October 18, 2011Doug Hadden
Doug Hadden, VP Products
While contemplating the state of government shared services, I was reminded of the Elvis Costello version of the song: (What’s So Funny ‘Bout) Peace, Love and Understanding.
Which led me to remember the the Canadian and Commonwealth governance concept of Peace, Order and Good Government.
Government shared services is often presented as a magic pill to overcome myriad government challenges. Standardization is seen as the key ingredient to catalyze cost savings and performance improvement. Some go so far as to suggest that standardization will improve agility and accountability.
It’s not surprising that technology vendors that make money on shared services use a little hyperbole.
Standardization and Good Government
- Standardization does not improve agility. The more standard the processes, the less agile the organization.
- Standardization does not improve discretion. The more standard the processes, the less discretion public servants have to make decisions that will improve performance.
- Standardization does not improve accountability. The more standard the processes, the less ability public servants have to demonstrate merit. Accountability requires discretion and agility.
At least standardization improves government efficiency. Or does it? Generic processes can introduce inefficiencies, can limit streamlining, can add management burden.
At least standardization improves government risk management. Or does it? Standardization can provide an atmosphere of risk adversity, reducing effectiveness and innovation.
Searchin’ for light in the darkness of insanity?
As captured by Mr. Costello’s version of the lyrics, we need to consider a shared services approach that weighs all factors. My sense is that many financial management software vendor shared services implementations lack the ability to achieve the right balance between standardization and accountability.
The ideal financial management shared services platform should adjust to the standardization – accountability balance:
- Enable thick standardization rather than thin. Thin standardization takes lowest common denominator, typically a part of a process. This often leaves orphan processes that are automated through custom development – or not automated at all. Thick standardization enables government organizations to share the processes that are appropriate.
- Respect mandate and agility. Different legal and organizational mandates mean that government organizations have many unique processes. These processes should be supported by multiple configurations. Those processes that should be standard are standardized, those that are unique remain unique. All operating in the same data centre or private cloud to achieve IT cost savings.
- Bottom-up governance. Standards must change to reflect changes in government objectives and recognition of good practices. This is enabled through governance mechanisms that adapt to real-life situations. Shared services must not be static and must not inhibit change.
Standardization, agility and accountability is serious stuff indeed.