As expected, NSW ServiceFirst has opened Registrations of Interest (ROI) for the outsourced delivery of its services.
The ROI reveals the scope of ServiceFirst’s outsourcing plans which will “involve the outsourcing of Service Bundles to one or more principal / lead suppliers”.
A single supplier or multiple suppliers could be contracted to deliver one or more of the service bundles as early as July 2014.
ServiceFirst has proposed different models for one, two or three outsourced Service Bundles. “At this stage it is envisaged that Services will be outsourced as either one, two or three Service Bundles, but the final model (including the exact number of Service Bundles which could be more) will be decided once indicative bids are received,” indicates the ROI.
Should ServiceFirst decide to outsource its services as one bundle it will be inclusive of:
- ICT components- Infrastructure, end-user computing, service-desk, ERP and applications;
- HR- Payroll, SES Payroll, Recruitment, Org Management; and
- Finance- Accounts payable, Tax Management, Change Management.
The second model would consist of two service bundles: an Initial Public Offering (IPO) bundle which includes the ICT components and a Business Process Outsourcing (BPO) bundle, covering HR and Finance.
A model with three service bundles would see ICT, HR and Finance all delivered by different suppliers.
The Shared Service provider has undergone significant changes since 2010. In July 2010, the Department of Premier and Cabinet’s (DPC) Blueprint for Corporate and Shared Services recommended that ServiceFirst and BusinessLink each develop a reformed business case “to deliver a more streamlined and standardised framework, more efficient services and renewed focus on customer service”.
According to the ROI, ServiceFirst accepted the recommendation and started a Reform Program which led to a re-structured business model and the shedding of nearly 100 FTE staff in 2012. The reform facilitated a reduction in operating costs of from $103 million in 2011/12 to $90 million in 2012/13.
A Refresh of DPC’s Blueprint is currently underway. The ROI states that the expectation that ServiceFirst maintain a client base of 20,000 FTE will not be a requirement of the outsourcing program.
ServiceFirst currently caters for 7,500 employees in multiple agencies. It is expected that this number will reduce to 6,300 as some client agencies, namely the Civil and Administrative Tribunal, NSW NOW and the Catchment Management Authority, will exit, according to the ROI document. ServiceFirst itself employs 350 Full Time Equivalent (FTE) staff.
DFS is already outsourcing some of its back-office systems. In February 2014, the Department issued a Request for Information (ROI) on Software-as-a-service solutions to consolidate the Cluster's array of disparate Finance and Human Resource systems.
The ROI notes, “The technology currently in place for ServiceFirst largely represents legacy investments transferred from the client agencies at the time of their transition to ServiceFirst. ServiceFirst is currently significantly updating its Technology Platform to upgrade processes, IT technology and replace dated and expensive systems.”
Based on recent activity within the NSW Government, there are a number of options for ServiceFirst following the outsourcing of its services. ServiceFirst could take on the role of a broker which is a role NSW has been adopting lately. There has also been suggestions that the Department of Family and Community Service’s (FACS) shared service provider BusinessLink will begin to act as a broker of services.
Another possibility for ServiceFirst is that it could be sold. In December 2013, NSW Government announced that it had sold 100 per cent of its shares in ICT service provider the Australian Centre for Advanced Computing and Communication (ac3) to Klikon Solutions. The press release noted “the NSW Government’s ICT Strategy sets out a road map for Government to move away from being a provider of ICT services to being a knowledgeable purchaser of ICT services from a contestable market place.”
The Outsourcing Program will follow a three-phase process. Phase one is the ROI, which closes on 22 April 2014. This will be followed by “non-binding indicative bids” which are expected to commence in mid-May 2014 and close in mid-June 2014. The final phase is a binding offer that is expected to be completed in July 2014.
Similar processes within the Federal sphere are allowed a year for the outsourcing process. An impending NSW election in March 2015 could be the reason for a shorter than usual outsourcing process.
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