Showing the Way To Shared Services

Public managers know all too well the barriers to sharing services across jurisdictional boundaries. One county in Michigan is knocking them down in ways others may soon need to emulate.
June 8, 2008
Jerry Mechlin
By Jerry Mechling  |  Contributor
A consultant and former faculty member of the Harvard Kennedy School

As all public managers know only too well, there are many barriers to sharing services across jurisdictional boundaries. Yet the need to deliver crucial services more efficiently is never stronger than in times of slumping revenues and tightening budgets. Oakland County, Michigan, deserves attention for being a catalyst behind cross-boundary collaboration, generating technology-enabled shared services in ways that others may soon need to emulate.

The context and vehicle for these services have been huge economies of scope and scale from digital networks and applications. For each user, the benefits of networking grow with the number of applications (scope) and users supported (scale). These increase as the network grows, yet costs per connection stay roughly the same. The result is typically an explosive growth in the benefits produced per dollar.

When the Defense Advanced Research Projects Agency invented the open standards of TCP/IP (Transmission Control Protocol/Internet Protocol), it became possible to knit formerly small networks together into the far-reaching Internet that now serves much of the globe. Because the network is now shared across extremely large numbers of users, applications and institutions, the New York Times and YouTube can reach billions of people at incredibly low costs per person.

Corporations have moved quite aggressively to implement shared services. Applications used to be proprietary and locally managed. Now they are provided by outside firms serving multiple members of an industry -- sometimes even multiple industries.

Government, however, has been slow to move toward shared services. This is due, in part, because costs are rarely a life-or-death problem for government. In addition, job losses from cost cutting can be a thorny issue to get past. And sharing data across jurisdictional boundaries requires agreements from multiple stakeholders and the creation of a new governance structure.

The chief objection to shared services, however, has typically been the bad taste left from earlier applications that were centrally provided but were unresponsive to local needs. From the local agencies' point of view, service was clearly more responsive when provided by its own employees -- be it for payroll, accounting, vehicle maintenance, computer support or some other support service.

The historic barriers to shared services in the public sector are eroding, however. Governments are taking productivity more seriously as the growing elderly population increases service demands while simultaneously decreasing the tax base and labor supply. As retirees leave government employment, worries about layoffs are being replaced by worries about getting the work done.

For most jurisdictions, resistance to shared services is still based primarily on worries about unresponsive external providers. How can users learn to trust an "outsourced" service?

This brings us to Oakland County and the future of shared services in government.

Consider one particular application, Oakland's Collaborative Asset Management System. CAMS represents a $6.5 million investment led by County Executive L. Brooks Patterson and Deputy County Executive/Chief Information Officer Phil Bertolini. CAMS will collect and share information on the status and maintenance of roads, bridges, drainage, sewer systems and water distribution within the county. Though this is not a conventional example of shared services, it does illustrate the key principles and benefits.

CAMS is structured as a partnership between the county Department of Information Technology (reporting to the county executive); the independently elected Drain Commissioner's Office; the independent county Road Commission; and independent cities, villages and townships. The Oakland County General Fund will provide capital funding, and ongoing costs will be covered by fees assessed on the various stakeholders.

By using a shared system, rather than a collection of smaller systems, the partnership cuts the costs per transaction. Even more important, the shared system will capture and make transparent the information needed to support a proactive rather than a reactive approach to maintenance. Instead of leaving citizens vulnerable to the expensive emergency repairs they've suffered in the past, the shared system will support predictive maintenance to reduce emergencies and, therefore, greatly cut costs and increase safety.

Probably the biggest key to getting CAMS off the ground has been the trust that Oakland County has built through previous shared-service initiatives. Over the years, Oakland has created a reputation for delivering on commitments. Working in support of this reputation, each project, including CAMS:

· Undergoes explicit and rigorous analysis to define, discuss, and measure (to the extent possible) project benefits, costs, and risks

· Is implemented via disciplined project management procedures to clarify and track areas of accountability and provide timely feedback for mid-course corrections

· Is operated under service level agreements and other governance structures to ensure responsiveness to continuing and evolving customer needs

What Oakland has done with shared services is straightforward, but it is not easy. It also represents the future of delivering government services that produce the most public value. Geographic information systems seem particularly ripe for such "regional technology" plays. Public safety is another arena where -- in a post 9/11 world -- cross-jurisdictional collaboration is not only greatly needed, but is both politically and technically viable.

So ... take a look at Oakland. I particularly recommend benchmarking the county's results and procedures for developing cross-boundary shared services.