Realising the full benefits of shared services and outsourcing

To realise the full benefits of shared services and outsourcing, government departments need to fully grasp the concept of the best practice vision for support function organisations.

The new coalition government will put shared services under the spotlight with a view to further savings and the possibility of more private sector involvement.

However cost savings often fall short of expectation. Part of the blame for this lays at the door of shared services organisations for not designing sufficiently customer sensitive processes to enable full adoption of services provided. Yet much of the shortfall arises because the retained organisations are not significantly reduced when shared services are created. Even worse the retained organisation is not clear as to its new role, leading to a duplication of effort.

The real value from shared services is realized when it is an integral and fundamental part of a complete functional transformation. In private sector the role of shared services has been sustained and enhanced in the past 25 years by using the best-practice vision for support function organisations. This includes three key areas of competence - corporate ‘centres of excellence/expertise‘, ‘business partners‘, and ‘shared services or outsourcing’. Focusing the right activities in each area and aligning the appropriate resources multiplies the benefits: e.g. shared services support the business partner roles by taking away the distractions of routine transaction processing and providing consistent data. The organization will benefit from the strategic value the business partner can provide if the right type of resource is deployed and the objectives of the role are clear.

Done well all three parts of this support function vision are complementary and the value of change is multiplied. If done poorly the results are a lack of clarity and belief in the shared services idea. The full benefits are not realised as costly retained resources prefer to act as “supervisor and duplicator”” of shared services, rather than refocusing on the new strategic opportunities of the new centre of excellence and business partner roles. Shared services are not just about cutting costs, it is about getting the maximum value from the resources that are retained.

At Atos Consulting, Shared Services Solution is part of our Cost Reduction focus.

Read more about: Cost Reduction