The Queensland Government has announced it will abandon its monolithic whole-of-government approach to shared services and replace it with three shared service providers.
In taking this decision the Queensland Government has accepted one of the key recommendations of the PriceWaterhouseCoopers (PwC) Review of the state’s shared service operating model. The Government has indicated it will adopt the Review’s other recommendations also.
In a statement issued on Tuesday November 23, Minister for Public Works and Information and Communication Technology Robert Schwarten said “the review says the principles behind the current shared service model are sound”.
“However, it says larger agencies are able to independently fund and deliver internal corporate services including payrolls,” Mr Schwarten said.
Under the new arrangement that PwC has recommended, the two largest agencies, Queensland Health (QH) and the Department of Education and Training (DET) will each have their own shared service provider in a three-tiered model of shared service delivery. The third tier will be a rest-of-Government (ROG) shared service provider.
“Once fully implemented, DET and Queensland Health will be responsible for their own finance and HR/payroll business applications,” the statement read.
The “new rest-of-Government shared service provider will continue to reside within the Department of Public Works and provide shared human resource, payroll and finance services to all other agencies,” it adds.
The new operating model will see responsibility for the two major departments of QH and DET removed from CorpTech, which currently handles payroll and HR requirements across Queensland Government. The decision to transition out this responsibility comes despite the introduction of a range of performance improving measures at CorpTech, following the high profile problems encountered by Queensland Health in its operation of a CorpTech provided payroll system, earlier in 2010.
Mr Schwarten said the new governance model will be “based upon clarity of objectives, inclusive representation, open communication and performance improvement”. While the Government has emphasised the benefits that the PwC-recommended model will bring, it had similar praise for the previous model. The recently released QH Annual Report 2009-10, said that the whole-of-government Shared Service Initiative would provide “high-quality and innovative corporate transactional services that support the delivery of health services and promote organisational effectiveness for Queensland Health”.
The PwC review argued that the Government would attain a number of benefits from their proposed operation model, including:
- Alignment of business processes with applications management, which will “allow for improved customer interactions and enhanced service quality”;
- Enhancement of the opportunity for end-to-end process improvement and small system changes;
- Optimisation of knowledge sharing and skills transfer through the opportunity to work collaboratively to identify opportunities for improvement; and
- Easement of transition associated with future Machinery of Government changes.
At the same time, PwC identified a number of challenges that the Government must overcome to ensure a smooth transition to the new model. Challenges include:
- Balancing whole-of-government project priorities – like those identified in the state-wide Toward Q2 through ICT strategy - across the three shared service providers;
- Gaining cross-departmental collaboration and cooperation to deliver projects;
- Ensuring that agencies have adequate access to specialist expertise; and
- Mitigating against negative impacts on CorpTech staff as the transition of personnel to different shared service providers takes place.
PwC advises the development of a “clear shared services direction and strategic plan”. Recognising the challenges inherent in a move to a new model of shared service provision, Schwarten said his Department will undertake a “carefully planned transition project” which will “minimise disruption to agencies and the important payroll and financial services delivered to government”.
“We will now consult with all staff and unions regard the government’s implementation of the PwC recommendations,” Schwarten said.
“Staff affected by the review of the shared service model will be kept fully informed during the transition to the new model”.