Whole of Defence workforce and shared services reform
PUBLIC SECTOR · DEFENCE · WORKFORCE & SHARED SERVICES
The situation
The 2009 Defence White Paper endorsed the Strategic Reform Program, an overhaul of the entire Defence enterprise intended to produce around $20 billion of savings over a decade for reinvestment in capability. Fifteen reform streams sat beneath it. Workforce Productivity and Shared Services was among the largest, carrying a savings target of $3.3 billion over ten years against an implementation cost of roughly $360 million. The target rested on three levers: creating leaner business support functions through greater use of shared services, civilianising military support positions where the role did not require a military competency, and converting contractor positions to Australian Public Service positions. Each lever was sound in principle. None of them had a baseline behind it.
As significant issue was Defence could not say with confidence how many people were doing back office work, which function they sat in, where they were located or what they cost. The numbers lived in separate group and service systems, built for different purposes on different definitions, and the savings target had been set before anyone knew the denominator. Scope ran across HR including payroll, personnel administration, education and training and career management, together with ICT, finance, non equipment procurement and other back office functions, and took in the remainder workforce sitting outside combat and combat related roles, intelligence, science and materiel. The population was a mix of ADF, APS and contractor personnel spread across the country and across three services.
Before
No validated enterprise workforce baseline
Back office cost not separately visible
Functions delivered separately by group and service
A savings number without a plan
No rules between provider and customer
The work
Retained as strategic reform partner, we ran four workstreams concurrently on a compressed timetable, with around twenty consultants working under a single programme director:
Established the strategic framework. What Defence actually wanted from a shared services model, expressed as design principles agreed with the executive, and how the available model options performed against them. Out of this came a decision support tool that scored each sub function on strategic importance and improvement opportunity, so that the question of what belongs in shared services was settled on evidence rather than on preference.
Determined and validated the in scope FTE baseline, more than 20,000 positions, and mapped them to function, location and cost. Process mapping, cost modelling, benchmarking and causal loop analysis built the fact base, and multiple service delivery options were then designed for each functional area and assessed for fit against the design principles.
Ran the remainder workforce diagnostic, generating and quantifying efficiency opportunities against an assessment framework that dealt directly with the permanent versus contractor question, civilianisation, role cessation, redeployment and consolidation.
Carried the design into implementation. Business cases, sequenced implementation plans and change management plans for each functional area under review, with the rules of engagement between the shared services function and its customers designed rather than left to be worked out after go live: service level agreements, a funding model, a KPI and reporting framework, and a process for resolving disputes.
More than 400 interviews were conducted across the department. In an organisation of this size that is not stakeholder engagement for its own sake. It is how the baseline gets validated, and how recommendations survive contact with the groups that have to implement them.
After
More than 20,000 FTE baselined and mapped
Cost modelled by function and benchmarked
One service delivery model applied function by function
Costed, owned and sequenced opportunities
Service levels, funding and reporting defined
The outcome
A validated baseline of more than 20,000 FTE and a recommended service delivery model applied function by function, with the $3.3 billion broken down into specific opportunities, each carrying a business case, an implementation plan and a change plan.
Functional designs that converted into implementation programmes rather than stopping at recommendation. Non equipment procurement moved into a three year programme covering site selection and business centre stand up, workforce transition and reskilling, purchasing process and system redesign delivered in waves, and benefits tracked back against the business case that justified them.
Rules of engagement designed before go live rather than after, covering service levels, funding, performance reporting and dispute resolution, which is the layer that usually determines whether a shared services arrangement holds together once the consultants have gone.