Transforming Public ServiceA Gauteng Case Study

Establishing the Gauteng Shared Service Centre

Establishing the Gauteng Shared Service Establishing the Gauteng Shared Service CentreCentre

Background• Constitutional Mandate – following 2nd elections -

“What was inhibiting delivery to the public?”• Expenditure ratio of line vs. support functions• Appointment of New Executive

Focus Areas– Economic Development– Good Governance– Improving the quality of service delivery

• Functional Audit conducted in 1998

• Resources (human and financial) duplicated across 11 departments in the Province

• Scarcity of skills (professional support roles) – not well distributed across departments

• Resources not being optimised (GPG spends R4b pa!) Levers not being utilised to drive value for the province

• Support functions clerically focused with poor service delivery –little measurement of impact

• Disproportionate allocation of resources – support: frontline – Focus on support functions distracts from frontline delivery

• Paucity of skills inhibiting transformation of public service, in support domains (e.g. e government)

FindingsFindings

Decision to Implement a Decision to Implement a Shared Service CentreShared Service Centre

Working Definition of a Shared Service Centre

“The concentration of company resources performing like activities, typically spread across the organisation, in order to service multiple internal partners at lower cost and with higher service levels, with the goal of delighting external customers and enhancing corporate value”

“Shared Services: Schulman, Dunleavy, Harmer and Lusk”

Higher costs

Variable standards

Different controlenvironments

Duplication of effort

Unresponsive

No business unit control of overhead costs

Inflexible to business unit needs

Remote from business

Pooled Experience

Enhanced career progression

Independent of business

Synergies

Lean flat organisation

Recognition of group functions

Dissemination of best practices

Common support systems

Economies of scale

Critical mass of skills

Bus unit maintains control of decision

Sensitive to local priorities

Responsive to Client needs

The Best of Centralisation and DecentralisationThe Best of Centralisation and Decentralisation

Shared ServicesDecentralisation Centralisation

VisionVision• Create a Value Centre for GPG by providing:

– Benchmarked and appropriate service levels at a Competitive Costadvantage

– Enabling Technologies– Accurate information for decision making– Thought leadership in professional support areas– Economies of scale

Core Services OfferedCore Services Offered•• Finance . Human Resources . Procurement . Technology Finance . Human Resources . Procurement . Technology

Support Services . Internal AuditSupport Services . Internal Audit

Vision for the Gauteng Shared Service CentreVision for the Gauteng Shared Service Centre

Scale of Project : Scale of Project : ““Before StatusBefore Status””

Support Services Operating Status quo:

• 11 Departments

• 95 sites delivering these

services

• 4000 staff delivering support

services

• 110 000 employees

• around 30 000 active vendors

• Annual provincial budget of

R21b (2001)

Scope of FTEScope of FTE’’s delivering HR services in Gauteng at the times delivering HR services in Gauteng at the time

Agric.1%

Social4%

Planning1%

Finance1%

Premier4%

Sport1%

Safety0%

Transport5%

Housing2%

Educ.28%

Health53%

AgricFTE’s 16

AgricFTE’s 16

EducationFTE’s 323

EducationFTE’s 323

HousingFTE’s 26

HousingFTE’s 26

HealthFTE’s 624

HealthFTE’s 624

FinanceFTE’s 6

FinanceFTE’s 6

SafetyFTE’s 1

SafetyFTE’s 1

SportFTE’s 9

SportFTE’s 9

TransportFTE’s 56

TransportFTE’s 56

PremierFTE’s 51

PremierFTE’s 51

PlanningFTE’s 12

PlanningFTE’s 12

SocialFTE’s 52

SocialFTE’s 52 •81% of FTE’s found in

two departments, serving 91% of the employees in Gauteng

Development18%

HR Administration

42%

Transfers and Terminations

16%

HR Planning, policy and

Management14%

HR Information Management

1%

Recruitment and Placement

9%

42% of the HR practitioners were found in HR Administration processes –characterised by high volume, repetitive transactional behaviour, suitable for a shared services environment

Baseline Data Baseline Data -- ExampleExample

Total HR FTEs = 1176Total HR FTEs = 1176GPG Employees = 110 610GPG Employees = 110 610

Volumetric GPG Average Highest Ratio Lowest Ratio

HR FTE per customer

1:94 1:183 Education

1:19 Development Planning

Cost of HR services per customer (R)

1:1328 1:9188 Sports and Recreation

1:790 Education

Baseline statistics continuedBaseline statistics continued

Service TypesService Types

1. Transaction based services (benefit from standardisation and cost reduction – efficiencies)

2. Centre of Excellence – consulting services (addressed skills paucity and spread)

Transformation Process Transformation Process –– what would change?what would change?

• 4000 employees• 95 sites• 2 main Legacy systems

and many manual workarounds

• Services regarded as “non core”

• Few technical skills –administratively focused

• No service measures

• No real performance evaluation

• Grade driven career growth

• 1700 employees• 1 Site• New technological

platform

• Services regarded as “core”

• Technical skills requirements high

• Service measure –SLA’s and LOE’s

• Performance Evaluation standard

• Broad-banded approach

CurrentCurrent FutureFuture

Transformation principles and process employedTransformation principles and process employed

• Consultative process for gathering input on the SSC business model

• Labour specifically engaged around the process of redeploying employees

• Once business model confirmed, jobs specified with standards

• 4000 Employees invited to apply for GSSC positions (1700)

• Applicants assessed against job standards (generic)• Migration of services from the 95 entities occurred in

a phased approach – 1+2 migration model• Employees migrated in concert with entity• Funds followed function• Delivery to departments to be governed by SLA

Progress to DateProgress to Date

• GSSC went “live” a year ago • Migration has not yet been completed• “Remaining Line Structures” have been established in each

entity that has migrated• Legacy systems are being revamped to provide the required

business support• Partnership Agreement in place with each department – SLA’s

in all entities that have migrated• Most of the staff who have applied and selected to join the

GSSC, have migrated• Most of the services up and running

– transaction services– Consulting services

Anticipated Operational StateAnticipated Operational State

•The document management centre will be processing more than 1 600 000 documents per year

•The contact centre (currently only operating on call volume), will handle 1800 calls per day or 430 000 calls per annum

•More than 400 000 leave transactions will be processed in a year

•More than R4b worth of goods will be procured through the GSSC, per annum

•800 000 – 1 000 000 cv’s will be processed per annum

•144 000 salary transactions will be done per annum

•Will be servicing 95 sites – all with courier services

Observations and Lessons LearntObservations and Lessons Learnt

• Translating a business design on paper into a reality

• Importance of Political support• Low self esteem of public servants –

convincing people that it CAN be done INSIDE the public service

• Not enough “internal” GPG applicants –business case potentially at risk

• Shifting business drivers from being compliance to output oriented – risk aversion

• “Initiation” competence under developed at provincial level

• Converging objectives – Encouraging a learning organisation whilst GSSC under the spotlight as a groundbreaking initiative

• Sustaining service delivery whilst transforming –contingency planning is critical

• Measuring delivery – practical application in an organisational context which is insensitive to measuring support services

• Evolving business model may be desirable but can be very confusing to business partners and employees wanting to know the “rules of the game”. Need to develop comfort around and an expectation for ambiguity

Observations and Lessons Learnt Observations and Lessons Learnt cont.cont.

• Consistent embodiment of the vision is critical! Line of site between activities and the vision needs to be as short as possible. Contextualisation is very important for those grappling with the new order

• The 30% rule of change and adaptation applies! Early adopters are important change drivers – look out for and celebrate the take up of ideas and experimentation

• Initial benchmarking of service delivery naïve – aspirations moderated as understanding matured

• Risk in giving up on aspirations prematurely• Care not to over develop – information overload!• Top 20% of the performers become overburdened –

manage this carefully – people who become passionate about the vision forget to pace themselves

• Develop values –when all else is uncertain, they can serve the organisation very effectively as a framework for thinking and as a platform for a new culture

Observations and Lessons Learnt cont.Observations and Lessons Learnt cont.

Lessons learnt continued Lessons learnt continued ……

• Changing technology platform – many layers of change has been overwhelming – but doable due to the fertility of the changing environment

• Business case – have not been able to prove the business case as expected– Resolution 7 impact– Delay in migration– Services which have not previously been delivered

• Move to costing service asap – value needs to be perceived by the clients. Major risk in shared services environment where clients are also evolving

End

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