The challenge for government is to make the most of the existing workforce. This can be done with training and development programs. Retention can be addressed by making straight-forward business processes as interesting as possible. But once an employer has exhausted these strategies a shift towards other sourcing arrangements might need to be considered
Shared services and strategic sourcing The most common approach within the public sector is shared services — bringing similar back-office activities such as finance, HR or IT together in one location. This consolidation is frequently accompanied by streamlining and standardising processes. Often cross-departmental sharing is required to reach the economies of scale required. Research by KPMG’s Global Government practice and the Economist Intelligence Unit shows that 60 percent of public sector organisations have implemented, or plan to implement, shared services in the next two years.
Organisations are increasingly aware of the savings and service level improvements that can be made through strategic sourcing decisions. A survey by The Hackett Group showed that commercial companies that had adopted an HR shared services model reported reduced process costs of up to 80 percent. A 2007 KPMG International sourcing survey shows that 89 percent of organisations surveyed plan to maintain or increase their current level of outsourcing.
Changing attitudes toward sourcing alternatives reflects a desire to improve the overall quality of public services delivery. Governments are willing to consider a variety of options to leverage their people and skills to maximum advantage. If an organisation needs to augment their core staff with external resources, and they feel this can be managed well, there are a range of possibilities to consider.
Under pressure to provide better services for less money, many government officials expect to see the popularity of shared services grow. An increasingly large number of public and private sector organisations now appreciate that using shared services and other sourcing arrangements - especially in basic transaction processing -is a way to achieve better value for money. As the success of well-managed shared services implementation grows across governments, there is a real opportunity to learn from each other.
This has been adapted from a KPMG International Government article.