Steve Hirst CPFA

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NHS Shared Business ServicesFreeing Up Funds
for Frontline Care

• Steve Hirst CPFA
• Business Development Director
• 6th April 2006

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Overview

• Shared finance and accounting services for NHS
  organisations
• 5050 Joint Venture between the Department of
  Health and Xansa
• Key response to Gershon review on public sector
  efficiency
• Launched April 2005
• See www.sbs.nhs.uk

Freeing up 224m for front line care ..equates
to 12000 nurses jobs
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Our Services
Purchase to pay
ProjectAccounting
Specialist advice Specialist technology Management
information Support Development Training
Procurement Support
Order to cash
Oracle 11i platform
Fixed Assets
Payroll
Accounting to reporting
Treasury and cash
VAT/Tax advice
HR Services
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History of Shared Services
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Opportunity Why a JV?

• Original DH must take mandate for SFSC removed
  mid-1993
• Ernst and Young review recommended a Joint
  Venture (JV) as best option
• Outsourcing would be selling the goose that lays
  the gold egg
• Seeking a partner who will add
• Business development capability
• Commercialisation skills
• Provide additional resources/capability to extend
  service

JV is a key part in the DH response to Sir Peter
Gershons Efficiency Review
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NHS Joint venture structure

5050 JV Commercial organisation Joint
governance Distinct but linked
Management Business Devt Team Business Support
Services Service Optimisation Best business
practice
Existing centres Existing customers Experienced
people Oracle EWA
Dividends 21 to DH
Dividends
Dividends
Cost savings

• 224m (over 10 years) available for front line
  patient care

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Xansa in Finance and Accounting

External benchmarking places Xansa in top 25
of world wide FA organisations

Xansas foundation FA BPO client
TUPE transfer from BT
July 2002
July 2002
2002
1997
1993
Global Services
March 2003
March 2003
Jan 2004
First European SSC Awards Best outsourced SSC
Most advanced automation
IDC places Xansa in the Top 8 of European FA
providers
March 2004
May 2004
March 2004
Feb 2004
Feb 2004
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Proposition to new customers
Low risk route to best in class FA delivery
Help tosmooth the cost of change
Guaranteed reduction in operating cost (20 )
Customer references Successful year end Clean
audit report
Provenapproach to business process change and
migration
Guaranteed year onyear price reductions (2)
Capital savings, e.g. on software investment
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Stakeholder Benefits
Department of Health

• Substantial returns for re-direction to patient
  care (224M) just from FA
• Transformation of the role of Finance
• Avoidance of capital investments in FA
• Creation of a world class FA service for the NHS
• Improved focus on Creating a Patient-led NHS
• Transferred people are rewarded for contribution
  - creates a culture of success
• Low risk proposition, based on experience not a
  technology promise
• JV model ensures shared success and transparency

NHS Organisations
JVCo people
Xansa
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So How is it Really Going?

• From 48 in April 05 to 100 in April 06
• Average saving of new Trusts 34
• 220 organisations in pipeline
• 17 organisations also taking payroll strong
  pipeline emerging
• Extended e-Procurement service went live in
  December 05
• NHS SBS being used as a major enabler of
  organisational mergers
• Transferred workforce well motivated and very
  positive
• Service Quality is being sustained and improved
• Exceptional public sector and International
  interest
• DH perceive NHS SBS as a major asset to be
  exploited

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Our Key Learning Points (1)

• Biggest benefits are derived from changing the
  role of the finance function to support strategic
  decision making
• Cost savings are big and real but benefits of
  transformation are much bigger!
• But some DoFs prefer controlling the back office
  to this brave new world
• Also some DoFs blame initiative overload as a
  reason to delay
• DoF vision is therefore a critical success
  factor for us and we qualify out those that do
  not want to change
• Mandated customers are a real pain
• Creating a carrot based proposition is much
  more successful
• We only take willing customers now!
• Centrally provided pump priming money for
  willing early adopters was an essential kick
  start to the acceptance of shared services in the
  NHS

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Our Key Learning Points (2)

• The move to shared services is now being used to
  enable mergers
• It is now not possible for Trusts to make a sound
  business case for replacement systems
• Shared IT platforms do not offer significant
  benefits - shared services do!
• Organisations who have just finished implementing
  new IT platforms also gain worthwhile benefits
• Do not let the CoA debate get in the way get an
  independent team to just pick one!
• Cost of change can be significant - but with a
  reasonable payback period

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Freedom to do more for your frontline services?