Public Sector Transformation Through E-Government
Page 38
2009
The contact center is built up, and the services for
diff
fferent ministries are implemented.
2010 and 2011
The HR service level quality is maintained, and the
services for the other ministries are implemented,
providing the total HR service delivery to the
majority of ministries.
Source: Lievense, 2005; P-Direkt, 2002; 2003; 2004a; 2004b; 2005a; 2005b; 2007; 2008; 2011.
5 ANALYSIS AND DISCUSSION
5.1 Phase I: Initiation of P-Direkt and Its Initial Failure
A key aspect of defi
fining a new HRM system was to increase the effi
c
ffi iency and
quality of the HR function of the diff e
ff rent individual ministries by bundling
these activities into one central entity that could provide HR services to the
central government. The government therefore decided to implement an SSC
to both benefi t f
fi rom economies of scale as well as increase the service quality,
as scarce HR expertise could then be shared among the ministries. When the
decision would have to be made, certain actions needed to have been com-
pleted. This was however not the case. The division of responsibilities was still
insuffi
c
ffi iently defi
fined and moreover, no arrangements were made regarding the
way P-Direkt would have to be managed during the period it would be opera-
tional. The business case was unclear and not convincing in terms of realizing
the expected effi
c
ffi iency gains, reduction of personnel costs and of bureaucracy
(P-Direkt, 2005b). Still, because of political pressure to quickly get results, the
government decided to go ahead with the implementation.
In July 2003, there is fi
final green light for the realization of the HRM SSC
that should be operational on January 1, 2006. The scope of the HRM SSC
would initially consist of the following activities: salary administration; person-
nel contract administration, annual and sick leave registration; other fi
financial
staff com
ff
pensation, e.g. expenses and data about the department and internal
organization (P-Direkt, 2003; 2004a; 2004b). It is decided that the design,
E-Government Implementation in Times of Change 217
implementation, and maintenance of the ICT infrastructure for the SSC will
be outsourced to a third party and the most important reason to do so, was
that the government wanted to use the market’s best practices and common
uniform standards. Moreover, the government wanted to have the third party
pay for the design costs in exchange for a multi-year contract to maintain the
system. It can be questioned whether this was a good strategy, as it created a
signifi c
fi ant dependency on an external party. After a European tender process,
a consortium of two IT providers was selected and an outsourcing contract
was signed. During the negotiations, it was decided that there was not enough
time to defi
fine the product specifi ca
fi tions and acceptance criteria and this would
therefore all be done in a next phase, which was not a proper basis to start the
realization phase (P-Direkt, 2005a; 2005b). Payment to the consortium was
based on the realization of milestones, but given that there were no accep-
tance criteria defi
fined for these milestones, the government was not able to take
proper legal measures when the consortium did not meet their expectations.
The contract did not take this aspect into account, and the signed contract
was not reviewed by an independent third party law fi
firm (P-Direkt, 2007).
Some critical remarks by other third-party consultancy fi
firms about the risks
were ignored and in that regard the risk management and quality assurance
processes were not properly part of a formal governance process.
The architectural design created by the consortium for the ICT infra-
structure was not approved by the government on two consecutive occa-
sions because it didn’t meet their expectations, and the consortium decided
to retract itself from this process as no agreement could be made about the
next steps. The state was obliged to pay 20.8 million euro compensation,
mainly for retaining the right to interim products, licenses, and documen-
tation that could later still be used. At the end of 2005, the Minister respon-
sible for this project confi rm
fi
ed that he still wanted to go forward with the
SSC and demanded an investigation into why the project failed.
There were many lessons learned and a variety of shortcomings in the
decision-making process. The strategy, the management and control on the
part of the government were contributory factors in the failure of the tender-
ing and implementation process. On a number of crucial occasions, decisions
were taken under excessive time pressure, and as such the decision process
did not meet the quality demands of the central government, also because
insuffi
c
ffi ient account was taken of the criticism from diff eren
ff
t external experts
about the management of the tendering process. Unsolved issues with the con-
sortium were put off
ff until a subsequent phase, including agreements about
the expected performance and acceptance criteria by which this performance
could be assessed (P-Direkt, 2007). Moreover, the information given about
the progress of the SSC was often too optimistic. Working together with a
private party consortium required a professional government commissioning
practice, but this was not the case, and there was no adequate project manage-
ment. There was insuffi
c
ffi ient quality assurance and risk management of the
products or services and insuffi
c
ffi ient information provision to all the stake-
holders involved. Moreover the expectations with respect to the timeline of
218 Anton
Joha and Marijn Janssen
the project and its milestones were not properly managed and not enough sup-
port was created among the most important internal and external stakeholders
(P-Direkt, 2005b).
There were dependencies of P-Direkt with other HR projects that were
managed outside the formal responsibility of P-Direkt, though they were
important elements within the new HRM system. This implied that P-Direkt
was not able to adjust certain aspects of their project but had to escalate this to
the responsible people within the other projects. This layered project manage-
ment approach was causing ineffici
ffi encies (P-Direkt, 2007). Moreover, because
the dependencies with certain projects were critical and these projects were
not able to meet their planning, the planning for P-Direkt regarding which
services should be operational at a certain date also needed to be changed.
Coordination requires good communication about the progress of each of the
projec
ts and the use of quality management tools, which was not the case.
There was no unifi e
fi d overall vision of quality management, which there-
fore did not result in a consistent and coherent quality management process
(P-Direkt, 2007). P-Direkt’s cost savings were partially based on the assump-
tion that the ministries did not have to have any HR activities anymore at all,
but P-Direkt was not able to provide the ministries with the dates that they
could discontinue their services and fully rely on the services provided by
P-Direkt. The ministry of fi
finance had already started their own HR project,
and moreover, there was a far longer period where both P-Direkt as well as the
individual ministries executed several complementary HR activities (Lievense,
2005). In Table 16.2, the lessons learned have been summarized using Baldwin et al.’s (2001) four dimensions.
Table 16.2 Lessons Learned from the P-Direkt Case Study
Dimension
Lessons learned
• The (master) planning was too ambitious
• Too many things were tried to be changed at the same time
• Role of the project principal was too weak
• Improve internal communication as the individual ministries were
not able to keep up with the decision speed
Strategic
• Project management tools were either not available or still in
and
development
organiza-
• Knowledge was too dependent on too many external people
tional
• Too many project leaders making it unclear who is responsible and
accountable
• The project management governance was not the same for the dif-
ferent individual sub-projects and for the different m
ff
inistries
• Either no clear responsibilities (and accountabilities) or the wrong
responsibilities were assigned to diff erent parties involved
ff
(continued)
E-Government Implementation in Times of Change 219
Table 16.2 (continued)
Dimension
Lessons learned
• The HR department was not enough involved, and the project
therefore lacked HR experts able to properly review the proposed
ideas and solutions
Strategic
• Unclear governance model and no clear alignment between the stra-
and
tegic, tactical and operational levels across the diffe
ff rent ministries
organiza-
• There was no experience with performance-based contracting
tional
• Division of responsibilities between the stakeholders involved was
(continued)
insuffi
ciently
ffi
defin
fi ed
• There was unclarity about the way the service delivery model and
the way the services were going to be provided to the organization
• Insuffi
cient attention for the users and change management was given
ffi
• No integral and consistent project management approach and
methodology
• Due to too much political pressure and ambition, reports were too
optimistic and positive about the project benefi ts and the progress
fi
made during the project preparation phase
• The third parties involved were not able to provide relevant input
as the design choices were already made
• Before any key project decision could be taken, a number of condi-
Political
tions had to be satisfi ed that the government had defi
fi
ned already
fi
in advance
• Ensure an open relationship with the external service provider and
enough countervailing power between all parties when using a
performance-based contract.
• More communicating about the relevance and necessity of the new
project to the internal organization to get more understanding and
support
• Share relevant knowledge with third parties as these were not up
to date about certain (legal) project requirements
• Overestimation of the possibilities of ICT
• Consolidation and standardization eff orts of the diff
ff
erent
ff
ICT
systems across the ministries had not taken place
• Acceptance criteria, interfaces and technical standards were not
Technical
clearly define
fi d
• Dogmatically trying to keep the scope the same as it was initially
agreed on, resulting in less effi
ciently working processes when
ffi
these are separated in an illogical and unnatural way
• The business case was ambiguous and not convincing
• No regular check and update of the business case was performed
Economic
• Unclarity about the funding model and the costs for the ministries
• Bonus constructions need to part of a performance-based contract
with a third party to ensure that the third party is incentivized to
use innovative tools, methods and quality checks
220 Anton Joha and Marijn Janssen
5.2 Phase II: Redesign and Re-initiation of P-Direkt
Based on the lessons learned, a new project approach was defined (P-Direkt,
2008; 2011). An important change in the strategy was to have a more phased
approach of the project using a growth model and a realistic planning. Three
stages were defined, and in the fi
first stage there was a focus on simplifying,
digitalizing, and bundling the HRM activities within each of the individual
ministries, with the main purpose to come to one ICT standard for the sal-
ary administration. Moreover, several ministries had to implement a self-ser-
vice concept and helpdesks. The ministries themselves were responsible for
the implementation and received support from P-Direkt. This fi
first stage was
planned to take 1 to 2 years, and this went according to plan. In 2008, twenty-
six standard HRM-processes were defi
fined for the central government, there
was a self-service portal for the diff eren
ff
t ministries and a central digital per-
sonnel dossier service, and the civil servants of a number of ministries were
getting paid via P-Direkt (Annual Report P-Direkt, 2007; 2008). At this stage
the diff eren
ff
t ministries were able to choose out of diff eren
ff
t temporary scenar-
ios to connect to P-Direkt, depending on how much progress they had made
and what salary administration system they used.
The second stage started in 2009 and was to implement one HRM admin-
istration and contact center for all participating ministries. This included
the physical migration of personnel to a limited number of SSC locations.
The activities of P-Direkt were performed by four main departments, includ-
ing a development department where services are developed and a services
delivery systems department where the services are managed and maintained
after developm
ent. Moreover there is a P-services department responsible
Table 16.3 Main Characteristics of the New Project Approach after the
Re-initiation of P-Direkt
Dimension
Main characteristics of the new project plan and methodology
• Using an incremental growth model and defi ning projects
fi
with few mutual dependencies
• Realistic master planning
• Better usage of existing HR knowledge, experience and people
Strategic and
• Introducing uniform HR processes across all participating
organizational
ministries
• New governance model
• Professional project and program management
• Introducing an implementation of a support helpdesk
Political
• Attention for change management
• Connecting to the demands of each of the diffe
ff rent ministries
Technical
• Use of technical standards and interfaces, so that each minis-
try could connect to P-Direkt
Economic
• New funding model and clarity about who is paying what
E-Government Implementation in Times of Change 221
for the non-automated services of P-Direkt that includes the helpdesk, and
fi
finally there is a department for simplifying and unifying processes, taking
into account the legal and regulatory requirements (Annual Report P-Direkt,
2009; 2010). Table 16.3 provides the main characteristics of the new project plan and methodology (P-Direkt, 2008; 2011).
6 CONCLUSION
Shared service centers provide a solution for public sector organizations
that lack resources and want to reduce costs and increase service levels at
the same time. The implementation of a large-scale SSC with many differ-
ent stakeholders is a complex transformation project. In this chapter we
explored the largest Dutch governmental HR SSC addressing the whole
government in the Netherlands that initially failed and only became suc-
cessful after redefi
fining the scope, governance, and implementation strategy.
We identifi
fied the lessons learned from a organizational, strategic, political,
economic, and technical perspective and also identifi
fied the main changes
that have been made when the SSC was re-initiated.
Already before the decision was made to implement the SSC, a number
of critical actions were not fi
finalized. During the implementation phase
itself, there were many lessons learned. These include a realistic master