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July 2011 · Volume 93 · Number 6


Best Practices in Shared Services

by Richard Dale

While the national jobless rate and falling real estate values dominate headlines and grab our attention, you don’t need to be reminded that this country’s national economic crisis is also a local one. Cities and counties are increasingly being held accountable by the public, as well as from within.

While we all seek stronger signs of economic recovery on a national scale, the need for local government managers to demonstrate fiscal responsibility—and fiscal restraint—is more pressing than ever. But when it comes to providing services to an already stressed constituency, how can you even consider compromising quality in the face of also needing to reduce budgets?

This is precisely where the concept of shared services should be considered, with the potential to provide answers to a complex set of questions.

When considering shared services there is the promise of not just cost savings but increased quality and efficiency too. While it might be easy to say that savings can be realized through the increased efficiency of public services, this may not necessarily be the case. Managers should focus goals with the understanding that the primary mission can be to improve the quality and the efficiency of the services delivered—entirely separate from the issue of cost cutting.

Where to Begin

Before even considering the best place to start, managers need to carefully examine whether or not this shared-services exercise has the buy-in of all department heads and elected officials. Interview these leaders to understand what is important to them. If they tell you to stay away from such public touch points as the fire or police departments or the department of public works, then focus should be on the administrative and back-office functions that are less visible to the public.

Managers also need to be well versed in the details of current structures in place, have a full view of staffing (both full-time and part-time employees), be aware of the effective conduits available for communicating to their constituency (websites, newsletters, town meetings, and social media) and know ultimately that they need to develop a methodology for measuring success.

When examining staffing, be aware of any labor agreements that are in place. As stressed at a shared services session held during ICMA’s 2010 Annual Conference in San Jose, California, managers should also communicate with the public first to find out what they think. Explore expectations, solicit suggestions, and then be prepared to address and incorporate the feedback.

Consider possible outcomes upfront, and try to be realistic. For example, don’t go into an exercise, internally or with a third-party, with the mandate to save money, to improve quality and efficiency, and to not reduce jobs or headcount. This unrealistic expectation will spell failure before you even start. Simply stated, if you set out to accomplish everything, you may wind up with nothing.

It is also helpful to have a clear “how it is now” and “how it will look” models to serve as your roadmap to assist in reaching articulated goals. Again, these models and goals should be shared with your staff and their feedback solicited and acted upon.

You should also present your views on possible outcomes, whether you take a conservative approach—combine jobs and realize savings through reduction in salaries and benefits—or you foresee a more aggressive approach—combine jobs and restructure departments to make for a more efficient structure. Keep your staff colleagues on the same page with you throughout the entire process with transparency and regular communications.

Set Priorities

To begin with, clearly define and then select a specific function or service to review. Assume you have gotten the feedback from department heads on the visible services as fire, police or public works departments, and these are off the table right now.

Consider starting with nonpublic touch points or areas less visible to the local population, perhaps administrative or back-office services. Examining the functions of human resources or information technology functions across all departments will be less obvious to the public and less politically charged, yet can have a meaningful impact on the services you deliver to the people.

It is also critical, although this may sound basic and simple, to be fully versed in your state requirements and laws regarding public referendums. There may already be statutorily defined steps to take when going about change. You want and will naturally benefit from the public’s support, and there’s always the need to be familiar with the state-mandated path that any recommendations or proposed changes may have to take.

Options to Consider

Once you have chosen a non-client facing area—perhaps an administrative or back -office function—it is important to take a look at functional overlaps. This holds true whether you are considering consolidation among multiple jurisdictions or just focusing on one locality.

Consider combining multiple administrative departments into one centralized department or seek to keep a decentralized structure but share services (computer systems, phones, facilities) and common functions. You can also aim for increased service levels by standardizing technology and creating unique operating policies and procedures across these multiple departments or municipalities.

The goals for shared services that do not require a lot of work can also be the often-overlooked area of emergency communication centers or 911 dispatch services. While these areas appear to have the potential for savings and improved efficiencies they are sometimes not practical to combine due to geographic considerations such as distance.

Increasing Your Chances for Success

While each locality is unique, there is benefit from studying the experiences of others. There are numerous success stories across the country that can’t all be featured in this space on governments making the commitment to cut expenses but not compromise on efficiencies and quality of services—and with good results. Here are a few examples.

After nearly one year of planning, the cities of Sandy Springs and Johns Creek in Georgia opened a joint 911 center known as the Chattahoochee River 911 Authority, or ChatComm. Both cities contribute operating funds to the center. So far, the shared service has been working and discussions are currently taking place with other neighboring cities interested in joining ChatComm services.

In Wyoming’s Converse County, the cities of Douglas and Glenrock assessed their emergency communications centers and examined the feasibility of the possible consolidation into a single center. Through the study, the benefits of consolidating were shown, and it is expected that the project will be completed later this year.

And, in the state of New Jersey, Bergen County conducted a study and found efficiencies in shared services among the county’s parks department and the public works and operations divisions.

Final Word

Naturally change is hard; employees inherently are often resistant, and the public is typically wary. But remember, too, that a focused look at services presents an opportunity for new and innovative thinking and possibilities for a revitalized community. A local government manager is like a baseball umpire—an umpire’s best games are when no one is even aware they are present.

There are no controversial calls and everyone just remembers a smooth game and possibly, who won and who lost. When implementing plans for shared services, the same goal applies: seamless execution with no disputed calls.

Richard Dale is chairman and chief executive officer, iXP Corporation, Cranbury, New Jersey (rdale@ixpcorp.com). iXP is an ICMA Strategic Partner (www.ixpcorp.com).

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