Shared Services should accelerate digital change; not just focus on consolidation and compromise.
Put two children on a table for lunch but provide only one lunch box and research proves both will share the available food as equitably as possible. Sharing is a natural response to scarce resources. One child does not wish to see the other child go hungry.
However, as we grow older, and as these childlike instincts give way to the more refined and less innocent behaviours, we start to think more strategically about sharing.
The Ultimatum Game is a fabulous economic experiment that explores the decision-making process used during an open negotiation. Now put two adults in a room to negotiate the sharing of a pot of money. Both know the amount on offer, but one is given the position of power of dividing the spoils between the two. They write an offer down and hand it over, with the other side deciding whether to take the sum on offer, or if they feel they are being treated unfairly decide that neither party will take away any money at all.
This is where it becomes interesting.
When a 50/50 split is offered most people take their half and shake hands. But what happens when the offer is lower, maybe forty-five, forty or say twenty percent? Neither party started with anything, so surely twenty percent of something is better than nothing? Surely you would take the money and run? This is where fairness takes over from simple monetary gain.
The experiment shows that even a small imbalance of perceived fairness can cause somebody gaining something they never had to throw away that benefit because the other person has gained more.
Welcome to the world of public sector shared services
The shared service model is a simple concept. Stakeholder organisations pool financial and people resources to build and operate IT platforms that serve their collective needs. Everybody contributes to create one thing that is suitable for all. Sounds simple. But agreeing shared IT services has always been more complicated than the concept, and over the last couple of decades this is a strategy has been tried, tested, succeeded, failed, aborted, and agonised over in equal measure.
Fundamentally, a shared service mandates some level of ceding control to others. And it’s much more than just what network or data centre technology will be chosen. Who will run it? Who will decide on the service catalogue it will provide? Who will define and govern the service quality? Who will arbitrate the different needs of all organisations? Who will pay for what?
The word ‘share’ is loaded with the perception that sharing means compromising. I must give up what I have to share something with you; we are taking 1+1 and making 0.75 – we are consolidating cost not constructing something compelling.
And that has always been the problem with shared services. It usually feels like a conversation about consolidation and compromise in a world obsessed with digital innovation, digital experiences, digital choice.
Digital cannot thrive in a world driven by simple consolidation. That is a digital compromise
And who wants to build a shared service that is ultimately DiNO; Digital in Name Only?
Thankfully, the world is changing.
With a new generation of adaptable digital platform technologies, powered by software defined technologies, the progressive CIO in public sector can now bring together people, processes and technology of disparate organisations and create services where everybody wins, and more importantly where no one perceives they lose. We are now in an age where shared doesn’t mean mediocre or the lowest common denominator. It doesn’t mean compromise through consolidation.
What organisation using AWS, Azure or Google believe they are downgrading their digital capability? Those massive shared cloud platforms have mastered the art of personalising the experience of users, delivering exactly what they need when they need it. These aggregated platforms have mastered automation, intelligence and personalisation, and so public sector shared services must adopt the same approach.
The CIO in charge of shared services designed for a digital future now has no choice but to do the same.
The trick now is to turn financial or operational or service need to build a shared service platform into a re-imagining of what can be delivered. Not just focusing on a like for like consolidated replacement of the technology but building a new adaptable platform that can share the resources based on agreed need and provide every stakeholder organisation with an environment tuned to their specific environment.
Yes, some shared decisions will need to be made.
Individual IT teams won’t be able to get their way on the choice of a vendor, or virtual machine type, or whether the hyper-converged infrastructure or network technology is one they have personally road tested and approved. They will have to cede operational control of their data centre platform, wide area network, or networks to a shared service organisation. But what they won’t have to do is compromise on the quality of services they provide to their users.
Because, with adaptable digital platforms, sharing is never about compromise.