Shared Services and Public-Private Collaborations

Shared services can be a powerful aid to any organization, but it's not always easy. It can be a complex process, involving a lot of work. That's why many governments often collaborate with private-sector companies. The private sector has much more experience with shared services, and that's something the public sector can lean on.

The public and private sectors collaborate on shared services in several ways. The most common are: 1) public sector hires private-sector shared services consultant; 2) public sector hires private-sector vendor for shared services; 3) a public-private partnership is created to share services; or 4) several government agencies form a cooperative to buy services from the private sector.

Many predict that we'll see more of these types of collaborations because they often make a lot of sense. One expert who believes that is Samuel Poston, senior vice president of ScottMadden Inc., a management consulting firm that works with both the public and private sectors on shared services. Poston said his company has been consulting for an increasing number of government agencies, partly because of its extensive private-sector experience.

"We worked with NASA and the State Department, and they liked the fact that we've done a lot of work in the private sector," said Poston. "We know what leading-practice, private-sector companies are doing globally."

The private sector has a big head start on shared services, and that can benefit governments that are diving in themselves, according to Zachary Tumin, executive director of the Leadership for a Networked World Program at Harvard University's Kennedy School of Government. Among its many activities, the program studies and facilitates the use of shared services in government, and it works with both the public and private sectors. "There's an awful lot of capability in the private sector to help government choose wisely and be effective in making those moves," said Tumin. "There are all sorts of successes in doing that."
 

Experts Unite
Tumin pointed out that these partnerships don't always work, but he's seen many cases where they've been very successful. It can be extremely productive to put experts from both worlds on the same team. "When they work together, they are obviously able to translate the vast experience on the consulting side with very detailed knowledge on what's required to be successful on the government side," Tumin said.

Somerset County, N.J., has been involved in shared services for more than 20 years. The county is a good example of how well shared services can work. Many of its projects have been collaborations between the public and private sectors.

The Somerset County Business Partnership (SCBP) works with the county, municipalities, school districts and businesses to facilitate progress on numerous projects including shared services. Many shared services efforts are going on in Somerset County, many of them among several municipalities.

"The governor has recognized shared services have to be the norm, not the exception," said Peter Wright, shared services administrator of SCBP. "All towns are looking at it now."

The SCBP is working on several shared services projects that involve the county and the private sector. These include traditional types of shared services, such as several towns working together to make bulk purchases of textbooks, paper and other supplies from private companies.

The SCBP also does more elaborate collaborative projects, such as a new teacher education program that includes the private sector. The SCBP is helping set up a program in which companies educate local teachers on what the private sector needs from employees. Participating teachers of grades 6-12 receive stipends and hours toward renewal of their teaching licenses. The companies can start relationships with the school systems, and students learn what will be expected of them in the professional workplace later on. Private-sector participants include companies from a wide variety of industries. The goal is for teachers to know more about the local economy and the potential therein for their students.
 

Public-Private Possibilities
Somerset County has been so successful with shared services, in part, because it's willing to look at all possibilities, including those that involve the private sector. "If an opportunity presents itself, we're going to pursue it," said Wright.

Most of the counties in New Jersey have shared services coordinators, Wright said, and they've recently formed the New Jersey Statewide Shared Services Association to foster more use of shared services for the benefit of governments and citizens throughout the state.

Harvard's Tumin believes we'll be seeing more of the kinds of things they're doing in New Jersey elsewhere. "I think increasingly we're going to see regionalization efforts. They're already under way," Tumin said. The economies of scale that can be had regionally can be quite compelling, he added.

ScottMadden's Poston said information sharing between public and private sectors can be very effective. When he's advising the public sector, sometimes managers don't get the exact idea until he shows them. So he'll take government leaders on a visit to a private company using shared services, and it makes an impression. "They'll say 'Wow, that's cool. That's what we want to do,'" Poston said.

It's often the start of a very useful dialog, as government managers ask all sorts of questions about how things are being done in shared services. Government is very interested at that point, and in Poston's experience, private companies have been very open about sharing best practices with government.

There are many believers in shared services, and there seem to be more and more who believe public and private sectors should work together on these projects. "The more the doors are open both ways," Poston said, "the better off everybody will be."

For more information on shared services, please visit www.govtech.com/sharedservices