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Shared Services

What is the Shared Services Team?

The Shared Services Team is part of the Transformational Government Unit within the Cabinet Office. It is responsible for taking forward Shared Services as part of the Transformational Government strategy, promoting the sharing of corporate services functions such as HR, Finance and Procurement and looking at opportunities for wider sharing within Central Government (e.g. Banking, Vetting, Fraud, Debt recovery, Estates. Audit. Travel, Correspondence).


What do we mean by shared services?

Deploying shared services involves separating the transactional operations of a business or function into a self contained unit which is organised to deliver more effective service at lower cost. Savings made through sharing can then be passed to front line services to improve service to the public.

There are already examples of large operational shared services (such as the centres in Department of Work and Pensions and HM Revenue and Customs) which have shown financial benefits as well as improvements to the quality of services.


How is the Shared Service Team helping deliver change?

The team drives the shared services understanding in government departments about:

We do this by holding regular cross Government briefings; running the Pan Government Shared Services Group, promoting the use of tools such as Benchmarking; networking with providers and customers and promoting the use of best practice. There is more guidance for providers and customers.


Where has the drive towards sharing come from?

The Transformational Government strategy (Nov 2005) highlighted three themes:


What are the benefits from sharing services?

Benefits can be classified into three groups;

  1. Better Services
    • Reliable consistent management information. Easily accessible organisational level data can be stored. Users can, for instance, obtain information on personnel from a single organisation–wide source, instead of referring to multiple sources;
    • Embedding financial management control. Management checks, such as financial authorisation levels, can be incorporated into the systems.
    • Making it easier for professionals to concentrate on their prime duties by freeing them from routine transaction processing tasks
    • Improved high level management information. This enables organisations to make strategic decisions based on quality management information.
    • Consistent, timely financial period end close. A shared service should be able to operate a faster, more reliable close.
  2. Cost savings
    Typical average savings from Shared Service operations are expected to be in the region of 20–40%
  3. Employee experience
    • Professionals are able to use skills more effectively;
    • Business staff can rely on consistent processes and systems;
    • Employees can concentrate on strategic objectives and leave administrative, transactional issues to the shared service centre
    • Employees working in shared services are provided with a career path and the chance to develop their professional skills, in a working environment where their skills and abilities are valued.


What activity falls under the remit of the Shared Services team?

The Shared Service Team focuses on sharing services that provide the opportunity to reduce waste and inefficiency by reorganising or reusing assets and sharing investments with others. The team started by focusing on sharing of HR, Finance and Procurement transactional services. Currently, there are Shared Service Centres in Department of Work and Pensions (DWP), HM Revenue and Customs, National Offender Management Service, Ministry of Defence, Department for Transport and Department for Environment Food and Rural Affairs. The team helps other departments examine how their services should be delivered. For example, the Cabinet Office will receive these services from DWP.

The team will also look at the potential areas for sharing outside HR, Finance and procurement. Examples of areas that might be looked at in future include Banking, Vetting, Estates, Debt Recovery and Fraud Investigation.


What are the critical factors that lead to a successful implementation?

A successful Shared Service implementation will in general require:

  1. Adequate Scale
    Increasing scale enables:
    • Realisation of operational efficiencies; sustainability of services and service levels (e.g. to ensure that service coverage can be maintained or that there are adequate personnel to create a centre of excellence);
    • Better payback on development costs, many of which are already fixed.
    • Economies of scale. Research in the UK public sector and best practice in the private sector indicates that a minimum of 20,000 customer employees are needed for a shared service facility to provide good value, with better returns achieved when 50,000 or more employees are served.
  2. Effective governance and programme management
    • Ensuring early agreement on the service offering;
    • Clear commercial and service management agreements;
    • Understanding the difference between customer and provider roles;
    • Commitment to making decisions at pace.
  3. Use of expert capabilities
    • Shared services is a delivery model that has not historically been delivered by the public sector so some expert resource may be required.
    • Expert capabilities can ensure the process runs smoothly.
    • Ensuring that transition processes in particular are approached with expert resources will minimise risk and ensure that the organisations benefit from the transformation in their retained organisations, otherwise full benefits will not be achieved and there is a likelihood of regression into old ways.;
    • Actively supports the implementation of transaction services;
  4. Making good use of the supplier market
    Using collective buying power and ensuring smaller organisations have access to the best providers.


Will I lose control when moving to a shared service platform?

No. Experience shows you will be less focused on routine transactional problems and will have more time to deliver value added decisions, use information better and have better access to support.


My department is different. How can it work for me?

Experience across a variety of organisations (National Health Service, Ministry of Defence, Transport for London, DWP, CO) has shown that basic processes are sufficiently similar to be standardised. Departments might differ operationally but the basic transactional services (say, in HR and Finance) are very similar. The shared service centre can cater for people who need to access their services via deferent channels, such as phone, internet and letter.

Sharing activities that can be carried out in a standard way enables organisations to focus on what makes them truly different.


How can I get more information about all aspects of shared services?

Go to the toolkit and Guidance to access the large range of assistance.


Isn’t shared services just outsourcing by another name?

While the terms are related, shared services and outsourcing are different concepts. Moving to shared services means a fundamental change to an organisation’s service delivery model. Shared services generally will drive, or be a part of, an organisational and functional transformation that leads to lower cost and/or better quality services. Shared services can make extensive use of the private sector or use internal resources, or some combination, to deliver the transformation.

Transformation will not generally be the reason why an organisation adopts outsourcing. Whatever is decided, there will always be a need to keep some resources in house; the ‘retained functions’. More about this can be found in the Toolkit.


Is Shared services an IT project?

No. Shared services is not just a change to IT systems. It is a change to the way that a Department does its business, by moving transactional type services from various parts of the organisation to a shared centre. New IT systems might be required as part of this change. There are some systems that are designed to cater for shared corporate services; they are known as Enterprise Resource Planning (ERP) systems.


Where can I get more information about Shared Services in Government?

Most of the information you need is on this site.


Where can I get guidance on setting up shared services in Government?

There is plenty of guidance in this site. Special guidance is provided for those who are to be Providers or Customers in Government and a toolkit is provided to show a logical path to establishment of shared services from Vision to Operation giving lots of useful examples and reusable templates.


Is this just about corporate services or is the work wider than that?

Within Central Government, Corporate services (principally HR, finance and procurement) are becoming accepted areas for sharing, but there are examples of sharing in other areas too (e.g. in Estates. Audit. Travel, Correspondence). Many departments already share services, especially where there has been a historical connection between them, or where they share premises. Examples of areas for sharing that might be looked at in future include Banking, Vetting, Estates, Debt Recovery and Fraud Investigation.


How does this fit with the work of the CIO and CTO Councils?

The Shared Services Director is part of the CIO Council and also works with the CTO Council.


Who is looking at sharing services at the front line (eg shared customer services)?

Part of the work in Transformational Government is looking at ways of modernising front line services to benefit the citizen. Information on how sharing front line services is contributing to these improvements can be found on the Improvement and Development Agency for local government (IDeA) site.


Does this mean that transactional corporate services are going to be offshored?

Not in the foreseeable future. Departments are still concentrating their efforts in-house to establish Government areas of expertise.


What progress has been made in creating shared services in central government?

Shared services in central government are currently focused on improving corporate transactional services such as HR, finance and procurement. Progress has been steady:

Other areas where sharing could happen in future include: Banking, Vetting, Fraud, Debt recovery, Estates. Audit. Travel, Correspondence. Any activity that is duplicated in Government Departments has the potential for sharing.


What is the level of savings?

It is expected that savings of between 20 and 40% can be achieved. In Department of Work and Pensions the benefits realised have included £50m savings to date.

Many departments choose to go to a shared services model because it helps them improve their systems and gives vastly improved management information.


Does shared services mean people will lose their jobs?

Not necessarily. Saving resources in Corporate Services means that departments can relocate people to other areas of work, including front line work. The purpose is to use our resources efficiently in this area.


What is local government doing in the area of shared services?

Information on this can be found on the Improvement and Development Agency for local government (IDeA) site.


How do departments know that shared services will provide better value than their current services?

First, departments need to recognise the amount of resource that is allocated to corporate services and publish this information annually. This information can then be ‘benchmarked’ against other providers of similar services. Benchmarking is recognised as a way to drive up efficiency.