We want it good, and the government wants it on the cheap. There is much speculation about the economics of scale, and the expected cost savings, that shared services can bring. On the other side of the debate, there is voluminous criticism, and the oft-begged question: where is the evidence that shared services will save money? This feature will look at the current examples of best practice in shared services and the evidence of cost savings.

The employment of shared services has been most prevalent within the public sector, with Whitehall leading the way in pushing streamlined processes and efficiency as it seeks to create savings in the current economic climate. The Local Government Association has provided research demonstrating that councils are saving more than £156 million a year through shared services, with 219 English authorities sharing IT, recycling and waste, procurement and other corporate services. The use of shared services in councils according to Jonathan Hamill, Sales & Marketing Director at APD Communications, “can result in real savings and will increasingly be key to ensuring budget cuts do not affect the essential services provided to the public.”

The private sector has looked at the viability of shared services, but the large scale models introduced by the government have yet to be adopted fully. Currently the public sector leads by example on the implementation of shared services while the private sector waits to determine the results of large scale implementation. Public sector procurement has often been limited by failing to establish advice on best practice for the employment of shared services. The practice of departments requesting bespoke software coupled with a failure to provide effective mandation has led to a history of projects beset by over competition and lack of trust.

• Defining services.

The short term success of shared services requires that the public sector compiles guidelines on the implementation of services throughout departments. Records need to be compiled detailing all of the variables of the project prior to commencing on a project of mutual cooperation.

From the outset the services to be shared must be clearly defined with the end objectives detailed. Focus should be placed on the requirements and expectations of the parties involved and support services established. Service areas which lend themselves to being shared between parties tend to relate to basic roles including, invoice purchasing, accountancy and IT servicers.

• Structure.

In order to reap the benefits of combining resources, an appropriate structure including governance arrangements must be drawn up in the initial stages of the brief. Effort should be made to avoid the procurement of shadow personal. Many examples exist of collaboration being weighed down by the practice of hiring of multiple consultants. In detailing the services to be shared the goal should be to streamline services while increasing efficiency with resources.

The move to a shared services environment must incorporate a clear understanding of a collaborative IT strategy. The appropriate technology should be identified for delivering shared services as well as identifying the potential obstacles of consolidating software applications. It is vital that up to date technology is employed in order to facilitate the consolidation of information and increase efficiency.

The effective use of Cloud based services can provide multiple benefits in integrating systems. The rise of cloud based technology provides the potential for organisations to work quickly together to set up and launch shared services operations in an efficient and economic manner. This ensures that only the services required are employed while diverting additional resources towards the core service delivery. A shared services partnership focusing on support services between Stockton-on-Tees and Darlington Borough Councils was implemented in just two weeks through the use of Cloud software delivered by supplier UNIT4.

• Monitoring

The implantation of shared services requires on-going monitoring to ensure that evidence exists of clear benefits being achieved. The gathering of baseline service data should be gathered in the initial proposal as well as being actively undertaken throughout the shared services lifecycle to facilitate fine tweaking and ensure the flexibility of the model.

• Relationship management

Relationships are fundamental to the success of shared services. Difficulties arise when shared services are taken from a theory to practice in which departments seek the competitive edge at the expense of genuine reciprocal collaboration.

Examples of shared services have been plagued by difficulties caused by a focus on the individual development, rather than mutual benefit between the sharing partners. A focus by those involved in sharing services to take the most out of the party cooperation is counter-productive in producing a stable relationship. Campbell McLundie, partner at Scott-Moncrieff Business Technology and Consultancy, said a “customer centric approach is key to the development and potential expansion of shared services beyond the original portfolio of activities”.

The Cabinet office having identified the weaknesses of past strategies has now started to improve the deployment of shared services, reducing complexity and enforcing mandates. Research from the Hackett Group now shows that companies are to use shared services in greater numbers with an estimated 93 percent beginning to take the step in employing integrated solutions. As the private sector increases adoption, shared services can be adopted with greater scope for flexibility and innovation.