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Queensland’s shared services ripe for reform

by Nathan Stormont •
Free resource

Improving self-service capability and process automation is crucial to the success of Queensland’s shared services agencies, according to a new audit report from the state’s chief auditor.

The Queensland Audit Office’s report shows that Queensland Shared Services (QSS), Corporate Administration Agency (CAA), and CITEC are not operating as efficiently as they could be and are losing clients.

The Auditor-General recommended a stronger whole-of-government focus to guarantee outcomes, including streamlining the number of providers of similar services, boosting agency commitment to the shared service model, and investment in new technologies.

Queensland’s shared service agencies conduct a range of back-office functions for government agencies, including human resources (HR), payroll, and ICT services. QSS, for example, operates a digital self-service centre providing electronic records management and document retrieval services, including finance, HR, and system support requests. CITEC provides government agencies with ICT support, including cyber security, cloud technologies, and managed IT.

According to the report, Queensland’s shared service agencies have expanded their range of services without offering an evidence-based case that delivery of these services was best conducted through a shared arrangement. The report also detailed that shared services agencies have an insufficient grasp on their customer base and that key innovation and automation decisions were being made on a siloed basis, from individuals rather than the agencies themselves.

CITEC and QSS have failed to respond to their customers’ requirements, and as a result, agencies are “taking back” corporate services due to a perceived lack of value. The report found that “customers are taking back services, automating services and providing them in-house, potentially increasing duplication across government,” and cited instances of agencies automating or overhauling processes on efficiency grounds. In one example, the Auditor-General noted that, by bringing one job evaluation management system in-house, a government agency was able to cut the turnaround in evaluations from 10 days to one.

The report also highlighted the lack of a dedicated automation strategy for shared service agencies, noting that individuals within agencies, acting as “siloes”, make decisions on automation and innovation, carrying no real benefit on a whole-of-government level. The report found that “[o]ver time a vision for Queensland’s shared corporate services, and customers’ confidence in the benefits it can deliver, have started to fade”, and called for a “reset [of] the strategy for corporate services delivery in Queensland.”

A WofG Approach to Shared Service Automation

The Auditor-General recommended that each shared corporate service provider develop a clear strategy that acknowledges technology, self-service, and automation in the delivery of services in a manner consistent with the Queensland Government’s whole-of-government policies. The report noted that while cross-agency technology strategies exist, these were not closely aligned with the whole-of-government shared services operating model. As a result, agencies have made decisions – or omitted from making decisions – without considering all relevant facts. The Auditor-General advised “[a] whole-of-government governance framework is needed to sustain a shared services operating model that delivers maximum benefits”, and identified the Department of Housing and Public Works as well positioned to determine this strategy due to its customer base, responsibility for the Queensland Government’s whole-of-government technology strategy, and its close links to CITEC and QSS.

Automation in the efficient delivery of shared services to government agencies has been a focus of successive Queensland governments. A damning February 2013 report by the Queensland Commission of Audit, chaired by former Federal treasurer Peter Costello and conducted under the former Campbell Liberal Government, stated that “actual capital and operating costs [of shared service initiatives] far exceeded initial projections, and overly optimistic projected benefits failed to be achieved.” Following Cyclone Debbie in 2017 and the staggered delivery of Federal Government aid, coupled with low revenue growth in the state, the Queensland Government was faced with strong incentives for innovation, including automation, as means to increase public sector productivity.

However, the audit report found that shared corporate service agencies in Queensland were barely keeping pace with the necessary innovation required to make automation a reality. “[L]arge providers (like Queensland Shared Services) have only just completed the required projects that have allowed some of these improvements to occur”, the report found. As a result, benefits have been slow to materialise and “customers question what corporate services should be delivered by which provider, if any.”

This might spell bad news for Queensland’s shared corporate service agencies. Despite CITEC reporting an above-target customer satisfaction rate of 68.8 per cent, like elsewhere in Australia the future trajectory of shared services in Queensland is perilous. After the election of the Palaszczuk Labor Government in November 2015, CITEC – slated for divestment for over ten years – earned a brief reprieve, despite an operating deficit of $2.2 million in 2016-2017.

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