Office of Shared Services Case Study
Office of Shared Services – Western Australia Government
Government agencies and departments across Australia have been under pressure to deliver best value services while demonstrating cost conscious performance. It has been recognised that the shared services approach has been demonstrated to be one of the most effective and efficient structures of aggregating core services, giving participating agencies focus on their particular functional and operational objectives.
The Office of Shared Services (OSS) was established on 1 July 2005 to provide corporate services to general agencies of the Western Australian Government (excluding Health and Education & Training). The implementation of a shared services model is a key reform initiative of the Western Australian Government. This aims to reduce costly duplication and to deliver more efficient, better coordinated services. With 102 agencies on its umbrella, totaling 46,000 users when fully implemented, Treasurer Eric Ripper stated, “When it reaches its full potential in 2008, the Shared Corporate Services project is expected to deliver savings to WA taxpayers of $55 million a year.”
Fundamental to the shared services model is the philosophy that the Shared Service Centre will be “centres of excellence”. As well as providing a consistent high standard of support, it will have a strong focus on professional development and the delivery of best practice services.
Moving towards a Shared Services Centre
In June 2002, the Premier Geoff Gallop, announced the formation of a Taskforce to undertake a Review into the Effective Delivery of Government Priorities. The Taskforce studied each agencies functions, services and programs in detail to determine their efficiency and effectiveness. At that time, there are many divergent systems used across the WA public sector for corporate services functions such as accounts payable and receivable, payroll and information management. In the largest 49 State Government agencies alone, there are 21 finance systems and 12 different payroll systems.
In early 2004, the Department of Treasury and Finance advertised a Request for Proposal (RFP1) for the development and implementation of system solutions, which includes a range of corporate services applications including Financials, Payroll, Human Resources and Electronic Document Management functionality. After a comprehensive and rigorous process, in October 2004, the $68M contract (RFP2) was awarded to Oracle, with ASG subcontracted to provide support services. This positioned Oracle’s eBusiness Solution 11i as the central Business System in the OSS function. RFP 3 covered systems integration services, whereby agency data will be migrated to the OSS business system. The last of the four major contracts (RFP4) equips the OSS with application and infrastructure management services for the ongoing operation of the Shared Services facility. The final 10 year $87.8M contract, one of the most significant, was awarded in December 2005, to a consortium lead by ASG comprising CSC, IBM, Amcom, RedHat and HP.
The ASG consortium provides OSS significant IP, local and global coverage (over 650 technical specialists in Perth alone), incumbent telecommunications knowledge and expertise backed by the largest and most successful hardware supplier. The scope of the contract includes:
- Provision of high availability infrastructure and disaster recovery capability
- Provision of managed infrastructure services covering enterprise server management, desktop management, service desk, security, network
- Provision of applications services for the range of Oracle and EDMS systems implemented
- A range of architectural and consulting services
- Project and Service Management services.
It has defined clear lines of accountability with ASG taking responsibility for the Architecture, the Oracle technology, and E-Business Suite applications including Oracle Collaboration Suite, and the Oracle middleware and Portal components. On the other hand, CSC takes responsibility for the infrastructure and the Document Management functions.
ASG, in partnership with OSS, completed the critical service transition phase in April 2006. The Financial application commenced live operation in July 2006, with a multi-year roll in program for the constituent agencies. The full application suite including HR/Payroll is due for completion mid 2007. The project has required a close working relationship with Oracle, the successful RFP2 vendor, particularly in the design and integration of the overall architecture and solution deployment.
With estimated savings of $50M a year, the shared services approach will allow all agencies, irrespective of their size, to receive the same standard of service. This will be of particular benefit to smaller agencies, which in the past have often been unable to secure a full range of corporate services using in-house resources.
It is envisaged that the target savings will also allow the Government greater funding flexibility in addressing the priority areas such as Health, Education and Law and Order.