Finance claims savings of nearly AU$17m per year under Shared Services program

The Commonwealth department received AU$89.5 million across three years back in 2017 to consolidate and streamline back-office corporate functions in the Australian Public Service.

The Department of Finance has claimed its Shared Services program has saved just over AU$89 million in four years, and that it will produce ongoing savings of AU$16.8 million per year, starting from the 2019-20 financial year.

The program is led by Finance and is part of the federal government's Modernisation Fund, which, unveiled as part of the 2017 Budget, aimed to support the transition of agencies to more "modern and sustainable operating models".

Finance received AU$89.5 million across three years to consolidate and streamline back-office corporate functions in the Australian Public Service (APS).

This funding was allocated across 18 entities, including Finance, which received AU$45.4 million to support the development of entity capability and readiness related to shared services.

Must read: There are 84 high-cost IT projects underway by the Australian government

In addition to delivering savings of AU$89.1 million from 2016-17 to 2019-20, as well as the per annum predictions, Finance said the Shared Services program has also seen the establishment of six shared service provider hubs that are "providing more efficient corporate services" to 29 Commonwealth entities.

Finance said it has also designed and mapped over 200 standard business processes, telling the Finance and Public Administration References Committee in response to questions taken on notice this means that in the future, APS employees will have a common way of managing corporate matters such as accounts payable and receivable, payroll, credit card management, and travel.

"Implementing a digital travel and expense management capability which integrates with the whole of government travel provider making it easier for business to work with government as well as reducing administrative time in the APS," it wrote.

"This first of a kind integrated capability, initially implemented into six agencies, is increasingly being adopted by other Commonwealth entities."

Finance said redesigning the procure-to-payment processes within its Service Delivery Office (SDO) drove a 64% decrease in cost to other agencies for back-office functions like finance and payroll in one year.

See also: New strategy to uplift digital capabilities of the Australian Public Service

According to the department, the Shared Services program is currently enabling a reduction in the total cost of ownership, maintenance, and upgrades of the 170 bespoke corporate IT systems across the APS through the design of the shared enterprise resource planning (ERP) technology platform, GovERP, which is SAP-based.

"Efficiencies from the program will flow after the GovERP system is built and agencies on-board," it told the committee.

The Productivity and Automation Centre of Excellence is also touted by Finance as "streamlining manual processes, driving productivity gains, and building APS workforce capability".

It said several departments -- including Finance, Social Services, Foreign Affairs and Trade, and Industry, Science, Energy and Resources -- now also boast process automation capabilities.

"In 2020, Finance's Service Delivery Office process automations returned about 3,050 hours to business allowing prioritisation of activities to improve customer experience, eg improving the timeliness of manually processed transactions to an average of 4.38 days as at 31 March 2021," Finance said.

"The SDO has also supported processing officers to be trained as process automation configurers, demonstrating an investment in staff as part of the workforce of the future."

The SDO boasts 15 clients that it provides support for, mostly around transactional services such as payroll, Finance said.

The committee has been looking into the current capability of the APS, particularly in the areas of digital and data, as well as if transformation and modernisation projects initiated since the 2014 Budget have achieved their objectives.

MORE FROM THE INQUIRY