5 tips to setting up and delivering successful shared services
Byon March 26, 2018
As shared services continue to gain popularity within the public and private sectors, understanding how to effectively set up and deliver them is key to saving the time, money and resources that was intended at the outset. This article will guide you through the five crucial steps that you need to follow if you wish to reap the full benefits that service sharing can provide.
From simplifying service delivery to making your organisation more sustainable, sharing services can provide your business with the time, space, and relationships it needs to expand or manage its key staff, capital and vital resources more efficiently.
When considering whether or not to set up a shared service with a neighbouring organisation or potential partner, it is important to understand that open and honest dialogue is vital if you wish to create a shared vision and foster a strong and trusting relationship to support that vision. When bringing different organisations together for the first time, there are bound to be areas of strain – perceived conflicts of interest, initial feelings of uncertainty about who to trust, a perceived loss of control over the services and a reluctance to rely on third parties for service delivery, are just a few of the issues to bear in mind. Structuring the stakeholder engagement and the services themselves in the right way means these perceptions will remain just perceptions and not reality. This article will assist you to navigate these challenges so that you and your partner organisations can deliver successful services together.
Why are Shared Services important in modern business?
The concept of shared services is not new. Organisations have been sharing services for decades both formally and informally.
In the public sector alone, by sharing services, many organisations are finding new ways to keep important services open, as well as reducing costs and potentially even driving innovation. From waste management to ICT, shared services, when properly implemented, can be an excellent way to simplify and standardise key services across the board.
Of course, as you are aware, sustainability is also key in today’s business landscape, and sharing services can give many organisations the opportunity to strive for a more sustainable future, as economies of scale and improved efficiencies become ever more important.
The potential for making savings, as well as fuelling expansion and innovation are just a few of the primary reasons why both public and private sector organisations are turning to shared services. By sharing key tasks, not only can you continue to offer in-house services that may have previously been unsustainable, it may also be possible to completely overhaul and transform those that have not been meeting all of their targets, and sharing your learnings with others as you develop the services. The quality of services provided could then be improved, helping to increase customer satisfaction and boost team morale. Sharing services is also a great way to help free up staff for more customer/citizen-facing roles, or to work on other projects – thus driving innovation in other areas of your organisation at lower costs.
Five steps to securing successful shared service provision
In order to reap the full benefits of shared services, it is important to understand the pitfalls, challenges and conflicts that could beset your relationships when collaborating with other parties. To help you to achieve the best results, here are our five steps to creating successful shared service relationships.
1. Understand the context
It is integral to the success of any shared services relationship that you and your prospective partners understand why reform is needed in the first place, and that you agree on the shape this reform will take. In other words, all partners being clear on ‘what good looks like’ for the business outcomes you are expecting to achieve, once the new services have been implemented. It is also important that both organisations share a mutual understanding of the amount of work that will be required to ensure that the shared service is a success. When working together with any team, trust needs to be at the centre of your relationship from the outset, and it is only by forming a trustworthy relationship that you will be able to have a clear grasp of what it is that you will be sharing, whether that be knowledge, IT systems, services or staff.
It is also, of course, vital to start out with a defined core team and to understand who are the key partners and parties that you will be working with in order to drive these changes through. Apportioning roles and responsibilities is crucial, and deciding which key team members will be in charge of the overall project is importance so that hierarchies of authority and communication structures can be put in place.
2. Understand your partners
Of equal importance to building strong communication between you and your partner, is the ability to understand them and how they function as an organisation. All organisations, no matter how similar, have working practice nuances of their own, and it is a good idea to get to know the quirks and idiosyncrasies of your partner before you take the plunge. This is to ensure that you do not run into any unexpected problems with misunderstandings further down the line.
As trust is the only way to succeed, it is also wise to build up personal networks between you and your partner organisation. Putting into place the freedom for members from both teams to get together informally to discuss their ideas and share their concerns, helps not only to build strong trust between them but also assists in mobilising people quickly to get initiatives off the starting blocks and moving. In addition, creating a formal leadership team for the project out of staff from both organisations is an excellent way to foster collaboration and make the best use of you and your partner’s knowledge pool.
3. Understand your opportunities
Making the most of the opportunity to create a shared service is the best way to save money, cut costs and create something that will succeed well into the future. In order to achieve this though, it is important to ensure that there is consensus on the improvements and changes that you wish to implement, and the challenges that forging these changes will pose. It is, therefore, vital to make sure that all parties are on the same page, and that everyone is clear about the service they are expected to deliver. Clarity of ambition, instruction and communication is vital to success here.
No project is without its risks; therefore, understanding them is essential if you want to guard against them. It is far easier to do this with an acceptance that both risks and rewards will be shared by all parties on the project.
4. Share the same vision
A concrete vision for the entire life-cycle of a project and a clear understanding of each party’s contractual obligations is essential for success.
Some team members may be concerned about relinquishing control of key services or parts of the project that they had once been solely responsible for. There may, of course, also be a shared reluctance to see important data being transferred elsewhere, and it is for these very reasons why it is so vitally important to create a mutually trusting relationship between your organisations, teams or departments.
By truly collaborating on making a genuinely shared service, your organisation will benefit from shared knowledge, skills and resources, increased innovation and growth in ways that you could not have achieved alone. Once trust has been established, it will be so much easier to come to agreements on shared mutual outcomes and how best to achieve them.
5. Establish a consensus
Once trusting relationships have been created and a thorough due diligence exercise performed to establish the risks involved, the next step is to ensure that all key stakeholders buy into the project and process.
Gathering opinion from those whose skills and ‘on the ground’ experience provide valuable insights for a project is an important step. Therefore, all relevant parties should be asked for their input and informed of the direction you wish to take the service in. Clear lines of communication need to be established and the decision process and hierarchies ‘set in stone’. However, this should not be seen as a limited process as it is wise to be open-minded to the possibility of vital input adapting service delivery direction at any point in the relationship.
A shared service case study
One cross-council initiative that has fashioned success from failure is the Suffolk and Norfolk shared service that was set up to tackle the problem of waste disposal.
Norfolk Council was forced to abandon its plans for a £500 million incinerator in King’s Lynn, in part due to local opposition to the scheme, but the final nail in the coffin was central government withdrawing a key waste infrastructure grant of £169 million for the project.
Despite this setback, what Norfolk decided to do next shows what can be achieved with a little innovative thinking. Teaming up with Suffolk Council, who had completed work on their new Great Blakenham incinerator, the two councils agreed that Suffolk would take 40,000 tonnes of Norfolk’s waste each year for the next two years, thereby saving each council around £1 million. These savings were made due to Suffolk Council benefiting from economies of scale and Norfolk having to pay less in landfill tax.
By thinking collaboratively, both councils were able to benefit in different ways from this shared service and were able to help one another to reap mutually beneficial rewards.
Shared service relationships, between organisations, departments or teams, are only likely to grow in popularity in the years to come as they offer all parties a chance to save struggling services, develop new and profitable relationships and drive innovations forward much further than each party could achieve on their own.
Our five steps to successful shared services above are just the start of the process, but we hope that they will assist in providing some clarity between you and your partners to achieve great things together.