Mention the words “outsourcing” and “public sector” in the same sentence and there is only one true lord and master of this realm. The one person who’s genuinely devote his career to advising this industry… from British Telecom’s ePeopleserve to Accenture, to founding and leading Equaterra Public Sector to its eventual acquisition by KPMG, and finally back to Accenture’s Federal Services for one final hurrah to drag public sector operations out of the dark ages. Meet Glenn Davidson, the man bringing a new type of GaaS to the services industry: Government-as-a-Service.
The public sector – that oft overlooked and much-maligned part of our world that we can’t live without – is squarely in our focus in the wake of our new research report “Government-As-a-Service: How the “Eight Ideals of As-a-Service” Help Federal Agencies Find New Value.” The report sheds light on the impact of new technologies and operating models on business operations, and how this is impacting US Federal Agencies. So we thought we’d catch up with Glenn to get the lowdown on why As-a-Service could get a real game-changer for public sector bodies seeking to escape from legacy technologies, obsolete processes and manually-intensive tasks that slow everything down and drive up our taxes…
Phil Fersht, CEO HfS Research: Glenn, I think we’ve known each other for, I don’t know, about 12, 13 years now. I remember your career in services starting way before mine even in the early days of BPO … when Accenture created its e-peopleserve partnership with British Telecom in HRO. During your career, you’ve been a buyer of services, a provider, and, prior to re-joining Accenture, an advisor to those in the public sector thinking about their service delivery options. What strikes you as the most significant change in this industry today?
Glenn Davidson, Managing Director, Accenture Federal Services: The most significant industry change to me is the “As-a-Service” concept – the idea that we can provide the technology and the services to our clients on a transaction basis. Organizations no longer have to make massive upfront capital outlays for applications’ licenses, implementations, or ongoing operations and maintenance. They don’t have to hire more people to handle related transactions. They merely have to specify outcomes – what they want – and have providers deliver the services via the Cloud.
Phil: So when we look at what’s going on in the public sector, to what extent is As-a-Service having an impact? Is it creating as significant a disruption as it is in the commercial sector?
Glenn: Phil, as you know, the US public sector is not a monolithic industry vertical. It’s made up of multiple sub-sectors – NGOs, multi-laterals, and governmental organizations at all levels.
Because many state governments have balanced budget requirements, they were among the first public sector entities to adopt alternative service delivery and sourcing models. Declining revenues bring a commensurate reduction in ongoing operating costs or increase in taxes or fees. As a former state government official, I know first-hand that our elected officials are loathe to raise taxes or fees unless there is no other choice for balancing the budget. Not-for-profits were the next group to consider their options, facing the reality of dwindling contributions as individual wealth or foundation revenues declined. Really, the last to adopt alternative service delivery and sourcing models has been the US federal government. But we’re starting to see change there as well, as budgets become more and more constrained.
Phil: Glenn, let’s zero-in on the federal government—are you seeing change starting to happen here too?
Glenn: Yes, indeed we are, Phil. The holder of the purse strings for the federal government, OMB (Office of Management and Budget), is requiring agencies to share applications – for human resources and financial management, for instance – as opposed to upgrading what they have or installing new ones. However, it’s largely federal government employees and contract personnel provided by staff augmentation firms that are performing the associated transactions work. And two cabinet level departments – Commerce and Veterans Affairs – are moving aggressively to establish their own shared services centers.
Perhaps, more interestingly, I have begun to see As-a-Service procurements. Most Federal procurements are discoverable by searching a publicly available database of opportunities. I looked at a three-month period-of-time, earlier this year, and found nearly 300 procurements seeking As-a-Service solutions. While most of them were for applications or infrastructure, there were a good number seeking assistance with business processes.
Phil: Federal organizations are seeking business process support in an As-a-Service model?
Glenn: Yes, Phil, we’re seeing an increase in the number of contracts for payments and collections, and service and contract management where the client wants staffing, process and technology support in an As-a-Service model.
One of the biggest pain points in the federal government today is actually recruiting and hiring. Many agencies have large backlogs of open positions. While a portion of these backlogs has to do with the very prescriptive policies and practices that agency officials must follow, there are other areas hampered by the absence of automation, archaic processes and insufficient resources available to get the job done. As a result, agency leaders are asking, “Could I actually get both the applicant-tracking tool and people to support the process in one? Could I pay for both on a transaction basis – that is, per successful hire – as opposed to buying the tool and paying time and materials for the staff support?”
Phil: Is this related to what brought you back to Accenture after all these years, Glenn?
Glenn: Yes, indeed, Phil! I lead the Operations line of Business for Accenture Federal Services. I like to say that in the “design, build and run” continuum, my team and I do the “run.” What attracted me back to Accenture was the specific opportunity to work in a business unit that is wholly dedicated to the federal government and where its people, who are public servants at heart, are committed to solving complex and difficult problems. And, then, it’s the reach-back to Accenture; I have the ability to bring the totality of what the firm offers to my clients – whether their needs relate to defining strategy, re-engineering their business processes, introducing digital solutions, implementing and operating their technology suite, or running their day-to-day operations.
Phil: So just a final question Glenn. You are anointed the emperor of the public sector operations world for one week and you can do one thing to change the sourcing industry, what would you do?
Glenn: If I were in charge of the public sector, I would leverage its purchasing power for social good. I would mandate that our services providers find a way to employ people –from segments of our population that are grossly under employed – who really want and need to work. In the US, that would include veterans, military spouses, Native Americans, racial and ethnic minorities, and the disabled. For me, life has always been about the contribution that you bring to society. Impact sourcing has long been important to me before we even had a name for it. So, my edict would be that any time that we source something, we should use that opportunity to employ those that have been otherwise unemployable.
Phil: There is such huge potential in tapping into the local base that way. Glenn, thank you for your time
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