However, in a workshop last week on shared services, Canada was a leading example of where things may be heading next. (workshop agenda: http://www.3ecompass.net/public/Shared%20Services%20Agenda)

[For info on our May 22-24 workshop on Portfolio Management and Communications for cross-boundary implementations: see: http://ksgexecprogram.harvard.edu/lnwportfolio]

Until recently, "shared services" meant internal administrative work -- e.g., payroll, personnel, accounting (information-intensive services), or vehicle maintenance (a physical service). The key benefit was economies of scope and scale. High-volume production for multiple departments could offer lower unit costs - and potentially higher value per unit - than if each department provided for itself.

The downside to high volume services - at least for the departments served - is loss of local control. Outside producers, especially those with monopoly power, have a poor reputation for customer service and innovation.

In analyzing where shared services are now in the public sector, the workshop came to several general conclusions: 

1. Major opportunities for efficiency remain to be harvested. Good numbers have not been adequately documented and shared, but practitioners and researchers are convinced that the benefits are real. If you haven't been planning for and investing in shared services, you should be.
2. The hard part of implementation is the soft part, not the technology: i.e., leadership and governance are the big challenges, and are not getting the kind or amount of attention they deserve. We need to design shared service projects primarily as organizational change efforts. We need to carefully design incentives for operational responsiveness (service level agreements are important, but not supported by everyone).  We need to reinvest efficiencies into new opportunities for innovation and improvement.
3. The future of shared services will embrace face-to-face customer services and outside organizations. Here is where Canada provided the leading examples. Service Canada is implementing face-to-face services as well as telephone, mail, and Internet interactions under a one-stop/no wrong door design. While portals have been getting serious attention around the globe, Canada is clearly a leader in face-to-face customer service on a shared services/multi-department basis. (See link: http://servicecanada.gc.ca/.)

Canada is also aggressive on standardizing shared services for improved productivity and transparency across multiple independent institutions, not just multiple departments within a given government enterprise.

I'm old enough to have participated in the Planning-Programming-Budgeting Systems (PPBS) work of the 1960s, looking to standardize financial management across programs and departments. Talk then was that DoD should not think of itself only as an aggregation of Army, Navy, Air Force, and Marines, but rather as a capacity for nuclear deterrence while also fighting multiple conventional battles. PPBS was developed for analyzing such management and policy issues. While the financial and personnel numbers were huge, the focus was department by department within the larger DoD structure.

That's different from what Nova Scotia is trying to do today. Shared services for Nova Scotia extend across 15 departments in the Provincial Government, 8 separate School Boards, 55 separate Municipalities, 9 Health Departments (with 40 hospitals), and also the colleges and universities of the province. The dollars managed are smaller than for DoD in the 60s, but it's amazing to see all those programs and semi-sovereign groups using the same standardized ERP software. (Here's some detail: http://3ecompass.net/library/view/compass-library/Gartner_-_Nova_Scotia_Uses_Shared_Services.pdf)

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Are Service Canada and ERP in Nova Scotia interesting but essentially aberrations, depending on a political culture and legal frameworks that will not travel well to the south? Or are they the leading edge of the next wave of reform needing only some new legal language, interpretation, and leadership?

I think I see a wave forming. Trickle down could soon become a flood. To catch this wave, better get your board ready…