Shared service delivery: 4 tactics from the private sector

This blog post was written by my colleague John Weigelt. You can read more of his posts here.

Governments everywhere are looking for opportunities to do more with less. One approach is to create a shared services organization so services can be consolidated across departments or agencies (the city of Frankfurt is a good example). Private-sector product managers are great at this. They’re the master jugglers who are responsible for delivering the right products at the right time to the greatest number of customers.

Product managers know how to find the sweet spot between features, functionality, cost, and schedule. Their best practices can be applied by public-sector agencies when developing a shared services environment:

1. Know when to say no.

Some products have a bewildering number of moving pieces and considerable complexity. Product managers often address this complexity by demanding consistency and resisting one-off additions. The same tactic can be used in a consolidated services environment, where a single government agency must address a very large number of stakeholder needs. The approach: maximize scarce resources by providing services with the broadest applicability while minimizing the complexities that often arise from a small number of unique needs. Sometimes this means saying no to highly specialized features that are required by a single agency’s program.

2. Scale, scale, scale.

Product managers try to create products that are useable by a large audience; customization often reduces that audience and adds cost and time—not only while the product is being developed but throughout its use. For a great example of how scale can drive efficiencies and cost savings across a broad community, check out our Economics of the Cloud whitepaper. Scale is one of the most important principles for any group—private or public—that wants to maximize its investment in shared services.

3. Empower others.

It can be unnerving to hand the reins of service delivery to a third party. You might assume that flexibility will evaporate, but that doesn’t have to be the case. Savvy product managers know that they can preserve flexibility and increase customer confidence by providing a range of configuration options on top of their services. By including flexibility within their offerings, shared services organizations can provide a consistent foundation while empowering the community to adjust the service to suit their individual needs. In a sense, the end user remains empowered to make use of shared services in a way that reflects their own perspective and needs.

4. Think platforms.

The consistent foundation for a product or a group of services becomes a platform on which many line-of-business applications can be assembled. One great example of this in the physical product world comes from platform thinking in the automotive industry. Ford developed the C-Car platform, which shares design, engineering, and components among 10 different cars. This reduces cost and complexity while helping Ford meet a variety of consumer needs. Similarly, the Microsoft CityNext program initiative provides a modern solutions platform that shared services organizations can use to deliver common services while giving their stakeholders a consistent foundation for innovation. This foundation provides scalable and repeatable services that will help drive efficiency and economies of scale within governments.

When shared services leaders in the public sector begin to think like private-sector product managers, they have a better shot at finding the right balance between features, functionality, cost, and schedule for service delivery. The result: meaningful solutions, delivered to the broadest number of constituents in a way that exceeds objectives for effective and efficient service delivery. It’s a business model that makes good sense—for private as well as public entities.

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Great read. Agree with the point on customization. A true shared services works like any organization – it should know clearly what it does and doesn’t do and it’s point of view (Starbucks isn’t selling steak. Starbucks isn’t the cheapest coffee – it’s the freshest, high quality)