Eight small Alberta municipalities – including Cold Lake, Okotoks and Taber – are making big leaps in their ability to serve constituents, improve operational efficiencies and reduce the costs of delivering municipal government services. How? Through the use of shared services, a relatively recent trend in Canada that allows towns and municipalities – and their residents – to share the costs and reap the benefits of implementing the latest software and technology systems.
Until now small Canadian municipalities have faced numerous challenges when trying to implement the technologies that bigger cities and senior levels of government are using to improve their operations and better serve their constituents. Smaller centres simply did not have the financial or human resources required to pay for and utilize the applications, nor the capacity required to advance a comprehensive technology strategy from research to rollout, and finally, to return on investment.
Today, the eight Alberta communities are surmounting these challenges through shared services, which take critical processes the municipalities have in common and deliver them through a single service provider. Shared services allow the municipalities to concentrate on improving the quality of services delivered to constituents while reducing their operating expenses – a win-win situation that is hard to ignore.
In Alberta, the Alberta Urban Municipalities Association (AUMA) – a province-wide association of cities, towns and villages – has led the effort to bring cutting-edge technology to smaller centres to support improved financial, online and human resource systems. Recently, the AUMA completed the design of the business template for a new shared application, dubbed MuniShare.
In addition to state-of-the-art financial and human resource services, the template recognizes the unique needs of each municipality and incorporates a best practices model.
The end result is that participants share their successes to help one another find and implement the best ways to utilize their new technology capabilities.
The AUMA and the eight municipalities are well on their way to adopting the shared services program and realizing the numerous benefits they were seeking, including:
Cost savings
More efficient services for their constituents
Enhanced administrative processes
Better transparency
Improved accountability
Another key advantage of utilizing shared services relates to the maintenance of the systems. With each separate municipality connecting into one core system, maintenance can be handled in one location to service the entire network.
Unlike prosperity cheques, shared services are not an Alberta-only phenomenon. They are applicable to municipalities – and indeed provincial and federal agencies, departments and Crown corporations – throughout Canada. With federal and provincial governments under pressure to reduce costs while providing enhanced services, shared services are gaining traction in government, Crown corporations and agencies, particularly in the resource intensive areas of health care and education.
For example, the province of Nova Scotia created a shared service model that has helped it achieve greater economies of scale, resulting in better use of its resources and employees’ skills. The province encourages a shared services model across government departments, agencies, municipalities, education providers and health-care organizations. The model has created consistent implementations for financials, HR/payroll and maintenance management applications while allowing participants to use industry-specific applications to serve their unique needs and maintain their operational independence.
The benefits that the province is enjoying speak for themselves:
Lower total cost of ownership, saving the province’s taxpayers approximately $43 million since its inception
A single view of the province’s operations, the result of unifying back-office systems through one provider
Successful, ongoing rollout, with multiple departments running a standard back-office system
Unified support programs that minimize personnel needs
Expanded internal capability, adding expertise and capacity to support the public sector While the benefits of shared services are real and proven, the lack of a standard method of calculating return on investment (ROI) in the public sector may be slowing adoption of the model. The lack of an accepted ROI model in a political realm, in which results are determined by more than financial metrics, can complicate efforts to gain support for significant public sector investments. Shared services are no exception.
However, public sector experts from institutions such as Harvard’s John F. Kennedy School of Government and the Centre for Technology in Government at the State University of New York in Albany recently met with SAP customers, partners and colleagues to launch a public sector ROI initiative, looking at financial, social and political ROI. The project aims to identify key needs, challenges, research areas and approaches for developing a universally accepted and non-proprietary method for public sector ROI analysis. The venture will provide a solid foundation that public sector organizations across the country and around the world will be able to utilize to determine the benefits accrued from investments in projects such as shared services.
With governments under increasing scrutiny to reduce costs, become more efficient and improve services to constituents, shared service models offer compelling benefits to all levels of government. The road has been paved by provinces such as Nova Scotia and those eight small municipalities in Alberta. Supported by efforts such as the public sector ROI project, there is every reason to expect that similar benefits may well be in store for other governments that are yet to move forward with their own shared services model. 068277
Michael Tremblay (michael.tremblay@sap.com) is Senior Vice President Public Services for SAP Canada Inc., responsible for the company’s public sector operations in Canada.