Challenges to shared services

I attended a think tank last week organised by the University of London Computer Centre (ULCC) under their FOTE (Future of Technology in Education) activity. The participants were from a broad spectrum of institutions, both in terms of their mission and size. The following is a personal reflection on the discussion; ULCC are producing a report on the meeting which will be available in due course. There were a number of key points:

  • Moving services to a shared service is just one of a range of options that should be considered. There is a view that Government in particular is putting too great an emphasis on shared services as the solution when there may be other alternatives which are more cost effective. Effective cost management should be the key driver not the type of solution.
  • The sector still does not know its numbers in that few institutions know the accurate (full economic) costs of their services. This makes attempting to assess the potential worth of a shared or outsourced solution difficult.
  • The start up cost of shared service initiatives is a significant inhibitor. It was recognised that where shared services already exist, organisations are likely to consider moving services into the shared offering. If the service does not exist, organisations are unlikely to spend time and money in seeking partners to set up a new service. An exception to this might be where an organisation has streamlined its services so that it is in a position to provide those services to other institutions (those institutions merely buying the services from the host).
  • Pump priming can help establish new shared services, particularly in areas where they are unlikely to emerge naturally. The pooling of research expertise in the sciences in Scotland is a case in point; the competition between universities in Scotland would have continued to act as an inhibitor without funding and direction from the Scottish Funding Council.
  • Nevertheless it was recognised that there is an opportunity to share with like minded institutions in order to deliver efficiencies, improve services or reduce risk. These could lead to small scale shared services which deliver benefit to the institutions involved but which are unlikely to scale up nationwide. There are currently no good vehicles to facilitate setting up such small scale initiatives. There is a need to establish what institutions are willing to share and to allow some assessment of potential partners to help develop initiatives. There is a session planned at the UCISA Managers’ Forum on Shared Services to discuss whether such an initiative can be established.
  • The sector does not have the skills to manage vendors effectively. There are challenges in managing suppliers of services without the added complexity of balancing the requirements of all partners in a shared service. There is a lot of resource involved in managing shared services – service managers need to understand the challenges of shared services, contracts, economies of scale, etc and this cost will need to be borne in mind when considering sharing.

It might be concluded that there was little appetite for shared services amongst the participants from the points above. This was not the case; there was the appetite for considering shared services when looking at cost effective ways of delivering services but recognition that they were one option. Most institutions had services or components of services that they considered could be shared; what is missing is the brokerage service to help bring these willing partners together.

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One Response to “Challenges to shared services”

  1. Dominic Macdonald-Wallace Says:

    I lecture on the Postgrad Certificate in Shared Services at Canterbury Christ Church Uni and agree with some, but not all of your article.
    The HE sector has to look to the local government sector which is about three years ahead of where we are now.
    However, more importantly, only do shared services as a last resort. It is really difficult, which is why we teach senior leaders how to do it properly. Over 400 senior public sector leaders have been through our first PCSS module and they learn that they must (a) first try tough it out on their own, (b) look at outsourcing and the next step and (c) only then to consider shared services. (a) and (be) give you almost 100% control. Shared services are similar to getting married where trust and permissions have to be shared – so control is only available through negotiation.

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