Stockholm: Breaking down silos

The Stockholm summit divided its time almost equally between fairly formal plenary presentations, some of which I have already written about, and smaller and less formal working sessions, where the discussion to presentation ration was much higher.  I went to the one on ‘breaking down silos’, billed as being about ‘the strategies governments need to adopt to break down departmental silos and secure the real benefits of e-transformation’. 

Speakers included

  • Joe Harley, whose slides are here,
  • Kim Nelson, CIO of the US Environmental Protection Agency – though perhaps more pertinently, she announced at the end of the session that she was leaving government, and from this month is executive director of e-government at Microsoft.
  • Gordon Macatee, Deputy Minister [= permanent secretary] of Labour and Citizens’ Services, Government of British Columbia and Chair of the BC Buildings Corporation, Canada
  • Andreas Nemec, Chief Executive Officer, Federal Procurement Agency, Austria

I wasn’t taking extensive notes as these were more workshop based sessions, but slides from the other speakers are due to be circulated – I will add links here when I get them. 

Joe’s presentation was designed to give a UK government as much as a DWP perspective on shared services and drew on Transformational Government material as well as our own.  It was very well received – the discussion in the group over the following 24 hours came back to many of the points made in it

Of the other presentations, I thought Gordon Macatee’s was the most interesting. The British Columbia government is tiny by our standards – HR shared services could mean going from an HR team of eight people for a single department to one of thirty for a cluster of departments – but the underlying issues were all very recognisable.  Gordon’s department includes a shared Public Service Operations Agency as well as a service delivery initiative which spans the entire provincial government. The consistent theme was the need for shared services to be customer-driven – with two particular hard edged consequences:

  • budgets stay with the customer, they don’t go to the provider
  • customers always have a right to leave the shared service.

Consequences of applying those two principles include:

  • defection is a real threat for some services:  departments have clustered for services such as finance and HR, which makes it viable for an unhappy department to leave one cluster and join another
  • on a larger scale, a department wanting to use a provider other than the Public Service Operations Agency has to make a case to a board made up of the deputy ministers of all main departments – the PSOA itself cannot compel its clients’ loyalty.

Gordon clearly felt very strongly that these quasi-market disciplines were critical in ensuring that the objectives of PSOA remained effectively aligned with those of its customers.  It was less clear h0w those disciplines could be made to work where the reason for the shared service approach was not (or not just) efficiency, but about the wider customer experience, and in particular the delivery of integrated services to citizens.  Defecting from, say, an integrated online portal is clearly a rather different proposition from defecting from a shared payroll.

My overall conclusions from the presentations and the lively discussions which surrounded them were:

How to make shared services work

  • Clear governance, with a very authoritative collective management – in our terms, probably needing to be at permanent secretary level
  • Clear initiatives/programmes where a shared service approach is going to be pushed forward – otherwise it is too easy to sign up to the principle while keeping clear of the substance
  • Strong leadership commitment – it will always be possible to find short term reasons for not taking this forward, and unless those are transcended centrifugal forces will outweigh centripetal ones.
  • Piloting
  • Consider both internal and external services – but be clear about the differences between them

How to sustain shared services

  • Defined standards (operational and technical) against which performance of the service can be measured
  • Plausible threats to withdraw – where ideally, plausibility is more important than withdrawal
  • Shared service organisations and organisations which share services:  the former will often be simpler; where there are reasons for the latter there will need to be strong mechanisms to ensure that the provider organisation does not favour itself over other customer organisations
  • Embedding cultural change:  the overall effect is to shift the boundary of the make or buy decision:  without confidence in the sustainability of the ‘market’ for services, the tendency will be to creep back towards the apparent control offered by making rather than buying
  • Measuring success:  if shared services don’t deliver benefits, they are not worth the overhead.  If they do, the benefits should be identified not just for their own sake but as a further way of embedding change.

Can everything be shared?

  • Services for efficiency: yes
  • Services for customers: less straightforward.  In principle there may be stronger reasons for sharing, because there are external as well as internal benefits to be captured (which in principle suggests that just looking at the internal benefits will lead to sub-optimal levels of sharing).  But in practice, there may be a trade off between more specialised expertise and more integrated, but more generic, service provision.