Why business models matter…and how Service Canada shifted the centre of its universe

…and how Service Canada shifted the centre of its universe

Many organizations assume that success is determined primarily by their product and service offerings, how well they meet customer needs, and on the efficiency and effectiveness of their operations.

But in today’s rapidly changing and complex environment, the business model is becoming equally important and arguably inseparable from the product and operational strategies of an organization in determining how it achieves success.

A business model defines how a business creates value for its clients, stakeholders and shareholders. It defines the core functions that an organization will excel in, the structures and competencies that it needs to execute on their mandate and the relationships and strategies it will establish with its partners.

A successful business model also defines the competitive advantage that will set it apart from others and make it “best in class.”

Getting the business model right is often the difference between surviving or not, between being truly transformational or simply incremental. Many business models in the private sector demonstrate a simplicity, precision and focus that can be communicated in just a few words, such as:

  • Procter & Gamble’s transformation of its former in-house research and development process with a new “connect and develop” model to leverage external networks of inventors and scientists for new product development;
  • Dell’s “direct model” based on the premise that the most efficient path to the consumer is through a direct relationship, with no intermediaries to add complexity and cost; and
  • eBay’s “automated online auctioning” business model pioneered in order to innovatively and instantaneously match buyers and sellers.

Business models are as relevant to the public sector as they are to the private sector. For many years, governments world-wide have delivered service to their citizens through a traditional programmatic business model. This model is characterized by multiple policy departments, each with its own set of programs and service delivery channels.

For some time, it has been evident that this model is complex and frustrating for citizens to navigate, expensive and duplicative, and focused on transactions, not outcomes. In Canada, the situation has been much the same.

Putting citizens first

But today, Canadians are demanding better service. As the Citizen’s First surveys have shown in this country, they want personalized, high-quality service. They expect government to provide service that is comparable to or better than what’s available in the private sector.

There are better ways. The successful deployment of the new citizen-centered business model is central to the value proposition of 21st-century government, in terms of service relevance, innovative design and delivery, and overall performance.

Service Canada is the Government of Canada’s one-stop service delivery organization for service to individual Canadians. Its mandate is to provide access to a range of government services and benefits for Canadians. The business model that supports Service Canada’s mandate is the “citizen-centered” business model that focuses on people, not programs, and puts the citizen at the centre of how government delivers service.

There are four defining concepts underpinning this new business model:

  • Focus on the citizen: A citizen-centered organization connects people to the programs, services and information they need, regardless of who delivers them.
  • Deliver one-stop government service: One-stop service ensures that government is easy to find, easy to deal with and easy to access.
  • Integrate citizen information: Instead of asking for the same information every time a person accesses government, a citizen-centered organization asks for the information once and remembers it in the future, while strengthening privacy and security.
  • Collaborate and partner: Bringing services together in a way that is easy and integrated requires extensive collaboration and partnering, as organizations work together to leverage their collective potential to create new value for citizens.

Service Canada’s mission is to apply these concepts to improve service, lower costs and, above all, achieve better outcomes for citizens. The implications of a new citizen-centered business model are significant and challenging. While much progress has been achieved, there is much that remains to be done. Realizing service transformation necessitates systemic change both within Service Canada and across the public sector as a whole.

In transformation, resistance to change is both unavoidable and natural. Indeed, such resistance can even be healthy in encouraging thoughtful discussion on the prospective risks and benefits in devising a new approach to doing business.

Stemming from these discussions, there are three common concerns that arise on the suitability and potential of Service Canada’s citizen-centered model. They are: firstly, the dangers of separating policy and service; secondly, a conception of Service Canada as merely a front office window; and thirdly, the perils of weakened accountability through an integrated government-wide service provider.

Dispelling common concerns

The creation of Service Canada signifies a strengthened focus on both the policy and service delivery functions within the Government of Canada. The new service delivery model recognizes the importance of both functions in achieving outcomes for Canadians and provides clear accountability for each.

Service Canada also provides a clear point of accountability for service in the federal government that will strengthen the government’s ability to serve Canadians and meet their needs.

At the heart of Service Canada’s business model is the recognition of the importance of gathering information about the needs of Canadians through service delivery and sharing that information across government to inform the policy and program development process.

A well-performing delivery network integrated and aligned with policy departments can infuse a cross-pollination of feedback and ideas by better incorporating the views and experiences of client-facing staff and citizens into policy-making systems.

The second concern is based on a concept that Service Canada should remain exclusively the initial point of contact with Canadians. It supposes that moving beyond a “front-end” single window toward more integrated “back office” functions means a massive agglomeration of departmental operations that will be inflexible, inefficient and unwieldy.

Yet the notion of a citizen-centered business model that separates front-end client service from back-end processing is out of step with global trends and best practices. Leading service organizations are moving very rapidly and deliberately to integrate their front-end and back-end business processes to better serve their clients at the point of contact.

Gone are the days of asking clients to complete and send multiple forms in order to conform to internal processes. The citizen-centric business model is about achieving better service at reduced cost via a more integrated and responsive service architecture, predicated on improving the user experience.

The contention that an integrated service provider risks weakened accountability, by effectively dispersing it across many partners, reflects the need to establish a new accountability framework.

The governance model should respect both traditional notions of ministerial accountability and collaborative or shared forms of accountability that are necessary for horizontal initiatives like Service Canada, including accountability to partners and citizens, and for results.

For example, with strong support from the premier, New Brunswick established a standalone crown corporation, Service New Brunswick, to work horizontally across all provincial departments and municipal governments to achieve integrative outcomes.

British Columbia, by contrast, has established a less autonomous but no less empowered unit within a central agency to foster such collaborative ties, leveraging in turn a refashioned and integrated delivery network jointly designed and maintained with industry. And Ontario has recently begun to aggressively move toward a one-stop, citizen-centered service model strongly rooted on service guarantees.

In the U.K, the minister responsible for government-wide transformation reports directly to the Chancellor of the Exchequer. As importantly, however, this minister is supported by two cabinet sub-committees collectively responsible for implementing two key dimensions of the transformation agenda: information sharing and identity management.

In short, governments have embraced the new citizen-centered business model to provide the political direction for more effective, collaborative and integrative outcomes.

Public servants, in turn, must be empowered with the legislative tools and resources to achieve such outcomes. Both parties play separate roles, but in a manner that is unified in purpose: namely, better service and better outcomes for the citizen.

Pursuing service excellence

The citizen-centered business model is based on the premise that in order to optimally create service value and better outcomes for the public, government organizations must adapt accordingly.

This transformation is not one for Service Canada alone: recognizing interdependence is essential.

Service Canada is therefore engaging with all stakeholders, both internally and externally, to foster greater awareness, dialogue and innovation in terms of how decisions are made, and how authority and responsibilities are parceled out – and shared. The quest is how best to achieve more effective policy outcomes and efficient service.

For Service Canada to succeed, the entire Government of Canada must succeed in embracing and implementing this new business model predicated on people, partnerships and performance. A more efficient, integrated and adaptable business service model means better results for government and a better deal for the public, as both taxpayers and clients of their public service providers.

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