Published by MBA Skool Team, Published on January 29, 2013
Current economic situation demands opportunities for gaining efficiencies in service delivery. Costs of control and maintenance have become the prime concern in public management. The emphasis is not only on the innovation in e-governance but also on cost efficient operations of servers and data centers (SDC: State Data centers). Budget and expertise are limited and it’s high time that duplication of efforts, especially in municipality level should be ceased to gain benefits of the plans. A single window delivery mechanism for all services is the basic aim of all policies,an anytime anywhere service model.
The goal of this article is to explain the stepwise execution of shared service in organization and theoretical explanation of benefits of this execution.
ICT resource sharing has its origin in computer science (sharing of DNS, proxy, time service, distributed file systems, shared database). In the last decade idea migrated to the consolidation of services such as human resource, payroll, and accounting, into shared services. Services generated from central organization and shared among local organization at the same horizontal level.
Sharing of services introduces new opportunities for, especially small government organizations, to
outsource non-core activities,
dimension the capacity of their ICT infrastructures efficiently and
access and use ICT resources currently out-of-reach.
SHARED SERVICE EXECUTION PROCESS:
Governing Board is the lone actor in this stage. Here, all the suggestions are initiated and appreciated. The suggestions can be from an Advisory Board, a consortium of managers, staff etc. These suggestions for Shared service are received and prioritized by Governing Board. Here, we can also have a dedicated panel for identification of areas. (ITES related areas to be jotted down). The candidate areas for SSC (Shared Services Center) in an organization are Finance, HR, Supply chain, Customer and IT.
The purpose of assessment is to foster consistent and complete evaluations of proposed shared service prior to approval. By careful analysis of subjects (covered below) a proposed Shared Service can be successfully implemented and produce intended results.
Strategic Direction and Vision: The proposed shared service should be in line with the company’s vision. Here, purpose and support for the SSC is studied.
Identification of scope of the Shared Service and Present State analysis: This starts with description of like-services currently performed. Then the problems to be solved or opportunities to gain in current situation are discussed andfinally, scope is Operating Model
Breadth and cost of Deployment: Two factors are discussed: Technology and Cost. Technology consideration includes proposed technology and need for re-engineering, Disaster Recovery and Continuity of Operations requirements and lastly any maintenance windows by provider that will impact consumer agencies. Cost Analysis includes: Cost model, Pricing Models, Funding sources and most importantly Total Return on Investment.
Organizational and Staff impact and Change Management Strategy: Change Management strategy include describing the changes and how they will be successfully managed (Organizational, personal, technical, financial, process, etc.) and describing the change control process and changes to address. Organizational and staff impact includes: Changes in current job mix, cross culture problems, support for SSC workforce (Training, job enrichment etc.), required skill-set and other SSC related classifications.
Business Case: Here, cost benefit analysis is done. Steps include analysis of targeted savings, service quality impact and improvements, business opportunities provided, incentives to consumer and service provider and description how the benefits will be realized by consumers and provider.
Implementation Roadmap: Complete brief of transition approach, teams, costs, technology, facilities, other resources, schedule, risks/mitigations and barriers and plans to overcome.
In the design phase, organizations define, in detail, the components of the new shared services operation. The shared services operating model should remain at the heart of the effort, outlining the goals and strategic objectives for the design team. The deliver developed contains following: Business process Design, Redesigning of Organization, Functional Characteristics of new SSC, Resource requirements and designing of enabling Technology, Create Workforce hiring/ recruitment/transition plans, Develop Training Plan and Management Development Program, Design Facilities, Design Service management approach details.Government Process Re-engineering one of the critical elements of e-Gov projects, this includes focus of Transformation rather than Translation, Effected by closely working with Departments by following best practices of change management. The major work here will be done by separate teams with relevant expertise but there must be a close integration of all the deliverables. This is to maintain a holistic design and meets the strategic objectives of the new organization.Internal Capacity Building is vital part of this step. It includes:
Under NeGP, E governance Consultancy Support to Departments through CeG
Process study (as is to be)
Functional requirement Specification
Detailed Project Report
Bid process management
Continuous Trainings/ workshops/Conferences
Build and Deploy
The build and deploy phase moves the shared services program beyond theory so that the shared services center organization, processes and technology take physical form. Deliverables from this phase bring the shared services vision to life, creating the processes, systems and facility outlined and approved in the design phase. Organizations prepare the shared services center and the operating units to receive the new processes and systems. The final deliverable of this phase is a successfully transitioned shared services operation and workforce.
Build phase consist of steps: Develop Service Management Processes, Manage Budget and Schedule, Performance support and training materials, Build Facility, Recruit workforce, Create Service level agreements, Define KPIs, Communication Plan, Build organization and conduct deployment plan.
Deploy phase consist of steps: Execute Deployment Plan, Conduct Training and work Shadowing, Testing of Shared Service Center: Pilot > Group1 > Group 2 and Execute workforce transition plan.
After deployment, Regional Centers can be formed based on Core Business and Language. A strategic and Tactical 3rd party Business Partners should be made. To increase performance of this newly-formed SSC, dedicated transformational teams, effective Performance management system and good (3rd Party) Training and Coaching should be there in place. Apart from this, a good Governance System is very crucial. The issues with bad governance can be
Inadequate risk assessment resulting in a weak risk framework,
Lack of management ownership and participation
Change control procedures not enforced leading to increased cost, risk, business disruption
Processes for escalation of issues and dispute resolution are weak
Solutions for same
Conduct a current state risk assessment
Test a sample of key controls
Review of governance procedures, roles and responsibilities
Test procedures for change control and issue resolution
Global Governance Committees: Multiple 3rd Party relationships, Dedicated 3rd party Relationship Managers, Standard Performance Management (SLAs), Global Pricing Strategies and contracts.
Review and progress against Budget
Review and adjust staff support
Finally, adding an upgrade path
Critical Success Factors
The following factors must be in place to ensure the success of SSC:
The governance structure should be formally adopted and implemented
The Shared Services Governing Board is formed, and is:
Reviewing and approving recommended strategies and priorities for enterprise utility shared services
Making business decisions on enterprise utility shared service assessments, business cases, and adoption rates
Fostering state level commitment to implement shared services
Removing barriers and providing support to providers and consumers
Experienced and expert Leadership. Other management selection should be effective in achieving targeted benefits and facilitate successful transition.
Project management support must be available to guide successful implementation.
Startup funding is available as approved in each shared service assessment. This enables development by the provider and transition to the new service for consumers.
Building new culture
Balancing business process redesign and reshaping of roles and technology
In terms of the ongoing operations for a share services model, there are four key success factors:
monitoring and managing costs;
use of service level agreements; and
Citizen Service Delivery Models:
Implementation Model- Public Private Partnership Model( PPP)
Business Model BOOT( Build Own Operate & Transfer)
- Transaction Charges based model
Based on category of services
Based on Slabs( Transaction Volumes)
Pay As U Use Model
SHARED SERVICE EFFECTS
Delivery Multiple Services of Government Departments and Private Companies under one Roof( One Stop Shop)
Bring in More Transparency, efficiency, and accountability in Service Delivery Mechanism
Offering Services Closer to the Citizens Home
Delivering services through multiple e-Channels
Helping Departments to focus on their core functions
Live example and effect can be from Bangalore One. (Project launched in 2005).
Benefits to State Data Center made by Shared Service Model:
24x7 monitoring of servers
Support from SDC support team
Data Security – Firewall, IPS, Antivirus
No procurement & maintenance cost of hardware and software, for the departments
Vendor support, which ensures faster resolution of issues
High Availability - Servers, Storage, Network
Centralization of departmental data
Can be used as Disaster Recovery (DR) site
This article has been authored by Saket Kumar Gupta from IIM Indore.
Views expressed in the article are personal. The articles are for educational & academic purpose only, and have been uploaded by the MBA Skool Team.
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