Shared Services in the UK Government – a strategy or a tick in the box?

We're going to feature a series of posts around shared services and procurement outsourcing over the next week or two - we'll cover some public and private sector issues, but we'll start today with a UK government view.

It was a brave move by the coalition Government to publish business plans for all Departments and allow us to hold them to account in terms of meeting those plans. In general, it is to be applauded and has been a worthwhile initiative.

However, it does seem that in a few cases we’ve seen, there has been a last minute panic to “do something” or “publish something” because the plan required it to be so, even when really there wasn't much to say. And the cynic in me suspects that the Shared Services Strategic Vision paper, slipped out to remarkably little fanfare recently, falls into this category – it had to be done by the end of July, so a document duly appeared on the last working day in July!

The document is 6 pages long, of which 4 are content, and totals 1264 words – about the same as two of our typical blogs. Now size isn’t everything, (that makes it about the same length as the US Declaration of Independence), but this is by any standards a pretty thin document, even for a “strategic vision”.

Here are the five lessons learnt to date about shared services according to the paper.

Lesson 1: Independence is important to incentivise a better quality of services at a lower cost.

Lesson 2: Delivery of shared services is not a core Government skill and bringing in operational and commercial expertise is vital to improving current capability.

Lesson 3: On-boarding to a bespoke service can be expensive and issues on charging between public organisations can act as a barrier, e.g. smaller organisations need an affordable solution.

Lesson 4: Shared Services comprises a range of key components that influence cost and require standardisation – infrastructure, IT platform, ERP solution, business change, business processes.

Lesson 5: Strong governance is essential and efficiency gains are proportional to the level of mandation in the use of shared services.

Hard to disagree, but not perhaps particularly insightful.  We then finally get to meat -  2 pages of “strategic vision”. Here is what seems to be the core message.

We will reform how Central Government procures and manages consolidated back office corporate services - by establishing an equitable market of a small number (circa 2) of accredited Independent Shared Service Centres (ISSCs) and enabling Departments and their ALBs to choose between these – in order to drive up quality and reduce costs of these services, in support of Governments cost reduction targets

This seems to be the core – we’ll have a couple of shared service centres, dealing with HR, Finance and Procurement (although there is no description of what might be in or out of scope within those broad headings), operating independently from any individual Department. They may be public, private, mutual – there doesn’t appear to be any view on that pretty key element of the strategy as yet, or their location. I guess this is part of the next steps (see below)*.

OK, that sounds like progress. But then we get this.

Secondly, where they are large enough, Departments will be able to make a case to continue to use their own “standalone” back office corporate service provision. Performance of these Standalone Service Centres (SSCs) will still be monitored against agreed benchmarks by the central oversight function.

The central oversight function may be able to push Departments into an ISSC if their own centre doesn’t meet standards, but there is no mandation in the process, which may well mean Departments just keeping on with their own set-up.

So the vision (although it isn’t spelt out as clearly as this) seems to be that smaller Departments will migrate to the two ISSCs, while bigger may well stay with their own provision. That’s probably a pragmatic incremental strategy given where we’re starting from. But it’s hardly a dramatic or transformational shared services vision, and we'd be surprised if it delivered much in the way of savings within the life of this Government, given the pace at which things seem to be moving.

* “Over the next three months, the Cabinet Office ERG Shared Services team will work with Departments to conduct a due diligence exercise, to develop the plan to migrate to the future shared services model, together with an estimation of projected costs and benefits that will form the basis of a strategic outline business case. This work will be reported in November 2011”.

Voices (2)

  1. Epoch:

    This is such a disappointing and uninspired vision paper. It plays to all the stereotypes that people think shared services are, i.e.that they are all large back office processing centres, driven by massive ERP systems. No doubt Titus Salt would recognise these behemoths as a mere extension of the Industrial Revolution he was part of in the 19th Century. Shared services can be so much more now that Cloud technology and mobile apps are freely available but as ever, it seems that Government lags behind everyone else. I also find it odd that Ian Watmore hasn’t seen fit to really push the boundaries on shared services since his return to Government, seeing as it was his drive and passion that drove the last big shared services push in 2005-8. Perhaps, this is just to be swept under the carpet because HO, DWP et al, already have all the answers!!

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