First appeared in LGC on 4th October 2011
News that Scottish councils are rethinking a major plan to share back office services across up to eight councils highlights a very relevant debate about when and where shared services work best and exactly how they should be implemented.
The concept is not a new one, and some local authorities have long-reported the benefits of shared services, such as the implementation of innovative new ideas borne out of knowledge-sharing, and more streamlined processes. On the other hand, critics like Professor John Seddon label them ‘a fad’ and are suspicious of their success. Certainly, the role of shared services as a potentially easy avenue for local authorities to drive down costs is something of a hot topic at the moment.
But when considering whether shared services are the right option, it is important to focus on what success looks like and why an arrangement is implemented in the first place. For example, collaboration with other local authorities and organisations are generally part of a council’s strategic plan and long-term vision to deliver the best possible services for a community. Cost efficiencies may be a very positive outcome of a move to integration, but these are not guaranteed and should not always be the main objective. Instead, the benefits they can bring, such as knowledge sharing and improved services should be the focus of any change in working.
Before linking up with others on back-office or frontline services, local authorities need to consider a number of key points in the decision-making process to establish the risks they face.
There are a host of obstacles and risks to overcome including the ICT risks such as partners having incompatible software and systems or lacking the necessary security measures, different contracts and suppliers involved, different processes and systems and different and conflicting priorities. However, it is often the ‘human’ risks that will derail a project if not properly assessed. Like all major projects, it is the will and determination of people to make it work that will determine success or failure and making sure you take people with you is vital.
It is vital to assess the resilience of your organisation to withstand the changes that shared services will bring. Joining forces with other organisations will mean significant change and some loss of control and flexibility. There may be redundancies or a change of role and the impact on staff morale should not be underestimated.
It is also necessary to consider the strategic aims of each collaborating organisation. These may not naturally complement each other, so ensuring every organisation can work towards common, mutually beneficial goals will be critical to the success of shared services. These should be clearly agreed from the outset, and reviewed regularly. In addition, there should be an assessment of the organisational resilience of each partner and provider to guard against service failure.
Finally, a well thought out exit strategy could be key should any agreement prove to be problematic.
Of course, all of these kinds of critical measures take time and resource to implement – something that needs to be factored in to the overall cost and efficiency of shared services.
Those councils which stand to benefit the most from shared services are those which take a longer term view of the needs of their community, the resilience of their organisation, and the risks they face. Shared services are not ‘a fad’, but neither are they necessarily a shortcut to saving money.
