Progression of Shared Services in the Federal and Public sectors
Shared services are no longer an emerging service. For over 35 years, commercial organizations have sought to control costs and improve service quality by consolidating business support operations into a single service organization. Although the basic concept has changed little, the scale of service delivery has grown exponentially.
Larger Federal and Local agencies have adopted the Shared Service concept as well, and have realized significant value within the individual agencies – but have yet to fully embrace the scalability opportunities that exist from the expansion of their shared services operations in both size (more agencies and geographies) and scope (more processes, more functions, and more advisory services).
Other agencies struggle with the “Build or Buy” concept. While they see sister agencies gain great value from the initial consolidation to transactional shared services, they may not have the scale or resources that gain same level of benefit should they “Build” their own centers. At the same time, the landscape of federal service center offerings may not meet the immediate or future needs of the agency. These agencies do not yet have the luxury of having a selection of “BPO” services available that is offered in the commercial sector.
There is no doubt that duplication of services and spending across different government agencies makes little sense. But experience shows that there is insufficient attention to the governance aspects (agencies want to have a say in how the shared services are structured) and – more recently – to technology evolution, which is making some of the technology targeted through shared services more and more commoditized.
What is coming (and indeed already here) are well defined and functioning service delivery offerings available for “Sending” organizational who wish to “Buy” services, and capability development and growth within the “Receiving” organization who will “Build” the services and support that meet both service and competitive cost requirements of their brethren.
The challenge is no longer to put one organization in charge of delivering shared services, but to look at how to support agencies in efficiently buying the same service from external (Other agency or commercial) service providers.
The Federal sector is on the path towards providing these services – though are significantly behind the Shared Services capability provided in the commercial sector.
To meet the existing and future Public Sector demand, the Shared Service providers need to accelerate their service delivery capabilities, and services.
This evolution of the service delivery model can be viewed in the following stages:
• Proving Value
• Delivering Scale
• Integrating complexity
• Imparting Insight
Proving Value
Showing that consolidation of transactional activities within an agency reduces costs, while improving quality of service.
Many agencies have already shown significant value from the consolidation of transactional Finance, HR and customer support.
Delivering Scale
Taking the standardized, formalized and proven capabilities, and offer services to agencies outside the initiating Delivery Center, providing proven benefit realization and process execution excellence.
Integrating complexity
Moving up the value chain by executing and delivering complex transactional activities beyond the traditional Shared Services “Bread and Butter” finance back office activities.
• Project and Program accounting and tracking
• Grant Management
• Sourcing and Procurement support, including vendor performance reporting
Imparting Insight
The initial introduction of analytical support services to business areas. Project analytics, purchase and sourcing analytics, HR analytics, Grant execution analytics and other functional analytics that provide insight for the decision making process.
Beyond the traditional analytics services, Imparting Insight demands the incorporation of emerging technologies and tools to take the analytics value to the next level. Where “Analytics” delivers insight to why things happened, leveraging “Big Data” to executing predictive analytics provides a peek into the future of a process or service to mitigate “Surprises”, and not only add significant cost benefit, but also avoid potential losses.