The Treasury - central agencies shared services

Standardisation and structural change is backbone to sharing back-room services

Sharing “back-room” services between the three central agencies had been on the cards for almost 10 years, but it wasn’t until the State Services Commission, the Department of the Prime Minister and Cabinet, and the Treasury agreed to standardise their corporate services that there was any traction.

After a couple of false starts, the Central Agencies Shared Services (CASS) business unit was established in March 2012. It is still early days, but CASS Director, Alastair Mackay, believes the experience of getting to this point is worth sharing with other public entities considering doing the same.

Mr Mackay says the most critical element of making any shared service a success is having a shared objective and agreeing to standardise. All three agencies agreed they needed to model collaborative best practice, reduce costs, and build back-room capability. However, “the approach of trying to collaborate within existing structures wasn’t quite working and it wasn’t until they finally said ‘let’s do a structural change’ that things moved quite quickly.”

Effectiveness to us is a quality measure on how well we deliver the desired outcome. CASS will deliver a better quality outcome through the use of best practice policies, processes, and systems.

A governance group made up of senior representatives of each agency oversaw the creation of CASS, with the implementation led by Establishment Director, Denise Amesbury. Recognising the significant effect that the new delivery approach would have on staff – essentially, the corporate services teams in the three agencies would be reduced to one – expert assistance was sought from change specialists Sue Carr and the team at Right Management.

Today, CASS is a business unit of the Treasury, but with its own branding, located in the Treasury’s Wellington office. It provides human resources (HR), financial, information technology (IT), and information management services. CASS is governed as a joint venture between the three agencies, rather than as a customer/supplier arrangement. This could be scaled up at a later date to cover other services such as legal, communications, and property management.

Efficiency to us means performing a task or function with the minimum of wasted effort or cost. CASS will deliver a standard service to the three agencies more efficiently than three different variations.

CASS’s team of 73 people provides support to about 700 people in the three organisations. CASS ensures that it has a presence in each organisation with two or three staff operating from “hot desks” each day so that someone is always on site. “I’ve got a fantastic team who have come into a challenging situation of having to support three agencies with three different ways of doing things and after a challenging structure change, but they have kept everything going,” says Mr Mackay. “They believe in what they do and chose to be part of it. That’s the right kind of motivation to make things happen.”

The secret is keeping it simple. For CASS, this means ensuring that the delivery structure is embedded in each organisation and is not “too commercial”, says Mr Mackay. “We have chosen to not go over the top with an account management model but to work across all levels.” The HR team, for example, includes an HR Manager who provides strategic advice to all three “clients” and an HR Advisor who fronts for each agency, and all are in constant contact with each other to ensure consistency of both advice and service levels while being responsive to each individual agency’s requirements.

CASS has an overall budget, portions of which are charged on to the State Services Commission and the Department of the Prime Minister and Cabinet. However, Mr Mackay is adamant that certainty of charges and simplicity is more important than recalculating costs at the end of each month.

The model they have developed is based on extensive research of international models. They have drawn heavily on the UK Audit Office’s review of the success, or not, of five to six years’ experience of shared services in the UK, particularly the lessons learned.

CASS was created with the intention of minimising the risk inherent in smaller organisations of not having enough skills or career opportunities available in-house. It also wanted to provide better services by being more agile and responsive, and by encouraging innovation. Ultimately, the central agencies want to lead by example in encouraging other public entities to build strong corporate services that “deliver services that exceed the sum of their parts”. CASS will be using the Benchmarking Administrative and Support Services (BASS) scores as one of the main tools for measuring improvements.

By combining delivery of corporate services into one team and increasing its buying power, the central agencies expect to save $1 million a year, which will be transferred to the “front line”. However, in the first year, savings will be reinvested in CASS. “We have three of everything at the moment and we are picking out the best of these to apply across all three agencies,” says Mr Mackay. The payroll will be one of the first to be standardised and other IT systems are expected to also change during the next year.

Mr Mackay’s advice to any organisation thinking of doing the same is to start the change management process as soon as possible to reduce any “discontent” among staff. He also recommends constant communication within the new team and with staff in the agencies throughout the process, in the form of meetings, workshops, and newsletters. “We have found that they are three organisations with distinct cultures and CASS is essentially forcing them to work together,” he says. “We hold workshops with each part of each organisation so staff can tell us what services they need.”

But the key is to “be very clear about what you want to get out of it”. And the desire for change has to be “in the bones” of each and every organisation involved.

Based on an interview with Alastair Mackay, CASS Director, on 29 June 2012.

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