Can Shared Services Canada beat Aussie failures?

Comment: Canadian budget savings remit may prove more challenging.

The head of the Canada's newly established shared services agency, Liseanne Forand, claims the country can succeed where Western Australia failed.

In a recent Canadian news report, Forand acknowledged doubts about shared services, highlighting Western Australia's decision to shut down its shared services project in July.

“We did learn from that,” she said of the failed project. “It's actually quite a bit different from what we're talking about.”

The WA project consolidated financial, procurement and human resources services on an Oracle Enterprise Resource Planning (ERP) platform.

West Australian Economic Regulation Authority's report, tabled in July, blamed customisation issues, mandatory participation and a lack of service level agreements for poor service.

A separate study by consultancy Deloitte concluded that WA’s shared services executives underestimated the effort needed to change staff thinking and work habits in such environments.

Almost six in ten on the 270 shared services executives polled said that "increasing change management would have improved their shared services journey".

Technology ranked equal third in terms of underestimated effort.

Delivering savings

Shared Services Canada (SSC), established in August, will shut down more than 90 percent of the government's 300 data centres, leaving it with fewer than 20 when the plan is complete.

It will also rationalise 100 different e-mail platforms to one all-encompassing system, with SSC assuming responsibility for the e-mail, data centre and network services of 44 departments and agencies.

Cost-cutting will likely be a major challenge for Forand's organisation, which was primarily founded on the basis of Budget savings.

The Canadian Conservative Government anticipates savings of between $100 million and $200 million annually through streamlining its information technology strategy.

A PricewaterhouseCoopers report commissioned by Public Works and leaked to Canadian Press said any savings from SSC would be long-term, with consolidation complete around 2024.

Forand said SSC would start delivering savings over the next few years, and, like all federal departments it must submit a deficit reduction plan.

E-mail will be consolidated first, she said, but other systems will take longer. “It will take somewhere between six, eight, 10 years to complete the full consolidation,” she said.

The prospects for Canada’s SME IT suppliers appear uncertain. Small providers may be forced to work with larger firms to be considered.

In an interview with Canada's Computer Dealer News, the country's Treasury Board president Tony Clement indicated that that he planned to make sure smaller IT resellers and vendors can compete.

He said SME firms need to be competitive and the government needs to make sure it gets value for money.

“We're always looking for ways to make sure the smaller players have a level playing field. But sometimes you've got to aggregate, and that may mean larger vendors and sub-contracting,” said Clement.

“All of these solutions are important to make sure we're helping the local suppliers, but at the same time have a transparent and accountable process for the taxpayers. That's the balancing act.”