SHARED SERVICES The Central Agency Cluster Experience

1
SHARED SERVICESThe Central Agency Cluster
Experience

• Financial Management Institute
• November 24, 2005
• Patrick Borbey
• Privy Council Office

2
Background

• Five central agencies agree to sharing systems
  and services
• Treasury Board Secretariat
• Finance
• Canada School of the Public Service
• Public Service Human Resources Management Agency
  of Canada
• Privy Council Office
• Demonstration project as part of Wave 1 Corporate
  Administrative Shared Services (CASS)
• Planning stage since late 2004 aiming at first
  stage of implementation by April 2006

3
Background (contd)

• Client population 5,000 FTEs and budget of 500
  million per year
• Current scope of corporate services 700 FTEs and
  72 million per year
• Strong affinities between the partners similar
  business lines, information needs, employee
  profiles, security requirements

4
Benefits

• Improved service and cost efficiencies
• Redirection of resources to emerging priorities
• Stronger capacity to pool resources and expertise
• Easier succession planning and career progression
• Modernized and standardized systems, methods,
  processes and services
• Current and accurate information to support
  decision-making
• Proof of concept and blueprint for shared
  services evolution

5
The Vision

• Shared Services
• Organization
• Centres of Expertise
• Transactional Services
• Systems / Tools

• PCO Corporate Services
• Corporate
• Responsibilities
• Advisory Services
• Specialized Services
• Challenge Function
• Knowledgeable Client
• Capacity

6
The Transition Model
Central Agencies
Convergence toward Increasing Amalgamation/Sharing

CASS CA Cluster
Single Common Service
Science Depts Agencies
Science Cluster
C IC
C IC
Departments Agencies drawing common services.
Leaderrship by CIOB, OCG PSHRMAC in policy
development and setting standards
Wave II Depts Future Waves
CA Cluster operates from common SAP PeopleSoft
April 2007
April 2005
April 2006
Longer-term Target
7
Principles

• Equal Partnership
• Full Transparency and Openness
• Trust and Mutual Respect
• Full Consultation
• Concensual Decision-Making
• Shared Accountability for Results
• Continuous Learning and Improvement
• Fair Treatment of Employees

8
Project Governance

• An ADM Steering Committee directs and actively
  leads Working Groups and critical path actions
  and includes senior officials from Policy Centers
  (PSHRMAC, CIOB, OCG)
• Working Groups are chaired by ADMs for each
  functional domain with representatives from all
  agencies and policy centers project
  accountabilities have been determined for each WG
  for 2005-2006 and 2006-2007
• Day-to-day coordination of the project is led by
  an Executive Director, supported by a dedicated
  project office

9
CA Cluster Project Governance
Service Transformation Advisory Committee
DM Oversight Committee
TB Portfolio Advisory Committee
Establish operating model, identify
opportunities, define and prioritize service
offerings, help transition to operational pilot
CASS Wave 1 Steering Committee
ADM SteeringCommittee
Project Office Exec DirProject
ResourcesSecretariat
Policy adviceOCG, CIOB, PHSRMAC, others
CA ADM Champion
HR
Finance
Admin.
Audit Evaluation
Change Mgt Comm.
Chair Fin/TBS MembersPSHRMACPCOCSPS
ChairPSHRMAC MembersCSPS PCOFin/TBS OCG
Chair CSPS MembersPSHRMACPCO Fin/TBS
Chair Fin/TBS MembersPSHRMACCSPSPCO OCG
Chair PSHRMAC MembersPSHRMACCSPSPCO Fin/TBS O
CG
Functional Working Groups
Project Office Rep
Expert Analysis Partner Agencies, Policy Centres
(CIOB, OCG, PSHRMAC), IFMS and People Soft
Clusters, etc.
10
Services in Scope and Timetable
Design and Implementation in 2005-06 Design and
Implementation in 2006-07 Other opportunities to
share will continue to be explored and may be
added to scope.
11
CA Cluster operational modelComponents and key
related issues
Governance

• Governance
• structure
• operating principles
• responsibilities and accountabilities
• MOU, SLAs

• Agency capacity left behind
• scope and focus
• knowledgeable client
• what kind/how much/what level
• decision making

• Shared Services Office
• scope and focus
• funding/charging
• location/host/entity
• operating principles
• responsibilities, accountabilities,
  delegations
• service standards

• Service Interface
• scope and focus
• operating principles

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Next Steps

• Decisions on governance structure and
  accountabilities for April 2006
• Roll out financial and human resources systems
  for April 2006
• Consult with unions and employees on new
  organization and human resources transition
  strategy

13
Next Steps (contd)

• Determine timetable for key services to be shared
  (e.g. compensation, accounting operations)
• Design accountability instruments (MOU, SLAs,
  service standards, etc.)
• Continue to work with Central Agencies Policy
  Centres and other Wave 1 departments towards the
  eventual establishment of a single shared
  services organization
• Learn and adapt

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Key Lessons Learned / Issues for the Financial
Community

• Accountability/Authority
• Legal status / governance
• Segregation of sections 33 and 34 of the FAA
• Delegations of Authority
• Signing / Attesting Financial Statements (audited
  financial statements)
• Funding
• Base Funding vs Cost Recovery
• Legal Authority for Charging / Cost Recovery
• Pricing model
• Schedule of Payments / Cash Management
• Increases / Decreases in Funding
• Transition Costs vs Eventual Savings

15
Key Lessons Learned / Issues For the Financial
Community (contd)

• Systems / Processes
• SAP System of Choice for the Future
• Double Transition to End State Systems / ERP
• Common Chart of Accounts
• Re-engineering Basic Processes (before or after?)
• Standardization (any flexibility)?

16
Key Lessons Learned / Issues For the Financial
Community (contd)

• Business Planning / Reporting
• Designing MOUs / SLAs
• Realistic Service Standards
• Mandatory vs Optional Services
• Dispute Resolution Process
• Benchmarking to Best Practice
• Performance Measurement and Reporting
• Risk Management

17
Key Lessons Learned / Issues For the Financial
Community (contd)

• Capacity
• One of many changes affecting financial community
• Difficulties for small departments and agencies
• Community demographics
• Unrealistic expectations
• Strengthened challenge function (?)
• Managing change, while maintaining good service
• Fatigue / stress

18
Key Lessons Learned / Issues For the Financial
Community (contd)

• Employees
• Career mobility between SSO and department
• Maintaining job security
• Retaining good people during transition
• Learning / adapting to new realities
• Cynicism / rumour mill

19
Key Lessons Learned / Issues For the Financial
Community (contd)

• Communications / Consultations
• Messages need to be consistent
• Nature of the commitment to employees (?)
• Relationship with the unions under new PSMA
• Uncertainty about the end state
• Relations with / involvement of clients
• Impact on regions

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Conclusions

• Shared services is the right direction
• Will take time and effort to do it right
• Best to proceed incrementally, learn from
  successes / mistakes
• Most benefits will be realized in the longer term
• There are many obstacles to overcome, many of
  which are systemic
• Importance of communications and change
  management
• Financial community uniquely positioned to be at
  the leading edge of change