Getting something right doesn’t make good headlines, especially where government IT is concerned. Which is probably why the publication of ‘Government Shared Services: A Strategic Vision’1 in July was overshadowed by the release of the report into the National Programme for IT in the NHS2. Guess which one contained the bad news?
But for me, it’s the Shared Services Vision that makes for a more interesting read; and not just because it talks about an initiative that is going to plan and has a heavy dependence on ICT. The paper appears to formalise a change in mindset away from the traditional view that ICT is a cost to be borne – a necessary evil – towards one where investment in ICT can deliver business benefit beyond the boundary of technology.
Many of us, across the public and private sectors, have experience of legacy IT systems that fail to keep pace with evolving needs. This is often compounded as we simultaneously contend with multiple systems. Duplication, lack of interoperability and dwindling support often imposes avoidable overheads on the operation. Tackling the ‘IT issue’ in isolation is frequently a typical and logical first step. Resolving legacy problems doesn’t always eliminate legacy thinking and ICT continues to be seen as a financial burden. For the public sector, moving beyond this stage is critical and the Shared Services Vision shows it is happening. This is a significant moment for public sector ICT.
Anyone involved in a private sector merger or acquisition knows that duplication is attacked with a passion. HR, payroll, procurement, and other back office functions are brought together to drive improvements in efficiency and consistency. ICT becomes an enabler for change and frees up scarce resources to deliver front line services. So it comes as no surprise that central government is doing this as part of its efficiency reform. Already, three departments are reporting annual savings in excess of £65M1. A glance at the SOCITM site shows this is an initiative the whole of the public sector is talking about. This is an encouraging start but there is still a long way to go.
The government’s own estimate is that shared services across central government can deliver savings of £500m on the current cost of £2.5Bn. Just think what a difference this could make if moved from the back office to front-line services. But the shared services concept is not new. For instance, Cambridgeshire and Northamptonshire County Councils have been working in partnership in this respect since 2007. There are many other examples too.
So are we right to ask if the initiative is moving fast enough? I think the private sector would vigorously pursue this kind of saving.
The Shared Services Vision does give us a clue. The majority of existing central government shared services are clustered around the main departments of state with very little sharing between departments. The big savings come when common services are shared across departments rather than within them. The Efficiency and Reform Group (ERG) has developed a future shared services model that sees two independently operated shared services centres in effect competing for custom across government departments. Following a due diligence exercise, the ERG will report back in November 20111. To date there are no timescales although 2013 is seen an inflection point when support for many existing platforms will be withdrawn.
But, in the current economic climate, I can’t get that £500M out of my head. Should the government be more aggressive in pursuing these savings? How would a private enterprise approach this opportunity? What can be done before 2013 to maximise savings? Is this just a matter of scalability and secure access or should other factors be taken into account? Should collaboration be planned for when implementing shared services? Do you think ICT will now be seen as an investment rather than purely a cost.
1 Cabinet Office (2011) Government Shared Services: A Strategic Vision
2 House of Commons Committee of Public Accounts (2011) The National Programme for IT in the NHS
3 Cabinet Office (2010) Shared Services