Shared Service Management
From Blindside
Contents |
[edit] What is it
Shared Services is the singular management model for the organization and delivery of effective internal support services. Organisations exploring or implementing Shared services intend to facilitate cost reduction, outsourcing, process reengineering, TQM or organisational restructuring alternatives. Implementing the shared services model leads to organizations restructuring internal business structures and processes. The Shared Services model intends to stimulates greater accountability with varied management practices while leveraging capabilities of staff resources across the entire enterprise.
A shared service can take the form of a variety of business structures at onshore or offshore geographic locations:
- Unitary - A single organisation consolidating and centralising a business service
- Lead department - An organisation consolidating and centralising a business service that will be shared by other organisations
- Joint Initiatives (Internal) – Agreement between two or more organisations to set up and operate Shared Services
- Strategic Partnerships (External) – Contractual arrangement with third party provider for a range of services which include Shared Services
Technologies that enable effective Shared Services Management:
- Workflow technology: Technologies that ensure that work processes are performed in a repeatable, consistent, and traceable manner and generating measures and metrics, critical management tools for monitoring service delivery performance.
- Collaboration tools: Tools to communicate and collaborate such as electronic team rooms, web meeting capabilities, integration of instant messaging, video conferencing, remote communications / execution via PDA’s and other devices, voice recognition, and other tools are not just ubiquitous but critical.
- Digitization: Digital capture of source documents and tagging, controlling, tracing, and tracking those documents within an integrated process flow is essential to being able to move work between service points.
- Knowledge management: Knowledge capture and sharing tools. Organisation are also increasingly exploring tools and processes for the conversion of tacit knowledge into explicit form for better usage across organisations
A recent survey of public sector officials conducted by Kable shows the barriers to take-up of shared services have large implications for shared service management. Those barriers include (in order of priority):
Tax and VAT implications
Organisations in different sectors
Increased risk of project failure
CEO unwilling to give up power
Management/staff reluctant to change
Size of organisation
Geographical location
Lack of clearly documented best practice and directory of services
Political make-up of neighbouring organisations
Ownership and liability issues
Lack of political will
[edit] Impact & Maturity assessment
Impact 2 (Intermediate) Maturity 2 (Intermediate)
In the last twelve months there has been a step change in shared service activity in the UK public sector. Two years ago the concept had a relatively low profile; a year ago there was still a lack of clarity about the options for government, and the opportunities for suppliers were widely exaggerated. Now the future shape of the market is becoming clearer.
Shared services are not new to the public sector ICT. In the 1990’s Chessington Computer Centre provided a computerised service for payroll, personnel fi nancial accounting and other administrative services to central government, and was sold to the private sector in 1996.
Renewed interest was triggered by the 2004 Gershon Efficiency Review and Lyons review into public sector relocation, both of which emphasized the efficiency benefits of rationalization, with an emphasis in the first on moving resources from the back-office to the front-line; and in the second on relocation from the south-east and London.
In November 2005 the Cabinet Office published “Transformational Government – Enabled by Technology” which emphasized the benefits of services designed around the needs of citizens. More recently, in the lead up to the 2007 comprehensive spending review, Sir David Varney published his report on service transformation, which concentrated on channels for delivery of services. Varney made specifi c recommendations related to shared services including standardising contact centres, data sharing to enable improvements in service delivery; alignment of assets such as Government Gateway, Government Connect and other key systems; migration of services to the Businesslink and Directgov web sites; exploring a single access number nationwide for all non-emergency public services; coordinating services around common citizen and business themes; more cross-government one–stop-shop services; and development of joined-up services across local authorities.
The development of shared services in the public sector is thus occurring in an environment where the emphasis for transformation has extended beyond efficiency, to include service quality, and the focus has extended beyond backoffice functions to include front-line delivery.
In mid-2005 a Shared Services Team was established in the Prime Minister’s Delivery Unit in the Cabinet Offi ce. The team consists of a small number of public and private sector experts in shared services and corporate transformation. Their role is to raise understanding in government departments about the benefi ts of shared services; and how to achieve success. To do this they work across three workstreams covering shared services in government; the supplier market; and supporting activities and tools.
For the shared services team, the emphasis is on separating the transactional operations of a business into a self contained unit which is then reorganised to deliver more effective service at lower cost. These transactional operations can include any non-core activity, but the initial focus is on HR, fi nance and IT infrastructure. The expected benefits include better service to the business (consistent management information, financial control, value–added services, etc); cost savings (typically 30% - 50% for HR, 20% - 30% for finance); and a better experience for employees (more effective use of skills, improved career paths, etc).
This framework has set the context for the design of shared service initiatives over the last 18 months, and has been largely reflected in the plans published to date. The implementation plan committed to publishing nine shared service sector plans, each guiding the development and implementation of shared services over the next three to seven years for a specific sector:
- Home Office; - Defence; - Health; - Education; - Local government; - Department for Work and Pensions; - Her Majesty’s Revenue and Customs - Departmental families; - Department for Transport; - Department for the Environment, Food and Rural Affairs; and - Rest of central government (remaining Whitehall departments, agencies and NDPBs).
The shared services sector plans were published by the Cabinet Office in January 2007, and provide a shared services route-map, primarily for central government bodies and agencies. The structure reflects estimates of an optimum size for a shared service operation between 20,000 and 100,000 clients.
[edit] Information Assurance issues
New or changing shared services - Risks to the host and client(source: The UK Government Improvement Network)
Ephraim Schwartz writes about Outsourcing vs. shared services, two competing trends that help companies get more value out of IT operations. The writer quotes Chris Carrington, who leads Capgemini Outsourcing North America. Chris Carrington believes that effectiveness of internal SLA's in a shared service environment may be compromised. “What will they do [to IT] if they don’t hit the mark? Call another meeting?” he asks.
Organizations that have strategic partnerships with external organizations require strong virtual management and know-how of cross-border laws and regulations / cultural considerations, especially if the partner is an offshore company, to ensure information security.
[edit] Implications for UK Government
[edit] Timescale
Is the impact of this emerging technology felt - now (less than 18 months) - in 2-5 years? - in 5-25 years - longer-term than that even
We think that the impact of implementing, testing and running effective shared service management systems will largely be felt over the next 5-10 years.
[edit] Examples
Health – The Department for Health (DoH) places strong emphasis on the role of the NHS Shared BusinessService (NHS SBS), which is providing over 100 organisations with finance and accounting services. While the DoH expresses its intention to expand the scheme, decisions to join remain with individual organisations and it is up to NHS SBS to sell the service.
Education – The Department for Education and Skills (DfES) is considering core requirements for a newly formed corporate centre and what form of shared services are needed.
Home Office (including police) - all 239 Home Offi ce organisations will use shared services for finance, HR, procurement, IT and estates by 2010-11. It will conduct a convergence review of existing centres and proposes an entity to operate at arm’s length with clear accountability for service delivery; a national police shared service operation is under discussion.
Local government – We believe that this will be determined locally, using a complex mix of two-tier initiatives (county / district), cooperation between neighbouring authorities, and cooperation between local government and delivery bodies in other sectors.
Whitehall (including the Cabinet Offi ce, Department for Constitutional Affairs, Department for Culture, Media and Sport, Department for Education, Department of Health, Department of Trade and Industry, HM Treasury, Department for Communities and Local Government, Office of Government commerce and Office of National Statistics).
The Cabinet Office: the Project Isaac IT procurement is to be completed during 2007. It is also looking for solutions for other services from an internal provider.
Treasury and Office of Government Commerce are merging corporate functions during 2007-08, and in the longer term are looking for another government supplier to take on the transactional elements of their operations.
Office of National Statistics recently took its HR and finance onto a shared service, and is open to taking on services from other parts of government, but this is unlikely to happen before 2009-10. It also has an involvement in Project Isaac.
Department for Constitutional Affairs recently has a new IT arrangement and has existing contracts on finance and HR; and n Department for Trade and Industry covers corporate services under its current private finance initiative which will remain in place until 2014.
Departmental families - including Department for Environment, Food and Rural Affairs (Defra) and the Department for Transport, both of which operate a substantial family of associated agencies.
Department for Environment, Food and Rural Affairs plan Shared Services Direct, which should provide HR, finance, procurement, IT and estates functions for all of the agencies under the department. The exception is the Environment Agency, which has its own shared service operation, but the sector plan states it could be placed under the same management as Shared Services Direct in the future.
Department for Transport currently has a shared HR, finance and procurement operation for the Driver and Vehicle Licensing Agency and the Driving Standards Agency, and hopes to extend this to its six other agencies by the end of 2009.
The Ministry of Defence is working on a People Service Centre, which should take on HR operations for its Shared services in the UK public sector - civilian staff in 2007-08, and a shared service centre for finance, scheduled to become operational in 2008-09. It is also installing the Defence Information Infrastructure for IT, which should be in place by 2008-09.
HM Revenue and Customs (HMRC) is extending its existing enterprise resource planning system to the Valuation Office Agency, and is waiting until the system is bedded down, before considering a shared service for finance, HR and procurement. It is also working with the Cabinet Office on extending the use of the Government Gateway, and with the DWP on shared delivery.
Department for Work and Pensions - has had a shared service organisation for finance and HR in place since September 2006. It is promoting standard approaches to service, and sees itself as a “vision leader” for 2010.
[edit] Comments (attributed)
What people say about this emerging technology (attributed)
[edit] Organisations
Groups which have a particular contribution or point of view about this emerging technology, eg tech businesses, user organisations or advocacy groups
[edit] Documents & research papers
Very brief abstracts or links to informative documents, presentations or academic research papers about this emerging technology
[edit] Experts (academic, practitioner)
Links to academic experts or expert practitioners and commentators on this emerging technology
