Interview with Chris Price, Head of Public Sector at Alsbridge plc
Chris Price
Head of Public Sector at Alsbridge plc
Chris Price shares his views on the sharing of corporate services in the public sector and whether we will see a more prominent use of offshoring in the future
Q Why has sharing of corporate services in the public sector become such a hot topic?
A In July 2004 the Gershon Review laid out a vision of a more efficient and effective public service, where resources would be released from back-office activities to allow greater focus on front line services that meet the public's highest priorities. The last part of that sentence is the most important – focus on front line services. Shared services is not about sharing for the sake of it; it is important because resources need to be redirected towards transformation of services. Since Gershon there has been a tremendous amount of activity across the whole public sector with organisations considering and/or implementing shared services. And there have been many reports, studies and updates on the topic – all saying basically the same thing as Gershon.
Sharing services makes sense in the public sector, given the high level of homogeneity between many public sector services. Local Authorities, Police forces and government departments all carry out similar back office activities – paying invoices, managing assets, hiring staff etc. The recent pressure on budgets, which will continue into the foreseeable future means that Public Sector bodies can no longer ignore this simple means of gaining cost efficiencies and freeing up key staff to focus on more value-added activities.
Q Why hasn’t it happened faster?
A There are many reasons. Firstly, loss of control. Public sector bodies have been reticent to enter into shared services for fear of losing control of their service delivery. There is a perception that having another public sector body delivering your back-office will lead to reductions in quality that the individual departments cannot influence. Of course proper service management can actually increase the control an entity has over the quality and cost of services; and private sector organisations, with a longer track record of shared services, would recognise this point.
Secondly, getting consensus. Where shared services have been implemented, it has often been a challenge for the individual organisations to reach consensus on best practice – even though processes are fundamentally the same, different bodies have different procedures to execute them, and rarely does an organisation want to give up their process to adopt that of another. So the time taken in discussion and consensus building has soaked up time.
Thirdly, politics. The redundancies associated with shared services are unavoidable, but organisations are often reluctant to take the ‘bad news’ – which causes them to stall.
Finally, mandating – or lack of it. In the private sector, a Chief Executive will take the decision to implement shared services and the organisation just gets on with it. In the public sector, mandating from above is not common; so it relies on the individual organisations deciding for themselves, which takes us back to the first three points above.
Q What needs to happen differently in future?
A It is a well known fact that no initiative will succeed without proactive sponsorship from senior management, so a key step is for senior staff in the public sector to not only endorse the shared service concept, but to instruct departments to implement shared services. There are a number of existing ‘providers’ of shared services, such as HMRC and the DWP, who are in a position to deliver shared services to other public sector bodies. The Treasury should provide assistance to these providers so that they can continue to expand and offer cost-effective services.
Also, there may be value from central government pump-priming in some areas. For example, the NHS SBS model was funded centrally, and is now delivering services to many NHS Trusts; it is difficult to imagine such progress would have been made without this initial funding.
I believe that there is still too much reinventing of the wheel; whether it is the approach for developing business cases, or the detailed design of a shared service operating model, or any number of other areas. The public sector has a huge advantage over the private sector, in that it can and should share knowledge; so there should be more mechanisms for encouraging sharing of this knowledge.
Finally, we should celebrate the successes – several bodies have successfully implemented, stabilised and expanded shared services. Better publicising these successes, as well as sharing lessons learned, will give the public sector greater comfort to move forward with shared services.
Q Doesn’t all this focus on cost saving mean a poorer service?
A A key part in the preparation and implementation of shared services or outsourcing is the review, standardisation and improvement of processes. This leads to greater consistency and also increases quality and control as staff have clearly set responsibilities and easy access to the right information to help them execute those responsibilities. Shared services mean there is always a person on the end of a phone, as responsibility for answering queries is shared among a pool of experts. We have seen that a shared service environment increases the rate of queries and issues which are resolved at the ‘first touch’ i.e. without the need for a call-back or further investigation. This leads to increased satisfaction of all staff, and therefore increased productivity, since staff are not concerned with having back-office issues resolved.
Q Will offshoring ever feature in the public sector?
A Offshore delivery of back office services (those where there is no requirement for human contact) is already happening in the public sector. For example, Steria, an outsourcing provider that delivers back office services to many NHS Trusts (via NHS SBS) has a well established operation in India, from where many of the processes are delivered. But most public sector organisations shy away from offshoring, due mainly to the political issue around moving jobs out of the UK. I am sure there will be more in the future, but I wouldn’t see it going as far, or as fast as we have seen in the private sector. If offshoring does happen, I think it is more likely to happen via an outsourcing contract.
Q Why do public sector organisations need external advice when outsourcing or sharing?
A The public sector is properly resourced to deliver business as usual, but it does not typically have the skills or sufficient numbers of people to undertake the significant change programmes that are required to implement shared services or outsourcing. External advisors have supported such implementations many many times, so can bring knowledge and hands on experience to ensure mistakes of others do not reoccur. Advisors also play a vital role in passing on to public sector staff the skills needed to implement shared services, thus increasing the sustainability of the programme. Finally, using an advisor can speed up the process, as they will use their experience to identify and eliminate barriers and issues before they happen, and to reapply previous experience to quickly solve any problems that do arise.
Got a question for Chris? Email him direct at chris.price@alsbridge.eu or call him on +44 (0) 20 7242 0666.
Contact
How can Alsbridge plc help you?
Please get in touch to discuss your business needs.
Europe Head Office:
+44 (0)20 7242 0666
Email: enquiryEUR@alsbridge.eu
US Head Office:
+1 (214) 696 6410
Email: enquiryUSA@alsbridge.com
