Speakers Examine Proposal to Create Three Shared Administrative Service Centres, as Budget Committee Considers Benefits, Cost of Global Service Delivery Model

GA/AB/4285
19 June 2018
Seventy-second Session, 46th Meeting (AM)

Speakers Examine Proposal to Create Three Shared Administrative Service Centres, as Budget Committee Considers Benefits, Cost of Global Service Delivery Model

With the long-term goal of improving the United Nations worldwide delivery of administrative support services in mind, the Fifth Committee (Administrative and Budgetary) today took up the Secretariat’s proposal to create three shared service centres — in Nairobi, Budapest and Mexico City — to handle dozens of transactional services.

The global service delivery model is a crucial part of the Secretary‑General’s management reform efforts and aims to boost the Organization’s effectiveness and efficiency by delivering shared administrative services through fewer locations.

Japan’s delegate said the importance of that revision could not be overemphasized.  Japan had strongly supported the global service delivery model since its inception as it would enhance the value of Member States’ collective investment in the Organization.  He supported the system’s launch in January, as proposed by the Secretariat, although he wanted to know why the Secretary-General decided to reduce the number of shared service centres from the original four to three, and why the number could not be limited to two or one.

Yet, Uganda’s delegate, associating himself with the “Group of 77” developing countries and China, said the Secretariat’s proposal did not include the full scope of shared services and did not indicate the costs of terminating staff contracts.  At the same time, the General Assembly was being asked to provide $55.9 million for operational costs and $11.42 million to support the establishment of 324 posts to carry out shared services.

Also associating with the Group of 77, the representative of the Philippines questioned whether the three global shared service centres — in Hungary, Mexico and Kenya — were sufficient, given the workload and nature of the administrative processes they would be handling.

Mexico’s delegate said his country could offer cutting-edge technological services and top-notch logistical facilities, adding that Spanish was the second most-spoken language in the world.

Christian Saunders, Assistant Secretary-General for Central Support Services, introduced the Secretary-General’s reports on the global service delivery model, including an addendum that was released on 1 May.  He said the revamped delivery model was a natural progression after the roll‑out of Umoja had made business processes more standard and automatedThe proposed global service delivery model would consolidate fragmented administrative structures within and across duty stations with the goal of improving service delivery across the global Secretariat.  “The United Nations Secretariat can become both nimbler and work more efficiently and effectively to better support both its normative and operational activities,” he added.

Carlos Ruiz Massieu, Chairman of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introduced the Advisory Committee’s related report.  While reaffirming the importance of a global service delivery model, the Advisory Committee considered that two Global Shared Service Centres could carry out the required functions while ensuring business continuity and meeting client needs.  It recommended that the General Assembly ask the Secretary-General for a new proposal, that would create two centres, during the main part of its seventy-third session.

Jeremiah Kramer, Chair of the Joint Inspection Unit of the United Nations System, introduced the Unit’s related report, which reviewed how seven United Nations system organizations developed multifunctional global shared service centres for administrative support services.  While cost savings was a main driver of the changes, other motives were reducing the footprint of missions and the number of civilians residing in hazardous situations.  He added that, while labour arbitrage was an important consideration, it was incorrect to conclude that savings realized were the sum difference of staff costs.

Also speaking today were representatives of Egypt (on behalf of the “Group of 77” developing countries and China), European Union, Switzerland (also on behalf of Liechtenstein), United States, China and Kenya.

The Fifth Committee will reconvene at 10 a.m. Wednesday, 20 June, to discuss the status of implementation of the information and communications technology strategy for the United Nations.

Global Service Delivery Model

CHRISTIAN SAUNDERS, Assistant Secretary-General for Central Support Services, introduced the Secretary-General’s reports on the global service delivery model for the United Nations Secretariat (document A/72/801) and an addendum on the revised shared service centre distribution (document A/72/801/Add.1/Rev.1), which described the Secretariat’s proposal to consolidate administrative functions that were location-independent within a small number of Global Shared Service Centres.  That was a natural progression after Umoja made business processes more standard and automated.  The proposed global service delivery model would consolidate fragmented administrative structures within and across duty stations with the goal of improving service delivery across the global Secretariat.  “This would enable services to be delivered with greater consistency and scalability, provide economies of scale and reduce the Organization’s footprint in high-cost and higher‑risk duty stations,” Mr. Saunders said.  “The United Nations Secretariat can become both nimbler and work more efficiently and effectively to better support both its normative and operational activities.”

The model would help the Organization realize the full capacity of enterprise systems to free up programme managers from administrative tasks and let them deliver on their mandates by focusing on strategic priorities and provide high‑quality, timely and cost-effective administrative support services to all clients, he said.  The model was a key enabler of the Secretary-General’s reform agenda and was fully aligned with the redesigned organizational architecture and operating framework laid out in the Secretary-General’s proposed management reform.  Its development had benefitted greatly from the direction set by the General Assembly and the recommendations of oversight bodies on business transformation initiatives, he said.  In selecting the number and distribution of future shared service centre locations, various configurations and scenarios were considered, both in the context of the services being proposed for consolidation for 2019 and the potential for expansion in the future.  Subject to the decision of the Assembly, the model was planned to begin operations in 2019.

CARLOS RUIZ MASSIEU, Chairman of the Advisory Committee on Administrative and Budgetary Questions (ACABQ), introduced the Advisory Committee’s related report (document A/727/Add.50), which reaffirmed the sustained importance of a global service delivery model for the Secretariat.  The Secretary-General had proposed the creation of three Global Shared Service Centres, in Europe, Africa and the Americas, for the delivery of 60 transactional administrative processes in the first phase.  The proposal would provide time zone coverage under a “follow‑the-sun” model as it reflected business continuity considerations.

The Advisory Committee noted that since only 8 of the 60 processes to be handled by the centres were time-sensitive, it was not fully convinced that a “follow-the-sun model” for time zone coverage was essential.  The Advisory Committee considered that two Global Shared Service Centres would be able to perform the required functions, ensure business continuity and meet client needs.  The Advisory Committee recommended the Assembly ask the Secretary-General to submit a new proposal during the main part of the seventy-third session for the establishment of two centres.  With the workload and number of United Nations personnel in the Africa region, the Advisory Committee recommended that at least one of the centres be located in Africa.  The Assembly may wish to consider providing the Secretary-General with additional guidance for the new proposal.

With the Organization’s number of staff in French-speaking countries creating an expected significant workload in the French language, the Advisory Committee considered the new proposal should ensure adequate coverage of French‑speaking staff.  Noting the higher costs and lower savings of the proposed model, the Advisory Committee emphasized that the new proposal should clearly lay out increased efficiencies and cost savings, and that the centres’ proposed staffing should be reviewed.  It urged the Secretariat to continue consulting with Member States, including potential and current host countries of United Nations offices which may be impacted by the global service delivery model.

JEREMIAH KRAMER, Chair of the Joint Inspection Unit of the United Nations System, introduced the Unit’s report titled “Administrative support services:  The role of service centres in redesigning administrative service delivery” (document A/72/299).  That document reviewed the experience of seven United Nations system organizations in considering and developing multifunction global shared service centres for administrative support services.  The Unit examined the drivers of change, the experience in developing business cases and cost-benefit analysis, selecting locations, realizing benefits, defining governance arrangements, measuring performance and addressing change management and human resource management issues.  Perhaps the most important insight was that the development of a multifunctional global shared service centre was not merely a technical project, but a vehicle for business transformation.  A long view was needed, not only because change required time and resources, but also because service centres were often appealing platforms for the addition of other non-location-dependent functions.

Another insight was the need for a strong business case, he said.  The main driver of change was a quest for cost savings, but there were other motives as well, such as reducing mission footprints and the number of civilians in hazardous situations.  A broad view of what needed to be pursued and how to measure success was required, he said, adding that the benefits of Global Shared Service Centres were not self-realizing, but must be harvested.  He added that, while labour arbitrage was an important consideration, it was wrong to conclude that savings realized were the sum difference of staff costs.  Multifunctional and transaction‑oriented service centres presented specific challenges.  Those included:  high local staff turnover in some locations; a rigid staff contractual framework; the lack of pension portability for those not making a career in a service centre; international staff who viewed service centre work as unhelpful for professional advancement; and low post adjustment in locations such as Malaysia and Hungary for international staff.  Among other insights, he said key performance indications — never a strong feature of the United Nations service centre experience — should be periodically revised.  The Unit’s report also included recommendations to ensure accountability to, and oversight by, legislative bodies vis-à-vis service centres.

MOHAMED FOUAD (Egypt), speaking on behalf of the “Group of 77” developing countries and China, expressed serious concern about the very late introduction of the agenda item on the global service delivery model, almost three weeks after the official end of the time allocated to the Fifth Committee’s second resumed session, which traditionally focused on peacekeeping and other urgent matters.  While the Group of 77 was exercising flexibility on this occasion, it reminded the Secretariat and other stakeholders that keeping a sense of discipline in the Committee’s work required the submission of information and documents “in full, on time and without excuses”.  The Group of 77 would carefully examine the Secretary‑General’s proposals and the Advisory Committee’s remarks, paying particular attention to how they responded to General Assembly resolution on the global service delivery model and how they might improve service delivery and outcomes.

JAN DE PRETER, European Union, said the Organization’s service and support processes were too complex to respond to today’s challenges in a flexible and agile manner.  “It is time for the Organization to evolve to become more fit for purpose,” he said, emphasizing that the European Union supported the goal of a truly global Secretariat that could better deliver on its mandates.  The global service delivery model was essential for pulling together different reform processes and creating synergies, he said, adding that it would also be key for unlock the real benefits of Umoja.  The overall objective was to improve the quality of mandate implementation and free up resources.  The European Union would study the Secretary-General’s proposals carefully, as well as the Advisory Committee’s recommendations, he added, emphasizing the importance of keeping up moment on the entire range of United Nations management reform proposals.

ALEXANDRA ELENA BAUMANN (Switzerland), speaking also on behalf of Liechtenstein, expressed support for the Secretary-General’s vision for management reform and his overall vision for a global service delivery model.  However, given time constraints, it would be difficult for the Committee to discuss the proposal for the model in detail.  A refined proposal should be submitted during the main part of the General Assembly’s seventy-third session and in it the Secretary-General should better explain his proposed location selection and why the locations identified in his report presented the most benefits to the Organization.  Current and potential future host countries must also be consulted and informed in due process, she said.

CHERITH NORMAN CHALET (United States), recalling that the General Assembly had endorsed the global service delivery model initiative two years ago, said:  “It is time to move past the conceptual stage to implementation.”  If properly implement, the model could bring the Organization in line with modern business practices by moving location-independent administrative functions out of high-cost duty stations, such as New York.  The United States agreed with the Advisory Committee that the Secretary-General’s report could have proposed more processes as part of its scope for inclusion in the model.  His report had identified 201 location-independent processes within the Secretariat, but only proposed 60 for relocation to shared services.  The Secretary-General should therefore be more ambitious and propose additional processes for relocation, she said.  She went on to say that shared services locations should be chosen on the basis of transparent and objective criteria, with effectiveness and efficiency remaining paramount.

JUAN SANDOVAL MENDIOLEA (Mexico) said the proposal to create shared services was a step forward to decentralize support services in the Organization.  Regional centres, given appropriate teams and staff, could lead to speedier implementation of the Organization’s mandates.  It was an integral part of the Secretary‑General’s reform mandates.  He was convinced that the decisions of the Fifth Committee could help the Organization become more effective.  Mexico City was being considered as one of the regional centres and Mexico was grateful for that proposal.  Mexico offered cutting-edge technological services at very competitive costs and top-notch logistical facilities.  It could ensure considerable savings for the Organization.  He agreed with ACABQ that any proposal needed to provide more savings, stressing that a centre in Mexico would be a centre of excellence if it was selected and could provide immediate benefits for the Organization.  He also supported multilingualism and noted that Spanish was the second most-spoken language in the world.  He urged the Fifth Committee to speed up its negotiations to arrive at an agreement on its body of work.  There was no reason why the Fifth Committee could not arrive at a decision on those issues this week.

ADONIA AYEBARE (Uganda), associating himself with the Group of 77, said that, in an era of doing more with less, the General Assembly was being asked to provide $55.9 million for operational costs and $11.42 million to support the establishment of 324 posts to carry out shared services.  However, the Secretary‑General’s report did not indicate the costs of terminating staff contracts.  Noting that Budapest, Mexico City and Nairobi would host the shared service centres, he emphasized that $17.5 million to $25 million had already been spent on the Regional Service Centre in Entebbe, and that the Secretary-General’s report implied that that money would be lost if the proposal moved forward.  He went on to say that the proposal failed to include the full scope of shared services, creating difficulties especially for peacekeeping staff who would have to access various services from different shared services centres.

Ms. XUE (China), associating herself with the Group of 77, supported the Secretary-General’s efforts to improve the Secretariat’s administrative services.  Going forward, China hoped the Secretary-General would refine it.  The selection of locations for global shared service centres should be an open process, led by Member States, and the Secretariat should make public relevant information to Member States in a timely fashion.  Important factors, such as geographic distribution, must be taken into account in choosing the locations for the centres, she said, adding that relations with existing regional services — which had provided a huge amount of services and accumulated valuable experience — must be properly handled.

KATSUHIKO IMADA (Japan) said that the importance of the global service delivery model, an integral part of the Secretary-General’s management reform vision, could not be overemphasized.  Japan had strongly supported the concept since its inception as it would enhance the value of Member States’ collective investment in the Organization.  Japan looked forward to discussing the proposal so it could be successfully launched this coming January, without delay.  He agreed with the Advisory Committee that the piecemeal submission of revised documents and subsequent amendments had produced a lack of clarity in the existing documents now before the Fifth Committee.  He wanted to know the logic behind the Secretary-General’s decision to reduce the number of shared service centres from the original four to three after the original report was submitted on 21 March.  Any rationale had to be coherent and consistent and should have been applied to the original four-location proposal.  It should also justify why the number of centres could not be limited to two or one.  The Secretariat also had to ultimately convince Fifth Committee delegates why a proposed location was the best solution to enhance the Member States’ collective investment by integrating and streamlining transactional and administrative services that were “location dependent”.

Ms. VALLES (Philippines), associating herself with the Group of 77, questioned whether three global shared service centres — in Hungary, Mexico and Kenya — were enough, given the workload and nature of the administrative processes they would be handling.  Noting that the Secretary-General’s report had mentioned the proposed abolishment of 684 related posts and general temporary assistance positions in 2019, she asked which specific nationals would be affected and when.  In addition, she requested more details on workload indicators used to evaluate the proposed cost-sharing arrangement among funding sources of client offices.

LAZARUS OMBAI AMAYO (Kenya), associating himself with the Group of 77 and the European Union, appreciated that the lessons learned from previous reform initiatives had been incorporated into the process and had helped develop a shared service model that addressed human resources changes.  He noted that the Joint Inspection Unit had been instrumental in helping the Secretariat develop that model.  The Organization needed to be nimbler and the reform would help it implement the 2030 Agenda for Sustainable Development.  To effectively manage the current Organization, Kenya believed the Secretariat needed to improve service delivery and achieve transparency.  The Fifth Committee needed to discuss the agenda item and move forward taking into account Member States’ views.  He did not believe that the Fifth Committee could complete consideration of that important issue within the remaining two days of the current session and urged it to consider going the extra mile to discuss it properly for the Organization.  As host country of the United Nations Office in Nairobi, Kenya welcomed its selection as one of the recommended global shared service centres and would be able to go the extra mile to provide services to the Organization.  Kenya supported the reform process and looked forward to discussions in that area.

TOMMO MONTHE (Cameroon), Chairman of the Fifth Committee, said he was satisfied that the Committee had finally taken up the agenda item.  He was pleased that Member States stated they would engage on the issue because if there was no engagement, there would not be any negotiations.  He noted that Member States said they would engage actively and constructively in a timely manner and pragmatically.  With all those key concepts in mind, he was sure the Fifth Committee would reach a consensus on the issue.  The Bureau would provide its knowledge and capacity to Member States during the informal consultations.

For information media. Not an official record.