Keywords: shared services, finance shared services, shared services Australia, CenITex, Department of Internal Affairs, iGovt, shared services New Zealand

New Zealand's push towards shared services labelled 'ambitious'

Susie West | News | 11 June 2012

  • Print

The New Zealand government's plans for shared services in many of its operations have been labelled "quite ambitious" and "not an easy ride".

Peter Blades, who recently retired as Chief Executive of the Australian state-owned IT services agency CenITex, has discouraged plans by the neighbouring country to centralise its services and instead follow the example of the Australian government.

One of the biggest supporters of shared services is the Department of Internal Affairs, which has announced it will centralise its procurement processes, establish supplier 'panels' and build common applications such as identity management system iGovt, reported Stuff.co.nz.

However, Mr Blades warned: "If you have a look at Australia and New Zealand there are no success stories in shared services, particularly in government."

He noted that where shared services has worked has been by agencies like CenITex, which has taken a basic approach to shared services and operated at some distance from government.

The expert highlighted the troubles experienced with the Queensland and Western Australia governments, which fell at the hurdle of consolidating payroll.

"If you struggle with payroll, how are you going to get on with an end-to-end services application?," he told the news provider.

"In government you don't have a gun in your holster. Mandates are supposed to work, but they generally don't … We have stuck to infrastructure where organisations couldn't argue they needed to be different."

Therefore, Mr Blades suggested that New Zealand's approach to lead the transition to shared services directly from the government is going about it the wrong way and could lead to failure.

According to Internal Affairs, it has examined the possibility of the Australian model with CenITex, particularly its process of selling services through a catalogue and holding service level agreements to ensure quality.

Elsewhere, three local authorities on New Zealand's South Island are considering setting up shared services operations between them, according to the Marlborough Express.

Marlborough District Council, Nelson City and Tasman District Council could move to shared processes as a cost saving measure.

Comments in chronological order (2 comments)

You need to be logged in to leave a comment

 

Howard Clark, Calchas PSS | 12 June 2012

There is a great gap between hype made by those selling shared services and the reality of performance on the ground. These are commonly reported and persistent features of shared services: • High entry or up-front costs • Long time to realise small savings (years ... if at all) • High failure rates (as much as 70% have been quoted) • Loss of local knowledge • Loss of service visibility • Loss of control & accountability • Locking-in failure and waste • Worker dissatisfaction & union troubles (industrialization & standardization) • Costs of failure pushed onto service users • Costs passed onto to service users • Costs pushed into other budgets • Savings in 1 budget as costs are pushed into other parts of the system • Failure and waste displaced over a longer period of time There is much work needed to study the damage and impact of shared services, but very few organisations once they have spent millions of pounds want to open the doors to critical questioning.

David Turner, Harrogate, UNIT4 Business Software Ltd | 12 June 2012

The negative sentiment towards shared services highlighted here is sadly predictable. However, it's not true that there are no success in Australia and New Zealand - certainly not in the commercial sector - and in the public sector successes are growing around the world. At UNIT4 we can point to a rapidly growing number of successes, many of them very established, from Scandinavia to the UK and beyond. So the New Zealand government can draw on the many positive experiences around the world to ensure success. Let's hope they're not put off by such negative feedback.