Shared Services The Liverpool Experience +

1. Shared ServicesThe Liverpool Experience + BUFDG Seminar 28th June 2006

2. Outline • What is a ‘Shared Service Centre’? • The Liverpool Experience • NHS Shared Business Services • HE & Cabinet Office

3. Shared Services Overview Conceptual Model • Shared Services is based on the principle of transaction processing and strategic decision support being provided by separate entities. • Strategic, value adding services remain close to the business and repeatable, operational processes are undertaken in shared service centres • Shared Services is a distinct operating model that • Ensures excellent customer service • Delivers the benefits of scale and efficiency for shared transactions • Means better value from top managers

4. What is shared? • Corporate Services • Finance, Procurement, HR. IT, Facilities, Communications etc • Most common to share in Finance include accounts payable, fixed assets and accounts receivable • Most common to share in HR include payroll/pensions, recruitment, workforce administration, training and development • Other Services • Any transactional services that are not explicitly ‘core business’

5. Examples • Private Sector • Philips – Global Procurement • Alstom – IT • Exel – Finance • Smurfit – Finance • BP – Finance • Public Sector • Transport for London • NHS • Westminster Council • HM Prison Service

6. Examples • Higher Education • UCAS • HESA • Internal Audit Consortia • JISC • QAA • UMAL • SLC

7. Collaborations can be sharing of services: • Bloomsbury Consortium • M25 consortium of academic libraries • Stoke University Quarter • Purchasing Consortia • Accommodation etc

8. Liverpool Experience - Background • Grant from the Leadership and Management Fund £30k for a feasibility study • Vision of shared services • Better, more efficient and more effective support for the two Universities’ core activities of teaching, research and knowledge transfer • Objectives • Investigate feasibility to achieve • Economies of scale • Eliminate duplication • Enhance services through optimum delivery • Explore barriers to change and potential inhibitors

9. Liverpool Experience - Process • Set up Project Board • Defined Stakeholders • Process Map created • Boundaries set and potential targets identified

11. Liverpool Experience - Process • Set up Project Board • Defined Stakeholders • Process Map created • Boundaries set and potential targets identified • Questionnaires developed and completed • Workshop 1

12. Liverpool Experience - Workshop 1 • Objectives of the Workshop • Increase understanding of the project and shared services • Address the ‘soft issues’ • Emotions • Enablers and Blockers • Soft Issues • Strategy • Skills and Competencies • Organisation • Culture • Information systems and technologies • Processes

13. Liverpool Experience - Process • Set up Project Board • Defined Stakeholders • Process Map created • Boundaries set and potential targets identified • Questionnaires developed and completed • Workshop 1 • Assessment of target processes • Report produced

14. Leave Standalone • Exams Management • Student Support – Health • HR – Employee Counselling • Finance – Financial planning and reporting • Procurement • Management Reporting • Audit compliance • Catering

15. Collaboration • Bibliographic Services • Library Information Services • Student Support – Accommodation Support • Facilities management – Travel planning • Risk Management

16. Shared Services • Student Financials • Student Support – Counselling • Student Support – Loans/Welfare • HR – Training and Development • HR – Maintain staff records • HR – Monitor staff absence • HR/Finance – Payroll • IT – Production and Operation Support • IT – Business Systems Management & Support • Finance – Operational Transactions • Facilities management – Business Continuity • Printing Post & transport

17. Some Issues…. • VAT • Investment • Autonomy • Differences eg scales, systems, governance, management, culture • Experience • Staffing

18. Some Benefits…. • Sharing Risk • Best value • Clear accountability and management of service • Efficient and effective • More resource into ‘core business’

19. Selected for further consideration • Collaboration • Facilities management – Travel planning – detailed work Support for………. • Bibliographic Services • Library Information Services • Student Support – Accommodation Support • Risk Management • Shared Services • IT – Production and Operation Support • IT – Business Systems Management & Support • Facilities management – Business Continuity • Printing

20. Liverpool Experience – Next Steps • Workshop to re engage participants • Sub groups identified to progress target areas • Dissemination of experience to Sector • Benefits will start to be assessed • Continuous review of further exploitation when ‘time is right’

21. Visit to NHS Shared Business Services • Shared financial and accounting services for NHS organisations • 50:50 Joint Venture between the Department of Health and Xansa • Key response to Gershon review on public sector efficiency • Launched April 2005

22. Structure 50:50 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 2:1 to DH Dividends Dividends Cost savings £224m (over 10 years) available for front line patient care

23. Proposition to new customers Low risk route to best in class F&A 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

24. Savings • The smaller the organisation, the greater the % savings • But you need the bigger customers to get economies of scale • Small organisations (total finance cost <£1m savings average 39% (lowest 19%, highest 70%) • Medium sized £1-5m get progessively less, average 31% (lowest 17%, highest 60%) • Large organisations >£6m get around 20% • Trusts limit size of finance function that can go across – average is 30%, but highest is 54%, lowest is 10%.

25. Adding value - technology • Custom built configuration of Oracle Applications • Benefit from Enterprise Wide Agreement for Oracle licences and support • Custom built NHS Chart of Accounts • Web based reporting portal • Incorporating workflow technology (eg for online approvals) • Ongoing NHS SBS development programme • Benefit from ongoing Oracle developments within NHS context • eg building in links from online procurement to NHS procurement initiatives • Links to additional specialist software and hardware • Neopost for despatch • Invoice scanning • OCR • Cheque printing

26. Adding value - information • Management information to aid effective decision making and control • Ready made reporting suite and web-based delivery mechanism • Income and Expenditure reports by cost centre available by email to NHS budget holders • Drill down facility from cost centre to individual invoice detail • Huge potential to increase purchasing leverage • Ad hoc analysis to complement standard report suite • Powerful performance information • Monthly charts and analysis • Potential for benchmarking or sharing agreed information with other trusts if appropriate

27. Cabinet Office & HE • Top of Government engagement • Cabinet discussed shared services 6/10/05 • Transformational government published 11/05 • Significant focus in CSR07 • Nine sectors for shared services formed • Home Office, Education, Health, Defence, W&P, Revenue & Customs, family groups, local government and rest of central government. • Market engagement • Market strategy aims to achieve transformation and standardisation • Support • Removal of barriers including work on Headcount caps, Funding vehicles, VAT etc

28. Cabinet Office & HE • Education and Skills sector plan commenced Jan 2006 • Developed through 4 mini reviews to form a first draft Education and Skills Sector Plan by June 2006 • HE review being led by HEFCE with the support and engagement of key stakeholders