Shared Administrative Services at the New York State Business Service Center
- March 9, 2017
- Operational Excellence in Government
This resource is part of the Ash Center's Operational Excellence in Government Project.
Shared services defined
Shared services is a means of providing high quality, low-cost administrative processing for multiple agencies of government through a single operational entity. Shared services can be delivered across a cluster of agencies by a central administrative team, or support services can be shared across an entire jurisdiction, or across jurisdictional boundaries. Shared services reduces duplicate administrative functions and systems across the departments and agencies that share backend processing functions.
Shared services is a proven approach for efficient, high-performing, technology-enabled, and customer-focused support for public-sector agencies and employees. This model is well suited to HR, finance, IT, procurement, and the grants management function. Following models that have been in place in the private sector for two decades, a public-sector shared services team is a dedicated, skilled workforce that uses technology and efficient processes to deliver consistent, high quality services. The result is better service to government employees and a higher return on taxpayer dollars.
The interest in shared services among governments seeking increased efficiency.
A number of the reports collected for this project recommend consolidating administrative services either for all of government or for clusters of agencies. For example, the Connecticut report estimated a savings of $2.7 million for shared services of back-office operations for human services agencies. Reports in San José and Ohio recommended shared services for administrative functions. The Cleveland report recommended a shared services approach for geographic information services (GIS) for city departments. As a result of the recommendations made in its report, Minnesota has taken a shared services approach to document printing and saves $440,000 a year by reducing redundancies.
Success in shared services: New York State Business Service Center
In New York State, shared services has delivered not only cost savings, but has also generated employee skill and morale benefits as well as customer satisfaction improvements. The New York State Business Services Center (BSC) provides shared services across state agencies for Human Resources and Finance transactions. The BSC is part of the Office of General Services (OGS), a state executive agency. With a staff of 450, the BSC prides itself on providing outstanding customer service to the 60+ agencies across state government that it serves. BSC aims to “increase efficiencies, lower costs, and support agencies as they focus on core mission activities.”
Recommended through the work of the Spending and Government Efficiency Commission (SAGE) created in 2011, the Business Services Center was created in the 2012–13 Executive Budget by Governor Cuomo. When the final report of the SAGE commission was released in 2013, the BSC was already beginning to take shape.
As of 2016, the BSC provides human resource transaction processing for 45 state agencies and finance services to 62 agencies. In one example of how this shared service provides financial value, optimization of the state procurement card program resulted in rebates of over $6 million in each of the last two fiscal years, a 360-percent increase from two years earlier. Also, by making payments to vendors faster, the BSC has saved 32 percent on late fees and interest charges.
Services provided by the Business Services Center to customer departments include:
- For HR, services include Benefits Administration, Payroll, Personnel Administration, and Time & Attendance services.
- For Finance, services include Accounts Payable, Accounts Receivable, Credit Card Administration, Purchasing, and Travel & Expense.
In addition to strong support from the governor for the project, the enthusiastic leadership and support from Commissioner RoAnn Destito and Executive Deputy Commissioner Karen Tyler were critical to the success of the effort. Both were involved from the beginning. Destito had experience in the legislature leading the Governmental Operations committee, so had a keen understanding of the need for operational efficiencies across the departments of state government. Tyler, who served as the Director of the BSC before assuming her current role, had a budget background and was able to effectively create an implementation plan, identifying both the needed resources and the anticipated savings.
The project, which began in 2012, started with skepticism from department leaders across the executive branch. Resistance to the project came from three factors: administrative employees feared losing their jobs, executives feared losing control of their operations, and there was uncertainty about how it would work. To address these concerns, the BSC leadership team relentlessly communicated with state employees, both at the commissioner level and across management levels to assure openness during the transition. This helped to create the right tone and to establish ownership of the project from within state government. This was important because the idea for shared services had come from outside of government, with the external SAGE Commission that issued a report in 2013 identifying $1.6 billion in potential savings to the state from a number of initiatives and shared services, including the BSC.
At the start of the effort to create shared services for the state, a consultant was brought into the process to help implement. Taking on shared services across state government was quite a task, but it was not entirely new to OGS, which was already at that point providing HR and finance services for 20 agencies too small to run their own operations efficiently. The consultant was helpful in creating a detailed implementation roadmap and supporting the ambitious change management program. Commissioner Destito agrees that using a consultant was helpful to accelerate early success and says, “We are completing the process without the consultant because they gave us a great foundation.”
Commissioner Destito advises an inclusive approach to communication and an incremental approach to implementation. She recalls, “After the Governor made the announcement, we had to communicate what we were doing and how we were going to do it to every agency. We spent a lot of time meeting with Commissioners and deputies to explain the plan. We met personally and outlined the what, when, where and how we were going to do it. Then we implemented the plan incrementally. We didn’t try to get all 62 executive agencies all at once.”
Two keys to success for the project were having a unified state financial system and relentless change management.
- Statewide financial system. Starting with a foundation of the same financial system in each state agency made it much easier to have a standard process and set of tools for the finance shared services program.
- Change management. Effective change management is essential to getting buy-in for the project, and for smooth implementation and for continuously reminding people to not slip back into their old habits and ways of doing business. Says Executive Deputy Commissioner Tyler, “We can’t even say enough about change management.” She recommends filling the change management role with “people who believe that change is possible.” Within the state’s civil service system this was a challenge but was not insurmountable.
The effort began in three separate leased office spaces and now inhabits a newly renovated building that leverages all of the technologies and efficiencies of the modern workplace. The new space has no individual offices, but has ample collaborative space for people to work and team huddle areas.
Customer service has been a hallmark throughout. During the initial outreach meetings, the Commissioner and Executive Deputy Commissioner shared the vision and what they were trying to accomplish, and then committed to regularly meet with and update their customers. The same is true for the unions—they had early meetings and then continuous feedback loops. Today, the BSC is guided by its active Customer Advisory Council, with representatives from various customer agencies. This group meets quarterly and provides advice and input on major decisions as well as providing ongoing feedback about quality of service delivery at the BSC.
Staff training is a key element of the customer service strategy. All BSC staff receive customer service training. They also receive training in Lean methods so that they can be empowered to continually assess customer service and make suggestions for improvement. According to Executive Deputy Commissioner Tyler, “frontline staff are empowered to implement the changes they identify.”
One benefit has been the consolidation of expertise into the single BSC entity. Another benefit is that for many HR and finance staff, they now have a promotion path that didn’t exist for them before. Staff in smaller agencies did not have a true career ladder until they joined the BSC.
In summary, creating the BSC was not a simple task, but it demonstrates increasing benefit each year in improved quality of service, high customer satisfaction ratings, and reduced cost.
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