Queensland Shared Services to be made ‘market worthy’

The Quensland Government is seeking a consultant to help overhaul Queensland Shared Services (QSS) before the provider is forced to face competition from the open market.

At present the government-operated shared services provider enjoys agency patronage through a central government mandate rather than market appeal. The Queensland Commission of Audit put an end to this when it recommended the Government abolish the mandate earlier this year.

To prepare QSS for the transformation, the Department of Science, IT, Innovation and the Arts (DSITIA) is looking to appoint an ‘industry partner’ to overhaul the way the unit does business.

“The industry partner will assist DSITIA and QSS develop a revised business model, define its value proposition to potential client departments and design an implementation roadmap for transition activities identified through the course of the engagement,” according to tender documents.

The consultant will recommend a split between those services that should be opened to contestability and those that should be kept in house. They will also need to estimate the “critical mass” of clients that QSS will need to maintain business viability.

The trade-off for respondents is that the successful tenderer will not be able to bid for any of the corporate services work that is subsequently released to the market under the scheme.

In aggregate the work could be worth more than $180 million per year, based on the estimated user fees to be charged by QSS in 2013-14.

The new business model and market sounding is due back to the State Government by 15 January 2014.

QSS is Queensland’s ‘rest-of-government’ shared services agency, delivering finance, procurement and HR services as well as core finance and HR systems application support to 78,000 public servants in 18 government departments and the statutory authorities. Its client base excludes Queensland Health and the Department of Education, Training and Employment.

In issuing its shared services recommendations, the Commission of Audit led by former federal treasurer Peter Costello said the model adopted by the Queensland Government had failed in its original objectives.

“The adoption of the shared services model in Queensland has been of questionable value for money. Compared with the original business case, costs have been higher, savings lower, and the time required for implementation longer,” it said.