SECTION 3: How?
Shared Services Models
Operational Structures
When embarking on a Shared Services journey careful consideration must be given to the operational structures and models and sourcing options which reflect the organisation's business strategy and vision. One of the early Shared Services decisions to be taken is whether the organisation will be a provider of Shared Services, use an external provider or to form a partnership of some kind, this decision can be complex as it considers culture, political, financial, resource, capability factors and vision.
There are numerous operating structures (often referred to as commercial structures or engagement models) for Shared Services which should be researched carefully to determine the most appropriate. Different services may require different structures and it is important to think these through service by service and not necessarily make one structure fit all. Operating structures each have their own benefits and risks.
Some organisations will naturally fall into one structure and others may start with one structure and migrate through to other structures as the Shared Service matures and this should be taken into consideration when building the business case. Equally the size, scope and number of participants will also determine the type of operational structures adopted.
The UK Government Cabinet Office engaged the Buy IT Best Practice network (made up of government departments, large corporate organisations using Shared Services and Shared Services consultants advisor members ) to develop and communicate Shared Services best practice. As part of this work, the Buy IT forum identified six basic structures:
Unitary: A single organisation consolidation and centralising a business service
Glasgow City Council, provide Finance, HR and Procurement Shared Services for its 10 operational divisions |
Lead Department: an organisation consolidating and centralising a business service that will be shared by other organisations
Scottish Government - provides finance and HR services to some Agencies and NDPBs |
Joint Initiatives:(internal) agreement between two or more organisations/departments to set up and operate Shared Services
NDPBs managing National Collections collaborate on joint procurement and shared business processes |
Strategic Partnership: (External) Contractual arrangement with 3rd party provided for range of services
Forth Valley GIS Limited, provides GIS services and skills to a range of public sector and its partners |
Joint Venture: (JV) Joint Venture legal entity and between 'Authority' and 3rd party provider
Somerset County Council and Taunton Deane Borough Council created joint venture company 'Southwest One' to deliver finance, ICT, HR, customer services, property services, facilities management, design, print and postal services and procurement. |
Outsourcing:3rd party provider takes full responsibility for managing and operating service. The 3rd party can be another public sector organisation.
South Lanark Council provide hosted services for Customer First and a University |
The range of Shared Services opportunities, actual working examples and the types of governance and operating structures that exist are very broad. The services provided, and different relationships that exist between public sector organisations allow a wide range of service offerings and organisational structures. The Shared Services Consultation feedback was for strong support for sector led approach. Equally a national or cross sector approach could be viable options depending on the outcome of any business case or feasibility study. These range from the purely informal and collaborative types, such as knowledge sharing through to formal partnerships, joint ventures of fully outsourced contractual structures.
Operating Model
The operating model (often referred to as the delivery model) of a Shared Services encompasses the service framework and the services provided, within the Shared Services. Each service having a functional operating model of how the service is delivered identifying the use of self-service, centres of excellence, service centres and processing centres and the use of multi-channel access. The model will also identify transactional, advisory and managerial roles and their organisational structure, service level agreements and key performance measure.
For example, a Procurement business process may have an operating model designed that consists of the majority of transations being handled by a Shared Services Centre of Scale, and some of the transactions being undertaken by suppliers and procurement officers in a self-service mode. A Human Resources (HR) process operating model on the other hand may have a large number of transactions handled on a self-service basis by the employees and a Shared Services Centre of Skills being available to provide specialist HR skills and advice to employees and managers. Both of these models having different operating models supported by different ICT structures and procedural processes, workflow and service level agreements.
Shared Services Centres of Scale and Skill can operate separately or together, and processes can be outsourced or maintained in-house.