfar.Amuchbettermethodinvolvestheabilitytoscaleyourbusinessplanandinvestmentovertime.Thisenablesaclosematchofreturn-on-investmentofselectserviceareastodiscretefundingsources.Soit’sfeasiblewiththismethodto“chunk”theinvestmentovermonthsandyears—lesseningthestrainonnear-termbudgetaryissuesforfundersandcreatingincentiveforallpartiestosucceed.
Fromthetacticalperspective,it’simportanttoknowthenumbersandassumptionsintheplaninsideandoutandtobeabletospreadthemoutand“flex”themovertime.Forexample,Aaroncurrentlyforecasts4.5yearstobreakevenforOhioSharedServices.However,it’sultimatelyhiscallastowhattimeframethat’sdelivered.Heexplains,“Ifweaddmoreprocessesfaster,thebreak-evenobviouslycomesdown.ButIreallyputalotoftimeinthebusinesscase.IunderstandeveryleverinthebusinesscaseandIknowyoucantweakacouplethingsandyoushootit[ROI]upordownprettydramatically.Ihaveonemodelthatshowsacertainlevelofsavings,andIhaveanothermodelthatshowsahigherlevel—butyouhavetogoinandknowwhatleversyou’recomfortablewithandwhatassumptionsyou’rewillingtomake.Wehaveconsultantswhohelpwithanalysistellmetherangeisfromheretohere—yetmyjobistoknowwhatIcanreallydeliver.”
Thisformofscalingandstaginginvestmentalsoopensupthepossibilityforanewfundingstreamthatmaynotbeavailablecurrently.Forexample,OntarioSharedServicesmovedtoacorefundingmodelapproximatelythreeyearsago.Thefocusisnowonhowefficientlytheyspendavailablefunding,andchargebacksarelimitedtospecificconsumption-basedservicessuchasmailandprintservices.
Ageneraltacticalinsightistoengagebondcounsel,legislativebudgetofficersandanyotherfundingexecutiveearlyonintheplanning—you’llneedtheirsupportlater.“Theprocesstosecureallthefundingtookalongtimeandconstantlyneedstobedefended,eventothisdate,”Aaronsays.“Ittookalotofpersistence—asthebudgetforecastschangedeveryquarter—tomakesurethefundingwasavailableandprotectedasmuchaspossible.IntheendIdidnotgetasmuchfundingasIwasseeking,butIhaveenoughtofinddifferentwaystomakeitwork.”
Fromaleadershipperspective,thepointtoconsideristhatdevelopingthefinancialstructureisaconstantstructuring—selling—financingcyclewhichrequiresadefthandatfinancialanalysis,negotiationandcollaborativeproblemsolving.
Preparing for Implementation and ChangeTeriTakaiofCaliforniahasabigjobahead—theannalsoforganizationalhistoryareriddledwithgreatideasandplansthatfailedoncewordswereputintoaction,andsharedservicesisnoexception.Infact,becauseoftheintensefocussharedservicesenterprisesmusthaveoncustomersatisfaction,thestakesareevenhigher.Compoundingthisisthechallengeofsettingupanewsharedservicesorganizationwithinthedominantorganizationalcultureingovernment.Surmountingtheseobstaclesrequiresreadyingboththesharedservicesorganizationforhighperformance,andreadyingthecustomerandstakeholdergroupsthroughchangemanagement.
Readying the Organization
Awell-designedbusinessisbuiltaroundthe“niche”thebusinessisservingandtheattributesandcapabilitiesneededtosucceed.Thesameistrueinsharedservicesasthestructureoftheserviceorganizationhastobeformedaroundboththeportfolioofservicesbeingofferedandtheperformancethresholdsofhowthoseservicesneedtobedelivered.Thisisasubstantialeffort,andonewaytobreakitdownistofocusondesiredoutcomes—andhowthemajororganizationaldesigncomponentsofstructure,people,processes,technologyandmeasuresactasoptimizinglevers.
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• Structure: Thestructureofasharedservicesorganizationbuildsofftheestablishedgovernanceframeworksandmakesthemexecutableviathetypesofdecisionsthataremadeandwhomakesthem.Structurealsodrivesorganizationalcultureasitpre-setsandinformsthesharedvalues,ideals,attitudes,goalsandpracticesthatcharacterizetheenvironmentandguidecollectiveaction.
• People: Centraltotheperformanceofthesharedservicesorganizationarethepeoplewhowillbeworkingthere.Inacustomer-centricorganizationsuchasasharedservicesenterprise,everyonehastobeempoweredtoproactivelydecideandactoncustomerissues.Whendesigningtheworkforce,considerationsshouldincludethelocationofthecenter,thedistributionofemployeesacrossagenciesandthecenter,theratioofgovernmentemployeesandcontractors,andthedecisionrightsateachlevel.
• Processes & Technology: Thesharedservicesorganizationhastoexcelatdeliveringprocess-orientedservicestocustomersandithastoexcelatitsowninternalmanagementandoperationalprocesses.ThekeyhereistolinktheprocessesandtechnologytoarobustServiceManagementFramework(SMF)andtotheServiceLevelAgreements(SLA)thatprovidethetacticalunderpinning.TheSMFsetsexpectationsforallpartiesbasedonacleardefinitionofservicesanddefinestheroles,responsibilitiesandmetricsforthesharedservicescenterandcustomers.Effectivelydone,theSMFandSLAsaretoolsthatdrivemanagementandoperationalprocessesandensureserviceconsistency.TheServiceManagementFrameworkalsofacilitatesthedevelopmentofemployeesandoperationswithinthesharedservicesenterprise.Systematicandregularreviewoftheagreementshelpsalignbusinesspartnerneedswithoperatingefficiencygoalsandprovidestheobjectivesandprinciplesforhowthesharedservicesstaffwillmakedecisions.Further,theframeworkandagreementsprovidetheabilitytoholdthestaffaccountableandtolinkperformancemeasurementtorecognitionand/orrewards.(FormoreinformationonServiceManagementFrameworks,pleaseseeAccenture.com/sharedservices.)
• Measures:Putinplaceatooltomeasureworkoutcomesfromdayone.Themeasuresshouldflowdirectlyfromthecorecapabilitiesthesharedservicescenterisattemptingtoachieve.Forexample,NASASharedServicesCenterputinplacea“BalancedScorecard.”Thescorecardcontainsfourdifferentdimensionsthattheymanage:customerconfidenceandloyalty,financial,unparalleledservice,andinvestinginemployees.Eachofthesedimensionsissupportedbyasetofstrategicgoalsdesignedtoendurethreetofiveyearsinlength.Andeachofthestrategicgoalsissupportedbyasetofannualtacticalgoalswithactionitemsthatarerolledintoemployees’performanceplans.RichardArbuthnot,ExecutiveDirectoroftheNASASharedServicesCenterexplains,“Thebalancedscorecardisabigdealforus.Itisnotjustastrategicmanagementdocumentthatisthreeinchesthickandsitsonsomeone’sshelfthatnobodyreads.It’safive-pagedocumentthatweusedailytomanagetheNASASharedServicesCenter.”
Theleadershipkeyistomodulatetheseleverstofittheoutcomesdesired—andaswe’llseeinsubsequenthorizons,adaptthemovertime.AsyouworkthroughtheVisioningHorizonandtransitionintotheLaunchingHorizon,makesuretokeepaneyefocusedontheformoforganizationthatwillhelpyourealizedownstreamsuccess.
Readying the Environment
Mobilizingsupportandmomentumforsharedservicesimplementationisbothaprocessandanartform.Ittakesmultiplestepsandcontinuesthroughoutthelifecycleoftheinitiative—andsystematicallymanagingthischangeandreadinessforimplementationisvitalforsuccess.HerearekeystepsleadersshouldtaketomobilizetheenvironmentthroughouttheVisioningHorizon:
• Campaign for Change:Thisstepisthe“wake-upcall.”It’swhentheleadershipofthesharedservicesinitiativeestablishesasenseofurgencyaroundthechallengesandopportunitiesfacingthegovernment.Mosteffortsthataresuccessfulinthisregardcreateacloselinkbetweenthelong-termstructuralchallengesthegovernmentisfacing(financial,demographics,inefficiencies,etc.)andhowsharedservicescansolvethosechallenges.Thiseffortiscloselytiedtothebusinessplanningworkasaccuratebaselinesoncurrentcosts,externalbenchmarks,internalsurveysandprojectionsonsavingsandserviceimprovementshelpgalvanizestakeholdersontheurgentneedforchange.“ForCaliforniathatwillmeanreallyhighlightingthepotentialandprojectedeffectivenessandefficiencyimprovementsandmakinganargumentforchange.Andthenrepeat,repeat,repeat,”Terisays.
• Create a Change Coalition: Havingexecutivesponsorshipiscriticaltosharedservicesinitiatives,butthissteprequiresadeeperandwiderapproach.Bringonboardselectagencyleaders,unionleaders,technologypartnersandthemedia.Initially,thisgroupsimplymustbuyintothegeneralnotionthatsharedservicesisneeded,butovertimetheyneedto
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worktogetherondevelopingthevisionforwhatsharedservicescanaccomplish.Thisisaniterativeprocessandoneinwhichthesharedservicesleadershiplearnsjustasmuchas thegroups they’re speakingwith as theconversationsraiseideas,issuesandconcerns.Thegoalhereistomovethepeopletobecometheevangelistsfortheinitiative.
• Align Vision and Frames: Oncethesharedserviceschange coalition develops a picture of the futureand how shared services enables that, they musthelp disparate and potentially affected groups andorganizationssee thevision through their respectiveframes. For example, they should consider howsharedserviceswouldimpactandhelptheeducationdepartment, front-line health and human servicesemployeesandunionemployees.LookingatNASA’sstrategy,thesponsorsoftheCaliforniasharedservicesinitiativerealizedtheyhadtogobeyondtalkingabouthow shared services can enable productivity, andspeakdirectlytohowsharedservicescanfacilitatetheoutcomesCalifornianeeds—morehealthandhumanservicesworkerson the front lines to servecitizens,faster response times for business licensing andpermitting, enhanced learning materials for primaryandsecondaryeducationandtheretentionandgrowthofstateparksandenvironmentalcauses,forexample.
• Assess Adaptive Challenges and Opportunities:It’softensaidthatpeopleresistorareafraidofchange.The more accurate view is that people are afraidof loss. People rarely resist a promotion, receivingan inheritance or a winning lottery ticket. Majortransformationeffortsalwayshavegainsandlossesatboththeorganizationallevelandtheindividuallevel.Buildingontheworkinstepthree,instepfourleadersshouldassesswherethesegainsandlossesare.Whiledifficulttodoattheindividuallevel, it ispossibletocreate a matrix of potential impact in categories oforganizationsandpeople.Thisassessment—whilealotofwork—reapsbigdividendslaterasthesharedservicesleadershipwillbeabletoplanandcommunicatemoreeffectively.(Formoreontheimportanceofexercisingleadershipthroughadaptationpleaseseethesidebarentitled“LeadingAdaptation”onpage29.)
ItremainstobeseenwhatformsharedserviceswilltakeinCalifornia.Thequestionsonvalueandfeasibilityhaveyettobeanswered,andleadershipisstillgarneringtheresolvetomoveforward.Yetclearlytheyhaveagoodstartatlayingthegroundwork—andTerigraspstheroadahead.“Asyoumoveforwardtoasharedservicesmodel,whatI’mfindingisthatyou’redoingvisioning,launchingandimplementationinsomecasesallatthesametime.Andthatthere’sinterplaybetweenthemasyoutrytomoveyouragendaforward,particularlyasitrelatestowhatyouneedtohavetocontinuetogetexecutivesupport.Iwanttomakethatpointbecauseifyou’reintheearlystages,itmaybeeasytosaywell,IneedtodothevisioningpieceandthenIcanmoveintothelaunchingpieceandthenIcanstartimplementing—butinrealityyouhavetoseethewholejourneyaheadofyou,”shesays.
OnceCaliforniahasasolidvision,executivesupport,governanceandabusinessplan,what’snext?AndwhatstepsshouldTerithinkaboutinpreparationtolaunchsharedservices?Let’slooktoOhioforsomeanswers.
“We cannot afford waste and fraud in any
department or agency. This unprecedented
action will mean a total review of government:
its performance, its practices, and its costs.
Together with my dedicated team of experts, we
will make California the first true 21st Century
government in America, a government that is as
innovative and dynamic as the state itself.”
–Gov.ArnoldSchwarzenegger
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The angle of the September sun reminded Aaron Erickson it was getting late. He glanced at his watch — 6:30 pm. “Wow, what
an incredible day,” he thought, loosening his tie.Hereflectedonthemonthsofplanning,theanalysis,themeetings,andcalls—andhowthesharedservicescenterfinallyopeneditsdoorstocustomersthatday.Hetookalong,relaxedbreathandtypedacongratulatorye-mailtotheteam:
Aaron Erickson Director of Ohio’s Shared Services Center
Current Shared Services Status: Launching
Aaron Erickson is Director of the Ohio Shared Services Center where he leads the start-up and rollout of the new operation. Prior to launching the Shared Services Center, Aaron served as Deputy Director for the State of Ohio’s Office of Budget and Management where he was the prime sponsor of the State of Ohio’s Enterprise Resource Planning (ERP) project — the Ohio Administrative Knowledge System. Previously, Aaron held executive positions with Accenture and Deloitte where he focused on technology, business process reengineering and change management.
Ohio
HORIZON TWO Launching
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Fortwoyears,AaronandthemanagementteamattheOfficeofBudgetandManagementandtheDepartmentofAdministrativeServicesworkedtobringtofruitionGov.TedStrickland’svisionofaninnovativeexperimentinhigh-performanceworkplacemanagement.Theeffortrequiredcomplexlegislationandextensivechangestosystemsthroughoutstategovernment—accountingrules,financialreportingprocesses,reimbursementpolicy,cashmanagementmeasures and collective bargaining agreements — and was accomplishedwithfewresources.WhenOhioSharedServicesplanningbeganin2007,thegovernorandstateofficialsfacedastaterevenuebaseerodingby$1.6billionperyearandfiercepressuretomaintainor increasethecapacitytodelivercitizenserviceswithoutaddingpeopleormoney.Ohio’srevenueserodedevenfurtherfollowingthenationalfinancialcrisisandensuingrecession.In2009,stateagencybudgetswerefundedat70-80percentoflevelsthreetofiveyearsprevious,andthestatewasoperatingwithfeweremployeesthanin1983.
The Strickland Administration decided that aggressive implementationof shared serviceswould leverage the significant investment alreadymadeintheirERPsystemandhelpthestateobtainsavingsthroughstreamliningfinanceoperations.SoonaftertheERPsystemlaunched,AaronproposedtotheExecutiveSponsorsofOhioSharedServices,DirectorPariSabety fromthe Office of Budget andManagement and Director Hugh Quill from theDepartmentofAdministrativeServices,thatthestatebuildthedatatoprovethebusinesscase.TheteamlaunchedabenchmarkstudywithHackettGroup,astrategicadvisoryfirm,thatcomparedstateoperationstoothergovernmentsandcompaniessuchasRadioShack,Panasonic,PhillipMorrisandCapitalOne.
Whentheresultscamein,thedisparitybetweenOhio’sstate-runoperationsand other states and high-performing organizationswas evident, fosteringsupport for change. Ohio’s finance costs as a percent of operating budgetwerethreetimesthoseofotherstatesandhigh-performingorganizations,forexample,andthestatehad75percentmorefinancestaffthanotherstatesand 150 percentmore than high-performing organizations. Similar patternsappearedacross severalfinancepractices (e.g. accountspayable, travel andexpense reimbursement, customer billing) and in comparison with high-performingorganizations,transactionswerelessautomated,lessintegrated,andtooklongertocomplete.Furtheranalysisshowedthatthroughenterprise-widesharedservices,OhiocouldgeneratesavingsworthaNetPresentValue(NPV)of$1.2billion.CommentedPari,“ThisprojectallowsOhiotomovetotheheadoftheclassandcreatetheplatformforanewoperatingmodelforefficiencyinstategovernment,andqualityserviceforitscitizens.Modeledonbestpracticeintheprivatesector,OhioSharedServiceswillbringstategovernmentfinanceoperationsintothe21stCentury.”
AsAaronpreparesforthedaystocome,heisready.“Ourvisionistobeabest-in-class,high-performingpublicserviceentity,”hesays.OhioSharedServiceswasabletoopenitsdoorsinSeptember2009becausetheteamwasdedicatedtohighperformance.Inlaunchingsharedservices,Aaronandhisteamexcelledatthekeysteps:deliveringonthegovernanceandbusinessplans,preparinganewworkforceandformoforganizationandmanagingchangeandcommunication.Let’stakealookattheirworkindetail.
Implementing the Processes and ServicesOccasionally,sharedservicesinitiativessufferanuntimelydeathinastunningfashion:ablowupatthelegislature,anexecutivesponsorderailedbypoliticalstunts,oragencyheadsdoingalast-minuteabout-face.Butmoreoften,unsuccessfulinitiativesexperiencea“cloak-and-daggerdeath”broughtonbyapoorlyexecutedtransitionofprocessesandservices.Makingitworse,problemswithmigratingprocessesandservicescandestroyfinancialprojections,return-on-investmentandyourcredibility.
Horizon Two: LaunchingAtthislevelthesharedservicesinitiativeisinimplementationmode.Theprimarydirectiveistoexecuteagainstthesharedservicesbusinessplan,governancestructureandservicedeliveryframeworkinameasuredfashion.Tactically,theenterpriseisworkingtostageandroll-outitsfirstportfolioofservicestoitscustomersviaawell-plannedmigrationandimplementationplan.Leadershipoftheorganizationisalsotrainingtheworkforceonnewprocessesandbusinesspracticesandrolling-outasystematicsetofchangemanagementandcommunicationactionsbothinternallyandwithcustomersandstakeholders.
Key competencies at this horizon include:
1. ImplementingtheProcessesandServices
2. PreparingaNewWorkforceandFormofOrganization
3. ManagingChangeandCommunication
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Yetmanysharedservicesinitiativeshavenavigatedthisstepandsetasolidplatformforgrowth.Sohowdoesthesharedservicesleadershipensurethesuccessfultransitionandimplementationofservices?Hereareafewlessonsfromthetrenches.
• Keep Morale High: Start-upoperationstendtobehecticandthepaceanddurationofworkcanweardownemployees—especiallyduringthefirstsixmonthsoruntilstabilization.Inaddition,theculturalshifttoacustomer-centricworkplacecanbeunsettling.Leadershipshouldcontinuallyassessemployeemorale,providesupportwhenneeded,andcelebratebothbigandsmallsuccesses.
• Follow the Benchmarks:NowisthetimetobuildtothebenchmarksandbestpracticesthatwerenotedduringtheinitialassessmentphaseandthroughoutthedevelopmentoftheServiceManagementFrameworkandgovernancemodel.Astheprocessesandservicesareactuallytransitionedtothesharedservicescenter,it’simperativetomeetthecriteriaandidealsexpressedthroughoutthevisioningphase.Tohelpachievethis,putsomeoneinchargeofmonitoringthestandardstomakesurethere’snoslippage.
• Optimize End to End:Buildingonthebenchmarking,makesuretounderstandeveryprocessfromstarttofinishandwhat’sworkingwell.Bywatchingkeymetrics,suchastransactiontimeanderrorrates,youwillbeabletoascertainwhetheraprocessisworkingasplannedanddevelopimprovementsonthefly.Additionally,ateachpointofhandoffthroughoutaprocesscycle,there’sriskofsomeentityorpersonwantingtoretainapastpractice.Thismaybefine,butensurethatafterpastpracticesarebalancedwiththenew,theoptimummethodisretained.Apartfromaselectfewexceptions(usuallypoliticallydriven),nowisalsonotthetimetostartrenegotiatingprocessflowandhandoffs—justfocusonoptimizingendtoend.
• Watch for Shadow Processes: Inanefforttoretainauthority,powerorthepast,customerorganizationswillsometimescreate“shadowprocesses”withintheirorganizations.Shadowprocessescreateredundancyandinevitablyincreasecostsenterprise-wide.Topreventthis,thesharedservicescenterstaffshouldbeincommunicationwithcustomerstoinstillconfidenceinthenewbusinesspractices.Andofcourse,maintainingnormalservicesthroughouttransformationiscritical.Preventingshadowprocessesisalsoachangemanagementissueandanadaptiveissue—sothesharedservicesleaderhastomaintaindialoguewithagency(customer)headstoensurethatmonitoringishappeningfromthetopofeachorganization.
• Live and Breathe the Service Level Agreements: Duringthetransitionprocess,staffatboththesharedservicescenterandatcustomerlocationsshouldintegratethestandardsintheServiceLevelAgreementsintoeveryprocessdecisiontheymake.Thekeyfilterpositionedasaquestionshouldbe:Balancingeffectivenessandefficiency,willthisdecisiongetusclosertoorfurtherfromthestandardsintheSLA?
Thekeyinsightforleadersisthevalueof“pacingtheprocesses.”Pacingtherolloutofprocessesandserviceswhilemaintainingapositiveworkenvironmentisafineart,andultimatelyitistheroleofsomeonelikeAarontoensuretheachievementofmigrationandintegrationwithoutsacrificingeffectivenessandefficiency.
Preparing a New Workforce and Form of Organization “Youcannotoverlooktheimportanceofbrandingandculture.Igetalotofquestionsaboutthetechnologyandwehavesomecoolstuff,butthatwillnotbethekeytooursuccess.Ourcorecompetenciesandvaluesarealldrivenaroundbuildingtherightcultureandhavingprideinourbrandanddeliveryofservicefirst.Thefirst120hoursofanassociate’scareeratsharedservicesisstructuredtobringthebrandtolife,”Aaronexplains.“AftervisitingprivatesectorsharedservicescentersatMarriott,NationwideandLimitedBrandswerealizedthatahigh-performanceworkplaceisinstrumentaltoprovidingtheservicewewantedandthecontinuousimprovementwewillneed.Sowe’reinstillingacustomer-centeredculturethatpermeatestheentiresharedservicesorganization.”
TurningthatvisionintorealitymeantworkingcloselywiththeOhioCivilServiceEmployeesAssociationtoalignstateanduniongoalsandcreateanewperformance-orientedworkforce.Thesharedservicescenterengages47employeesfrom15stateagenciesinself-directedworkteams,skill-basedpay,andmetricsmeasuringweeklyjobperformance—aredefinitionofworkthatrequiredbothsidestoshedpreconceivednotionsandembraceapartnershipextendingbeyondmandatedproceduresandgrievanceprocesses.“Wewantedtheculturewell-definedbeforeweeveropenedthedoor,”saysAnneSaunier,DeputyDirectoroftheOhioOfficeofBudgetandManagement,andpartnershipchairrepresentingthestate.“Butit’scommonlyreferredtoasahigh-performancecultureandweweren’tsurehowtheunionwouldreacttothat.”Topromotetrustandsupport,thestatesetabroadpartnershipagenda,invitingunionrepresentativesto
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weighinonanarrayofcenterpoliciesincludingmanagementstructure,managementjobdescriptions,andcontinuousimprovement—mattersoutsidetypicalnegotiationsinvolvingwages,hours,andtermsandconditionsofemployment.
Fewovertureswereneededtopromotesupportforahigh-performanceworkplace.CarolBowshier,DirectorofHealthPolicyandAdministrativeServicesfortheOhioCivilServiceEmployeesAssociationandpartnershipchairrepresentingtheunion,sawthesharedservicescenterastheperfectopportunityforlabortohelpdefinethehigh-performancepathway.Infact,laborhadalreadydevelopeda“high-performanceplan”promotingworkredesign,moretraining,andtheimplementationofnewtechnologies.“Itwasourthoughtthatifwecoulddevelophigh-performanceworkplacesinstategovernment,theprivatesectorwouldn’tbeabletocompetewithus,andthereforeourworkwouldneverbecontractedouttothem,”Carolsays.Thecenter,whichoffersworkersincreasedpayastheyacquireskillsets,willalsoprovideworkersgreaterjobsatisfactionandaself-directedcareerladderinadditiontogreaterjobsecurity,sheposits.
Anneagrees.Self-directedworkteamsattainedbyflatteningthemanagementstructureandreducingtheratioofexempt-to-bargainingstaff—akeyagreementnegotiatedbetweenlaborandthestate—willlikelybecosteffective.“Ifwedon’thavetopayforallthosemanagers,I’mmorethanwillingtopaytheunionratesfortheworkers,whicharealittlehigherthanwhatweseeintheprivatesectorinColumbus,”shesays.
With these guidelines in place, the partnership team flushed out other key program criteria:
• Agencyparticipationisvoluntary.Agencieswillminimizelayoffsbyusingnaturalattritiontostaffthesharedservicespositions
• Aselectgroupofcurrentemployeescanbidtoenterthesharedservicescenter,andwillhavegrievancerightsiftheybelievesomeonewithlessexperienceisawardedtheposition
• Employeeswhohavebeenperformingmuchofthesameworkforalengthyperiodoftimewillnothavetoserveaprobationaryperiodinthenewposition
• Sharedservicesemployeeswillallenterasoneclassificationbutwillbeeligibleforpayraisesastheymovethroughfourskillblocks—adeparturefromthe“step-and-grade”paysystem
• Employeeswillbeexemptfromacurrenttwo-yearpayfreezerecentlynegotiatedbytheunion• Effortswillbemadetoflattenthemanagementstructure• Weeklymetricswillprovideemployeestheopportunitytoself-evaluatejobperformance,andworkerswillevaluate
their“coaches”viaquarterlysurveys• Sharedservicespilotprogramswillbelaunched
Lookingforward,CarolandAnneseechallengesandopportunities.Botharemindfulthatgreateragencycooperationisneededtostaffthecenter,andthatprotractedeconomicconcernscouldhinderreal-timeworkplaceadjustments.Buttheyagreethatpotentialbenefitsoutweighthesehurdles.Forlabor,anenvironmentofcontinuousimprovementwillunleashthepowerofindividualworkerstosettheirowncareerpaths,theysay.Andgreaterproductivitycombinedwithcost-savingmeasuresmayjustmakeOhiosharedservicesamodelforotherstates.
“Wereallywanttodemonstratethatthisispossibleinastate-rununionshop,”Annesays.“Wefundamentallybelievethatitisandwewanttopointatthisandsay,‘See,ifyouworkreallyhard,thisiswhat’spossible.’”Theleadershiptakeawayhereisthatittakestime,energyandcommitmentfromallstakeholderstoputtogetherahigh-performanceorganization,Aaronexplains.“Everydayisanewchallengeasaleader;somedaysitcanbeoverwhelming.Ihavetoremembertostop,breatheandlettheteamworkthroughtheissues.Thesharedservicesteamwilltakeanyproblembacktothehomeofficeandworkonresolutionforanagency;itisnotacceptabletosay,‘Thatisnotourproblem.’Theleastwecandoislistenandgiveadviceonoptionstoresolvetheproblem.Ifourcustomersneedourhelp,weneedtobetheretodeliver.”
Managing Change and Communication“‘Thereisnoeasyroadtobuildingsharedservices.Youwilltakehitsandmanyofthemyouwon’tseecoming.Stayresilient,’PamMurray,fromMarriott,toldmewhenIfirstmether,”Aaronsays.“Short,simpleandperfectadvicetosharewiththeteamandoneofourcorevaluesweexpectineveryfacetofoursharedservicesenterprise,”henotes.
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ThefirstfewmonthsoftheLaunchingHorizonprovideanopportunitytovalidateassumptions.Often,sharedservicesleadersfindtheyneedtorefinetheirbusinessmodeltomeetunanticipateddemandsandcommunicatedifferentlytoretainexecutivesponsorshipandstakeholderresolve.Sensingwhat’shappeningandrespondingquicklytochange—beingagileandresilient—iswhat’sneededdirectlypost-launch.
Inpractice,sharedservicesleadershipmustmanagechangeandcommunicationalongbothorganizationalandauthorizingenvironmentdimensions.SofarOhioShareServicesisperformingwell.Theassessment,benchmarkingandmetricsproducedduringtheVisioningHorizonprovidedsounddatauponwhichtomakedecisions,andtheoperationismeetingthegoalsofthebusinessplan.Justthreeweeksaftergoinglive,sponsorsapprovedstartingapayrollshared
servicesprojecttoexpandthescopeofservices.YetOhioSharedServiceshasalsofoundareasthatneedrefinementiftheyaretosustainprogress.
Refining the Organizational Structure
Fromtheorganizationalperspective,nowisthetimetoreviewtheorganizationaldesigncomponentsofstructure,people,processes,technologyandmeasuresandsetapathforrefinementandchange.
• Structure: Thestructureofasharedservicesorganizationbuildsofftheestablishedgovernanceframeworksandmakesthemexecutableviathetypesofdecisionsthataremadeandwhomakesthem.Lookingatthetrajectoryofserviceadoption,AaronrealizesthatOhioSharedServiceswillneedtomodifygovernancesoonerratherthanlater.Thecurrentgovernanceisprimarilyfocusedontheprojectandcurrentscopeofprocesses.Thelong-termgovernancemodelwillneedtobemorediverseandfocusedonbuildingandexpanding.
“Ithinkwehaveunderestimatedthetimeandeffortrequiredtomovetotheoperatinggovernancemodel.ItissomethingIhavetofigureoutveryquicklyinordertostartexpandingservices,”Aaronexplains.
• People: Apartfromestablishingthedesiredworkplacecharacteristics,managementofthesharedservicescentermustalsomonitorandrefinestaffingtactics.Akeylessonhereistostartasearlyaspossibleinplanningthenumber,identifyingandrecruitingstaff.“Ittakesmuchlongerthanmostrealizetoselectandtrainaworkforce,”Aaronsays.“Ithasbeendifficulttoassembletherightstateteaminatimelyfashion.Althoughweplannedforstaffonanappropriateschedule,ittooklongertomovethemtotheprojectthanexpected.Asaresult,westartedtheprojectwithoutallthekeyteammembers.”Agoodpracticeistoforecasttheteamrequirementsandgetpeopleontheteamamonthbeforetheyareneededfortheworkplan.Oncethesharedservicesoperationhasafewmonthsofexperience,rewardtheemployeeswhohaveperformedwellandcontinuetodevelopandpromoteemployeeswhopersonifythehigh-performanceculture.
• Operating Processes & Technology: Thesharedservicesorganizationhastoexcelatdeliveringprocess-orientedservicestocustomersandithastoexcelatitsowninternalmanagementandoperationalprocesses.OneofthefirstrefinementsOhioSharedServicesmadewastotweaktheprocessforbillingagencies.“Wewerepresentedwithseveralscenariosforbillingagencies:budgetbasis,allocationanddirect.Basedoninputfromthecustomerswearegoinglivewithamodelofbillingagenciesdirectforeachservicebytransactiontypeversusthebudgetorallocationmodel.ThiswasastrongrequestfromtheCFOadvisorycouncilandlong-term,Ifullysupportthemodelandthetransparencyofsuchamodel.ThedifficultyisthatIhaveallkindsofassumptionsonwhatmycostpertransactionwillbeandIwon’tknowtherealcostforayearortwo.IfIhadtodoitoveragainIwouldasktheadvisorycounciltouseabudget-basedallocationforthefirstyearofaprocessandthenmovetodirectonceitisstable,”Aaronsays.Technologyplaysakeyroleinassuringthatemployeesprocessingworkeverydayareoutfittedwithtechnologysolutionsenablingthemtobehighperformingandmeetcustomerneedsduringeachandeverytransaction.
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• Measures: Themeasuresforthesharedservicescentershouldflowdirectlyfromthecorecapabilitiesandserviceofferings.Post-launch,thesharedservicescenterwillproduceawealthofdatathatcanbeanalyzedandmeasured—don’tletthisdatagotowasteasitgivescriticalinsightintoperformance.LikeOSS,usethedatatomakechangesthatoptimizetheoperation.“WeparticularlywatchthenumberscominginfromourContactCenter(helpdesk)aswellassystem-widefeedbackfromcustomersandemployees,andweusethatdatatotweaksystemsandgetfullyuptospeed.It’sonewaytoreally‘listenandrespond’tocustomersduringthelaunch,”Aaronsays.
Managing the Authorizing Environment
Thesharedservicesleadershipmustcontinuallytakethetemperatureoftheauthorizingenvironment—theviewsofthekeysponsors,stakeholdersandconstituentgroups—duringthetransition.Thisassessmentwillhelpmanagethechangeandcommunicationthatwillsecureandsustainresolve.BuildingonthestepsrequiredintheVisioningHorizontopreparetheenvironmentforimplementationandchange,thereareadditionalstepsleadersshouldtakethroughouttheLaunchingHorizon:
• Engage Stakeholders in Adaptation: Understandthatadaptationtothenewbusinessandorganizationalmodelsdoesn’tstoponcesharedserviceslaunches—itgenerallyintensifies.FocusingontheinsightscollectedduringtheVisioningHorizonandduringthelaunch,sharedservicesleadershipshouldcontinuedialoguewithkeygroupsandindividualswiththegoalofremovingbothrealandperceivedbarrierstochange.What’simportanthereislistening,nottelling.AsAaronrecalls,“Mychangemanagementteamputcommunicate,communicate,communicateonslidesatonepoint.Ireplaceditwithlisten,listen,listen.Talkingisnotcommunicatinginthisenvironment.”Morethananything,peoplewanttobeheardinthisphase.Evenifalltheirissuesaren’tresolved,airingthemismostofthebattle.Backlisteningupwithasystematicefforttoengagepeopleinthechange.
• Stay on Message:Sustainingtransformationisverydifficultwithoutthecontinualbuy-inandhelpfromstakeholderandemployeegroups—thepeoplewhowillhavetodotheday-to-dayworkthatbringsasharedservicesenterprisetofruition.Thus,it’simportanttokeepthemessageofthemissionintheforeground.Managingcommunicationinvolvesmanyfactorsandtacticaldetailsspecifictoeachinitiative,buttheprimarylessonlearnedandespousedbychangeexpertsistomakeyourfirstplan,thenmultiplythecommunicationamountandchannelsbyafactoroften.It’smemorablerepetition—andoveralongperiodoftime.Asinothertransformations,thekeywithsharedservicesistohaveasmanycredible“sponsorvoices”aspossible—fromthechiefelectedofficial,totheleadsofagenciesandtopartnerssuchasunionsandindustrygroups.Ohio’soutsideadvisorycouncilofsharedservicesleadersfromMarriott,LimitedBrandsandNationwidesupportedtheprojectthroughouttheVisioningandLaunchingHorizons—makingitpoliticallydifficulttoquestiontheproject—andofferedsolidproofofconceptforsupporters.
• Solidify the New Business Model:Whereasthebenchmarkingandassessmentphasewasaformof“unfreezing”legacyprocessesandbusinessmodels,thesharedservicesleadershipshouldnowmoveto“refreeze”thenewprocessandbusinessmodels.It’simportanttodothisassoonasthesharedservicescenterhascrediblesuccess,asthat’swhenit’spossibletorapidlychangepoliciesandprocessesthatdon’tfitthevisionofthefutureandtoinstitutionalizenewmethodsandhigherperformance.Leadershipacrossthesharedserviceenterpriseandthecustomerbaseshouldalsocontinuetocommunicatetheconnectionsbetweenthenewsharedservicesbusinessmodelandcitizen-facingprogrammaticsuccess.Additionally,besuretocelebratetheearlywinsastheyhelpmaintainmomentum.What’simportanthereistomaketheongoingargumentfortransformation—andthatsharedservicesisanenablerofincreasedpublicvalue.
Managingchangeandcommunicationgoeshandinhandwithsustainingsupportforsharedservicesduringthelaunchingphase.Essentially,itinvolvesmanagingthe“holdingenvironment”andpacingthechangeforcustomersandstakeholders.Agenerallessonlearnedfromtransformationeffortslikesharedservicesisthatthechangeprocessstartsearly—andtakessubstantialtime.Sostartnow,anddon’tletup.
What’snextinOhio?Stabilize,optimize,andexpandisthequickrundown.“Ourbiggestchallengegoingforwardisthestabilizationphaseandwehavetogetthroughthat.Iwanttokeepthemomentumgoing,”Aaronsays.“UnderstandingGovernorStrickland’sneedtocreateopportunitiesforagenciestosavefunds,anddirectthosefundstomission-criticalservicesarethedrivingforcesbehindsuchiniciativesasOhioSharedServices.”
Toexploreincrementalinnovation,let’snowlooktotheGrowingHorizon,andhowGregWasshasbroughtnewenergytosharedservicesinIllinois.
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The Adaptive ChallengeLevel and Form of Organizational Innovation
High Levels of Organizational Change,
Realignment, Competency and Innovation Needed
Extreme Change and Adoption of
New Technologies and Capabilities Needed.
Current Technologies and Solutions Match with Current
Organizational Structures and Competencies
New Technologies and Competencies Need To Be
Discovered and Implemented Within Standing Structures
Technical Innovation
OrganizationalInnovation
High
High
SharedServicesTransformation:the Adaptive ChallengeForthemajorityofgovernments,sharedservicesprovidesclearfiscalbenefits,increasedefficienciesandenhancedeffectiveness—sowhyisitthatsomesharedservicesinitiativesfailtolaunchandgrow?
Afairguesswouldbethatleadersunderestimatethelevel,formanddurationofchangerequiredtolaunchandsustaintheeffort.Yetthefullansweristhatleadersmustrecognizesharedservicesinitiativesforwhattheyare—atransformationalchangeeffort.Transformationalchangeinsharedservicesgoesbeyondchangemanagement—andhassomesignificantdifferences.
Thedifferencesresideinthenecessityofinnovatingalongtwodimensionssimultaneously-technicalandorganizational—andhowtheresultingtensionimpactsthesocialsystemandenvironmentwithinwhichthesharedservicesenterpriseoperates.Broadly,thedimensionscanbedescribedas:
• Technical Innovation: Thisformofchangeiswhatwe’remostusedto.Organizationsandpeopleexperiencethiswhenimplementingincrementalchange(suchasupdatingaprocess,technologyormanagementmethod)withintheircurrentorganizationalstructure,authoritylinesandknowledgeset.
• Organizational Innovation: Thisformofchangeiswheremostpeopleandinstitutionsgetuncomfortable,asitrequiresthedevelopmentandadoptionofnewcompetenciesandcapabilities—oftenwithinanewenvironment,governancestructureandorganizationaldesign.
Combinethesetwodimensionsandyouhavean“adaptivechallenge”onyourhands.AccordingtoRonHeifetz,FounderoftheCenterforPublicLeadershipatHarvardKennedySchool,anadaptivechallengerequiresexperiments,newdiscoveriesandadjustmentsfromnumerousplacesintheorganization.Withoutlearningnewways—changingattitudes,valuesandbehaviors—peoplecannotmaketheadaptiveleapnecessarytothriveinthenewenvironment.Thesustainabilityofchangedependsonhavingthepeoplewiththeprobleminternalizethechangeitself.Mr.Heifetzsuggeststransformationalchangecannotbeaffectedcompletelythroughauthorityor(change)management.Rather,ittakesaperson(orsetofcomplimentary-actingpeople)toactivelymobilizestakeholderstoaddressrealandperceivedlossofimportantideals,valuesandcompetenciesthathavebeeninplaceforyears(ifnotforalifetime)whilealsoactivelylearningnewcompetencies,capabilitiesandculture.
Whenpeopleandsocialsystemsareworkingthroughanadaptivechallenge,ahighlevelofpersonalandorganizational“cognitivedissonance”canarise.Thisstateofpsychologicaldistressiscausedbythevariancebetweenaprojectedorrequiredfutureandthecurrentreality.Athighlevels,thestressandfearoflosscanspurpeopletoworkagainstthechange.Thusthecapacityofpeopleand organizations to move throughadaptive challenges and end up onthepositivesideoftransformationalchange is largely dependent onplanningforandexercisingleadershipbymobilizinggroupstoworkthroughtheiradaptivechallenges.
What happens when adaptationdoes not go well or when peopleexhibit maladaptive behavior?When personal and organizationaldissonance rises to a level wheresuch behavior occurs, the resultingdisturbancecanbeenoughtoderailasharedservicesinitiative.Commonexamples of maladaptive behaviorinclude:
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For more information on exercising leadership and adaptive challenges please see:
“A Survival Guide for Leaders4,” RonaldHeifetzandMartyLinsky,HarvardBusinessReview,June2002.4
“Leadership on the Line — Staying Alive Through the Dangers of Leading5,” RonaldHeifetzandMartyLinsky,HarvardBusinessSchoolPress,2002.5
“Leadership Without Easy Answers6,” RonaldHeifetz,HarvardUniversityPress,1994.6
• Avoidance: Peopledisengagefromtheinitiative—consciouslyorunconsciously—astheyavoidthepain,anxietyorconflictthatcomeswithactivelyworkingthroughthegainsandlosses.
• Direct Push-back: Peoplewillactivelyfightthechangestakingplace.• Circumvention:Peoplewillbypassorworkaroundthesharedservicessponsorsandlobbyagencyheads,legislators
orwhoeverwilllendasympatheticearinordertodelay,distractorderailtheinitiative.• Shadow Processes: Peoplewillsecretlykeeppastprocessesandoperatingmodels—duplicatingworkinsomecases
—inordertoretainasenseofcontrol.Shadowprocessesareparticularlydestructivetoefficiencyastheyunderminethesavingsthatcomefromasharedservicesbusinessmodel.
Methods to Exercise Leadership and Mobilize the Shared Services StakeholdersClearlytheimportanceofexercisingleadershipthroughthesharedservicesadaptationiscriticaltosuccess.Herearesomerecommendationsformobilizingindividualsandorganizations—andyourself:
• Understand and Assess the Psychology of “Gains and Losses”: Thefirststepistounderstandtheperceivedandrealvaluegainsandvaluelossestoeachcategoryofstakeholder,i.e.,datacentermanagerswillperceivethevaluevastlydifferentthananauthorizingbodyoraseniorexecutiveintheinitiative.Itisimportanttodiscoverbothsidesofthegain/lossequationasperceivedlossesaffectadoptionasmuchasperceivedgains.
• Identify the Adaptive Challenges: Beinapositionwhereyouknowwhatwillhappennext.Ifyouassessandforecastwheretheadaptivechallengeswillariseyoucanstartworkingwiththepeopleandunitsaffected—movingthemtosurfaceandresolvingthedifficulttensionsandtradeoffsrelatedtotheirchangingroles,capabilities,loyaltiesandidentity.
• Pace the Innovation and Adaptation: Realizethatpeopleneedtimetoworkthroughadaptivechallenges—andgettoknowtheirlimits.Asthesayinggoes;“Keepithotenoughbutdon’tletitboilover.”Onewayyoucanachievethisisbycreatinga“holdingenvironment”(thetermoriginatedinpsychoanalysistodescribetherelationshipbetweenthetherapistandthepatient)forgroupstodiscussalloftheissuesrelatedtothechangeinanon-judgmentalatmosphere.Theintentistounderstandpeople’sunderlyingfearsandaddressadaptivequestionssuchas:Whatdowehavetogiveuptomakethiswork?Arewecompetentenoughforthisnewmodel?Howwillthischangetheidentitiesofourcurrentorganizations?Dowebelieveinthisnewwayofdoingbusiness?
• Protect Voices of Leadership: It’scriticaltofindandprotectthepeoplewhoexerciseleadershipbutwhodon’thavethecoverofformalauthority.Thesepeoplearethe“change-makers”withinanorganizationandusuallyhaveahighcapacityformobilizingthemselvesandtheirpeers.Makesureyoufunnelthemtimelyinformation,engagetheminhelpingtovoicethenecessityofchange,andprotectthemduringtheprocess.
• Hold Steady:Last—andmostimportant—protectyourself.Realizethatyouareaffectedbythechangeandadaptationasmuchasothers.Makesureyouworkthroughyourpersonaladaptation—andevenbetterifyoucandosomeofitwithothers.Akeyelementisclearlyseparatingyourselffromyourroleandunderstandingthatmaladaptivepeoplewill“attack”yourroleandyourauthority—don’ttakeitpersonally.
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Imagine that you’re the captain of a large passenger plane. You’re flying through turbulent skies at a 25,000- foot altitude and have the nose
up a bit to reach 35,000 feet and the jet stream — where the real speed happens. Butasyoulookatthedashboardyouseeadizzyingarrayofissues.Oneengineisrunningat80percentandtheotherat40percent;thetailrudderisn’tasresponsiveasyou’dlikeandthepassengerskeepbuzzingtheirservicebuttons.It’salittleoverwhelmingtogglingamongthehatsofcaptain,systemsengineerandflightattendantallthesametime—butyouseeblueskiesahead.
Ifyoucanimaginetheabovescenario,youknowabitaboutwhatit’sliketorunasharedservicesenterpriseintheGrowingHorizon—andtheworkofIllinoisCIOGregWass.Gregisfocusedonthechallengeofsimultaneouslystabilizingandgrowinghissharedservicesenterprise.Withastateemployeeheadcountreducedby13,000overthepastdecade,aplethoraofpaper-and-peopleintensiveprocessesandoutdatedcomputersystems,Illinoishasalotofroomforimprovement.Currently,sharedservicesinIllinoiscompriseITinfrastructure,fiscalandhumanresourcesareas.Greg’sprimarychallengeistosolidifyandscalethoseoperationswhilebuildingoutnewprocessesandtechnologiestoformaplatformfornewservicesandnewcustomers.Simultaneously,heisstrivingtodevelopfuturesharedservicesleadersandmakethecentersanemployerofchoice.GregknowsthatifhecanmoveIllinoissharedservicestothenextlevel,hewillbeabletofocusonincrementalinnovationandlaunching“front-end”servicessuchashealthandhumanservicesintakeoperationsformultipleagencies.
Greg Wass Chief Information Officer, State of Illinois
Current Shared Services Status: Growing
Greg Wass is the Chief Information Officer for the State of Illinois where he oversees the shared services initiative, coordinates application development for all agencies, and leads the state’s strategic technology plan with an emphasis on cross-boundary efforts to transform government through greater collaboration and resource sharing. Prior to being appointed CIO of Illinois, Greg held executive positions with the City of Chicago, Illinois State Treasurer and City of Alexandria, VA. Previously, Greg worked as a vice president of government solutions for a Fortune 500 company, was co-owner of a Chicago-based management and technology consulting firm and led research at the Civic Federation.
Illinois
HORIZON THREE Growing
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Greg andhis teamhavehadmore than their fair shareof challenges.Politicalupheavalbroughtonbyagovernor’s impeachmentcoupledwiththeworstbudgetdeficitinstatehistorysethisplansbackalmosttwoyears,anddelayedaprojecttoreplacemorethan100 legacycomputersystems.Even in thebestofeconomic times, shared services leaders in this stagemustrelentlesslysellcustomersonthevalueofsharedservices,persuadestakeholders to stay engaged and move employees through furtheradaptation—challengesthatrequireextrastaminaandtenacitytoday.Yetmomentumisnowonthesideofreform,andGregislookingtoharnessthatmomentumtogrowIllinoissharedservices.
There are three key competencies in the Growing Horizon: scalingservices and operations, refiningworkforce capabilities and performanceandgeneratingvaluethroughincrementalinnovation.Let’stakealookathowGregandothersareaddressingtheseareasandattemptingtogrowtheirsharedservicesoperations.
Scaling Services & OperationsIncreasing uptake of services weighs prominently on Greg’s mind.Executedwell,sharedserviceswillbring$229millioninsavingstoIllinoisoverfiveyears.Thisamountconsistsprimarilyofsavingsgeneratedthroughincreasesintheefficiencyofadministrativefunctionsandtheeliminationof maintenance costs of computer systems identified for replacement.Investments in implementing integrated administrative systems (e.g.purchaseofsoftware,hardware,implementationservices,contractorsandtraining)willbeapproximately$108millionoverfiveyears.Theresultcouldbe$121millioninestimatednetpositivecashflowoverfiveyearsand$110millioninestimatedreducedoperatingcosts,recurringannually,beginninginyearsix.
Yet achieving those numbers requires scaling services and operationsthat are all at different stages in their lifecycle. Information technologyconsolidation is about 80 percent complete and human resources andfiscal shared services is about 40 percent complete. While they’re wellontheirway,there’sstillalotofworktobedone—andalotofgrowthtobeachieved.
WhileGregismanagingtheadoptionandscaleissue,he’salsodealingwith the realities of selling and persuading. “There are still areaswith alackofpoliticalsupportandleadership,andpocketsofpeoplestandinginoppositiontotheprogram.SoI’mcontinuouslysellingthesharedservicesprogramtothegovernor’soffice,stateagencydirectors,myownsharedservicesprogramstaffandthevendorcommunity,”hesays.“WealsohaveproblemsrelatedtotheperceptionthatthelaunchingphaseoftheITconsolidationthatprecededourHRandfiscalsharedserviceswasa‘bruteforce’consolidation.So,we’vegotthatkindofbadwilltodealwithinour‘good’sharedservicesprogramforHRandfiscal.”
Whilemanagingtheseissues,Gregisfocusingonthreeprimaryareas—maximizing,maturingandextendingtheplatform.
• Maximizing the Base:Thisisabouthittingthenumbersinthefinancialforecasts.InOhio,AaronEricksonwasintunewiththeleversinthefinancialplanandhowhecouldflexthemupanddowndependingonhowfastcustomersadoptedtheprocessesandservices(inscope)andatwhatservicelevel.Furthermore,hedevelopedasolidideaonwherethebreak-evenoptimallywas,andhowmuchcustomervolumewasneededtogetthere.Illinoisisabitmorecomplicatedasthesharedservicescenterhasthreeserviceofferingsatdifferentlevelsofmaturity.Greg’schallengeis
Horizon Three: GrowingAtthislevelthesharedservicesenterpriseisupandrunningandhasoperationalexperiencewithaportfolioofservices.Theprimarythrustofoperationsisonmanagingtheuptakeofservicesandincreasingthepaceofscale.Leadershipoftheenterpriseisalsoactivelyassessingkeymetricsandmeasuresandadjustinggovernanceandservicerequirementsinordertooptimizeadoptionofservices.Additionally,thesharedservicesenterpriseisdevelopingandmovingtoacommerciallyorientedandperformance-basedculturethatisadeptatdesigningandrolling-outnewprocessesandservicesbasedoncustomerinputanddemand.Thekeychallengeatthisstageismanagingthebalancebetweenachievingthemaximumlevelsofeffectivenessandefficiencyincurrentserviceswhileplanningandbudgetingforincrementalinnovationandextensionsofserviceofferings.
Key competencies at this horizon include:
1. ScalingServices&Operations2. RefiningWorkforceCapabilitiesand
Performance3. GeneratingValuethroughIncremental
Innovation
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toknowexactlyhowmanycustomershecanhaveoneachserviceofferingandtrytomaximizethat.Toachievethis,hewillworktomaximizethecustomervolumebyincrementallymovingcustomersontotheserviceswhilekeepingacloseeyeonproductivityratios(suchasheadcountandcycletimes)inthesharedservicescenter.Overtime,thisloadbalancingwillensureIllinoisisgeneratingthemaximumamountofefficiencyfromeachservicebroughtonline.
• Maturing the Platform:Asthesharedservicescentergainsexperience,valuabledatacanbegathered.Ingeneral,the“sweetspot”ofamatureserviceiswheretheresources(technologyandstaff)andthebusinessprocesses(patternsofinteraction,coordination,communicationanddecisionmaking)showaconsistentratioofinputtooutputandatthelowestaveragecost.Thevalueinthisformulaisthatitenablestheinternalabilitytoknowexactlywhatthethresholdsareforcuttingcostsandimprovingservicequality,aswellashowtoextendtheplatform.
• Extending the Platform:Onceaserviceofferingismature,sharedservicesleadershipcanlooktoextendtheofferingasdeeplyaspossible intothecurrentcustomerbase.Yetthechallengehere is tonotoverextendtheplatform.Atsomepointthemodelmaybreakorbecometoostrainedandadditionalresourceswillberequired—andthatcanimpacttheoverallbusinessmodel.Fromtheleadershipperspective,youshouldextendincrementally—whilecarefully watching metrics. It’s also important tofrequentlyspeakwithstafftogaugetheirsentimentandmorale.
AkeyinsightfromGregandothersisthatleadingwithintheGrowingHorizonrequiresjustasmuchresolveasintheVisioningandLaunchinghorizons.It’slikefightingalongwarontwofronts—butoptimismeventuallypaysoff. “I think the final realization of shared services forback-officefunctionscouldtakeusfiveyears,”Gregsays.“WehadthatproblemofnothavingthefundingavailabletostartERP,butwe’regoingtogettherethisyear,soI’mreallylookingforwardtofiscal2010!”
Refining Workforce Capabilities and Performance“Mymain goal is to develop future center leaders andmake shared services centers employers of choice,” headds.Thisisavitalgoalasemployeesofasharedservicescentermakeup60to70percentofoverhead—andmustbeperformingatpeaklevelsinordertodeliveronthepromiseofsharedservices.AttheGrowingHorizon,thefocusofrefiningworkforceskillsandperformanceiscenteredonmaturingthecapabilitiesofcurrentemployeeswhilereadyingthemforfuturechangeandinnovation.
Aninterestingchallengeatthisstageisleadingaworkforcewhichhaspocketsofemployeeseagertomoveintothefutureandothersclingingtothepast.“Thisisn’talwayseasyorwelcomedbyemployees,butgetsbetterovertime,”Gregexplains.“You’llgetcontinuedpushback.Especiallyfromemployeesthathadtomoveaspartofthesharedservicestransition.But,Ithinkthatonceyougetasharedservicescenterinplace,theyformtheirowncultureandtheyformtheirowncamaraderieandI’veseenreallygoodthingsstartingtohappen.”
Overtime(andaswe’llseeinthecaseofOntario),asharedservicesenterprisethatwantstogrowwillhavetodevelopacommerciallyorientedcultureandsystemsbasedonagility,flexibilityandbeingabletoanticipatechangeinordertorespondquickly.Yetthisishardtoachieveinorganizationsfocusedoncost-cuttingandmaximizingefficiency.Tomakethistransition,leadershipofthesharedservicesenterprisemustincrementallychangethevaluesandmethodsinwhichworkisperformed.
ApracticalframeworkforachievingincrementalrefinementandgrowthwasdevelopedbyRobertSimons,HarvardBusinessSchoolprofessorandauthorof“LeversofOrganizationDesign:HowManagersUseAccountabilitySystemsforGreaterPerformanceandCommitment.7”Simons’sworkpresentsanaction-orientedframeworkfordesigninghigh-performancejobsbymodifyingfourspansofwork—control,accountability,influenceandsupport—from
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theperspectiveoftheemployee.Atabaseline,eachemployeehastoknowtheanswertofourbasicquestionsrelatedtotheirspans,whichleadershipcanadaptovertime.Appliedtosharedservicesenterprises,theframeworkcanbedescribedas:
• Span of Control:“WhatresourcesdoIcontroltoaccomplishmytasks?”Thisspandefinestherangeofresources(assetsandinfrastructure)forwhichanemployeeisgivendecisionrights.
• Span of Support:“HowmuchsupportcanIexpectwhenIreachouttoothersforhelp?”Thisspanreferstotheamountofhelpanindividualcanexpectfrompeopleinothersharedservicesunitsinordertoimplementastrategyordeliverable.
• Span of Accountability:“Whatmeasureswillbeusedtoevaluatemyperformance?”Thisspanreferstotherangeoftradeoffsaffectingthemeasuresusedtoevaluateachievement.Forexample,asharedservicesleadresponsibleforheadcountinaparticularserviceareahasasmallerspanofaccountabilitythanamanagerresponsibleforprofitandlossacrossmultipleservices.
• Span of Influence: “WhodoIneedtointeractwithandinfluencetoachievemygoals?”Thisspancorrespondstothewidthofthenetthatanindividualneedstocastincollectingdataandinformationandattemptingtoinfluencetheworkofothers.Inasharedservicescenter,anemployeeresponsiblefordatainputmaynotneedtopaymuchattentiontopeopleoutsidehisorherarea,whereasacustomerservicerepresentativemustinteractextensivelywithotherstoinfluenceactionandsolveproblems.
Foranyorganizationtooperateatmaximumefficiencyandeffectiveness,thefourspansmustbeoptimizedtothe role and responsibility of each employee. It’s alsoimportanttounderstandhowthespansinterrelate—foranysharedserviceorganizationthesupplyofresourcesforeachjobandeachunitmustequalthedemand.Inotherwords,spanofcontrolplusspanofsupportmustequalspanofaccountabilityplusspanofinfluence.
For organizations that are trying to become moreinnovative,leadershipwillgenerallyincreasethespansfor certain individuals and teams in order to generatemore experimentation and to develop new ideas andapproachestobusiness.InIllinois,Gregmustpreparetheworkforceforinnovationandnewmarketsbyadjustingthespansforcertainemployeesinordertogivethemlatitudetobeentrepreneurialandinnovative.Atacticalapproachtothiswouldbetocreateacross-unitteamthatcanlookatservicesenterprise-wide.Providethemwithawidespanofinfluenceandimpartsomecreativetensionintheteambychallengingthemwithstretchgoalssuchasreducingaservicecostbyalargepercentageormodifyingaprocesssothatitcouldbeappliedtoanewcustomer.
ThedelicatebalanceforGregandhisoperationistomaintainthefocusandmethodologiesforstandardizationandcostcuttingwhilealsoenablingemployeestolookforanddevelopideasforincrementalinnovation.
Generating Value through Incremental Innovation“TheservicethatI’mreallylookingforwardtogettingoffthegroundisthehumanservicesandhealthportal—intake,eligibilityanddetermination,andcasemanagement.”Gregsays.“That’stheonethatI’mstartingfromthebeginningwithagoodteamofbelievers,andthenotionisthatwehavetodefineprojectsthatarealreadyinflighttotheprogram.So,inawaywe’relookingforquickwinsthatwerealreadythingsthatwerebeingthoughtof.”
Greghasagreatvisionforthefuture,andnowhischallengeliesinretainingtheperformanceandbestpracticesofmaturebusinessprocesses,whileharnessingandattachingcapabilitiestonewandextendedofferings.Aswe’veseenintheprevioussection,refiningworkforcecapabilitiesisoneoftheleversinsuccessfullygrowingandprovidingincrementalinnovation.Theothertwoleversarerefiningboththebusinessmodelandthetechnologicalmodelofserviceofferings.Thetaskhereispacinginnovationandadoptiononboththesharedservicessideandonthecustomerside,soasmethodschange,adaptationkeepspaceandperformanceimproves.
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Thisisoneoftheclassicdilemmasofmanagement.HarvardBusinessSchoolProfessorClaytonChristensenexplainsinhisbook,“Innovator’sDilemma,8”that“Processesandstandards,bytheirverynature,aresetupsothatemployeesperformtasksinaconsistentway,timeaftertime.Theyaremeantnottochangeor,iftheymustchange,tochangethroughtightlycontrolledprocedures.Whenpeopleuseaprocesstodothetaskitwasdesignedfor,itislikelytoperformefficiently.Butwhenthesameprocessisusedtotackleaverydifferenttask,itislikelytoperformsluggishly.”
Sohowdosuccessfulbusinessleadersapproachthischallenge,andwhatlessonscanwelearnfromIllinois?Thekeyisfindingandchoosinginnovationsthatintroduceamoderatelevelofdisruption—rockingtheboatalittle,butnotcapsizingit.Classically,thepathtocreatingincrementalinnovationandsubsequentvalueisbyhelpingyourcustomersdothesamethings—butinawaythatleadstobetteroutcomeswithoutalotofnewlearning.
Thefirststeptowardachievingthisendistoscanfor“BlueOcean”amongcurrentandpotentialsharedservicescustomers.Forasharedservicesenterprise,ablueoceanstrategyiswhentheservicesofferedcanbeslightlymodifiedtocreatevaluesimultaneouslyforboththesharedservicesenterpriseandthecustomer.Todothis,createateamcomposedofafewofyourmostinnovativeemployeesandchargethemwithfindingBlueOceanopportunitiesandoutliningnewprocessesandstandardstomeettheideasgathered.Theteam’scentralfocusshouldbeonextractingcurrentbestpracticesanddeterminingthemodificationsnecessarytoincreaseeffectivenessandefficiencyonthecustomerside.Inpractice,thisrequireshelpingcustomersviaimprovementsintheirbusinessmodelandviaenablingtechnology—andmorespecifically—inhowthetwodimensionsinteract.
• Innovation in Business Model: Referstothemanagementandoperationalprocessesusedtocreate,developanddeliver a service to citizens. For example, Illinois currently hasmultiple health and human services organizationsprovidingservicestoconstituents,andoftentheorganizationsoverlapand/oraredependentonhand-offsbetweenorganizations.This has been the dominant businessmodel over the past century as authority and accountabilitystructuresweredependentonstricthierarchyandsilo-basedstructures.Thisbusinessmodelcanleadtoduplicationandinefficienciesandoftentimesresultsinharmtoconstituents—theexactoppositeoutcomethat’stargetedforhealthandhumanservices.
• Innovation in Technology: Refers to thecommunication and information technology, theinfrastructureandthestandardsthatenableabusinessmodel. Building on the example above, the currenthealthandhumanservicesorganizationsdon’thavetobedismantled—theyjustneedtobeinterconnected.Technologycouldbeappliedthatcouldhelphealthandhuman services back-office and front-officeworkerscoordinate and collaborate across organizationalboundaries. The result would be more seamlesshandoffs,real-timeinformationsharingandultimately,healthierandsafercitizens.
The shared services organization is well positioned tobe the synchronizer of these two dimensions as it hasanenterprise-wideviewofcurrentandfuturecustomerneedsandcanassesstheincrementaladvancesthatbringbothaperceptionandrealmeasureofvalue.
Atthispoint,ideasarestilljustthat—ideas,andtheleadershipofthesharedservicesoperationstillhasthechallengesofdevelopmentandadoptionandchoosingthe“right”ideastomoveforward.Essentially,asintheVisioningHorizon,we’reasking,canwemakeithappen?
DecidingwhetherornotaninnovationcanbesustainablerequiresassessingexpectedvalueandexpectedriskandassigningtheideaanInnovationValueProfile.Themostdirectwaytodothisisbylookingateachideaandqualifyingitsvalueandriskprofilewithdimensionsandquestionssuchas:
Perception and Measure of Public Value
En
ablin
g Bu
siness an
d Tech
nology
Mod
el
Base Incremental Value Enhanced Value New Value Proposition
Next Generation
Advanced
Incremental
Base
Idea 1
Idea N
Idea 2
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• Organizational Impact: Howmuchbusinessmodelandtechnicalmodelchangeisinvolvedintheidea?Howmuchinternalandcustomeremployeeresistancewilltherebe?Whatlevelofbenefitwillthisbringtoourcustomersandtheirconstituents?Whatlevelofbusinessmodelandtechnicalmodel(organizationalform)changedoweneedtobringthislevelofbenefittothecustomer?Canthescaleandscopeofthecurrentsharedservicesplatformbeextendedtothispurpose?Willweloseourvaluepropositionandconnectionwithcertaincustomers?
• Expected Value: Howvaluableisthistocustomers?Howvaluableisittothesharedservicesoperation?Doesthevalueforcustomersandthesharedservicesorganizationintersectinapositiveway?Howmuchpoliticalvalueisatstake?Howmuchfiscal value and risk (measuredbyfinancialtoolssuchasPayback,InternalRateofReturn,NetPresentValue,etc.)isatstake?Canweaffordnottodoit?
• Perceived Risk: What is the probability offailureandhowwouldthatbemeasured?Isourorganization capableof absorbing this amountof internal shift and change?Dowehave thetechnical capability to complete the project?How would failure impact our organization’soperatingenvironment,customerrelationships,authority, and perceived value within ourauthorizingenvironment?
Assessingeachideaonabaselevel(anorganizationshoulddevelopacustomizedsetofmeasuresandmetricsinordertotailoraportfoliopreciselytoitsmission)ofmetricsandthenplottingthemaccordingtoexpectedvalueandriskwillprovideasnapshotofthearrayof ideasandpotential innovationstochoosefrom.
Plottingwillenablemanagementtopickasetofinitiativestomoveintodevelopmentandstartwithabalancedportfolioofinnovativeservicedevelopmentprojects.Formostorganizations,incrementalchangeisthemostfeasibleasitbringsa“tempered”levelofvalue.Alternatively,highlevelsofinnovationandchange(aswe’llseeintheTransformingHorizon)aredifficultbecauseoftheadaptationnecessary—eventhoughbreakthroughchangewilloftenbringthegreatestpublicvaluecreation.
InIllinois,Greghasbeenworkingwithagenciestobetterunderstandtheirneedsandfindincrementalinnovationsthatthesharedservicesenterprisecandevelopandlaunch.Fromthisworkhehasaportfolioofnewideasincludingasharedcallcenter,deeperITservices,grantsprocessesandthehealthandhumanservicesportalmentionedabove.
Donewell,thisprocessofdevelopingincrementalinnovationsandofferingthemviathesharedservicesmodelbringsnewvaluetoagencies,thesharedservicesoperationandthestate—awin-win-winscenario.Astheleadermovingforwardtheseformsofinnovation,remembertocontinuouslysellthevision.Gregprojectsagreatexampleashemovesforwardoninnovationinhealthandhumanservices:“ThehealthandhumanservicesworkistheonethatI’mmostcommittedtoandengagedwithasithasthemostresultsperendclients,forpeoplewhoreceiveservicesfromthestate.It’smucheasierformetodealwiththatbecausethat’savisionandyoucaninspirepeoplewithavision.You’reatthatpointwhereyou’redealingwithahundreddifferentsystemsaroundhealthandhumanservicesthateachhasasilobureaucracyaroundthem.Andthatdescriptionofhowyoufusethosethingsandhowyougetbenefitsandefficienciesout—that’sacompellingargumenttomake.”
Gregknowsthere’salotofroomforimprovementandimpactinIllinois,andseesdevelopingnewprocesses,standardsandservicesasacatalystforpreparinghissharedservicescentertomoveintotheTransformingHorizon.Yethewonderswhatnewcapabilitiesthey’llneed.Foranswers,let’slooktoDavidHalletandtheCanadianProvinceofOntario.
Innovation Value Profile
High
Feasibility of Completion and Adoption
HighMedium Low
Expe
cted
Val
ue o
f In
nova
tion High
Medium
Low
Invest and
Grow
Be Selective
AvoidIdea 5
Idea 3
Idea 4
Idea 2
Idea 1
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David Hallett Associate Deputy Minister Ontario Ministry of Government Services
Current Shared Services Status: Transforming
David Hallett is Associate Deputy Minister of Ontario’s Ministry of Health and Long Term Care. He was previously the Associate Deputy Minister for Ontario Shared Services where he led a comprehensive transformation strategy to reposition shared services into a high-performance organization. Prior to assuming his position at Ontario Shared Services, David was Chief Information Officer for Ontario Central Agencies where he created IT-enabled solutions for the Cabinet Office, Management Board Secretariat and the Ministry of Finance. Previous to his public sector work, David held executive positions at Loblaw Companies and Oshawa Group.
Ontario
“
HORIZON FOUR Transforming
Game-changing innovation” is the mantra of David Hallett, Associate Deputy Minister of Ontario’s Ministry of Health and Long
Term Care.PrevioustohisappointmentinDecember,2009,DavidservedasAssociateDeputyMinisteroftheMinistryGovernmentServicesinOntarioforfiveyears,duringwhichhespearheadedtheprovince’ssharedservicesinitiative—aneffortthathasmadeOntarioamodelforothergovernmentshopingtotaketheirsharedservicesenterprisetothenextlevel.Sinceitsinceptionin1998,OntarioSharedServices(OSS)hasevolvedfromanorganizationthatsimplyprovidedback-officetransactionalsupporttoanentitythatishelpingtodrivetransformationalchangeacrossgovernment.Today,astaffof1,200deliversstrategicadviceandservicesinfinancialservices,humanresourcesandpayroll,enterpriseservicesandsupplychainmanagement.
Yetsuccessdidn’tcomerightaway.Davidwasrecruitedin2004toturnaroundasharedservicesoperationthatwasstrugglingthroughtheLaunchingandGrowingHorizons.OntarioSharedServiceslaunchedwithalaudablemission:“todriveinefficienciesanddriveoutcosts”byeliminatingduplicationandleveragingeconomiesofscale.Despitetheirinitialefforts,however,progresswasslowedbyanunwillingnessofcertainministriestoembracethesharedservicesmodelforthedeliveryofback-officeservices.Furthercomplicatingtheireffortswasthelackofamature,focusedbusinessmodeltoguidedecision-making.
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By 2004 the shared services organization was faced with significantcustomerdissatisfactionanda$12millionannualoperatingdeficit.InassumingtheleadershipofOntarioSharedServices,David’soverridingobjectivewastopositiontheorganizationforlong-termsuccessbyfocusingresourcesondeliveringcoretransactionalservicesthatwouldmoveOntarioSharedServicesintotheGrowingHorizon.
Between2004and2008,OntarioSharedServicestransformeditselffromanorganizationthatdeliveredsharedservicesofallkindstoanorganizationthatdelivered coreback-office transactional services exceptionallywell.RomanZydownyk,ActingAssociateDeputyMinisterofOSS,attributesthesuccesstostaff implementingthekeyfoundationalelementsofsharedservices—including standardizing business processes and supply chain managementprocesses, consolidation, and implementing enterprise resource planningsystems(ERPs)forhumanresourcesandfinancialtransactions.Theseeffortsnotonlyhelpedeliminate the initial$12millionannualdeficit,butOntarioSharedServiceswasalsoabletoabsorbadditionalannualizedcostpressuresofroughly$28millionandgenerateapproximately$225millioninnetnewrevenues,coststructureflexibilityandcostsavingsforthegovernment.Italsoreduced thenet sizeof itsworkforceby24percent (395positions) in fouryearswhilecontinuingtotransform,extendandimproveitsservicesacrosstheOntariopublicservice.
Bytheendof2008OntarioSharedServiceswasreadytomoveintotheTransformingHorizonwiththe launchof itsVision2012strategy,aplantomovefromprovidingcoreback-officetransactionalservicestohelpingdrivepublic sector modernization through the implementation of innovativeenterprise solutions and services. OSS leadership will not only continuelookingforopportunitiestodriveinefficienciesanddriveoutunnecessaryadministrativecosts,butalsobeakeycontributortoincreasingoverallpublicsectorperformancethatincreasestheconfidenceOntariocitizenshaveintheirpublicservice.
Ontario Shared Services Vision 2012 comprises three overriding objectives:
1. Extendthereachofexistingservices
2. Pursuegame-changinginitiatives
3. Contributetofinding$1billioninefficiency-relatedsavingsacrossgovernmentoverthreeyears
Let’stakealookathowtheyplantoachieveit.
Optimizing the Service PortfolioToachieveVision2012OntarioSharedServicesmustcontinuallyoptimizeitscurrentservices.Themantra,“driveinefficienciesanddriveoutcosts”formedearlyonstillpermeatestheorganization.However,there’sakeydifferencebetweenthepastandthepresentasitsmaturityhasenabledmultiplemethodsofachievingthereductionofproductandservicecosts.
ThetrendlinesofgovernmentspendingpaintapictureofhowsuccessfulOSShasbeenatdrivingoutcosts.Whilegovernmentdirectexpendituresincreasedroughly25percentfrom$9.7billionto$12.1billionbetween2004and2009,theOntarioSharedServicesoperatingbudgetdecreasedby9percent,from$184millionto$168million.Onacomparative
Horizon Four: Transforming
Atthislevelthesharedservicesbusinessispositionedasastrategicpartnertoitscustomersanditsvaluepropositionhasgrownbeyondtransactionalservicestoincludeprofessionalservices.Tactically,theenterpriseishighlyadeptatreducingthecostsofservicesthroughinnovativeuseofnewtechnology,processoptimizationandoutsourcing.Strategically,thebusinessisgrowingbybringinginnewsetsofcustomersandcreatingaprofessionalservicesculturewhosefocusisnowonpro-activelyhelping“clients”totransformtheirorganizationsthroughlarge-scaleinnovationsupportedbycomprehensiveprojectandchangemanagementcapabilities.Thedrivingvisionandgoalistostayaheadofthecurveinordertohelpclientsincreasetheircapacityforproductivityandtorealizecompletelynewformsofpublicvalue.
Key competencies at this horizon include:
1. OptimizingtheServicePortfolio2. CreatingaProfessional
ServicesCulture3. IdeatingandLaunching
NewPlatforms
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basis,OSS’operatingbudgethasgonefromrepresenting1.9percentofdirectgovernmentexpendituresto1.3percentofdirectexpendituresinthepastfiveyears.
How does Ontario Shared Services generate thislevel of efficiency? In four primary ways: developinginternal excellence, fostering client excellence, affectingpolicychangesandenablingincreasedtransparencyandaccountability.
• Developing Internal Excellence: AsOntarioSharedServiceshasmatureditsprocessesandsystems,it’sabletoextracteverydropofefficiencyfromthem.Fromaproductivitypointofview,since2004,thenumberofclients servedper full-timeemployeehasgone fromroughly 43 to 59; an increase of about 37 percent.As David proudly points out, “These productivityimprovementswouldnothavebeenpossiblewithoutthecommitmentandeffortsoftheorganization’s1,200professionalpublicservants.”
• Fostering Client Excellence: OSS has developed adeep understanding of processes and services fromthe end-to-end perspective, as well as the qualityandaccuracyofboththeinputsandoutputsoftheirservices. OSS employees have garnered a wealth ofrespect from their clients, enabling collaboration toachieveserviceimprovementbreakthroughs.AsDavidexplains, “Workingwithour clientsusing fact-baseddatahashelpedbothpartiestoidentifywhatneedstobedoneandtojointlypursuecorrectiveactionsthatachievepositiveoutcomes.”
• Affecting Policy Changes: ThethirdmethodOSSutilizestostreamlinethesimplificationandautomationofprocessesisthroughpolicychanges.AsDavidputsit,“Inordertodriveinefficienciesanddriveoutcosts,youneedtostreamlineprocessesandautomatewhereverpossible.Toensurestreamlinedprocessesandautomationachievetheintendedoutcomesitisoftennecessarytoreviseexistinggovernmentpolicies.”Forexample,whenOSSintroducedafinancialsystemssolutionknownasiExpensesfortheprocessingofbusinessexpenses,thefinancialpolicyforprocessingbusinessexpenseshadtobeupdatedtorequireroughly43,000publicservantstoonlysubmitbusinessexpenseselectronically.Thatpolicychange,combinedwithanautomatedsolutionwithstreamlinedprocessesallowedOntarioSharedServicesanditsclientstoprocessbusinessexpensesinfivebusinessdaysratherthan15,andpermitapproximately40OSSprofessionalstoberedirectedtodelivernewserviceofferings.
• Enabling Increased Transparency and Accountability: OntarioSharedServicesplaysakeyroleinimprovingaccountabilityforgovernmentexpendituresandenablingincreasedtransparencyinseveralways.OSSdrivesstandardizingbusinessprocessesforkeyfinancialprocessessuchasbillpayments,payrollandprocurement,which,inturn,ensuresthatfinancialcommitmentscanonlybemadewithproperapprovalsandspendingauthorityinplace.Usingsingle,enterpriseITsystemsforthesecorefunctionsalsoenablesbettertrackingandreportingacrosstheOntarioPublicService.Forexample,OSShasautomatedandstandardizedreportingacrossgovernmentonspendingforkeyareasoffocusforexpensereductionsuchastravel.OSSalsodrivesincreasedaccountabilityandtransparencythroughgovernmentprocurementpoliciesanditsVendorofRecordprogramsthathavestandardizedhowtheOntarioGovernmentmakespurchases.
Thisvalueof“whatcouldbe”isbecomingmoreandmoreapparent.AsRomanandtherestoftheOSSmanagementteamcontinuetobuildtheircapabilitiesandintroducenewservices,anintegralpartoftheireffortistofurtherdeveloptheorganization’sprofessionalservicesculture.Let’sgetaglimpseintohowtheyareachievingthis.
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Creating a Professional Services Culture
AsOntarioSharedServicespositionsitselfasastrategicpartnertoclientagencies,staffliveandbreathetheethosofcollaboration,everreadytosolveclientchallenges.“Webelieveifwedoourjobverywellinthebackoffice,publicservantsonthefrontlinescanfocusonwhatismostimportant—servingtheneedsofprovince’scitizens,”Davidexplains.“Ifwecandirectlyandindirectlycontributetoincreasingtheoverallperformanceofpublicservants,webelievethiswillsignificantlyincreasetheconfidencethepublichasinthepublicservice.”
Becomingavaluedpartnertoclientsrequiresmuchmorethandeliveringcurrentserviceseffectivelyandefficiently—itmeanssolvingclientchallengesandcreatingnewvalueinproactiveandvisionaryways.Itmeansbeingfullyclient-centered.Anditrequiresaprofessionalservicesculture.
Toenabletheseoutcomes,OntarioSharedServiceshasbeenguidedbyasetof“CoreBeliefs”and“StrategicThrusts”since2004.
The three Core Beliefs are:
1. Commonback-officeservicesenableministriestofocusonthedeliveryofcoreservicestocitizens.
2. Drivinginefficiencies,drivingoutunnecessarycostsfreeupsavingsthatcanberedirectedtoothergovernmentpriorities.
3. Anenterprise-focusedorganizationenablessound,ethicalandinnovativepublicadministration.
The five Strategic Thrusts are:
1. ReduceProductandServiceCosts • Ensurethegovernmentgetsthebestvaluefromitsvendorsandserviceproviders,includingOntarioShared
Services.
2. SimplifyProcessesandAutomate • Simplifyprocesses,pursueenterprisesolutions,anddeployself-servicetechnologies.
3. StreamlinePolicies • Facilitatethesimplificationandautomationofprocessesthroughpolicychanges.
4. PromoteSmartConsumption • Provideself-servicetechnologiesthatfacilitateinformeddecisionmaking.
5. StrategicallyEngageStaffandKeyStakeholders • Harnesstheknowledge,skillsandtalentsofOSS’entireprofessionalworkforceandtheOntarioPublicService
community.
Thebeliefsandthrustscontinuetoserveasafoundationforday-to-daydecisionmakingandenabletheorganization’spursuitofitsVision2012strategy.
Since2004,OntarioSharedServiceshastreateditsentireworkforceasapoolofhighlytalentedprofessionalsthatistobeleveragedandrepositionedtoensureservicedeliveryexcellencebasedonchangingclientneeds.Thesharedservicesorganizationhasalsoworkedhardtodevelopstrongworkingrelationshipswithkeystakeholderssuchastheministries’chiefadministrativeofficers.AsDavidputsit,“Thegovernment’schiefadministrativeofficershavebecomekeyleadersinhelpingtransformOntarioSharedServicesintoanexcellentproviderofbackend,enterpriseclassadministrativeservices.”
Developingandfosteringaclient-centeredandprofessionalservicecultureisaprerequisitetohelpingministrieswithtransformationalchange.Butmakingthishappenalsorequiresachangeofmindsetwheresharedservicesisseenasaproviderofsolutions,notsimplyaprovideroftransactionalservices.Thisisaculturalshiftthathastakentimetoachieve.
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Ideating and Launching New Platforms“Ourkeystakeholders seeusasmuchmore thansimply a transactional organization. They areactively working with us to find new ways toextend existing services as well as identify andpursue‘gamechangers’thatwillfurthertransformhow the government operates,” David says. “Aswe pursueVision 2012, we’re focused more thaneveronenablingenterprisesolutionsandservicesthatcanbeextendedfurtherintoministriesaswellasofferedtoalargerclientbaseintheprovince’sbroader public service. At the end of the day,it’s about ensuring all public servants across theprovince are working to ensure tax dollars areprudentlyusedandthatwe’regettingthemaximumvaluefromeachdollarspent.”
OntarioSharedServices’maturefoundationnowenablestheenterprisetofocusonthefuture—whichincludesinitiativessuchase-wasterecycling,aggregatingandconsolidatingprintoperationsacrossthegovernmentandcentralizingthemanagementofallgovernmentforms,tonameafewplans.LookingbacktothecaseofIllinois,GregWassandhisteamarecreatingincrementalinnovationbyfocusingonchangestocustomerbusinessmodelsandenablingtechnologies.Andwhilesimilarinmethods,OntarioSharedServicesispushingintonewterritorybycreatingnewplatforms—a“leapfrog”move—thatdeliveracompletelynewvaluepropositiontoclients.ThisiswhyDavidcallsit“gamechanging”—theadvancesfundamentallyalterthepublicvaluethatcanbegenerated.
OntarioSharedService’sentrepreneurialculture,structureandpeoplealsoenableittobringforwardtransformationalsolutions.Aspartofhisstrategy,Davidharnessedthesecapabilitiesandappliedthemtotheoverallpositioningoftheorganizationandhowitcommunicatesthatpositioning.
Whenitcomestopositioningtheorganizationandcommunicatingwithcurrentandpotentialclients,OntarioSharedServicestakesapageoutoftheplaybooksofleadingbrandmanagementexperts.OSS’strategyistocommunicateapositionthathelpsclientsseetheorganizationinanewlight—onethatconveyscapabilityandprogress—onethat’sbeyondtransactionalservices.“Wewanttochangethelexiconoverthenextfouryears,”Davidsays.
“OSShaschangedtheconceptofhowcustomerstraditionallylookatsharedservices,”headds.“Forexample,takethephrase‘accountspayable’.Bychangingthatphraseto‘payablesprocessing’youbreakawayfromsimplybeingunderstoodashavingaservicethatpaysinvoices;youhaveaservicethatcanpayothertypesofexpendituresaswellonbehalfofministrieswhichcanbeleveragedthroughtheOntariogovernment’soneenterpriseclassfinancialsystem.Underthisnewframeofreferenceforexample,OSSiscurrentlyworkingwiththegovernment’sMinistryofHealthtopotentiallytakeoverthepaymentofmedicalclaims.”
Anotherexampleispositioningandcommunicatingaround“businessintelligenceanddecisionmaking.”Traditionally,sharedservicescustomerswouldbeofthemindsetthatthesharedservicesprovidercan’thelpwithanytypeofanalysisanddecisionmaking.Yetamaturesharedservicesoperationwillovertimecollectimmenseamountsofdataandinsightthatcaninformenterprise-widedecisions.
AnapplicationofthisisOSS’leadershipinhelpingreducethegovernment’scarbonfootprint.OSSisworkingincollaborationwithitsstakeholdersandclientstoprovideleadershipinmanagingthegovernment’sinventoryofapproximately10,000vehiclestoachievereducedcostsand,moreimportantly,reducedemissions.Theanalysisandsubsequentimplementationofafleetmanagementselectortoolnowallowsclientstomakeinformeddecisionsonthetypesofvehiclestoacquirewiththefullunderstandingofhowthosedecisionswillpositivelyreducetheoverallamountofgreenhousegasesthatgovernmentvehiclesgenerate.
Perception and Measure of Public Value
En
ablin
g Bu
siness an
d Tech
nology
Mod
el
Base Incremental Value Enhanced Value New Value Proposition
Next Generation
Advanced
Incremental
Base
Idea 1
Idea N
Idea 2
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Inaddition,theOSSplatformsupports“greeningtheOntarioPublicService”throughthedevelopmentofpoliciesanddecisiontoolsthatrequireenvironmentallyfriendlypurchasing,printmanagementstrategiesanddisposalofsurplusgovernmentassets(furniture,computers,etc)includingdivertingmorethan500,000kilosor1.2millionpounds(60tractortrailers)ofe-waste(oldandunneededcomputers,printers,etc)fromlandfills.
Keepinmindthatthisdoesn’thappenovernight.It’stheproductoforganizationaldesign,ofbuildingandharnessingcapabilitiesandskills,ofknowingwhenandhowtomoveforward,andofprovidingmeasuresandincentivestodrivetransformationalchange.Theleader’sroleistopaceallofthis,tosetavisionforthefutureandmotivatetheorganizationtoexcel.
Building the Platforms
Asthepublicvaluecreatedfromaninnovationisdirectlydependentoncitizensandcustomersadoptingthenewservice,it’simportanttosetupbotha“front-end”processthatdesignsthepolicyandservicestrategyandarchitectureofeachideaanda“back-end”processwhichsynchronizesthesharedservicesoperationwithcustomerinsight.Theoverarchingstrategyistokeepalevelofconsistencywiththelong-termpolicyandserviceevolutionwhilereachingthedesiredlevelandformofinnovation.
Onthefrontend,thismeansreallydrillingdowntowhatmakesatransformationsuccessfulinbothdevelopmentandadoption.Mostcustomer-drivenorganizations(especiallyprivatesectorcompaniesbutincreasinglygovernmentagencies)usethe“RogersModel9”forpreliminaryassessmentofhowanewproductorservicewilldointheircustomermarket.
TheRogersModelisbasedonresearchbysociologistEverettRogerswhichshowsthat49percentto87percentofthevarianceintherateofnewproductandserviceadoptioncanbeattributedtofiveproduct-basedcharacteristics.Theseareclassifiedas:
• Relative Advantage —thedegreetowhichaproductorserviceisbetterthantheproductitreplaces.Inthisarea,customerfeedbackshouldbegatheredthatcomparestheoldmethodofinteractingwiththeorganizationanditsservicetothenewmethod.Thesharedservicesorganizationmayfindthatwhilethenewbusinessortechnicalmodelisadvantageoustotheiroperation,itisactuallylessadvantageoustothecustomer.
• Compatibility —thedegreetowhichaproductisconsistentwithexistingvaluesandexperiences.Customersgetacclimatedtoawayofinteractingwithanorganization’sservicelineandthisinteractionbringsasetofvaluesandexperiencesthatbecomeimportanttothecustomer.Customerswilloftenvoicethesevaluesandexperiencesbysayinghow“responsive,”“easy,”and“nice”theoldservicewasforexample.Itisimportanttotapintotheseunderlyingvalueswhenformulatingthenewservice.
• Complexity —thedegreetowhichaproductisdifficulttounderstandanduse.Thismeasureisimportanttocapturebecauseoftenpolicymakersandtechnicalstrategistswillseethevalueinaninnovationbecauseofmacro-measuresandassumethecustomerseesthesame.Yetwhenthecustomergetsexposedtothenewservicethenewcomplexitycanoverpowerthelong-termvalueandsuppressadoption.
• Trialability —thedegreetowhichaproductmaybeexperimentedwithonalimitedbasis.Thismeasureisgearedmoretowardprivateindustrydevelopedconsumergoodsbutcanbeapplicabletopublicsectorinnovationswhenthecustomerhastoadapttoalargetechnicalshiftinthenewservice(suchaswithelectronicmedicalrecordsorelectronicbenefitcards).Inthesecasesitisimportanttoprovideanopportunityforidentifiedleaduserstobeta-testanewservicepriortolaunchtogeneratefeedbackforrefineddevelopment.
• Observability — thedegreetowhichproductusageandimpactarevisibletoothers.Adoptionbycustomersisacceleratedwhentheycanseeanotherperson’sororganization’ssuccessfuluseoftheservice.Ifpossible,thenewserviceshouldbebuiltsowhenusedbyacustomeragencyotherpotentialcustomerswillbepersuadedtoadoptit.
Thecustomerfeedbackandusabilityfiltersinthedevelopmentprocessshouldincorporatetestingonallfivevariableswithaneyetomaximizingtherateofadoptiononcetheserviceislaunchedtothecustomer.Again—manygovernmentalorganizations(andevenmanyprivateorganizationsdrivenbyevenmoreforcefulmarketpressures)neglecttobuildincustomeriterationduringthedevelopmentstage,butsuccessfulorganizationssuchasOSSmakecustomerfeedbackintegraltotheirprocess.
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The“back-end”processincludessettinguptheteamanddevelopmentstructurebymatchingthelevelofcross-functionalexpertiseandinsightneededtotheformofteamandlevelofcontrolneeded.Ingeneral,developmentsthataremoreexperimentalinnaturewithalotofuncertaintyastohowtheinnovationwillprogressshouldutilizeateamthatisdedicatedtotheinitiative,yetlooselymanagedand“organic”inprocess.Developmentsthathaveclearbenchmarksanddeliverablesyetarecomplexinnatureshouldbemoretightlymanagedwithateamthatcanmovetheprojectthroughstagesinafluidway.
Teamsshouldcomprisememberswhocanbringcross-functionalexpertisetothedevelopment.This isnotapointto“throwtheideaoverthewall”andhavetechnicalexpertsonlyworkingonthedevelopment.Ontheteamshouldbeindividualsrepresentingthepolicyfunctionsoftheorganizationandkeepinganeyeonthelong-termservicestrategy,individualsfrominformationandtechnologybringingtheleveroftechnologytotheproject,andindividualsfromtheorganizational development side, pressing for thecustomerviewandorganizationalgrowth.Last,theteamshouldhaveadedicatedprojectmanagerandanexecutivesponsortoallocateresourcesandorganizationalleverage.
As the developmentmoves through the process thefocusshouldturnmoretocustomerinputanditeration.Aseach ideahitsa levelofdevelopment itshouldpassthroughcustomerfiltersthatfirstassessthedirectionofthedevelopmentandthenas thedevelopmentmaturesinto a pre-launch phase to assess the usability of theproposed service.Key to this is runningpilotprogramswhere one or two customers run a temporary serviceenvironment for thenewoffering.Position thepilot asawin-winscenariowithboththesharedservicescenterandthecustomerresponsibleforcommittingtothepilotand to sharing the learning, best practices and successmeasures.
For example, Ontario Shared Services has partneredwith ministries to improve the way it bills, processesaccounts receivables and non-tax revenue activities.This has resulted in net new non-tax revenues for thegovernmentincludingmoreeffectivemanagementandcollectionofnon-taxdebts(e.g.studentloans)owedtotheOntariogovernment.Previously,whenloansfromgovernmentweren’trepaidontime,theywentintocollection,butgovernmentministriesdidn’thavecapacitytoactuallyfollowup.Asaresult,thesizeofnon-collectabledebtforgovernmentwouldinvariablyincreaseeachyear.
Asaresultoftheseinnovations,OSShasincreasednetrevenuestogovernmentby$60million.ConsolidatingcashcollectionfunctionsinoneplacehasalsoimprovedcashmanagementfortheGovernmentofOntario.Thisinturnimpactsthetimingand/orneedforshort-termborrowingbythegovernmentandresultinginterestcosts.
RomanZydownykexplainsthesignificance:“That’sasignificantamountofmoneyinthecurrentfiscalenvironment.Wenowhaveamodelwithaproventrackrecord.Weareworkingwithareasofgovernmentthataren’tusingourconsolidatedmodeltobringthemonboardwhichwillincreasethereachandeffectivenessofournon-taxrevenuecollectionprogram.Andagain,that’llchangethewaywedothings.It’saco-developmentmodel,andthat’swhatpowersgamechangers.”
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Hecontinues,“Duringthissameperiod,OSShasbeenrecognizedasatransformativeleaderintheOntarioGovernment.Thishasmeantincreasedinvestmentinsystemsandpeopletosupportgrowth.OSSisalsogivenincreasedopportunitytotakeonnewinitiativesthatwillfurthertransformgovernment.”TheOSSteamcommunicatesthisprogressinthegraphicbelow–chroniclingthejourneysharedservicesinOntariohasbeenonsince1998.
Overall,managingthepaceofgamechangingtransformationistheprimarychallengeforOntarioSharedServices’managementteam.Executivesandmanagershavetokeepaneyeonthepolicyimplicationsastheydevelopinnovationsandhavetobalancemaximizingvaluecreationandensuringcontinuity.Whensuccessful,astreamofinnovativeservicesbringsvaluefortheorganization,customersandstakeholders.
Davidreflectsonthis:“Whathasbeeninstrumentallyimportantforoursuccessistosustainclearstrategyandgoalsgoingforward.Wedon’tletday-to-dayeventsdistractusfrompursuingthecoursewehavesetforourselves.Mytraitisthatwhenyoudecideonastrategy,youalignallresourcestoachievethatstrategyandyourelentlesslypursuethatstrategymakingonlyminormodificationswhereappropriate.Whenwebeganpursuingourstrategyin2004weexperiencedboth‘crosswindsandheadwinds’thatcouldhaveeitherthrownusoffcourseorslowedusdownhadwenotbeenresolvedtoremainfocusedonachievingtheendgameforsuccesswehadsetfortheorganization.Yetwepersevered,andnowwearehelpingtransformgovernment.It’sagreatplacetobe.”
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“Shared services offers a new way forward – enabling an organization to optimize back-office processes and transfer resources to programs that directly impact the citizen.”
DavidWilson,Accenture
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SmartMoves:A Glimpse into the Future of Shared ServicesRealbreakthroughsareoftencreatedbyleveragingmultipleincrementalinnovations—andsharedservicesisnoexception.Whenthenewbusinessmodels,processesandtechnologiesthatunderpinsharedservicesareputinplace,whatwillvisionaryleadersdowiththem?ParticipantsinAccenture’sSharedServicesSummitatHarvardidentifiedfourprimarywaysthatsharedserviceswillimpactandshapethefutureofpublicservices:Generatingeconomicdevelopment,drivingmasscollaboration,fosteringlegitimacyandequityandenablingfront-officeagility.
Generating Economic Development
Giventheversatilityofmodernnetwork-enabledbusinessmodelsandcommunicationstechnologies,sharedservicescanbesourcedalmostanywhere.Theprivatesectorhasfocusedonandexcelledatsourcinginlow-costregionsworldwide—andtodaytheoptionisviableoverthousandsofmiles.Ingovernment,visionaryleadersareapplyingthismodeltoeconomicdevelopmentstatewide.TheCommonwealthofVirginia,forexample,factoredeconomicdevelopmentintoitsplanningandbuiltadatacenterinsouthwestVirginia—providingvitallyneededjobsinaruralareawhilealsogainingasecureandlow-costcenterforcriticalinfrastructureandapplications.Virtuallyeverystategovernmenthasaregionthatcouldbenefitfromtheinfluxofprofessionaljobsthatsharedservicesentails.InnorthernMinnesota,the“IronRange”wasoncedominatedbyminingandforestingindustries.Butastheeconomychanged,thejobsdidaswell—leavingbehindaswathofunderemployedpeople.AsMinnesotaenvisionsitssharedservicesoptions,stateleadersshouldconsiderbuildingthebusinesscasetosupportacenterinatargetedareasuchastheIronRange.
Inabest-casescenario,aneconomicallychallengedregioncangaincriticalmiddle-incomejobs,whilethesharedservicescentercangainefficienciesthroughpayinglessinrealestateandwagesthantheywouldinahigh-costcenterofamajorcity.Increasingly,governors,mayorsandpublicofficialswilltakeadvantageofthiseconomicallyandpoliticallyviablemove.
Driving Massive Collaboration
Oneof thegrowingtensions ingovernment,especially in theUnitedStates,isbetweensustainingregionalself-sufficiencyandpreservingthe“Jeffersonian”modelofverydecentralizedandcommunity-basedgoverningdespitetheeconomicinefficiencyitbringsinthemodernworld.Therearethosewhoadvocateforconsolidatingcityandcountygovernments—especiallywherethepopulationhasdeclinedandbudgetsareseverelystrained—butthisisdifficultpolitically.
“Ithinksharedservicescreatestheopportunityforathirdway,”saysAccenture’sDavidWilson.“Wecanbothsustainourlocalcitygovernmentsandschooldistricts,whileatthesametimemakethemfiscallyviablebysharingservices.”Similartotherationalebehindsourcingforeconomicdevelopment,sharedservices can be leveraged across traditional jurisdictional andsectorboundaries.
TheOhioSharedServicesCenterplanstopartnerwiththestatepublicschoolsanduniversities,forexample.Thisrelationshipwouldprovidelower-costbusinessprocessestotheeducationsystemandfreethemtofocusoneducating(theircorecompetency)whilethesharedservicescentergainsvaluableclients.Thisexamplecouldbeappliedanywhere—imaginetheimmensesavingsastatelikeCaliforniacouldgenerate if shared serviceswere implemented among not only state agencies but also state boards and educationalinstitutions.
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PeggyFeldmann,theChiefApplicationsOfficerfortheCommonwealthofVirginia,sharesanotherexample.“Lookatgeographicinformationsystems(GIS)andschoolbusrouting,”shesays.“Manyofourlocalpublicschoolsarestillusingstringsanddotsonawall-mountedmaptofigureoutwhatthebestschoolbusroutesare.Unfortunately,eachofthoseseparateschooldistrictscan’tafforda$25,000mappingsoftwareprogram,buttheycouldmaybeafforda$2,000investmentintoasystemthatallschoolscouldshare.Thinkofthesavingsthere—inenergy,intime,inmoney.”
Whetherfederal-to-state,state-to-county,state-to-localoranycombinationtherein,modernsharedservicescanprovideurgentlyneededefficiencieswhileretainingthedecision-makingpowerandflexibilityofthelocalgovernancestructure.Theopportunityishereforthisformofcollaboration—andthetimesdemandit.
Fostering Legitimacy and Equity
Iftheworldhaslearnedanythingfromrecenthigh-levelelectionsaroundtheglobe,it’sthatcitizensaredemandingmoreopen,transparentandequitablegovernancestructures.Thismeansthatpublicserviceorganizationsneedtobeinapositiontocollect,storeandharnessinformationinwaysthatpermeatetheentirevaluechainofgovernment.Sharedservices,byitsverystructure,providesaplatformtoaggregateandpresentinformationinwaysthatfacilitateopenandtransparentdialogueontheroleofgovernment.
IntheCommonwealthofVirginia,officialsarecallingthismovementthe“360DegreeCitizen.”“Thedrivetowardstransparencyisreallyforcinggovernmenttorealizethatthecitizenwantstoseetheenterpriseview;theydon’tviewgovernmentasindividualagencies,”Peggyexplains.ThiswasmadeabundantlyclearwhenthegovernorofVirginiausedbusinessintelligencetoolssharedacrossagenciestocollectandtrackfederalstimulusfundsinreal-timeandreportbacktocitizens.Citizensengagedaswell,inundatingofficialswith$400billionworthofideasfor“shovelready”projects.Fromthatinformationthegovernormovedforwardwithanewfoundlegitimacytogetthingsdone.
Ascitizenshelpshapetheprocessofpolicymakinganddelivery,governmentwillhavetogetbetteratprovidingthemulti-directionalandreal-timeinformationflowsthatcitizensexpect.Publicofficialswhohavedeployed“311systems”toconnectcitizenstogovernment,forexample,arenowseeinghowinformationprovidedfromcitizensisdrivingpolicyandmanagementchangesdailyandhourly.AsBruceRobinson,headoftheNorthernIrelandCivilServicerelates,“Whenyoucanaggregatethedataprovidedbycitizenfeedback,youcanlookattrendsandyoucanstartsettingsomepolicies.Icantakeastepbackandsay,‘Waitaminute,whyareweofferingitinthisway?’Wecanreformthewayweplananddeliverservicesdirectlybasedoncitizeninformation.”
Offeringthisleveloftransparencyandworkingcollaborativelywithcitizenstomakedecisionsbasedoninformationisthekeytotrustandlegitimacy.Goingforward,sharedserviceswillbeakeyenablerofthatprocess.
Enabling Front-Office Agility
Citizensareincreasinglydemanding“one-stopgovernment”asservicesthataretailoredtotheirlives.Asaresult,publicserviceorganizationsaroundtheworldarestrivingtodesign“citizen-centric”businessmodels.Yetthisisachallengethatoftencutsacrosstraditionalorganizationalboundariesandnecessitatescreatingsolutionsthataresourcedfrommultipleareasofgovernmentexpertiseandservices—alevelofreformthatoftenrequiresredesigningservicesfromthegroundup.Sharedservicescanenablethistypeofreform,as“back-office”transformationdrivesresourcesandefficienciestothe“front-office”oftheorganization.
“Ithinkthewayfrontofficeisgoingtobeimpactedbythesharedservicesmodelisasbackofficesharedservicesbecomemorecommon,moreubiquitous,moreexamplesofrealsuccess,thenwewillbegintostartsaying,okay,nowwecanstartapplyingthesesameconceptstothefrontoffice,tothecitizen-facingpartsofgovernment,”saysDavidWilson.
Thismovementisalreadygainingtraction.InCanada,forexample,theintegrationacrosslevelsofjurisdictionalauthority(federal,provincial,andlocal)droveefficiencytothefrontoftheorganizationandenabledthecreationof“ServiceCanada”—acitizenone-stopwithonlineservice,singlewindowservice,onlineportalsservicingtargetedgroupsandlifeevents,andintegrationacrosschannels(internet,phone,mail,andwalk-in).Aswelooktothefuture,sharedserviceswillopenupthepossibilityfornewandcombinedcitizen-facingservices—directlyimprovingoutcomesandpublicvalue.It’samoveworthmaking.
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Summary: Acting in TimeEverygenerationofleadersfacesacriticalchallengeuponwhichtheymustactintime.Forleadersofpublicserviceorganizations,theforemostchallengenowismeetingdemandstoincreasethecapacitytodeliverservices,whilegrapplingwiththedeepesteconomicdownturnsincetheGreatDepression.Compoundingthesechallengesaretherealitiesofdemographicshiftsandsocialforcespushingforincreasedequityandtransparencyingovernmentoperations.Thisunprecedented“squeeze”onpublicserviceorganizationsstrikesattheverycoreofgovernment—publicconfidenceingovernmentinstitutions—andleadersaregrapplingwithhowtorespond.
Aspublicserviceleaderslookforsolutions,they’refindingthattraditionalanswersarenotfeasibleintoday’senvironment—cuttingprogramsiscounterproductive;raisingtaxesandfeesispoliticallydire;andtacticalfixeshavereachedtheirlimit.Thebestsolutionistoincreaseeffectivenessandefficiencyofpublicservicesthroughinnovationsthatbringimprovedproductivityandelevatedcapacity.
Proactivepublicserviceleadersareactingonthis“capacityimperative”bytransforminggovernmentorganizationsintohigh-performanceenterprises—andincreasingly,they’readoptingnewmodelsofsharedservicesastheengineforthistransformation.Astheseleadersmovethroughincreasing“HorizonsofSharedServicesValue”—fromVisioning,toLaunching,toGrowingandTransforming—they’rerealizingunprecedentedgains.Yetbuildingasharedservicesenterprisedoesn’thappenovernight—itrequiresanewmindset,newstrategiesandnewtechnologies—anditrequiresstakeholderstomakeaconcertedandsustainedefforttoenvisionandaffectchange.
Asthecasestudiesinthispapershow,thesharedservicesjourneynecessitateslarge-scaleinnovationandchangetoboththeorganizationalandtechnicalmodelsofanenterprise.Theresulting“adaptivechallenge”requiresstakeholderstoaddressrealandperceivedchangewhilealsoactivelylearningnewcompetencies,capabilitiesandculture.Thus,sharedservicescallsfor“adaptiveleadership”tomobilizeandpacepeopleandcommunitiesthroughthechangenecessarytorealizethegains.
Andgainsthereare.InCalifornia,officialsarelookingtoimplementsharedservicesasafoundationforeconomicrecoveryandstreamlinedcitizenservices.InOhio,sharedservicesisontracktodeliver$1.2billioninvalueandhasjumpstartedanewhigh-performanceculture.InIllinois,executivesaregrowingtheirsharedservicesinordertosave$229millionwhileprovidingneededreforminhealthandhumanservices.InOntario,leadersareworkingtoward$1billioninannualsavingsbypursuinggame-changinginnovationssuchasenvironmentallysustainabletechnologyandnewplatformsfortheeducationandhealthsectors.
Leaderswhopursuesharedservicesarelookinguponthechallengewithoptimism.Astheirorganizationsprogress,theyrealizegreaterefficiency,effectivenessandcapacitytodeliverthefutureofcitizenservices.Itistheseleadersandorganizationsthatwillsetthebarforpublicserviceperformance.Willyoubeoneofthem?Willyouactintime?
“The dogmas of the quiet past are inadequate to the stormy present.
The occasion is piled high with difficulty, and we must rise to the occasion.
As our case is new, so we must think anew and act anew.”
—PresidentAbrahamLincoln
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Acknowledgements and CreditsTheauthor,theLeadershipforaNetworkedWorldProgramandAccenturewouldliketogivespecialthankstotheleadersfeaturedascasestudies:Teri Takai (CA), Aaron Erickson (OH), Greg Wass (IL) and David Hallett (Ontario).Withouttheirinsightsandexperiencesthispaperwouldnothavebeenpossible.
TheLeadershipforaNetworkedWorldProgramwouldalsoliketothankthespeakers,panelistsandparticipantsinThe 2009 Shared Services in the Public Sector Summit: Accelerating Transformation to High Performance.Theirparticipationcreatedthefoundationforarobustlearningenvironment.
RichardArbuthnot,NationalAeronauticsandSpaceAdministration
PaulBartley,USDepartmentofHealthandHumanServices
CarolBowshier,OhioCivilServiceEmployeesAssociation
GregCondell,Accenture
GaryDuncan,Accenture
Dr.AmyC.Edmondson,HarvardBusinessSchool
AaronErickson,StateofOhio
PeggyFeldmann,CommonwealthofVirginia
SteveFletcher,StateofUtah
DebbieGiannoni-Jackson,USPostalService
DavidHallett,ProvinceofOntario
Dr.JerryMechling,HarvardKennedySchool
TimMould,Accenture
AntonioOftelie,HarvardKennedySchool
BruceRobinson,NorthernIrelandCivilService
AnneSaunier,StateofOhio
TeriTakai,StateofCalifornia
GregWass,StateofIllinois
DavidWilson,Accenture
RandyWozniak,Accenture
Summit Speakers and Panelists Included:
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Summit Plenary Included: Felix Ale NationalSpaceResearchandDevelopmentAgency,Nigeria
David Alexander Children’sHospitalofPhiladelphia
Cushing Anderson IDC
David Andrews Accenture
Alberto Angulo GobiernodelEstadodeMichoacan,Mexico
Bernardo Angulo CommunicationsandInformationTechnologiesStateCenter,Mexico
Glen Bjorklund U.S.FederalDepositInsuranceCorporation
Jennifer Bolcar Accenture
Julie Booth Accenture
Nolan Bowie HarvardUniversity
Barry Brighton EmoryUniversity
George Brophy UniversityofHartford
Antony Burger UniversityofMichigan
Sean Byrne U.S.ArmyHumanResourcesCommand
Carrie Capezzone YaleUniversity
Michael Cassidy TownofHolliston
Rafael CepedaMorales MetricsGestionyConsultoriaS.C.,Mexico
Alvin Collins U.S.DepartmentofGeneralServices
Bryan Cummings CouncilforEmergingNationalSecurityAffairs
Frances Dykstra YaleUniversity
James Earp CityofKyle,Texas
Janice Edgar Accenture
Steve Funck StateofOklahoma
Jenny Gilbert Accenture
Vanessa Godshalk Accenture
Jerrold Grochow MassachusettsInstituteofTechnology
Annette Heintz NewYorkCity
Steve Hendryx Accenture
Charles Henry GovernmentofCanada
Mark Howard Accenture
Ernst Huff YaleUniversity
Randy Hughes StateofFlorida
Steven Hurst Accenture
Juan Jarrett UniversityofMassachusetts
Michael Johnson CityofEastOrangeNewJersey
Meg Jones Children’sHospitalofPhiladelphia
Arnold Kishi StateofHawaii
Lisa Lagus Accenture
Nancy Laich U.S.PostalService
Stig Lanesskog UniversityofIllinois
Dustin Lanier CouncilonCompetitiveGovernment
Stephen Lenhardt UniversityofMassachusetts
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Jose Magallanes EscueladeGobiernoyPoliticasPublicas,Peru
Matshidiso Maile GautengSharedServiceCentre,SouthAfrica
Leila Malatesta StateofMississippi
Keith Manch U.S.DepartmentofInternalAffairs
Anne Margulies CommonwealthofMassachusetts
Shawn McCarthy IDCGovernmentInsights
Philip McGovern CityofBoston
Erik Mickelson StateofWisconsin
Tim Mould Accenture
Patrick Mungovan Oracle
David Nero CityofBoston
Ryan Oakes Accenture
Bill Oates CityofBoston
Dale Ott VitilSolutionsInc.
MarcoAntonio Pereira GovernodoEstadodoRiodeJaneiro,Brazil
Steve Reck UniversityofMichigan
Stuart Reilly Accenture
Ilee Rhimes UniversityofSouthernCalifornia
Betsy Rodriguez UniversityofMissouri
David Russell UniversityofMissouri
Aaron Sadusky U.S.DepartmentofDefense
Rene Sainz UniversityofTexasatBrownsville
Robert Schmidt U.S.DepartmentofTransportation
Geoff Schuman Accenture
Rita Seroski NewYorkCity
Verline Shepherd U.S.InternalRevenueService
Kathy Sheppard CommonwealthofMassachusetts
Steve Siegler StateofMissouri
Linda Singh Accenture
Peter Soh Accenture
Robert Solis UniversityofMassachusetts
Ann Sulkovsky U.S.DepartmentoftheInterior
Mike Teller WashingtonD.C.
Raghav Vajjhala PBGC
Chad VanderVeen GovernmentTechnologyMagazine
Pallavi Verma Accenture
Karthik Viswanathan CityOfSomerville,Massachusetts
Greg Wass StateofIllinois
Randall Wozniak Accenture
Lyle Wray CapitolRegionCouncilofGovernments
Victor Yap ProvincialGovernmentofTarlac,Philippines
Additionally,creditsandthanksareduetoToddGillenwatersforgraphicdesign,SarahM.McCannforediting,RussCampbellforsessionphotographyandJennyGilbertofAccentureforprojectleadership.
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Resources
Resources Cited
1. ManagingforValue:OrganizationalStrategyinFor-Profit,Nonprofit,andGovernmentalOrganizations,MarkMoore,NonprofitandVoluntarySectorQuarterly,vol.29,no.1,Supplement,2000.
2. UnlockingPublicValue:ANewModelforAchievingHighPerformanceinPublicServiceOrganizations,MartinColeandGregParston,WileyPress,2006.
3. BoostingGovernmentProductivity,TheMcKinseyQuarterly,November2004.
4. ASurvivalGuideforLeaders,RonaldHeifetzandMartyLinsky,HarvardBusinessReview,June2002.
5. LeadershipontheLine—StayingAliveThroughtheDangersofLeading,RonaldHeifetzandMartyLinsky,HarvardBusinessSchoolPress,2002.
6. LeadershipWithoutEasyAnswers,RonaldHeifetz,HarvardUniversityPress,1994.
7. LeversOfOrganizationDesign:HowManagersUseAccountabilitySystemsForGreaterPerformanceAndCommitment,RobertSimons,HarvardBusinessPress,2005.
8. TheInnovator’sDilemma:TheRevolutionaryBookThatWillChangeTheWayYouDoBusiness,ClaytonM.Christensen,HarperCollins,2003.
9. DiffusionofInnovations,FifthEdition,EverettM.Rogers,TheFreePress,2003.
Supplementary Resources
1. CreatingPublicSectorValueinaRapidlyAgingWorld,Accenture,2006.
2. DrivingHighPerformanceinGovernment:MaximizingtheValueofPublicSectorSharedServices,2005.
3. KeystoSuccessfulPublicSectorSharedServicesImplementations:FocusonGovernance,Accenture,2006.
4. LeadershipinCustomerService:DeliveringonthePromise,Accenture,2007.
5. OrganizingforEffectivenessinthePublicSector,theMcKinseyQuarterly,November2004.
6. SharedServicesinGovernment:GettingitRight,RichardG.Harris,Gartner2007.
7. SharedServices:ManagementFadorRealValue,BoozAllen&HamiltonInc,1998.
8. TheCaseforSharedServicesinthePublicSector,Accenture,2003.
9. TransformingtheBack-Office—WhyandHow,ReportoftheeC3Symposium,JerryMechling,HarvardKennedySchool,2006.
10.TransformationattheIRS,AmyC.Edmondson,HarvardBusinessSchoolCase9-603-010,2002.
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About the AuthorAntonioM.Oftelieadvisesseniorgovernmentandbusinessexecutivesonorganizationaltransformationbyhelpingthemtoevolvetheirmissionandstrategy,ideatenewbusinessandservicemodels,buildadaptivecapacityandcreateperformanceandvaluemeasures.Inaddition,Mr.OftelieworkswiththeLeadershipforaNetworkedWorldProgram(LNW)atHarvardKennedySchoolwhereheproducesresearchoninnovationinpolicyandtechnologyandteachescasesonleadershipandstrategicmanagement.
Mr.Oftelieisarecognizedexpertintechnology-enabledinnovationandorganizationaladaptationandhasdirectlyadvisedthreegovernors,fivefederalagenciesandnumerousprivateandpubliccompaniesontopicsrangingfromhomelandsecurityandpandemicresponsetoeconomicdevelopment,productandservicedesign,organizationalcollaboration,governmentrelationsandpublic-privatepartnershipstrategies.
Mr.OftelieholdsaBSinManagementandEthicsfromCrownCollegeandanMPAwithaBusinessandGovernmentPolicyconcentrationfromHarvardUniversity—wherehefocusedhisstudiesonleadership,finance,andpublicpolicyattheHarvardKennedySchool,andonstrategicmanagement,technology,andinnovationattheHarvardBusinessSchool.Mr.OfteliecanbecontactedatAntonio.oftelie@post.harvard.edu
About the Leadership for a Networked World ProgramTheLeadershipforaNetworkedWorld(LNW)ProgramatHarvardKennedySchoolhelpsthoseexercisingleadershiptobetterunderstandandrespondtothechallengesandopportunitiescreatedbyinformationandcommunicationtechnologiesandnetwork-enabledbusinessmodels.Foundedin1987byDr.JerryMechling,theLNWProgramtapsdiverseknowledgewithintheHarvardcommunityforuniquelypowerfulexecutiveeducation,researchandteachingcontent.
CurrenteffortsoftheLNWarefocusedonthecross-boundarychallengesofinnovationandchangemovingacrosstraditionalorganizationalboundaries:departments,jurisdictions,branchesofgovernmentandsectorsofsociety.Thesecross-boundaryreformsrepresentthenextwaveofthemanyopportunitiesandchallengesopenedbyinformationandcommunicationtechnologiesandnetwork-enabledorganizationalmodels.
Leadingsuccessfullyinthisnetworkedworldrequireselectedofficials,generalmanagersandtechnologymanagerstocollectivelymakedifficultdecisionsandchoicesaboutthelevelandpaceofreformandchange.Bybringingtogetherleadingpractitioners,academicsandexecutivestoshareideasandlearnaboutgovernance,theLNWProgramstrivestodelivercreativesolutionstoreal-worldproblemsandlastingpublicvalueforpressingchallenges.Findmoreinformationatwww.lnwprogram.org.
About AccentureAccentureisaglobalmanagementconsulting,technologyservicesandoutsourcingcompany.Combiningunparalleledexperience,comprehensivecapabilitiesacrossallindustriesandbusinessfunctions,andextensiveresearchontheworld’smostsuccessfulorganizations,Accenturecollaborateswithclientstohelpthembecomehigh-performancebusinessesandgovernments.
Asapremierthoughtleaderinsharedservicesconceptsandindustryleadingpractices, Accenture has been at the forefront working with governmentorganizations and educational institutions on how to seek the full potentialthatasharedservicesoperatingmodelhastoofferbytakingavalue-orientedapproachtoimprovepublic-sectorvalueandtransformcitizenservicedelivery.Accentureworkswithorganizationstohelpnavigatetheuniquerequirementsofapublicsectorenvironmentincludingtransformationofbusinessprocesses,policies,organizationalstructure,personnelmanagementandtechnology.
The 2009 Shared Service in the Public Sector Summit: Accelerating Transformation to High PerformanceheldatHarvardKennedySchoolwasdevelopedincollaborationwithAccenture.FindmoreinformationonAccenture’ssharedservicescapabilitiesandthoughtleadershipatwww.accenture.com/sharedservices.
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“And it ought to be remembered that there is nothing more difficult to take in
hand, more perilous to conduct, or more uncertain in its success, than to take
the lead in the introduction of a new order of things. Because the innovator
has for enemies all those who have done well under the old conditions, and
lukewarm defenders in those who may do well under the new. This coolness
arises partly from fear of the opponents, who have the laws on their side, and
partly from the incredulity of men, who do not readily believe in new things
until they have had a long experience of them.”
Nicollo Machiavelli in “The Prince,” 1537
www.lnwprogram.org
This document was developed from the 2009 Shared Services Summit held at Harvard Kennedy School and is intended solely for the basis of discussion and learning. The content and cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2009 by Leadership for a Networked World. All Harvard photos and content is Copyright © 2009 by Harvard University.