NHS Shared Business Services (part 3) – why has it worked so well?

- December 21, 2012 4:30 AM
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In part 1 and part 2 we looked at the NHS Shared Business Services (SBS) operation and described what they do for the UK health service in terms of back office shared services. We had an interesting comment after part 2, questioning whether SBS has really achieved much in the procurement field in particular. I think that’s fair comment – I suspect they haven’t really worked out how best to develop the North West Procurement Hub they acquired a while back. (We didn’t get into this in detail during my recent visit to their Leeds facility). And there is more they could do I’m sure to use the information they hold to drive more collaboration and better procurement generally across the system.

But having said that, it is an impressive operation from a shared services perspective, and is delivering value and service to hundreds of organisations now in areas including finance, payroll and procurement services.

So why has this operation been a success when so many shared services operations have failed? We discussed some issues in our previous two posts, but here is a summary of points I took away from my visit that perhaps help to explain why SBS has been effective.

  • A consistency of approach over the last five years has paid off – unwavering support from the Department of Health generally and Peter Coates ( the Commercial Director) particularly has undoubtedly helped. Whilst SBS can’t force people to join, that promotion and support has been invaluable.
  • The structure – a joint venture with the Department of Health and Steria (the private sector partner) both owning 50%, and an independent Board, has aligned the interests of Steria, the Department and clients very well.
  • Steria took nothing out of the venture until it was profit making. There are no clever transfer payments to Steria, consulting fees or other tricks used to boost the private sector’s profits, which we’ve seen in many other public / private partnerships. So customers perceive a sense  of fairness, rather than feeling that the public sector is being ripped off by the private.
  • SBS has benefitted from impressive continuity of staff, who clearly know what they’re doing. The blend of experienced NHS folk, Steria process and management expertise, and new experts recruited as required, appears to work well.
  • The guaranteed savings offered to clients has been a strong marketing tool and has forced the operation into a high-performance mode in order to meet the cost promises.
  • A combination of a standard approach to services with some limited client flexibility has worked well.  The core service is off-the-shelf, Oracle based, without too much ability for clients to flex. But that comes with a positive attitude to customer service – “if we can say “yes” when a client wants something a bit different, we will”, SBS say. But not if it subverts the overall process standardisation to an unacceptable level. (Knowing where that line sits is, I suspect, a key skill for senior managers).
  • The blend of onshore and offshore staff appears to work well and has helped achieve cost reduction for clients whilst not getting into too much political fallout about moving jobs to India, given SBS employment in the UK has also grown strongly.
  • A management style that appears to combine a strong drive for efficiency and continuous improvement with a genuinely caring attitude in terms of staff must have helped.

Some of this is arguably no more than good management. But the 50:50 ownership and the governance structure is something that other public organisations could consider in this shared services area and indeed elsewhere. Next time a local authority is looking at some wholesale outsourcing (Somerset, Cornwall, Barnet, are you listening),  maybe they need to go to Leeds and talk to SBS first.

Comments

  • Dave Orr:

    Why didn’t Health bodies in Cornwall take up NHS SBS then?

    Why did they prefer full 2+ year tender with Cornwall Council with BT?

    NHS SBS has a framework agreement, so no EU bid costs and no delays for Cornwall Health bodies taking up NHS SBS shared services.

    Why not research a bit more and ask the named Cornwall Health bodies why they didn’t take up NHS SBS?

    Could it be that NHS SBS has almost 50% of the workforce offshored in India and Cornwall was mindful of that impact and followed the Welsh procurement model (which you also highlighted) where a rounded view of local economic impacts on employment and skills was taken?

  • NHS Shared Business Services – our series isn’t liked by everyone! — Spend Matters UK/Europe:

    […] (SBS) that we published just before Christmas, following my visit to their centre in Leeds.  (Here’s a link to the third and final part of […]

  • Howard:

    Perhaps you’ll also link to my critiques of your article series:

    Settings the record straight:

    http://calchaspss.wordpress.com/2013/01/24/spend-matters-and-nhs-sbs-setting-the-record-straight-you-decide/

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