Shared Services: A Transformational Vision

In November 2005 the Cabinet Office published 'Transformational Government: Enabled by Technology', which set out the Government's vision for a long-term transformation of public services. The paper states that:

“...Government must move to a shared services culture – in the front office, in the back office, in information and in infrastructure and release efficiencies by standardisation, simplification and sharing...”

Whitehall has its own plans to cut central costs by sharing administration systems, with two of its organisations recently signing up to the Cabinet Office’s central IT deal. The newly-created Department for Innovation, Universities and Skills is the first stand alone shared services programme to be set up since the launch of the Transformational Government strategy and intends to cut public sector IT costs by 20%. Whitehall CIO John Suffolk said:

“...If an organisation can’t beat the quality of the service for the price on offer, then it should join up.  We have no axe to grind, but if what we have on offer is available for others to use then why would they want to reinvent the wheel?...”

The Benefits of Sharing Services

Sharing services presents the opportunity to minimise inefficiency by reorganising or reusing assets and sharing savings with others. Processes, people, systems and contracts are likely to be duplicated across services and departments. These could be streamlined and structured more efficiently and could release resources to re–invest in customer focused activities and the improvement of service delivery.

The Cabinet Office reports substantial reductions in headcount and financial spend, with savings of at least £1.4bn per year (20%) of the £7bn annual spend across HR and finance.

In other public sector organisations, Transport for London reported savings of 30% in the first year of moving to a shared service and the NHS of more than 20%.

The private sector reports savings of between 10-50%.

Big Savings, Bigger Challenges

Although dramatic improvements and substantial savings can be made through the introduction of shared services, there is no guaranteed ‘pay back’. One private sector survey found that while half of the companies surveyed targeted savings of 20% or more, only a third achieved it and over a quarter reported less than 10% savings (Business Intelligence 2004).

Warning! If you answer "no" to one or more of the following questions, you could risk not achieving your vision or target savings. Click on the links to understand how ValueAdding.com can help your organisation to minimise this risk. Has your organisation:

Question 1

Developed a robust, fully costed, strategic business case, evaluated all shared service options or established which services to transfer to a shared services centre?

- See how Making The Case can help

Question 2

Considered the change management implications?

- See how Managing Change: The X Factor can help

Question 3

Understood the readiness for change from internal and external stakeholders and identified the most effective channels of communication?

- See how Change Readiness Assessment can help

Question 4

Understood the complexities of implementing a major change programme?

- See how Project Delivery can help

Question 5

Considered how the new processes will be sustained and continually improved?

- See how Project Learning can help