40% of public sector organisations bringing forward Shared Services plans

The findings in this study are based on a survey run in January 2011 of 106 senior managers and directors in the public sector. Of these 45% were in local government, 19% in education, 16% in the NHS, with the rest from Third Sector, Central Government and Blue Light organisations.

Just over half of public sector bodies already have some type of Shared Service functions in place. However, in 2011, 40% of organisations are bringing forward plans to use Shared Services and a further 9% say that the Comprehensive Spending Review (CSR) has led them to opt for a Shared Service strategy where they did not have one before.

As a result of the Comprehensive Spending Review, expectations of cost-savings from Shared Service Centres are rising up to around 20%, in line, or a little below, required budgetary reductions. Despite this expectation we can discern no rush to private sector suppliers for outsourcing contracts or Joint Ventures.

The most popular types of Shared Service Centre structure involve public sector bodies taking charge and doing it for themselves. Be that via a dominant Lead Department model, a Joint Initiative Model or by a Strategic Partnership model. The preferred prospective partnership is between adjacent local authorities where the political party in power is not an issue, closely followed by partnerships with educational establishments and Third Sector organisations.

K2 Advisory strongly believes there are enough good, strategically-focused CIOs with involvement in forward-thinking Shared Service projects to provide services, guidance and partnership opportunities to those that are not as far down this path. In other words, the CIO community within the UK public sector is seizing the opportunity to successfully create Shared Services without requiring external leadership.

In 2011/12 the highest priority area for migration to Shared Service delivery is ICT. But our research suggests that the CIO is only likely to be considered as Head of the Shared Services function, where he or she has management experience outside of the IT Department, ie: the more strategically-focused CIOs. This holds true even where IT is the sole Shared Service and/or IT is the largest employer in the Shared Service function.

Rightly or wrongly most public sector bodies appear to be planning a tower by tower approach to Shared Services rather than looking to develop multi-process Shared Service Centres. The perception is that the multi-process approach may be too grandiose in ambition, and too costly to attempt in one (very large) project. K2 Advisory findings are that frontline customer services are the least popular area for using Shared Services delivery despite the Total Place initiative. This may be a missed opportunity for joining up back office processes with frontline delivery in order to properly execute Total Place.

Further information and the full research study is available to buy from K2 Advisory.