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WA's Shared Services Model Once Again in Doubt

by Kristen Hammond •
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Western Australia has become the latest government to question the effectiveness of the shared services model, with Premier Colin Barnett announcing this week that a critical aspect of the shared corporate services project would be suspended until a review has been undertaken. This latest announcement indicates yet another hurdle for the embattled program, which has limped along since 2003.

WA’s initiative was initially intended to provide 90 government agencies with shared services through shared service centres. According to WA’s Shared Services Portal, such a model would allow increased efficiencies, effectiveness and value for money through shared resources, technology, information and processes. Introduction of common systems would, it was argued, allow shared access to specialist knowledge, reduce management and staffing overheads and generally simplify the provision of services within government agencies.

Practical implementation of the project, however, has been plagued by problems. While the shared services model was intended to provide savings of $50 million per year through the consolidation of three shared services centres – the Department of Treasury and Finance Shared Services Centre, the Health Corporate Network and the Education and Training Shared Services Centre – the initial budget blew out from $91 million to $400 million, while the timeline for completion was extended by seven years.

These time and budgetary concerns led to the program nearly being scrapped in 2008, with then-Treasurer Troy Buswell announcing that it would only continue under the aggressive supervision of the government. The WA Auditor General has also recently criticised the project, questioning whether forecast savings would ever be met and identifying a number of areas within the shared services model which needed to be reviewed, such as the continued presence of manual workarounds and late payment of supplier invoices.

To date, the WA Department of Treasury and Finance Shared Service Centre has rolled over 50 agencies onto their single system Oracle enterprise resource planning platform, which consolidated 12 finance systems and 12 payroll systems. Agencies which have already been rolled in include the Department of Commerce, the Department of Premier and Cabinet, the Department of Transport and the WA Electoral Commission. The Department of Agriculture and Food, Department of Housing and the Department of Sport and Recreation are also due to be rolled in within the next 6 months.

Premier Barnett said that agency roll-outs would be put on hold until the review had been completed, describing the pending revision as a chance to take note of what has happened with the Office of Shared Services in recent times, so the WA government could reconsider its decision-making in the area. While the terms of review are yet to be released, Delimiter reports that there will be consideration of what has been achieved, what challenges were encountered and whether the project still offered value for money. 

WA’s waning confidence in the shared services echoes Queensland’s less-than-illustrious experience with a model that embraced the notion of just one shared service provider for the entire jurisdiction. It was announced late last year that the two biggest agencies, Queensland Health and the Department of Education and Training would separate from the government’s IT shared services strategy in the wake of the Health payroll debacle and the resulting damning report by the Queensland Auditor-General. 

Victoria has also recently defected from the shared services model. As the first jurisdiction to adopt super departments, Victoria announced they would be separating Health from the Department of Human Services in 2009. Helen Silver, Secretary of the Victorian Department of Premier and Cabinet, said at the time that the early-1990s adoption of a Human Services ‘mega department’ had originally been intended to better steer policy coordination through a coordinated, multidisciplinary approach.

However, the enormous department had proved too large and complex to function to the degree of effectiveness required, and was not adapting to new challenges. Silver said in 2009: ‘essentially, we are moving beyond a ‘one size fits all’ model to a structure that will facilitate our ability to tailor services to individuals’.  

It seems that the New South Wales government has heeded the message about the difficulties of having just one shared service provider across all of government.  It announced in August last year that it would be pursuing a shared services model, releasing a blueprint evincing the intention to overhaul the way the government manages ICT and other corporate functions. The blueprint outlines that NSW’s model will have six shared service providers: five of which will serve the major agencies employing over 20,000 full-time staff, and one multi-tenanted provider, ServiceFirst, which will serve all of the remaining agencies.

Western Australia’s shared services project, if it continues in its current form, is due to be completed in 2013. 

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