Paving the way for shared services development: Whos doing what

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Paving the way for shared services
developmentWhos doing what ( with whom)

• Jonathan Nulty CPFA

CIPFA SE Seminar - March 2008
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Todays presentation

• Shared services whats in a name?
• Drivers for shared services
• Some practical examples
• Key stumbling blocks (and how to overcome them)
• How we can move forward
• Some food for thought

CIPFA SE Seminar - March 2008
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Shared services whats in a name?

• Multitude of definitions but does it matter?
• Broad spectrum - networking to joint delivery

• Sometimes a grand name for an outsourced contract
• Shared services often going on well, without
  national recognition

CIPFA SE Seminar - March 2008
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Drivers for shared services

• Efficiencies 3 year on year (CSR07)
• Other financial constraints
• The pursuit of improving quality
• Resilience, Recruitment Retention
• Enhanced two-tier / LGR provision of new
  service delivery models
• CAA and MAA
• Political agendas

CIPFA SE Seminar - March 2008
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The basics...

• Agree your common objectives
• Determine who your partners are / will be
• Agree whats in and whats out
• Determine your baseline against which to
  measure success
• Build business case(s) develop/procure solutions
• Realise your benefits, measure and report them

CIPFA SE Seminar - March 2008
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Recipe for success

• Know exactly what you want from this
• Know why youre doing it (cost-cutting alone
  wont work, needs drive to improve quality)
• Carefully measure your starting point
• Test common approach with PAT or similar
• Do not slam services together this is a golden
  opportunity for BPR and best in class
• Keep communicating throughout

CIPFA SE Seminar - March 2008
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Delivery structures
MoU (or other informal agreement)
LLP
NPDO
Company limited by shares (e.g. JV)
SEMs / Joint Committees
CIC
Possible private sector involvement
CIPFA SE Seminar - March 2008
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Some practical examples

• Northamptonshire and Cambridgeshire
• Adur Worthing
• South Oxfordshire and Vale of White Horse
• Surrey County Council
• West London Alliance
• Norfolk County Council

CIPFA SE Seminar - March 2008
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Northamptonshire / Cambridgeshire

• Had originally looked to enter into NHS shared
  services model (Xansa)
• Denied under procurement rules
• Now plan a Federal Shared Services Centre
• Builds on an existing ICT platform
• HR, IT, Finance to be included transactional
  services

CIPFA SE Seminar - March 2008
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Adur / Worthing

• Started with waste and recycling
• One CE for both councils
• Moving to a single management structure and
  workforce
• Looking at the costs, benefits and potential
  risks involved in the proposals
• Politically accountable units will remain
• Being looked at elsewhere (Derbyshire, Suffolk)

CIPFA SE Seminar - March 2008
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S. Oxfordshire / Vale of White Horse

• Shared financial services and Revenues Benefits
• Jointly outsourced
• Includes transactional functions, but now also
  for accountancy services recently restructured
  to give a joint finance team
• Some teething troubles, but performance improved
  across the board

CIPFA SE Seminar - March 2008
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Surrey County Council

• Sovereign shared services centre
• Centralised back-office from departments
• Strong investment in ICT platform
• Transactional processes moved in
• Similar approach being taken by others (West
  Sussex, Oxfordshire)
• Some issues about move to Federal model

CIPFA SE Seminar - March 2008
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West London Alliance

• 8 London Boroughs
• Progress towards shared solutions across a wide
  range
• Short-list focus on
• HR and payroll (business case developed)
• Adult Services (procurement / commissioning)
• Childrens Services (procurement / commissioning)
• Taken view that not all 8 LBs need to be on board
  to start others can join in later

CIPFA SE Seminar - March 2008
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Norfolk County Council

• Norfolk Commercial Services and Norfolk Property
  Services (The Norse Group) - wholly-owned LA
  Companies
• Working with other LAs to provide services (long
  term partnership deals
• Creating Special Purpose Vehicles (SPVs) - with
  partners to deliver the services in each case
• Sharing of benefits
• Addressing resilience and recruitment/retention

CIPFA SE Seminar - March 2008
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Elements for shared services
Current Service Provision
Strategic
Professional
Transactional
Commissioning / Procurement
CIPFA SE Seminar - March 2008
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Key stumbling blocks

• Leadership
• Information availability and quality
• Openness / fear
• Investment
• The need for equitable solutions
• All or nothing mentality
• Buffalo herds

CIPFA SE Seminar - March 2008
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Overcoming the hurdles

• Leadership
• Seize the opportunities
• Learn from others
• Be open and honest
• Communication throughout the organisation(s)
• Winning hearts and minds

CIPFA SE Seminar - March 2008
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Overcoming the hurdles

• Information availability and quality
• Needed to assess the size of the prize
• Surprising how hard this can be
• Prepare now
• Information collation is not a benchmarking
  competition
• Needed for day to day management, not just shared
  services

CIPFA SE Seminar - March 2008
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Overcoming the hurdles

• Openness / fear
• Data collection is not about comparisons and
  point-scoring
• Look for commonalities, not differences
• Is your service provision really that different
  from others?
• Learn to trust each other!
• Look at opportunities for joint procurement, etc.

CIPFA SE Seminar - March 2008
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Overcoming the hurdles

• Investment
• Build a robust business case
• Look to build on existing platforms where
  possible
• Share the burden
• Look for incremental solutions, where possible

CIPFA SE Seminar - March 2008
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Overcoming the hurdles

• The need for equitable solutions
• Different starting points
• A robust baseline position
• Agree inputs, outputs and benefits
• Some room for compromise, good faith and altruism

CIPFA SE Seminar - March 2008
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Overcoming the hurdles

• All or nothing / Buffalo mentalities
• Consider a marketplace scenario build a
  framework that all partners can use over time
  and use as little or as much as they want
• Allows partners to go at their own pace (e.g.
  when existing contracts expire)
• Partners will have their own participation
  profiles

CIPFA SE Seminar - March 2008
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How to move forward...

• Two options for progress
• Step by step change incremental progress
• Radical, dynamic change
• Challenge the now
• Look at what others are doing
• Be prepared

CIPFA SE Seminar - March 2008
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Help is at hand

• Support infrastructure in place, though early
  days for RIEPs
• Outside support (consultancies, etc!)

• Efficiency funding agreed through recent
  settlement (185m) but how far will this go?
• Learning from other LAs

CIPFA SE Seminar - March 2008
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Some final thoughts

• Some organisations will have to be buyers rather
  than sellers
• To work, drivers cannot solely be cost-cutting
• Dont be constrained by combinations that others
  have used
• It doesnt have to be all or nothing
• The golden rules of Partnership apply

CIPFA SE Seminar - March 2008
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Recipe for success

• Know exactly what you want from this
• Know why youre doing it (cost-cutting alone
  wont work, needs drive to improve quality)
• Carefully measure your starting point
• Test common approach with PAT or similar
• Do not slam services together this is a golden
  opportunity for BPR and best in class
• Keep communicating throughout

CIPFA SE Seminar - March 2008
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Thanks for listening...

• Any questions?
• jonathan.nulty_at_jpnn.co.uk
• www.jpnn.co.uk

CIPFA SE Seminar - March 2008