In part one of the the Digital Corporate Services blog series we discuss the opportunities, challenges and benefits of maturing government shared services with emerging digital tools and how to extract greater value and increase organisational agility and flexibility by maturing these services.
It goes without saying that by now every public sector department and agency is on some kind of digital transformation journey. For a long time though these transformations have been end-user or citizen-centric – whether that be a new portal to renew drivers licenses online instead of queuing in person or a self-service function to help answer questions 24/7.
While the primary function of government is indeed to best support the citizens it serves by delivering the services they rely upon, there remains opportunity to achieve this by focusing not just on the citizen facing front-end, but on the operational back-end too.
Now we’re not going to waste time by telling you what shared services are – maybe 15 years ago that conversation might have been interesting, and we realise that most government departments have already transitioned to a shared service or outsourcing model that sees the consolidation and centralisation of back-office functions like Finance, HR, IT and Procurement.
What we’d like to discuss instead are the opportunities, challenges and benefits of maturing shared services with emerging digital tools and how to extract greater value and increase organisational agility and flexibility by maturing these services.
Shared-services functions have a central role to play in today’s digital environment. These groups exist to streamline the management of internal processes and to assist in the quick and efficient delivery of software and services to customers as increasingly, the back-end work they perform is critical for capturing data that can then be used to create even better, more seamless front-end experiences.
By maturing shared services through a comprehensive and strategic digital shared services model the public sector can:
- Drive faster decision making, more informed policy making, more effective workforce management and improved resource alignment
- Increase productivity and future-proof investments through scaling and sustainability initiatives
- Reduce duplication of work by breaking down silos, reduce software/hardware purchases and redeploy labour resources
- Promote cross-function and cross departmental collaboration
- Lay a foundation for automated service delivery which drives greater efficiencies still
Challenges & Strategies
While corporate and shared service initiatives offer considerable benefit and quick ROI, successfully introducing, scaling and maturing shared services within the public sector environment is typically a more challenging and prolonged journey due to the increased complexity of stakeholder relationships, public ownership, and overall a lower risk appetite.
Additionally, while it must be noted that many departments and agencies across Australia and New Zealand have begun to explore the opportunities created by digital technologies like Big Data, Artificial Intelligence and Robotic Process Automation, widespread adoption has not yet happened.
McKinsey boils this down to three key reasons.
Talent – the talent base in a typical shared service environment skews heavily towards processing and process efficiency. These functions generally lack the data scientist and analysts that are needed to truly harness the power of emerging technology.
To succeed in the digital world shared service functions will need to find and fill capability gaps and focus on hiring data science and automation experts as opposed to inexpensive entry level employees.
Silos – for years various shared service functions have existed in their own silos. And In the public sector were departments have been been around for decades, and are large and often-times reluctant to change knitting together legacy systems from various business units an updating processes and systems for a new digital context is challenging.
Integral to maturing shared services is breaking down operational silos – not just between the individual functions, but between shared services and the rest of the department. As operations and IT groups begin to collaborate more effectively through DevOps and Enterprise Architecture methodologies (which you can read about here and here) new services can be created, tested and delivered faster and more seamlessly.
Flow – how departments organise and where they locate their shared-services functions need to change in response to digitisation. The current model is far-flung “service factories” that exist to process simple transactions, but this model won’t be sufficient in a digital world that emphasises faster, more frequent, and more complex interactions with customers and vendors.
Corporate services should ideally be repositioned as a centre of expertise from where consolidated, accurate and reliable data can flow and support future operational decision making. While not public sector specific, over 80% of the world’s most successful organisations – those found on the Forbes Fortune 500 list harnessed some form of shared service centre.
Clearly there are a number of challenges that exist in the way of digitising shared services, made all the more difficult by operating in a public sector environment. But as the cliched, yet still totally relevant old adage goes; anything in life worth having is worth working for.
Ultimately, the digitization makes it easier for businesses to adopt shared services models, because it adds value to the business through better reporting and analytics, increased completion rates of projects at reduced completion times, and helps to simplify and streamline processes and communication, creating a better standard of quality and overall service.
According to a recent report published by PwC, modern shared service operations are focusing more and more on digitalising their processes in order to free up capacities that are currently tied to transactional processes. The digitalisation of processes, which is supported by the continuous advances in automation and artificial intelligence (AI) technologies, enables SSCs to increase the efficiency, quality and control of their processes. Additionally a push towards digitalisation adds operational value through better reporting and analytics, increased completion rates and reduced completion times, helping to streamline processes and create a better standard of quality and overall service.
In part two of the Digital Corporate Services blog series we take a look at a few A/NZ public sector organisations leading the way in the digital shared services journey and take a look at the results they’ve achieved.
Join the conversation and learn more about shared service transformation from like minded public sector professionals by joining the Corporate & Shared Services Community.