Gartner expert tells federal department CIOs they shouldn’t fear losing power from the model. But, he adds, governance will be key to success

Canada on right track for shared services: Analyst

OTTAWA –Names can tell a lot about an organization. Take Shared Services Canada, the recently-formed branch that will slash the number of data centres and applications across the federal government.

Still in the early stages, it’s not really a true shared services model, Gartner analyst John Kost told a group of government CIOs and IT administrators here Wednesday. “The only thing that’s shared about it is its name,” he said, because it isn’t governed by its customers – federal departments.

What the bureau is really starting to do now is consolidate IT infrastructure under the whip of the Prime Minister, he said.

But Kost believes the way Ottawa is doing puts it among the leading governments in the world in modernizing their IT functions. And, he said, puts it on the path to true shared services.

“The wisdom of the prime minister here was create Shared Services Canada as an organization, move the people, take the money and fix it,” he said in an interview. “And that’s a positive thing. It still has lots of challenges, but the top down, one-organization-in-charge approach with that much authority can make things happen more quickly,” as opposed to trying to do things by committee in the early stages.

“I am very excited about what you’re doing,” Kost told the bureaucrats and IT administrators. The U.S. government is trying to do something similar and is “way behind you.”

Kost knows because his job takes him around the world advising governments on creating shared services models and has seen the wreckage. The Australian state of New South Wales tried twice and “failed miserably.” The government of Britain today is struggling. In Canada the department of Public Works tried in 2004 to mandate consolidation of data centres but the effort was voluntary and sunk.

On the other hand, Kost says British Columbia is one of the shining lights.

The Conservative government announced last August that Shared Services Canada’s goal is to cut the number of federal data centres from 300 to 20, the number of email systems from 100 to one and chop the 3,000 overlapping networks. It hopes to save hundreds of millions of dollars.
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What makes successful government shared services voyages are two things, Kost suggests: A top-down order to civil servants – particularly important, he said, in Parliamentary democracies because the government disburses money to departments and not the legislature – and a governance model.

Governance is one of those 50 cent words that means different things to different people, but what Kost means is a structure under which government departments and a shared services bureau communicate about priorities. And that was his main message to the departmental IT officials he spoke to Wednesday: Don’t worry about losing clout over IT because some functions have been taken by Shared Services Canada (SSC).

“You all as stakeholders have to understand their objectives at Shared Services Canada … You don’t have to agree with it, but you have to understand it. And they yours. They have to understand what you as a business are trying to accomplish.”

So every government department has to set up a process to decide its needs, Kost said, and SSC has to set up a process to decide how it will deliver the capacity to meet those needs.

This won’t be easy, he said. The “demand governance” in a number federal government departments for their own IT was uneven before Shared Services Canada was created. Few thought of IT priorities across the government.

“Shared Services Canada cannot be successful unless you in the ministries do your part,” he said. “At the end of the day Shared Services gets little value from asset consolidation … The big money is to what degree can we standardize the business processes that run the government.”

There has to be mutual trust between SCC and departments, he said, driven by transparency in communications between bureaucrats and IT suppliers.

That’s the lesson New South Wales has finally learned, he said – focus on business processes, not on consolidating IT infrastructure.

“Ultimately the point of a partnership is to achieve synergies so both of you are better off than you would be separately,” he told the bureaucrats

The result, he said, could be what happened in the U.S. state of Michigan, where Kost was CIO in the mid-1990s and helped oversee consolidation of IT infrastructure: Departmental CIOs focused on building new applications and serving citizens rather than maintain servers and networks.

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