CPA Congress: Shared Services Readiness
October 12, 2017
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It’s 12 days until the Synergy CPA Congress in Canberra, and we’re bringing you an in depth look at the variety of topics we’ll be covering during the three-day conference. First up, is one of Synergy’s expert Partners, Paulette Robinson, sharing her insights on Shared Services Readiness.

Q: What is the overarching concept of Shared Services Readiness for small agencies?

‘Shared Services Readiness’ is a Synergy service we believe provides invaluable assistance for medium/small agencies and is in response to the whole-of-government initiative to move towards shared services.  Specific agencies have been nominated as providers of shared services and all other agencies have been allocated a suggested shared service provider.  The prospect of moving to shared services for smaller agencies is pretty unique as they often have  staff who multitask across different activities, and the way they outsource these services needs to be carefully considered to ensure they receive maximum bang for their buck.

The two most important things for smaller agencies to consider in their shared services journey is around the areas of governance, management assurance and compliance. The Chief Financial Officer and the Chief Executive Officer/Secretary are still required to sign off that the organisation’s financial statements are true and fair; this incorporates the concept that all expenditure has been made in accordance with government legislative requirements, policies and procedures, cementing their accountability and responsibility for the agencies actions regardless of who undertakes the actual transactional processing.

This notion about being responsible and accountable is particularly interesting as there is sometimes a belief that when any services are outsourced, all responsibility is outsourced also. This simply isn’t true and that is why having a strong governance, management assurance and compliance framework is really important.

Shared services are like any outsourced arrangement, take for example the government’s IT outsourcing arrangements in the past. The outsourcing arrangement required a certain amount of contract management and governance to make sure:

  1. The agency gets the services they require, and
  2. The service provider is meeting service level agreement standards.

So before engaging in any arrangement, what we would do is talk to the agency about how ready they are for the transition. We would ask them questions such as:

  1. What activities are being planned for outsourcing to shared services?
  2. How mature are the current processes?
  3. What would the new processes look like and how would they impact on the operations of the agency?
  4. Is the agency culturally ready for the change?
  5. What is the impact on agency employees?
  6. Does the agency expect to harvest savings from the shared service arrangement?
  7. Will appropriate governance structures be put in place?
  8. What agency systems are involved and how do they currently interact with the FMIS/Payroll systems? How will these systems and processes work with a third-party provider and FMIS/Payroll systems?
  9. Are there plans for new processes to manage the arrangement and the contractual obligations, e.g. manage the flow of communication and documentation, and monitor service levels and other obligations?
  10. What are the risks and rewards of a shared services arrangements to the agency and the achievement of its outcomes?

Q: What is the key message for smaller agencies looking to undertake or improve on their Shared Services portfolio?

The key message for smaller agencies is to ensure appropriate governance and processes are in place to deal with the shared service arrangements. By doing this, they will be able to manage the business more efficiently and effectively.

Again, to get to this point, it’s asking agencies questions such as:

  1. Do you understand the changes that are taking place?
  2. Do you understand the impact it will have?

To put into context, a small agency might be used to saying ‘I’ve got this invoice, the supplier is screaming for payment, it got held up in someone’s mailbox so I’m going to walk it over to my account payable person and they can pay it straight away’. Under a shared service arrangement this would not be possible. Agencies have to be much more structured and disciplined so that they are able to make payments on time, otherwise it is a cost to the business.

Q: How is this a key part of Synergy’s offering?

We have deep experience in all areas of shared services, from the whole-of-government strategy perspective, to provider set up and provision of services, and with the transition of agencies onto a shared services arrangement.  We know shared services extremely well from all angles.

We have provided advice and assistance to the Department of Finance for whole-of-government policy and strategy setting, so we have a firm idea of where the government is going with this policy.  We have also assisted with whole-of-government information gathering and benchmarking to enable a greater understanding of the current costs of corporate services.

We have extensive experience with the establishment of provider services, and we’ve now worked with a number of smaller agencies to understand how they fit into the picture and help them get onto a shared service arrangement in a considered and well organised way.

Q: What is the initial step in the Shared Services Readiness Methodology? And how do agencies identify such opportunities?

The whole-of-government approach has been to nominate all agencies as a provider of services or a purchaser of services. It’s a mandate for change. Agencies need to think about the timeline and how they might achieve the change in an orderly manner, or whether the change should occur at all.  In some cases, an agency’s activities may be so specialised or the benefits of a shared services arrangement are not compelling enough to take up shared services.

In the first instance Synergy can make an assessment of an agencies readiness for shared services or indeed whether shared services is appropriate.

Synergy brings experience across shared services landscape to say what works. We can come in and assess current processes, make improvements and determine if they are ready to outsource.

Q: How does this lead (or contribute) to high-performance in the workplace?

The consideration of an outsourced shared services arrangement focuses an entity on how to ensure the benefits are realised. The idea is that when you go to shared services it should be more efficient and effective, and it should cost less.

So, the high-performance element is that the agency is able to be more efficient and effective in delivering their services.