TGov Shared Services Transforming Local Government

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T-Gov Shared ServicesTransforming Local
Government
The Vision Transforming Through Sharing (Or A
match made in heaven?) Julian Morley, Director
SWCoE 30th January 2007 http//www.rcoe.gov.u
k/
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Transforming Through Sharing

• What are the drivers?
• Whats happening and where?
• Why is sharing hard?
• Is it any better in the private sector?
• Current themes
• Where do local governments RCEs fit?

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Key drivers

• Key Drivers
• CSR07
• Local Government White Paper
• Gershon Efficiency drive
• CPA rating, use of resources
• Local Government
• Yes, Local Government has been driving
  efficiency!
• The Environment
• Cost versus service (easier to measure?)
• Local Government re-organisation
• Shared services mantra
• Target Culture

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The target culture - W.Demming versus J.Morley

• What gets measured gets done
• True, where you are trying to focus improvement
  or control a process
• But also, What gets measured get corrupted
• Share holder value, 48 hr waiting time for GP
  appointment
• ....... when the measures are linked to
  recompense or reward

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Good things are happening in the SW, but perhaps
not as much as you would expect

• Devon Building Control Partnership
• West Devon Borough Council and Teignbridge
• Weymouth Portland with West Dorset
• Westwey Partnership
• Taunton Deane DC and Somerset CC
• ISiS CTS Partnership
• Cornwall authorities partnership
• Joint Services Partnership
• .. and others

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Shared services are growing in an adhoc manner

• Different services (within the same council)
  shared across different authorities
• No grand plan or vision
• There is not yet a structured approach
• Growth in shared services is very organic

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Why is sharing difficult?

• It is political
• Additional complexity up-and-above business
  transformation
• Finding suitable partners
• Skills requirement for running a partnership
• Commissioning versus delivery
• Experience of those who have done it before
• Reduced control and requirement for trust
• The county vs district paradox

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Councils inclined to have others share their
services
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So how does the private sector fare?

• Between 1997 and 2000 there were 34,000 mergers
  in the US, 8,000 a year and growing
• Of these 58 failed predicted targets and in
  many cases made things worse
• Profitability, share-holder value
• A recent study of 230 merging companies is no
  better
• Less than one third increased their profitability
  or share-holder value
• 60 experienced a drop in profits in a rising
  market

Source Dr. Fritz Kroeger, vice president of A.
T. Kearney
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Dr. Fritz Kroeger identified six deadly sins
associated with post-merger integration

• Superficial vision of what partners want to
  achieve
• Fit is enough to launch a successful
  partnership, but never enough to ensure one
• Lack of strong leadership
• Allows simmering conflict, unresolved decisions
  and anxiety
• Focus on cuts, closings and other cost-cutting
  moves as early wins
• Rather than improvement
• Imposition of a different corporate culture
• Needs sensitive management
• Failure to communicate
• With employees, shareholders and customers
• Lack of risk management
• No focus on how to mitigate the risk of things
  going wrong

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Dr. Fritz Kroeger concludes

• 80 percent of the merger and acquisition deals in
  the last decade never created the value that
  managers and shareholders expected
• Why do so many smart people and smart companies
  keep coming to the merger table?
• "Maybe it's the same reason people get married
  ..the triumph of hope over experience
• But it doesn't have to be this way.
• The trick is going in with your eyes open.

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The similarities between marriage and partnership
sharing remain compelling

• Both fusions require a close meeting of minds and
  values
• Neither is a decision to be taken lightly
• Like a marriage, a business partnership is a
  relationship that calls for caution costly if
  it backfires.
• The right partner is essential, require time to
  find the most compatible match
• The metaphor seems even more pertinent in 2007,
  as the risk associated with the failure of
  high-profile marriages continues to make
  headlines!

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Infact, the marriage metaphor yields five
compelling stages of a partnership

• Stage 1 Attraction
• Fascination with another person, organisation or
  project and a desire to learn more about them
• Stage 2 Power Struggle
• Partners test each other, often with a fear of
  loss of control
• Stage 3 Cooperation
• Learn trust one another and to resolve
  differences and understand the mutual benefit
• Stage 4 Synergy
• Realisation of a power greater than that of each
  individual
• Stage 5 Completion
• Often about the changing the form of the
  relationship, not necessarily the end of the
  relationship altogether
• Sound familiar? And thats just two people
• never mind an organisation

Source Layne and Paul Cutright, Centre for
Enlightened Partnership
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Lets hope it doesnt get this far
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We know sharing is difficult, even for the
private sector, so what are the advantages?

• Better utilisation
• Reduced duplication
• Lower unit costs
• Access to capital
• Access to technology
• Access to knowledge or know-how
• At least two of these must be applicable or
  theres probably a more effective alternative

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SWCoE were lucky enough to have Michael Watson,
VP Supply Chain at Avon Cosmetics address LA
Directors in the SW in June 06

• Michael identified critical factors to the
  success of large shared service type change
• Apply simple techniques
• Recognise the past
• Take time to listen and understand
• Avoid faceless change management workshops
• Drive the change
• Get a few of the right people in place in key
  roles
• Create a key vision of the future
• Set very bold goals
• Never compromise to keep people happy
• But there have to be consequences for people who
  will not support the change

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Theme 1 Customers have most contact with
district-type services

• Customers have most contact with district-type
  services council tax collection, refuse
  collection, street cleaning etc
• 70 of customer contacts with Local Government
  plc are for district-type services
• But these services only account for 15 of local
  authority costs in the SW
• Salaries, goods and services, not including
  education

Should performance improvement (aka non-cashable
savings) be the focus for district-type
improvement?
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Theme 2 The most expedient route benefits is
often through process optimisation
Increased efficiency
Degree of sharing of services
Starting point
Degree of business process optimisation
Within the context of a shared services strategy
and you must understand your own business
Source SW Centre of Excellence
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SWCoE is developing two major areas to support
Business Transformation in the SW

• SW CTS Support Programme
• Preparation support for business transformation
• Standardised open source approach
• Aimed at providers, consultancies and authorities
• Focus on Business Process Improvement not
  necessarily shared services
• Skills development in business transformation
• SW CTS (ISiS) Framework Agreement
• Capitalises on the work of the ISiS Framework
  Agreement
• Funding for legal scalability and authority
  engagement
• 34 authorities registered interest, should be
  open to any authority in the SW

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The South West RCE and West Midlands RCE CTS
support programmes follow the same business
transformation approach
Shared Services / Shared Delivery
Independent LAs Services
Collaboration /Alignment
Support for individual authorities or specific
services
Standardised approach
Business Transformation
The support programme is being developed in
conjunction with the national RCE CTS programme
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CTS support programme - reducing the barriers to
business transformation
Shared Services / Shared Delivery
Collaboration /Alignment
Independent LAs Services
Strategy
Programme Management
Implementation
Capacity Knowledge
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CTS support programme - reducing the barriers to
business transformation
Support Modules, Tools and Guidance Required for
Business Transformation and CTS
DCLG GuidanceService Delivery Partnership Design
Blackburn with Darwen BPA Process
4Ps Shared Service Procurement Offerings
Sprint BPR Tools and Process
Exists
Software tools, e.g. BridgeTriaster
Esd-Toolkit
IDeA Communities of Practice
CIO Toolkit
Capacity Building Toolkit (formerly e-Capacity
Toolkit)
System method for BPR
OGC Successful Delivery toolkit
National RCESurvey / questionnaire
SWCoE GuidanceEngaging Consultants
NPIP national project Standards, Common Tools
Terminology
Learning materials
Under Development
Quick Win Guides
Training Modules, Including NEBIT
Guidance on Key Services, Themes for Sharing
Diagnostics Maturity Assessments at various
stages
Framework Templates for key documents,
e.g. Business StrategyBusiness CaseProgramme
Plan
Workshop Outlines, e.g. VisioningOptions
AppraisalBPA/BPR
Supplier supported minimum standards for process
and documents
GovConnect
Needs Sourcing
Guidelines for Procurement
Partnership metrics
Performance and Cost Benchmarks
Library of Knowledge Information
Key themes customer requirements, flexible
working, workforce development, local economy,
eGov Connect, standardised approach, productive
time
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Shared Sevices a match made in heaven?

• But you have to work at it