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Alternative Service Delivery

Globally, almost every sector - public, not-for-profit, and private - is facing similar challenges. Demands for better-quality services, cost reduction, flexibility, and competitiveness are faced by every government, agency, and business organization. While addressing these demands we are also experiencing unprecedented advances in technology, a changing population and workforce, new skills requirements, and enhanced capabilities for partnerships and new lines of communication.

As a result, business and government organizations are experiencing a fundamental restructuring. Some sectors have already begun implementing new approaches to doing business. Important lessons can be learned from their experiences. Alternative Service Delivery is one way in which the government can achieve its goals of business renewal and providing effective and efficient services.

Alternative Service Delivery is changing the way government works. It opens up a vast array of new solutions to service delivery issues. By using ASD, the government is beginning to realize the benefits of focusing its business on the things it does best while allowing other sectors to deliver other activities and functions -- doing what they do best.

What is "Alternative Service Delivery?"

A Definition:

Defining ASD is a challenge. There is no "dictionary" definition or traditionally accepted meaning.

The Institute of Public Administration of Canada in its 1997 study "Alternative Service Delivery: Sharing Governance in Canada" gave much consideration to defining ASD for the government context. A workable definition was offered after much debate by practitioners, academics, and public administrators.

"Alternative Service Delivery is a creative and dynamic process of public sector restructuring that improves the delivery of services to clients ..."

The primary goal of ASD is to improve services to clients. When we implement an alternative method of delivery, it is because we have determined that the alternative will have pay-offs in terms of service and client/customer satisfaction. In addition to improving service, ASD can also provide organizations with other benefits such as cost savings, improved access to specialized expertise and capital, etc.

Although ASD may often appear at face value to be fuelled by fiscal constraint, ASD's principles of sharing responsibilities and service delivery functions with other sectors bring many benefits, creating synergies by drawing on a diversity of expertise.

ASD is Not New:

Although they may not be referred to as "ASD", the operating principles of ASD are already being used by a number of organizations to provide goods and services. Many private sector and not-for-profit organizations have realized the need to focus on core business. Other business activities and functions that are not core to the business are now delivered through alternative methods. Some core businesses also lend themselves to an ASD type of arrangement. Some examples:

  • corporations that contract out the management and provision of food services in the cafeteria of a large office building;
  • commercial property developers that leave the day-to-day management of a corporate office complex to a property management firm;
  • an automobile manufacturer that uses an outside supplier to design and assemble car components such as seats or steering wheels;
  • a small textile business that has its payroll services administered by a large payroll processing company that specializes in such services;
  • a group of community child care centres that pool their funds to hire an external bookkeeper to do all their accounting on a standardized system;
  • These types of organizations have used alternative delivery methods for a number of years. For these businesses, ASD means making the best use of resources and getting the required services through the most effective and cost-efficient means.

ASD is Not Just the Latest Management Tool for Cost Reductions:

Many organizations have gone through a number of methodologies to improve services, cut costs, and streamline processes. Most of us are familiar with such management terms as TQM (total quality management), bench marking, activity-based costing, downsizing, delayering, business process re-engineering.... to name a few. In varying degrees, these methodologies have all helped organizations cope with change.

In contrast, ASD is not simply a management tool or methodology for making service delivery more efficient. It moves well beyond management techniques of bench marking, activity-based costing, or business process re-engineering.

ASD starts with a process: a rigorous analysis of the business delivery function. This analysis helps the program manager to focus on selecting the best delivery model for a specific service. This selection is achieved by taking into consideration a range of options and assessing the risks, opportunities, implications, and benefits of applying those options.

Those who use ASD should undertake a fundamental analysis of what the business is, what services are provided, why those services should be provided, if at all, and who is in the best position to deliver them.

ASD Within a Government Context:

Within the context of government, the rigour of applying an ASD process is relatively new. Government has traditionally directly delivered a range of services to its citizens and has often created large organizations responsible for planning, designing, implementing, and administering the services. Today we recognize that government can no longer efficiently and effectively support such an extensive array of services by itself.

Governments in many different jurisdictions are rethinking the way they do business. In doing so, governments are seeking creativity and innovation, flexibility and responsiveness to increasing numbers of complex pressures and demands.

In response to this change and rethinking, governments have used ASD as a mechanism to identify and assess creative solutions. Since the mid-1980s many government departments have undertaken a wide variety of ASD initiatives with positive results. Some examples:

  • Transport Canada's devolution of services to the Vancouver International Airport;
  • The merging and coordination of social services in Alberta;
  • The use of Executive Agencies in Britain;
  • Land registry services through Teranet, a public/private partnership in Ontario.

In the future ASD will continue to be a useful tool as government rethinks how it does business.

* This description of ASD is reproduced by the ICCS with permission of the Ontario Public Sector Restructuring Secretariat. Alternative Service Delivery in the Ontario Public Sector, OPSRS, August 1999.