Failure and a lack of preparation pose the greatest risk to public sector shared services success

Recently the House of Commons Public Accounts Committee’s 2009 report, Central Government’s Management of Service Contracts, found there were no documented plans for managing 28% of contracts. A further 56% of contracts did not have a contingency plan in case of supplier failure.

from the overview of the late David Kaye’s Briefing Paper – Public sector supply chain: risks, myths and opportunities sponsored by Zurich Financial Services

As I reviewed the overview of the briefing paper regarding the late David Kaye’s incredible work on supply chain risk within the public sector, I was at once amazed that the inevitable collision between the irresistible force associated with risk and the immovable object reality of the high rate of supplier failure in key areas such as outsourcing continues to go unchecked.

Given the serious consequences of such failures in the public sector one cannot help but wonder why this issue does not take on a greater sense of urgency, especially as industry experts like Colin Cram are as outlined in one of my posts yesterday, advocating a shared services strategy.

While there is no doubt that economies of scale can be achieved and thus drive significant savings, centralizing Agency and/or Departmental service responsibilities with a core group whether internally managed or outsourced in whole or in part means that key elements of their organizational deliverables as the Briefing Paper points out, will be placed entirely into the hands of third parties. The question is simply this . . . are these third parties up to the task and are they prepared to assume this linchpin role?

If they are not, the consequences as Kaye was quoted as saying are diverse, serious and wide-ranging based on the fact that authorities not only have contractual and legal responsibilities in tort, but critical statutory and political responsibilities as well.

This is one of the reasons why the PI Window on Business’ coverage of Executive Director, NASA Shared Services Center (NSSC) Richard Arbuthnot’s presentation at the 3rd Annual Business of Government Summit in Washington in April 2010 continues to carry so much weight in terms of relevant insight.

Arbuthnot,who managed the largest A-76 public-private procurement competition in NASA’s history, as well as leading the Agency Transition Team that was tasked with executing the minute details associated with consolidating Agency-wide administrative activities across ten geographically dispersed centers in the areas of Human Resources (HR), Procurement, Financial Management and Information Technology, has the distinguishable advantage of having been there, done that relative to successfully implementing and managing a shared services initiative.

With this in mind, I would like to invite you to tune in to our coverage of the Rick Arbuthnot presentation titled Defining Business Viability with Advanced Service Portfolio Management (Click to Access), which originally aired on the Blog Talk Radio Network on April 28th, 2010 from the Ronald Reagan Building and International Trade Center in Washington, DC.

Richard Arbuthnot, NASA

Session Overview:

Wednesday, April 28th (Session 1, 9:00 to 10:30 AM EST)

Session 1 Title: Defining Business Viability with Advanced Service Portfolio Management (Click to Access)

Appointed to the Federal Senior Executive Service in 1999, Rick Arbuthnot is recognized for his executive leadership and credited with introducing significant initiatives across the Agency, such as the Competency Management System, Executive Succession Planning, and Manage to Budget. He is also recognized for his expertise in organizational structure and design. Most recently, he managed all aspects of NASA’s Shared Services effort and has served as the Executive Director, NASA Shared Services Center (NSSC), since March, 2004.

As Executive Director, Rick managed the largest A-76 public-private procurement competition in the Agency’s history, as well as leading the Agency Transition Team, tasked with executing the minute details associated with consolidating Agency-wide administrative activities across ten geographically dispersed centers in the areas of Human Resources (HR), Procurement, Financial Management and Information Technology.

In addition to leading the competition and Agency transition activities, Rick now manages all aspects of activating NASA’s newest field Center, including defining the organization structure and staffing the nearly 500-person organization, ensuring all facility, IT and business systems, including charge-back mechanisms, are in place to operate the organization.

Richard E. Arbuthnot, Executive Director, NASA Shared Services Center, NASA

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