Shared services – part not all the answer

There were a number of recurring themes in the Future of Shared Services in HE conference last week. Firstly, as Tim Marshall pointed out at the UCISA Conference back in March and reiterated here, you need to know your numbers. You need to know what your costs are so that you can understand whether you can get any benefits from sharing – or any other form of outsourcing. But few institutions are in the position where they know their true costs. How much does it cost to produce an invoice or to put a computer on an academic’s desk? The accounting systems in use in universities and colleges are not geared to establishing costs at that level. However, the need to cost services accurately has never been greater and must be a prerequisite to deciding whether or not to share or outsource services. Some work has been carried out by the JISC in this area and it is hoped that it will deliver useful models for the sector to use.

There was great emphasis on deploying shared services to drive down costs. Whilst this is very much the current mantra, it would be an opportunity lost if shared services that give additional functionality were not considered. The effect of the Browne review, assuming it passes safely thought Parliament, will be that the students, as paying customers, will demand quality services. And there is growing pressure on budgets and to do more with less. So the consideration and deployment of shared services should be part of an overall programme to deliver efficiencies and improve service quality. The question is whether the new era of increased competition will drive institutions to reject shared approaches, whether they will just focus internally on their services as something that gives competitive advantage.

It was recognised that one prerequisite to successful shared service delivery was the standardisation of processes. This is a particular challenge for the sector because, although many of the processes have the same inputs and the same outcomes, the ways that those inputs are processed into outcomes will vary from institution to institution. There are certainly significant savings that can be made through business process review and many institutions are deploying Lean or similar methodologies to realise those efficiencies. However, the opportunity also needs to be taken to standardise the processes, to identify what is common and hence what can be shared. This was the approach taken by North Herts College in a project run under JISC’s Flexible Service Delivery programme. They are now in a position where their processes are standardised and where they believe they can offer services to other FE colleges and schools. How many other institutions will seize that opportunity and try to position themselves so that they can be a net provider of services and so generate additional revenue?

Malcolm Gillies, the Vice-Chancellor of London Metropolitan University and Chair of London Higher, reported on a survey carried out of London higher education institutions. The institutions responding to the survey did not feel a strong pressure to cut costs. Consequently there was not a great appetite for shared services amongst the larger institutions in the capital but there was some interest shown by the medium to small institutions. However, costs were not the primary driver but more the desire to share quality services or to mitigate risk. This echoes the point I made earlier – the opportunity to improve quality should not be missed in an overall drive to make efficiencies. The suggestion of a lack of pressure to reduce costs could be an indicator of an already efficient system but could equally be seized upon as more evidence that the sector is feather bedded which is perhaps not the message that the sector would necessarily want to deliver given the emphasis put on shared services by the Government.

However the focus on efficiencies is rather missing the point. The customer, particularly if they are paying £9000 for the experience, will be king and every institution needs to grasp that. There is perhaps a greater need within institutions to ensure that the processes they operate and services they offer deliver the most cost effective quality service to that institution’s customers – the students. This alone should deliver efficiencies within the workplace and a better quality service for the students. If shared services drop out of that work, then they should result in greater efficiencies to the institutions taking part, or raised quality for the students or institutions. But shared services should not be driver for this work, merely the consequence.

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