Taken at face value, the UK Government’s Shared Services Strategy is a much-needed solution to a complex and common problem. For years, individual government organisations have operated in technological isolation – using different applications from diverse technology vendors to perform similar enterprise resource planning (ERP) functions involved in HR, finance, property and procurement.
Likewise, some (primarily front-office) functions have transitioned to the cloud while others (usually back-office) are still running with on-premise, legacy systems, adding to the Government’s Technical Debt.
This siloed approach has fostered inefficiencies, increased complexity and has hampered organisations’ ability to share data with each other. It has also made it difficult, if not impossible to track end-to-end processes across the Government due to differences in the way data is captured and held.
These problems have only been exacerbated by the pandemic as home working and isolation measures have created a greater reliance on digital services. This in turn has placed additional stress on civil servants who are constantly required to learn new skills to engage with and deliver citizen services, and potentially move across departments within the Civil Service to support with capacity.
Announced in March 2021, the Government’s Shared Services Strategy for Government is designed to address these problems. It will consolidate digital services across five multi-department shared-services centres, categorised as ‘Defence’, ‘Overseas’, ‘Synergy’ (previously called ‘Delivery’), ‘Matrix’ (previously called ‘Policy’) and ‘HMRC-led’. The Strategy provides a roadmap for more streamlined and harmonised services featuring cloud-based modern ERP systems that are user friendly and easily integrated. According to Matthew Coats, the Director General, Government Business Services: “[It] will allow the Civil Service to deliver insights; continuously improve to drive down costs; develop accessible, intuitive, and useful systems for civil servants; and innovate and embrace competition.”
The Government has high aspirations for its digital transformation strategy – and rightfully so. Over the past decade, private enterprises have recognised enormous efficiency, integration and cost-saving benefits from similar cloud-transformation programmes. However, there are some considerations, unique to the public sector, which public sector change leaders must address before embarking on what will ideally be a long-term partnership between the organisations and the technology providers chosen to deliver results.
- Accept that change is inevitable
“If it’s not broken, don’t fix it, right?” In this case: wrong. One of the key challenges that public sector organisations will likely face in their move to a Shared Services model will be leaving behind familiar systems that have been highly customised to meet their organisation’s perceived needs.
However, even without the Shared Services Strategy, most legacy systems being used in the public sector today are already aging and out-of-date. Many organisations still don’t have a clear pathway to the cloud for their back-office systems. Existing systems need to be replaced to keep pace with technological advancements and to benefit from next generation, modular cloud ERP platforms, processing capabilities, automation and cybersecurity safeguards. Some vendors may compare moving to a new ERP system to a simple upgrade. In truth, completely new systems and processes will need to be put in place, data will need to be migrated and the user experience will change, for the better.
Because of this, it may be easier and more cost effective for organisations to move to a new technology vendor to support the transformation programme, rather than remain with an old provider that doesn’t provide the right level of technology capabilities, services or support.
- Focus on value over price
In the past, traditional public sector procurement methods have been primarily based on a very simple evaluation criteria: Allocate a high percentage of marks to the lowest price.
This approach has historically not delivered the best outcome for customers, resulting in delayed projects or solutions that don’t meet the full scope of the requirements. These ill-conceived projects then must be managed through change control, leaving behind a trail of higher costs and at best strained and at worst completely broken relations between the customer, ERP provider and system integrator, in the courts and for all to see in the public domain.
Moving forward and when transitioning to the cloud, we all need to consider an alternative approach to procurement, by adopting a commercial model that makes all the parties work together with a common goal and shared governance. A commercial model where all the suppliers are more accountable and have ‘skin in the game’.
The best outcomes occur when all parties are prepared to engage in a spirt of openness. Where the ERP vendor can really get to understand the business pains relevant to each department and structure a commercial model that is linked to deliverables, outcomes and benefits. Mitigating risk and delivering a much greater return on investment and faster time to value.
- Embrace and simplify working with commodity cloud hosting providers
While public sector organisations will always want the assurance of working with an experienced ERP vendor, they should also benefit from the flexibility and economy of scale that come from working with the some of the most innovative dominating cloud services – known as commodity cloud hosting providers or hyperscalers. In fact, many public sector organisations are already working with commodity cloud hosting providers; it makes sense for them to choose a partner who will continue to leverage and scale the exiting relationship.
There is incredible power behind the innovation and sustainability that commodity cloud hosting providers’ data centres deliver, which means data centre resources are easily accessible, cost effective, reliable, and scalable. That scalability means having an ERP partner that can grow with the organisation, deliver on a multi-cloud strategy for its ERP business applications or adapt to new requirements are strategically important considerations. This is especially essential in a fluctuating world.
- Think adoption not adaptation
The civil service is not a single employer; individuals are contracted to their department. As policies and processes have diverged from organisation to organisation, so too have technology processes, as they have been customised to meet the specific needs of its users and department.
At first glance, the shared services strategy seems to put paid to the ability of organisations to use programmes customised to their organisation. Yet, while it’s true that the Strategy will emphasise common data standards and greatly increased data sharing across departments, a next generation, modular cloud ERP system will still allow departments to configure their solution to a way that works best for their organisation, while still working within the frameworks of the larger organisation / cluster.
- Choose secure in-country services
The public sector has tight regulatory requirements which increasingly require secure in-country cloud services. This allows organisations to support the UK’s Critical National Infrastructure in areas such as healthcare, transport, education, policing, central and local government, and utilities.
The impact of this can’t be overstated. By modernising and transforming systems through cloud transformation, services are simplified, unnecessary costs removed, and capacity is created for staff, such as frontline workers, freed up to carry out crucial roles – without being waylaid by cumbersome and time-intensive administrative systems. In addition to driving significant efficiencies, harnessing public cloud with sensitive data will facilitate better insights, driving faster and improved decision making to transform citizen services.
The Shared Services Strategy is an ambitious undertaking but one that is both achievable and beneficial to everyone involved – the Government, the civil service and citizens. It has unlocked an unprecedented opportunity to rethink how the Government interacts with its citizens and points the way to a more enabled, empowered and ultimately progressive future of government services. We at SAP welcome the Strategy and look forward to the opportunity to partner with you in delivering a successful programme.
Satpal Biant, Head of Public Sector, UK & Ireland