Why peer support, not a grand vision, is the key to shared services

Written by Richard Blanford on 6 June 2018 in Opinion

Richard Blanford of Fordway believes there is scope for much more growth in shared services if local authorities focus on working with each other

We are now seeing significant successes in shared services – where one local authority takes responsibility for providing one or more IT services to another. 

There are many potential advantages to such arrangements, including economies of scale and the opportunity to obtain services that were previously unaffordable. 

The continued pressure on local authority budgets raises the question of why more of them have not yet gone down the shared services route. However, it is a potentially complex transformation and this, combined with entrenched interests and a desire to maintain control, may discourage organisations from considering the concept. 

I believe human nature has played a role in limiting take-up to date. 

If people are given a choice of whether to share services with another organisation, their default response is likely to be no, or alternatively: ‘we love the idea – provided that we run it’. It takes a strong, confident leader to overcome this tendency and drive a shared-services initiative forward. However, after seven years of austerity local authorities are realising that shared services offer an effective way to reduce costs and improve efficiency.

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In my opinion, the key to success – in addition to strong leadership – is to work with your peers. Local authorities – whether unitary, district, or borough councils – are ideally placed to understand the needs of other local authorities. They deliver similar services, are likely to have similar business processes, and understand the need to balance the practical and the political. 

Organisations should take care not to fall for a grand vision, which promises the earth but does not take account of the day-to-day challenges they face. 

The most high-profile example of this is the Southwest One joint venture between a county council, a district council, a police force and IBM – three public-sector organisations with very different needs, in combination with a large commercial organisation. First established in 2007, it is currently just providing services to the Avon and Somerset Constabulary. The contract is due to end in June 2018. 

In contrast, as successful ventures across London boroughs and in other areas of the country have shown, when peer organisations work closely together the whole can definitely be greater than the sum of the individual parts. It can provide both efficiencies and an opportunity to implement new ideas and technologies, with the participants jointly implementing a best-practice solution while maintaining their separate identities to their users. 

Compelling arguments
As with any major IT transformation, a move to shared services should be driven by a compelling event, such as the end of an outsourcing contract or equipment approaching end of life. Change for its own sake is rarely successful. Participating organisations should also ensure that their interests are fully aligned. If they do not share the same goals, problems are likely to arise at a later stage. This requires a full and frank discussion about the aims of the transformation, the required return on investment, and the challenges expected – both technical and human. 

Even with strong leadership, a compelling reason for the change and a clear goal, it is easy to be derailed along the way. 

Leaders will need to overcome political hurdles, take difficult decisions and be willing to compromise and accept that another organisation may be doing something better than they are. They need to remain focused on the principles of what they are trying to do and avoid getting bogged down in the detail. Common processes are vital, as workarounds quickly cripple any joint initiative, and staff will need to be willing to adopt different ways of working. 

Shared services are not an easy journey. 

There will be new challenges in doing things on a larger scale, but the results should be better services, reduced costs and hence more money to spend on providing public services. One area where there is tremendous potential for shared services is in the NHS, and I hope that we will see more initiatives in this area.

About the author

Richard Blanford is managing director of Fordway

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