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Shared services can help cut costs

The Star, September 11, 2007

 

KUALA LUMPUR: Shared services is the way to go for governments that take pride in being citizen-centric, according to enterprise software solutions giant Oracle Corp.

Adaire Fox-Martin, Oracle vice-president of government, education and healthcare, said a shared services centre (SSC) would allow government departments to consolidate all their data into one area.

This would help them boost efficiency when dealing with members of the public, she told In.Tech after a forum held in Kuala Lumpur recently.

"A lot of governments are expected to continuously improve their frontliners but that can be difficult on a budget," Fox-Martin said.

An SSC, she said, can bring out the cost of maintaining backoffice systems to the front line.

It focuses on cost optimisation by alleviating administrative and repetitive activities in government departments. So, instead of having a backoffice system in each and every cluster within an agency, there is a single service delivery model to handle matters such as finance and personnel management, she explained.

Of course, a problem that may arise with the SSC is that it may need to be upgraded as usage grows and it will require upsizing.

But upsizing is not an option when faced with a tight budget.

Oracle's solution to this problem is its computer-grid offering, which pools server resources across the SSC.

The computing power harnessed from this pool will then optimse the services that are deployed over the centre.

Fox-Martin cited an example.

She said the National Health Service (NHS) in Britain, expects to save more than £400mil (RM2.8bil) over the next 10 years by employing shared services.

She said the cost savings would allow the NHS to hire up to 12,000 new healthcare professionals — a boon to the British public.

Having a single, consolidated centre that is shared over the entire government agency does not mean a government official cannot supervise the activities within the agency.

"In fact, in the case of the NHS, the Health Minister is able to monitor the entire public health situation in Britain," Fox-Martin said.

Malaysians would also be able to get the same results as their British counterparts, according to Oracle. "By saving funds, they could (for example) use the money to provide farmers with computers so that they will always be in the know when it comes to crop prices," Fox-Martin said.

She said this is already happening in India and the farmers there are able to sell their crops at competitive prices to the middlemen.

Oracle sees potential for SSC in the Malaysian market and the public sector is a clear target, said Fox-Martin.

The Government is already moving towards using a centralised system through e-Perolehan, the electronic system that manages all government tenders.

"This blends well with the idea of government departments reporting and supervising from a single source," she said.

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