Grant Thornton’s Transformational Center of Excellence runs Transformational Programs consisting of a series of focused projects in State and Local Government. Smaller projects provide faster results and improvements resulting in more immediate improvements (quick wins). In addition, this type of program results in continuous service improvement across Government. Attention must first be paid to structural improvements and funding mechanisms due to dependencies. A Government wide Transformational Program consists of:
- Structural and funding improvements - Start with improving Shared Services as the rest of Government is dependent on these core services. Any improvement here will be multiplied by resulting improvements across Government. In addition, during the second phase improvements will be dependent on support from shared services. Financial improvements typically include compliance for services using intergovernmental funds, setup or improve Internal Service Funds (ISF), setup or improve Working Capital Funds (WCF). Other improvements may require legislative initiatives which require time.
- Government agency, department, and division - The next phase leverages shared service improvements by reducing duplication: moving common elements to Shared Services but retaining unique subject matter expertise. Here it is important to be mindful of legal and compliance requirements and to have subject matter experts available by context.
- Government Sponsored Organizations (GSOs) - Typically includes Education, Health, and other community services. Here emphasis is on leveraging Government suppliers instead of Shared Services. Again, it is important to be mindful of legal and compliance requirements and to have subject matter experts available by context.
Emphasis is on making improvements continuously until ROI determines that it no longer makes sense for outside experts to perform improvements. At this point, an internal continuous service improvement process keeps the service model successful.
Shared services focus
Shared services is the management and provision of a service by one part of an organization, group or government entity of a service or process that could be centralized to serve multiple business units, components, agencies or entities. Often, such indirect or back office services are duplicated across internal corporate business units or entities (i.e., subsidiaries) or government agencies, and the centralization of the service is seen as a way to achieve efficiencies and effectiveness. The service is then managed as a shared service to benefit applicable internal or external customers under a shared service management framework or shared services center (SSC).
The managed, funding and resourcing of the service is shared and the shared service provider acts as a business within a business or a government agency for other government agencies, the logic being the receiving entity is seen as a customer. The shared service(s) should be strategically planned, optimally managed, and accountability shared appropriately by the provider of services and the customer receiving the services.
Grant Thornton has worked with migrating and standing up shared services both in the private and public sectors, as well as optimizing and transforming existing shared service models. Typical services that lend themselves to a shared service model or center include:
- Information Technology (IT), one of the fastest growing costs in both commercial and public sector organizations, and an areas where cloud and software as a services (SAAS) is furthering the concept of shared services.
- Human Resources (HR), a highly transactional area and one that can maximize the benefits of streamlined processes and applications available to realize HR transactional efficiencies.
- Procurement/ acquisition, from supply chain to sourcing, models for consolidation, vendor management, sourcing decisions including outsourcing/insourcing are available if the governance structure exists to take advantage of them.
- Facility and fleet management, although some of the earliest models of shared services, have new technology and perspectives that can lean out and optimize capacity, demand and cost savings.
- Finance, a popular candidate of cost savings, again has emerged as a front runner as the economy places emphasis on improving areas of the organization that have traditionally lagged in terms of value, agility and responsiveness.
Grant Thornton leverages its core competencies in the corporate communities where we work with executives including the Chief Executive Officer (CEO), Chief Operating Officer (COO), Chief Financial Officer, Chief Information Officer, Chief Procurement Officer (CPO), and Human Resources Director to improve processes, assist employees in adjusting to new corporate procedures and leverage technology optimally to instill a culture of continual improvement. Likewise, our work across all sectors of government have assisted new Governors and CIOs, agencies that want to improve and transform, and government entities that wish to remain a leader both in achieving its mission and managing its enterprise.
Grant Thornton currently has multiple projects working with some of the most exciting private and public sector entities to maximize shared services, innovate, and transform. Check out the pieces below to learn more.
A strategic IT service management (ITSM) model is key to successful shared services
Information Technology (IT) shared services are becoming critical to the sustained economic health of cities, counties and states. Over the last decade such models have allowed flexibility in service delivery, optimization of resource sharing and savings, and enabled state and local government to innovate more rapidly. This service delivery evolution has been propelled by a combination of better technology and increasing demand for transparency while staying within tight budget and staffing constraints.
Category management – Transformational change in public & private sector procurement operations
Advances in technology, changes in service delivery models, and increased competition are forcing public and private procurement organizations to reconsider the way they source goods and services for their businesses. Procurement organizations now place greater emphasis on agility and flexibility when making purchasing decisions with the goal of operating as a professional enterprise with an in-depth understanding of the buyers and suppliers in their value chain. This shift in priorities requires a new operating model that improves the integration of the sourcing process with other key business processes and separates strategic and tactical activities within the acquisition lifecycle.
Grant Thornton shared services whitepaper for the United States Department of Commerce (DOC)
Service quality, governance, and cost issues are driving DOC to investigate other models to effectively provide administrative services through a shared service model.
Shared services: Driving success using cost chargeback model
Government is a Service Provider. In today’s reality, much attention is focused on deciding policy, but the end result is: Government provides services to citizens, itself, and 3rd parties. Fiscal constraints and innovation are breaking down barriers between Government Service Providers. There is recognition that commonly used services can be shared to improve Outcomes:
What has your Working Capital Fund done for you lately?
With federal budgets declining as far as the eye can see, agencies should take a hard look at their Working Capital Funds (WCFs) to see if they are providing maximum benefits. WCFs are a useful method for funding centralized administrative functions. However, without active management, a WCF can become more liability than asset. WCFs share a wide range of challenges, risks, and issues in today’s environment. At a recent symposium hosted by Grant Thornton, federal WCF managers identified fund insolvency, cash flow issues, inability to recover full costs and inequitable cost recovery methods as fundamental issues in optimizing WCF operations. There was universal recognition that it takes thoughtful analysis and review to transform the WCF into an efficient and strategic device.