Government seeks input on shared services consolidation

Push to consolidate shared services across public service

The government is seeking private sector input on a move to consolidate shared and common service delivery, including ICT.

“The government continues to implement its Smaller Government Reform agenda through targeted initiatives that challenge the way the public sector undertakes its traditional policy and service delivery roles,” a statement from finance minister Mathias Cormann said.

“The shared and common services program aims to consolidate the provision of transactional and other common corporate activities to ensure public sector corporate services are sourced in the most efficient and effective way.”

The Department of Finance has released a discussion paper that seeks to “further frame the future Australian Public Service (APS) strategy for the Shared and Common Services Programme (the Programme) through engagement with the private sector”.

The paper classifies corporate services as comprising core transactional services, value-add transactional services, and strategic services.

The program envisages a first phase involving the consolidation of core transactional services, such as accounts payable/receivable, credit card management, ledger management, pay and conditions and payroll administration.

Value-add transactional services, which include the majority of ICT services as well as asset management, learning and development, recruitment, will be the basis of a potential second phase of consolidation, the paper states.

The public service spends $3.5 billion to $4 billion annually on corporate services, the paper states.

Core transactional services account for about a third of that expenditure. The Commonwealth public service has some 85 internal service providers across 96 non-corporate agencies. Those service providers have 239 individual relationships with private sector organisations.

“The majority of agencies have indicated a desire to be consumers of services in the future as they do not consider these functions as core activities of their respective agencies. Eight agencies are currently identified as potential service providers,” the discussion paper states.

“There are over 200 unique ERP systems across the APS, with no common data definitions, processes and contractual arrangements,” it says.

“Agencies typically make investment decisions in isolation, resulting in reduced purchasing power, unnecessary customisation and a ‘seller’s market’ for licensing and consulting services.”

The ‘tranche two’ ICT services that could potentially be covered by the program include infrastructure, applications and communications, with ICT management remaining a strategic service.

Read more: Government announces ‘Digital Marketplace’ for procurement

The discussion paper is available from AusTender.

The Department of Finance is accepting submissions until 10 February.

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