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NewCo “just one of our options” for shared services reform, says Minister

by Paris Cowan •
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NSW Minister for Finance and Services Greg Pearce has said that plans to consolidate shared service providers Service First and Businesslink into a single new organisation referred to as ‘NewCo’ represent just one of a suite of reform options available to the NSW Government, and are by no means set in stone.

His comments come despite the endorsement of the NewCo option in the final NSW Commission of Audit authored by Kerry Schott and released earlier this year.

The Minister has long made it known that he is unhappy with the state of shared services in NSW, which he described as “very, very complex” but conceded that the Government had yet to come up with a solution that he is satisfied would achieve its desired outcomes.

“We went back and tested the assumptions behind this model and frankly they were not rigorously tested and it anticipated a level of savings that we don’t think was achievable.

“I will admit that we have not got the solution going forward clear just yet but we are working on it,” he said.

The final report of the Schott Report revealed in August that the Government was looking into the NewCo plan which would see all the current clients of ServiceFirst and Businesslink transitioned to the new provider. NewCo would also have an expanded remit for procuring and managing outsourced corporate services on agency’s behalf. 

Schott’s recommendation number 104, which was subsequently supported by the Government, advised that the State go ahead with the plan within the short-medium term, but Pearce’s comments suggest the Government is having second thoughts.

“NewCo is one of the options we are looking into at the moment.

“One of my concerns is that we already have several corporate shared services businesses and I want to make sure that we don’t just ‘quadruplicate’ the number of those businesses without actually achieving synergies...NewCo may be the way we go forward but we have not made that decision yet,” he said.

The Minister once again questioned whether corporate services provision was even the kind of business that the government should be involved in.

“We are also looking towards outsourcing options because of course there are businesses out there than can do this work much better than we can,” he added. 

Discussions with suppliers capable of providing these sorts of managed services are understood to have been held, and the government’s intention to develop standards to inform strategic ICT sourcing also underscore the Minister’s comments that outsourcing will form part of the government’s future.

Pearce made the comments ahead of the opening the NSW Government’s second Ministerial ICT Forum at Parliament House, which was designed to update industry and other stakeholders on the implementation of the State’s ICT Strategy.

“It is a document of some terror for people like me, having specified 85 key actions and the timeframes for them, so we appreciate all of your help in making these actions happen,” he said of the Strategy document which was first handed down in May this year.

The Government says that its implementation roadmap is on track, listing 27 initiatives that have been either commenced or completed to date, including working towards a private Government Cloud for NSW agencies and the establishment of a Service Catalogue to provide on-demand access to ICT solutions.

“The whole of government cloud policy is on track for consideration in November. This will support agencies in making the transition to cloud-based solutions and will provide clarity for industry around our needs.

“Also coming soon is the establishment of a pilot private cloud offering for the government. We’ve begun scoping the works for this and we will inform industry of the progress in coming weeks,” said Pearce.

Pearce also stated that NSW Government departments are expected to outline their Open Government plans by the end of 2012 and that social media policy guidelines will soon be made available for consultation.

Major initiatives for the year ahead, not specifically mentioned by Pearce, but summarised in a handout provided to attendees include the development of:

  • a suit of standards to inform strategic ICT sourcing;
  • an integrated reporting framework for management information; and
  • a workforce strategy to meet public sector ICT requirements.

Related Articles:

Schott Report is a game changer for NSW Government ICT

NSW Government reaffirms commitment to shared services blueprint

ICT Strategy: NSW Minister casts doubt over the future of State Contracts

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  • NSW
  • Finance & Services
  • BusinessLink
  • Cloud Computing
  • Greg Pearce
  • NewCo
  • NSW ICT Strategy
  • Schott Report
  • ServiceFirst
  • Shared Services