NHS Shared Business Services (part 2) – blending efficiency and service

In part 1 we gave the background to the NHS Shared Business Services operation, following my visit to their Leeds centre recently.  The operation runs back office finance, HR and other services for hundreds of hospitals and other health organisations from around the UK.  Not only is it arguably the most successful shared services operation in the UK public sector, it is one of only 13 such organisations in the world that gets the Hackett “world-class” designation.

The first point that struck me during the visit was that it appeared less of a “processing factory” than I had expected. Whilst efficiency is clearly key, it doesn’t look or feel like a paperwork production line. An impressive young woman who runs the mail room described how tasks rotate around the staff there, to maintain interest and motivation, and how a “lean” approach, with everyone contributing to make the operation more effective, had paid off with significant efficiency gains.

So efficiency and staff involvement are obviously positive factors - but what do the SBS top team think is behind the steady and impressive growth in the number of organisations signing up to use their services?

“We’ve benefited from great support from the Department of Health”, John Neilson, the CEO of SBS told me. “Peter Coates (the Department’s Commercial Director) has been involved from the beginning and his backing has given us a credibility in the market and stability over the years that’s been invaluable”.

But Coates and SBS haven’t been able to force health organisations into using the services, so clearly there’s more to it than that. Indeed, as the original framework contract put in place has expired, potential customers now have to go through a formal procurement process and select SBS properly in order to contract with them. One smart move though, dating back to the early days, was offering Trusts a guaranteed saving if they outsourced to SBS. That offer still applies today.

The centre  runs an Oracle platform, and any client who comes on board transfers to that platform. SBS has an experienced migration team, and clients are moved into the platform over a carefully planned 3-4 month period. “We do offer a certain degree of flexibility and we can tweak services to meet specific client needs – but it is fundamentally a common platform, which obviously is key to drive efficiency”.

The senior team – and indeed the staff in general – come from a mix of backgrounds, which may well be a positive factor. Some were part of the original NHS team that was TUPE’d into the new venture. Some, like Neilson, were Steria executives, and some have joined since the operation started. “We’ve got very high staff retention figures – not just the previous NHS staff, who have retained pension rights and so on, but also amongst staff who’ve joined us more recently”, Neilson claims. It’s hard to tell from a quick tour of an office, but the atmosphere certainly did seem positive – and two of the staff I talked to have worked their way up into management positions from junior admin roles, a sign of the commitment to staff development.

Accounts Payable is one for the major areas of work, and SBS handles over 5 million invoices per year now. OB10 provides e-invoicing services – whilst only 8% of the invoices currently go through that route, that’s 8% of a very large number!

But SBS have been running a detailed selection and market review process to look at all the available e-invoicing platforms with a view to increasing that percentage, by offering more functionality and benefits for their clients and the clients’ suppliers. The selection process is at an advanced stage – but SBS weren’t giving anything away when I asked whether the end result was likely to be OB10 or another provider. It will be interesting to see how that pans out anyway.

In part 3 we’ll sum up and suggest some factors for the SBS success – and whether other shared services ventures can learn anything from this operation.

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Voices (4)

  1. Sam Unkim:

    Hi Peter

    Whilst this is all very nice and I am sure of interest to the readers you share with Ellen at APN. We purchasing folk would really have liked you to get into their Commercial Procurement arm.
    For example –
    Does Mr Nielson still feel that the NHS “wastes billions on procurement” now that he is responsible for much of that procurement?
    How are they getting on with their targets to
    “Utilise Trust data to aggregate spend and volumes together across organisations we create greater leverage and thereby give NHS Trusts the ability to manage the market”… etc..etc http://www.sbs.nhs.uk/commercial/end-to-end-procurement-service.

    Also e-invoicing (OB10), surely should have produced massive process efficiencies, What were SBS’s targets, who are the suppliers they plan to get on-board next, what savings did the NHS miss when it failed to reach even one in ten. Were the Trusts themselves incentivised to challenge their suppliers to get involved.
    and just how many tonnes of paper waste does 5million invoices and envelopes (-8% 🙂 ) equate to ?

  2. Alex K:

    Trouble at t’ Mill?

    Peter – just wondered what the SM take on the issues being faced at yorkshire technology vendor Proactis? Some interesting developments in recent days with announcements that:
    1) its long-serving CTO and “father” of the product is leaving and
    2) the company’s largest shareholder has publicly queried the company strategy and expressed concern at the company’s performance

    Clearly something going on there? What advice would you give to companies considering an investment at this time?

    1. Peter Smith:

      The full resources of the Spend Matters investigative journalism team is onto this i.e. I’m hoping to speak to Proactis shortly! Will report back soon one way or another anyway.

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