Shared Services Special
July 30, 2013

Shared services in Australia: a case study

Several state governments in Australia have attempted, with varying degrees of success, to implement shared services. In the past few years, the Australian media has reported extensively on their struggles: budgets blown, systems operating inefficiently, payroll debacles, and rumours of corruption in agencies.

It sounds dire, but they say that success can only be found through failure, and there is plenty governments across the pond can learn from the stories coming out of Australia. Using examples from three Australian state governments, below are lessons other governments can take away from these early struggles.

New South Wales
Delimiter, an Australian technology news source, reported in August 2012 that the government of New South Wales was experiencing problems in the implementation of shared services. According to reports, two of the state’s shared services organizations, ServiceFirst and BusinessLink, were unable to provide adequate services to their customers. Furthermore, because IT systems were not functioning effectively, senior managers were unable to perform simple tasks, such as sending a mass e-mail to staff on a single system.

These reports state that much of New South Wales’ problems stem from unwillingness to invest in the technology necessary to pull shared services off. A key lesson? Without an initial investment in the systems required for shared services, such initiatives may never succeed and future savings may never materialize.

Queensland
In 2010, the government of Queensland announced that it would no longer be using the shared services model for IT service delivery in larger government agencies. The decision was made after Queensland Health experienced serious problems with its payroll after the implementation of shared services: many employees were not receiving their pay on time, while others weren’t receiving their pay at all. The situation was blamed on an underestimation of the scope of the project. In 2010, former Queensland Premier Anna Bligh announced that the state would be abandoning shared services and that a one-size-fits-all solution was not the answer.

Queensland suffered from a lack of adequate planning. Systems were put in place before testing was complete, which resulted in the payroll disaster. Careful planning is key to the success of shared services, and Queensland’s experiences can be a valuable lesson to governments looking to avoid a similar outcome.

Victoria
Victoria has fared no better with shared services than her neighbors in New South Wales and Queensland. According to reports, the government of Victoria encountered many problems with its shared services provider, CenITex: the agency failed to deliver IT services to its clients as promised and there were reports of nepotism and favouritism within its ranks. CenITex even went so far as to shut down e-mail and IT systems on a swath of government employees for a week when it encountered problems with the infrastructure.

The lesson that can be learned from these experiences is that government departments and shared services agencies must build a strong relationship if they wish for shared services to succeed. With so many employees relying on agencies to do good work, it is imperative that responsibilities are clearly assigned and all organizations involved are held accountable for their work.

What are your thoughts on this topic? Let us know in the comments.

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