EXPERIENCES IN BUILDING A SHARED SERVICE MODEL

R. Scott Studham

APLU Panel Discussion on Shared Services

November 16 2009

MY BACKGROUND WITH SHARED SERVICES

CIO - Oak Ridge National Laboratory $1.4B research organization Consolidated 20 IT organizations to one via shared

service model Funded massive computer security effort and

application modernization while decreasing overall IT costs because the customers decided what services were their priority

CIO - University of Tennessee $1.7B higher education institution Nine months into building shared service structure

My first job – Burger King.Factoria Mall in Bellevue WA

How many customers feel about IT organizations

“MOST IT ORGANIZATIONS ARE NOT QUALIFIED TO MAKE HAMBURGERS.”

- UT executive during my job interview

ROADBLOCKS TO IT SHARED SERVICES Historically enterprise IT services did what they

wanted and not what the customer wanted (distrust of IT)

Everybody can do it better (entrepreneurial) False dichotomy of centralized vs.

decentralized IT Budgeting processes based on organizational

structure rather than services IT department that focuses on technology

rather than services IT leadership that wants to control IT rather

than giving customers control.

STEPS TO IMPLEMENT IT SHARED SERVICES

1) Financial Services need to be in Shared Service model before IT2) Centralize as much of IT as necessary, but no more.3) Inside the IT organization; Establish IT Service Level Managers

(SLM) that are independent from IT Technical Line Organizations. Give the SLM’s control over projects & budgets.

4) Document IT Services and their costs. Determine the customer.

5) Move IT budgeting process to “Service Based Budgeting”. Most higher education use “organizational based budgeting”

6) Give “Customers” complete control over what services IT provides

7) After credibility of central services is established work with customers to reduce duplications.

SO WHERE IS UNIVERSITY OF TENNESSEE IN THIS PROCESS?Done before I got there Financial Services need to be in Shared Service model

Year 1 Centralize as many IT services as necessary, but no more. Inside the IT organization; Establish IT Service Level Managers

(SLM) that are independent from IT Technical Line Organizations. Give the SLM’s control over projects & budgets.

Document IT Services and their costs. Determine the customer.

Year 2 Move IT budgeting process to “Service Based Budgeting”. Give “Customers” complete control over what services IT provides

Year 3 After credibility of central services is established work with

customers to reduce duplications.

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ORGANIZATION SHOULD REFLECT HAVING CUSTOMERS ESTABLISH IT’S DIRECTION

CUSTOMER-DRIVEN GOVERNANCE BASED ON SERVICE CATALOG

IT has established a list of central services

Working with each customer to establish their priorities

Will result in a change in what we do and in some cases who pays for what service.

The next step will be to build customer IT plans

CUSTOMERS HAVE NOTICED THE CHANGE

Working with customers to document what they want us spending their money on has improved customer satisfactionSurvey Pre-Reorg Post-Reorg Improvement

Responsiveness

4.36 5.4 23.9%

Communication

4.36 5.64 29.4%

Ability to deliver

4.4 4.75 8%

Shared

Services