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Public sector re-structuring - leadership is the key

Ahead of the Budget, George Osbourne will today announce details of plans to cut public spending by over £6.2bn, saying that action needs to be taken now to resolve serious long term issues in public finance. Budgets for IT, property, advertising and recruitment are expected to be cut and whilst the Chancellor is not talking about job cuts (yet) he is talking about recruitment freezes and a reduction in the number of quangos.

Inevitably there will be restructuring, but public sector behemoths have different strengths and weaknesses to private sector organisations, can they learn lessons from successful re-structuring in the private sector? have written a report which looks at parallels between public and private sector restructuring (Public Sector M&A) and have identified ten key lessons from successful private sector

  1. Carry out due diligence of the IT systems before restructuring.
  2. Undertake a detailed review of all systems once the immediate IT issues have been resolved.
  3. Start from the premise that this is a new organisation: only put back in those systems which will add value.
  4. The IT procurement team will play a fundamental role: make good use of them.
  5. Find smart ways to share some of the efficiencies in the new structure with your top-performing IT suppliers.
  6. Save substantial costs amalgamating processes, not just the hardware.
  7. Ensure that the most senior people in the organisation fully understand the scale and complexity of any technology issues. Don’t be tempted to deliver only good news.
  8. Involve staff directly delivering IT services.
  9. Accept that some people will resent decisions and decision-makers, especially in the short-term.
  10. Plan carefully, but act quickly, decisively and fearlessly.

According to Colm Reilly, “Most private sector mergers or acquisitions only release value after 18 months to two years. The idea that you can maintain service delivery and cut costs at the same time as restructure in the public sector simply isn’t realistic.”

The reports advocates strong, even dictatorial leadership, "The command and control management style, rightly discredited for organisations with a relatively even keel, has its place here. 'The organisation needs to know who's in charge,' argues Paul Freeman at Pcubed. 'They also need to know that it’s someone who can break through the bureaucracy that bedevils any large organisation.'"

NCC Resources

NCC Weekly News 24 May 2010



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