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Shared Services Governance Needs More than a User Group


August 3, 2010

Governance has become an increasingly important indicator of shared services success. Government shared services tend to succeed best when government organization service customers can impact decisions by the shared services provider. Good oversight can help align service provider priorities with customer needs. For all the work on improving governance mechanisms, program offices, competency centres and working committees – we seem to be forgetting an important third party – the software manufacturer. In our view, shared services governance centres on the service customer where the government service provider aligns with government policy and the software provider.

Shared services governance needs active and comprehensive software manufacturer participation. Yet many government shared services initiatives are arms length from the vendor. The software manufacturer will pick and choose enhancements from many customers. And, it is implicit in this type of relationship, that the shared services provider is responsible for customizing Commercial Off-the-Shelf COTS software to meet service customer needs. Large development and testing organizations are created by the government services provider. The consolation: at least the total cost to customize a group of ministries, departments and agencies is less than if every government organization did it themselves.

User Groups is not Governance

The enterprise software market has created customer expectations. Customer-centricity is not one of those expectations. Enterprise software companies define the scope of customer involvement. It’s all part of the supply chain. Customers gather at User Group Conferences to learn about what will be delivered and when. When upgrades will be necessary. When products that work will be “sunsetted”. (That’s one of my favourite expression like “friendly fire” – doesn’t sound anywhere as bad as it is.)

There is limited transparency.  That’s because there isn’t visibility into the entire software development cycle.

It’s an open secret – user groups are mostly about marketing and public relations. Vendors hope to cross-sell and up-sell.

Is there an Alternative Governance Model?

Software vendors need to be committed to government shared services. After all, governments are taking the risk that consolidation and standardization will reduce costs and improve agility. This can be a 7 to 8 figure gamble. Software manufacturers need to be equally committed. Involved. Change roadmaps to suit customers.

We believe that governments should be leading vendor roadmaps. That’s one of the reasons that many government organizations prefer developing custom software. Sure, it costs more and quality is difficult to achieve – but, at least you don’t run based on arbitrary decisions made by business people thousands of kilometers away!

That’s why governments should insist on the Steering Committee strategy to pool requirements from other governments to set the vendor roadmap. Vendors should offer to embed governments directly in the software development cycle. Many vendors think that beta testing is a great benefit to customers. Except when customers are asked to test features they don’t need. Government shared services governance should include visibility into product requirements, specifications, test plans and roadmaps. Outside of the annual User Group meeting.  And beta testing – testing features governments need. That’s why we believe in transparency and governance in shared services. It forms part of our Blueprint for shared services.

After all, FreeBalance is in the transparency and governance business!

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Doug Hadden

Doug Hadden

Executive Vice President, Innovation at FreeBalance
Doug is responsible for identifying new global markets, new technologies and trends, and new and enhanced internal processes. Doug leads a cross-functional international team that is responsible for developing product prototypes and innovative go-to-market strategies.

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