Like millions of others I was deeply saddened by Steve Job’s passing. I have read, viewed and listened to many documentaries, editorials, newscasts, blogs etc. about his life and achievements since. As a result I have been thinking seriously about the profound impact this one person had on our lives and our times. To say he was gifted and a visionary the likes of which we may not see but once or twice in a century sounds trite but it is true. One of the articles I liked most was The Legacy of Steve Jobs: 10 Innovation Lessons, by Don Reisinger . And so with due credit to Mr. Reisinger here is what Steve Jobs can teach us about shared services..
“Don’t Worry About the Cost”. Invest in the shared services infrastructure. This does not mean reckless spending. What it means is knowing when, for what and how much to spend. Things like a contact center to manage customer interactions, a business intelligence system to give you insights needed to run your business are fundamentals of shared services. They should be considered given costs without which you cannot do shared services or call yourself a shared services organization. And as Steve Jobs proved over the years, when you get these right the costs is just a footnote compared to the return.
“Give Customers What They Don’t Know They Want”. Shared services customers don’t know what they need until you show them. They want fast, reliable and cost effective services but it is your job to translate this desire into products and services. . “And then they won’t be able to live without it.”
“Don’t Be Afraid to Create New Markets”. Look for new ways to increase the shared services value proposition. ”
I am encouraged by the current emphasis on increasing government efficiency and reducing the cost of government. One can only hope that this will carry through the 2012 elections and become an integral part of an ongoing dialogue about how we can improve the economic health and well being of our nation. Agencies are cutting travel, pay has been frozen, a hire freeze has been imposed and the scope of constrtuction and IT projects have been reduced. Unfortunately, this is not enough. I am dismayed by the lack of a cohesive, long term strategy for reducing the cost of government in a way that will least impact public services. Left to their own devices, most agencies will take a haphazard approach to absorbing budget cuts that will likely do more harm than good in the long run. I liken this to surgery with a hack saw in that the long term survivability of the patient is in serious doubt. Enter shared services, a proven strategy for making government more efficient without impacting public services.
Implementing shared services in the public sector is more difficult but more rewarding than implementing shared servicews in the private sector. It is more difficult because of the unique attributes of government organizations and the environment in which they operate.
Government managers and the organizations they manage are risk adverse by nature and implementing a new business model, even a no brainer like shared services, would be considered a risk.
Political appointees have a shelf life of 3 to 4 years. They are not inclined to take on long term projects or initiatives that may benefit them in the short term but will also benefit their precdeccessors. True.
A storm is brewing around recent initiatives to reduce the federal deficit (Federal Times, January 20, 2011 ) Freezing federal pay and trimming the federal work force may reduce the cost of government but critics say that the impact will be deminimus and that there is more of political postering than there is strategy at work. I agree that absent a long term strategy for reducing the cost of government the impact of the salary freeze will be negligible at best. We need a more efficient business model for delivering administrative support services. By support services I mean back room services common to all agencies like employee payroll, accounts payable, employee travel, IT and HR. These are services that are invisible to citizens except as they impact the cost of government. With a better business model we can reduce the size and cost of government where it will least impact citizens.
Midterm elections are over and although both parties are still assessing the impact, the one thing they agree on is that the American people are deeply worried about the federal deficit and demand more efficient, less costly government as a result. Eliminating COLA’s for federal employees and retirees in 2011 and 2012, a government wide hire freeze and a decrease in per diem rates for federal travelers are just a few of the measures that have already been enacted or will be enacted to reduce the federal deficit. Big IT projects are being cut and in some cases eliiminated to reduce government’s IT spend. Everywhere you turn you see the same writing on the wall: we cannot sustain current spending levels and preserve our quality of life. Public outrage has given Congress and the Administration the will (for the moment at least) to reduce the cost of government but not the way. What is lacking is a strategy or framework for significantly reducing the cost of government without reducing the quality or timiliness of citizen services. Indeed, we need a methodology that will both reduce cost and improve services. Shared services is the answer (The Case for Government Shared Services, April 2010). The $28B in savings projected over 5 years from eliminating the 2011 and 2012 COLA is insignificant compared to the savings that could be realized from mandating government shared services.
Shared services provides a cohesive framework for reducing costs (and improving services). It is far superior to the current approach in which cost cutting measures are identified at random with no analysis of the likely impact. Worse, this hatchet and chainsaw “cure” won’t significantly reduce the deficit and, in the absence of a mechanism for tagging and bagging the savings and sustaining the savings over time (hallmarks of the shared services business model), in 2 or 3 years the effect will have dissippated. We’ll still be talking about the necessity to reduce the federal deficit and Congress will be proposing a new slate of cuts. In this case, the US should look to other governments for inspiration.
The UK, Australia, Ireland and other countries faced with an unsustainable growth in the national deficit, adopted shared services as the cornerstone of a strategy for reducing the cost of government and improving government services. Faced with the problem of a runaway national deficit and public disenchantment with government services at an all time high these governments looked to industry for an answer. They found shared services.
What aren’t we there yet?