Sharing the load – are shared services the answer?
As we discussed in a previous post all public sector organisations face the same basic dilemma today: how do they continue to deliver high quality services to their customers while spending less money?
Taking into consideration that there are no additional budgets available, yet demand for public services continues to rise, one way to redress this is for organisations to work together to deliver services – sharing the workloads, the cost of delivery and best practice.
It’s not a new concept, but could provide a logical solution to the current challenges facing the sector. Despite this, it may surprise you that little progress has been achieved over the last decade – however, it seems that the wheels of change are now in motion.
Capita’s software services currently supports 25 shared service operations for local authority revenues and benefits operations, payment management and a library service and in 2011, we announced six new shared services customers and can see a rise in demand going into 2012.
In a recent survey of senior directors and officers from 310 organisations across central and local government, police, fire and health , Capita’s software services division and SOCITM (the association of IT professionals working in local authorities, the public and third sectors and their suppliers) found that more than 94% of respondents felt that shared services provided an opportunity to cut costs, and 7 in 10 found it to present an opportunity for innovation, radical redesign of service delivery and for improvements in service quality.
Given the current age of austerity, it seems that the tide is turning for shared services, with 47% of respondents already working within established shared arrangements and a large number planning or about to do so.
So, what services can be shared? Waste, recycling and street cleansing are the most popular, with human resources and payroll and technology gaining increasing momentum, with one in four respondents establishing shared services in these areas. The research team also found that participants were also beginning to share services in legal, audit and business continuity areas.
As with all areas of change, concern can creep in at times and the biggest barriers to shared services include:
- Fear that implementing them will bring job losses within organisations
- Fears over loss of autonomy
- Fears over loss of organisational identity
While it’s natural to have reservations, these issues can be overcome by all the usual essential ingredients of culture change such as strong leadership, good communication and building trust.
In all, it will be interesting to see what 2012 has in store for shared service, but one thing is for certain – the stakes, and rewards, have never been so high.
For more information download the full report here
About the author:
Matthew Stammers works within software services as the marketing director helping clients apply technological solutions to enable them to drive their organisations forward to meet public sector challenges. Matthew has 16 years experience working across the public sector.
Shared Services seem a really good idea. Financially, they make sense in the long term (though some upfront set up costs should be considered). Operationally, the services are often performed as a ‘back office’ function and so relatively ‘location independent’. Politically, however, they can be more challenging.
Last year I tried to arrange a Think Tank on Shared Services in a Midlands city, aimed at bringing together local government (county, city and boroughs), education, health, and blue light services. The outcome was to introduce the concept and gauge the appetitive for looking at the options in more detail.
Disappointingly the response was very poor, but I did get to meet the fire authority contact subsequently and his suspicions were that local politics probably were getting in the way. Worries about job losses in each organisation (which is an understandable concern) were likely and so a desire to protect rather than to change. There was also a feeling of one organisation would be ‘creaming off all the work’ to the detriment of all of the others.
In this economic climate, there have to be ways to overcome these fears and perceptions, and see beyond local politics. Our Think Tank was simply a starting point for discussions and exploration. Many enlightened organisations have already introduced Shared Services (even in this area there are examples of shared chief executives and audit services across boroughs), and no doubt addressed the issues above.
Whilst we were unsuccessful on this occasion, providing an independent facilitator could be a good way to at least get everyone around the table. Watch this space for our next attempt!