Thought Leaders
A time for change: All organisations like to talk about "thinking outside the box" when they are planning to make big changes. Sometimes, of course, the reality doesn't quite match the rhetoric. But the unprecedented financial challenges facing all parts of the public sector seem to be provoking some truly radical thoughts these days.
A recent report claims that 40 per cent of public sector organisations will adopt a shared services model this year. Meanwhile 88 per cent of public sector executives attending a recent conference to hear about Birmingham City Council's pioneering business transformation programme said their own authorities were now embarked on a similar journey.
Stewart Wren, chief executive office of Service Birmingham, a joint venture between Birmingham City Council and Capita Business Services says:
"Make no mistake, this is a real departure from the public sector's traditional "own and manage" model of delivering public services. And there is little surprise about why it is happening. The squeeze on public spending is focusing the minds of senior managers in local authorities up and down the country around how to deliver the holy grail of public sector management: improved service standards for customers while at the same time reducing costs to taxpayers.
"Delivering this elusive combination is a pretty tall order. But by taking a radical, organisation-wide perspective and through the innovative use of ICT, delivering service improvements to both corporate back office functions and frontline services is possible - while reducing costs.
"This is the Birmingham model. Back in 2006, the council set out to save £1bn over ten years while modernising its services across the board - both back office and frontline. Birmingham City Council and Capita established my organisation, Service Birmingham, as a joint venture to manage the council's ICT resources and help drive forward its ambitious business transformation programme.
"Five years on, the programme - the largest of its kind in UK local government - is on-track. £712m has already been secured; meanwhile services have been transformed, becoming more efficient and customer-focused.
"Traditionally, of course, the local government model has tended to favour delivering services in-house, which often leads to a focus on processes rather than actual outcomes. This is not to claim, however, that the private sector has all the answers; there is plenty of scope to leverage private sector know-how while retaining a strong public sector ethos. Both have something essential for the delivery of modern public services in a tough financial climate.
"So what does the future hold? Well the scale of today's financial challenge means the outsourcing market is pretty buoyant as the public sector looks at how to realise benefits from shared services and business transformation.
"But there is a risk that public bodies approach the issue in a truncated and tactical way, looking for a quick win to save money in the short term without securing long-term service improvements. If that becomes the case, they will miss the need to "invest to save" in achieving real value-for-money improvements. Short-term, cost-driven reform is not genuine business transformation.
"Transforming business processes to improve services while reducing costs is difficult - but it is possible. Here in Birmingham, we have shown how to do it".
Research conducted with Local Authorities in the Midlands
This article first appeared in West Midlands Business Insider
