shared services guide

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Shared Services - Guidance Framework

December 2007

~ T he S co ttis h G o ve rn m en t


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Shared Services Framework

Contents

Ministerial Foreword

o Context

o Policy

Executive Summary

Section 1: Why?

o Background to Shared Services

o Successful Shared Services

o Benefits

o Non Financial Benefits

o Challenges and Issues

Strategy, Process, People and Technology

Shared Services Consultation Feedback

Section 2: What?

o What can be shared?

o Definition of Terms for Service Provision

Section 3: HoW?

o Shared Services Models

Operational Structures

Operating Models

Section 4: Where?

o Sourcing and Location models

Section 5: Conclusion and Next Steps

Section 6: Information and Acknowledgements

Appendix A: Detailed Case Studies

Appendix B: Summary Case Studies

Glossary

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Ministerial Foreword

We have set a challenging new agenda for our term of administration and we willneed to work together with our public sector partners to meet our commitment tosmaller, simpler government. This guidance is in response to the feedback you gave

during the Shared Services consultation and aims to provide all public sectoragencies and their partners with the information to consider where they are on theShared Services journey. I want to see delivery of shared services opportunitieswithin organisation, across their sector, and across the public sector in Scotland, toensure we can create a public service infrastructure that is efficient and effective andimproves the customer experience.

Shared Services is a key element of our efficiency agenda. We must achieve goodquality public services that are valued by their customers and ensure that efficienciesare applied consistently and proactively across the whole public sector, and acrossall corporate I common services. I expect that the majority of efficiency gains to be

delivered by best business practice and business process improvement, better useof public assets, improved collaborative working and mucn wider application ofShared Services, ensuring that value is added in all end to end business processes.

All public organisations must challenge themselves to collaborate, and engage insharing services as integral part of their on-going continuous improvement

Sharing procurement approaches and services will achieve significant gains. For thefirst time we have detailed management information and analysis showing there aresignificant benefits to be gained from working together on procurement. However,this is just one area where we can share. There are many examples of goodpractice in Scotland, the UK and the rest of the world, and I am committed to

ensuring that we can maximise the potential that Shared Services can deliver acrossthe public sector, and build on those good practice examples that will provide us withScotland wide solutions to transform the way that public services are delivered

I expect the public sector in Scotland to utilise this'guidance framework and consideroptions for shared services and therefore invite you to work with me in acceleratingthe pace of the Shared Services agenda.

John Swinney MSP

Cabinet Secretary for Finance and Sustainable Growth

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Context

The Scottish Government purpose is to: "Focus public services on creating a

more successful country, with the opportunities for all of Scotland to

flourish, through increasing sustainable economic growth ".

Our 5 key objectives to ensure that we can collectively work towards this are set outbelow, with our statement on how Shared Services can contribute to the objectives:

Strategic objective - Wealthier and fairer - Enable businesses and people toincrease their wealth and more people to share fairly in that wealth.

Role of Shared Services - To support the development of Shared Services inScotland that deliver high quality multi channel services, valued by citizens, andas cost effectively as possible to ensure that citizens and businesses contributeless of their wealth to support the State.

Strategic objective- Healthier -to work with others to deliver better and fasteraccess to integrated primary and community care in Scotland and to shift thebalance towards independence and choice so that everyone has sustained andimproved health and well being, especially in disadvantaged communities.

Role of Shared Services - To support multi channel access giving choice to allaspects of the community. To support the development of efficient, responsivehigh quality health services delivered on a cross-agency basis to return citizensto a state of health as quickly and simply as possible

Strategic objective - Safer and Stronger - Help local communities to flourish,becoming stronger, safer places to live, offering improved opportunities and a

better quality of life.

Role of Shared Services - To enable Shared Services opportunities which willdeliver efficiency gains that in turn, allows public sector organisations to reinvestin local communities and frontline services.

Strategic objective - Smarter - Expand opportunities for Scots to succeed fromnurture through to life long learning ensuring higher and more widely sharedachievements.

Role of Shared Services - To enable Shared Services opportunities which willdeliver efficiency gains that in turn allows reinvestment in early development,

education and lifelong learning and support multi channel access giving choice toall members of the community.

Strategic objective - Greener - Improve Scotland's natural and built environmentand the sustainable use and enjoyment of it.

Role of Shared Services - To develop Shared Services opportunities whichreduce the need to make contact with a range of dispersed agencies, anddevelop common business processes to support multi-channel access, andvirtual delivery mechanisms. This gives choice of access, and options for flexibleand remote working, which could in turn, allow for a reduction in individuals

carbon footprint.

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Policy

In setting our policy aim we need to ensure that we can have a clear understanding

of how we can support the implementation of Shared Services and in turn test policy

against the implementation. Our policy aim is therefore:

To support Shared Services opportunities that will provide Scotlandwide solutions, for smaller simpler Government, which improves theservice to the customers.

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Executive Summary

The Guidance Framework for Shared Services aims to provide information,

education, guidance and case study examples to those considering Shared Services

and to those already on a Shared Services journey. It is acknowledged that there are

many public sector organisations in Scotland that are already implementing SharedServices and embarking on Shared Services initiatives.

Others are seeking more evidence in the shape of case studies and further direction

of the potential benefits that Shared Services can bring to their organisations. The

framework provided should not be seen as a single source of guidance as there are

many other comprehensive research documents available; some of these are

referred to within this framework document.

Transition to Shared Services is a journey that needs careful planning and execution.

It requires a comprehensive understanding of the delivery process including

customer requirements and the delivery objective(s). The real challenge is indeveloping a strategy and vision, identifying the most effective business models, and

selecting the right people and partners, whilst securing political and organisational

agreement to be able to turn the strategy into reality and completing the journey as

planned.

The Guidance is set out into 6 sections as follows:

Section 1: Why Shared Services? - This section sets out the background to Shared

Services and confirms the opportunities and benefits for Shared Services as well as

exploring the challenges and issues that need to be tackled.

Section 2: What are Shared Services? - This section sets out the definition for

transformational Shared Services and what can be shared.

Section 3: How have Shared Services been delivered? - This section describes the

operating structures and models of how Shared Services may be deployed.

Section 4: Where have Shared Services been delivered? - This section describes

the sourcing and location models and identifies how the utilisation of ICT supports

flexible choices in these areas.

Section 5: Conclusion and Next Steps - This section provides a summary of the main

themes in the document and how to keep this framework current

Section 6: Further Information and Acknowledgements - This section provides

additional references for further reading and acknowledgements to source material

that is utilised in this framework document.

Appendices A and B : Includes some detailed case studies of successful Shared

Services and also provides summary information on other examples of good practice

both in Shared Services and other forms of sharing that modernise the public

service.

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SECTION 1: WHY?

Background to Shared Services

Organisations throughout the world constantly face operational and strategic

challenges to improve customer service at lower cost and increased effectiveness.Lean theories from manufacturing teach us that most improvement opportunitiescome from eliminating non-value added activities. Shared Services enablesorganisations to gain economies of scales and skills. Cost reduction and high qualityservice delivery can be achieved from economies of scale, and access to specialisedskill-sets and subject matter expertise. Public sector organisations also have thefundamental objective of delivering efficient and effective customer orientatedservices to citizens.

Shared Services is more than just centralisation or consolidation of similar activitiesin one location. It is the convergence and streamlining of similar functions within an

organisation, or across organisations, to ensure that they are delivered as effectivelyand efficiently as possible. In a Shared Services model, these service activities willbe run like a business, delivering services to internal/external customers at a cost,quality and timeliness that is competitive with alternatives.

Shared Services allows an organisation, or organisations to leverage the capabilitiesof resources across the entire enterprise, achieving and sustaining performanceexcellence. The underpinning is a concentration of common management practicesin a business-oriented organisation focused entirely on delivering highest-valueservices at the lowest cost to customers. This stimulates greater accountability thanhaving multiple points of responsibility and varied management practices.

Shared Services is revolutionary and can be truly transformational if it represents afundamental change in an organisation's structure. In a transformational SharedServices environment, service providers are service-oriented, business-based,contributor-valued, and partner-integrated.

SeNice-oriented: individual customers and their requirements are known,performance is measured, and problems promptly resolved. Providers knowwhat their customers expect for each service and are capable and motivatedin meeting these expectations.

Business-based: services to be performed are agreed upon with customers

and priced based on services consumed; Contributor-valued: accountability and responsibility is clearly delineated, and

compensation is linked to satisfactory delivery of service;

Partner-integrated: providers and customers co-define their respective rolesand agree upon how work is performed across organisational boundaries tomeet service requirements and expectations. Providers anticipate newservice needs. Users see service providers as direct contributors toprofitability.

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Additionally in a Shared Services environment energy and interaction is re-focussed

between the service provider and their customer. Customers and providers work

together on clarifying service requirements, performance improvements, and

priorities and share responsibility for successful service delivery.

Successful Shared Services

The move to Shared Services has gained momentum in both the public and private

sector and there are many successful Shared Services operating today, some of

which we have profiled in Appendices A and B. Some organisations have been

disappointed in the results from adopting Shared Services whilst others have

achieved benefits far beyond their expectations. An in-depth analysis of best and

worst practice clearly indicates that most of these initiatives fail due to a lack of clear

understanding of Shared Services and how to manage the change it involves.

Successful Shared Services models not only achieve significant cost savings; they

release substantial resources for front-line services and core policy activity. Theycan bring direct and indirect benefits to citizens by significantly improving standards

of service delivery, and multi channel access. Shared Services is an integral part of

wider service transformation and public sector reform.

Summarised below are the most common statements taken from Shared Services

organisations that indicate what is required to make Shared Services successful.

Secure strong leadership that is cascaded down through the organisation

Align Shared Services with the business strategy and organisation model, IT

and processes

Agree a shared vision for the future state of Shared Services

Important to recognise how Shared Services will operate in organisational

environment in terms of governance

Involve stakeholders in building and realising the business case to delver

significant benefits

Build a compelling case for change and communicate it to employees at all

levels to assist with culture change, buy-in and participation

Put in place strong governance, programme and change management from

the outset

Simplify with no compromises and maximise automation

Allocate adequate resources - quality and quantity, staff, money etc

Select the right location for the service/business

Performance measures, benchmarking, measuring success

Create a high performance service culture in the Shared Services

organisation and select leadership based on competencies required

Measure performance using an established baseline and track progress

against benefits to inform decision making

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Benefits

Shared Services can generate numerous benefits. Customers become moresatisfied with service delivery because they can specify and control which servicesthey receive and how much of those services they require. There is a significant

increase in customer interaction, and in the consistency of shared information, whichpromotes a service orientation. There are also numerous benefits to anorganisation, both immediate and long-term. In addition to the direct financialbenefits other benefits can be achieved by Shared Services:

By focusing on business processes for key support functions we can enhanceexpertise and build greater organisational capacity

Provide each part with a more robust and resilient vehicle for deliveringcritical services to demanding standards

Provides a platform for greater transparency and clearer responsibility forservice delivery, so it is very clear when and where processes are not

working Provide an environment for stimulating innovation and encourage greater

flexibility

Technology now makes it easier to provide services securely via a range ofchannels to multiple locations for front-line and back-office workers, allowingfor a more flexible working en.vironment.

By sharing ICT and systems substantial economies of scale can be achieved

Non Financial Benefits

Efficiency should be interpreted in a wide sense, since experience has shown thatShared Services organisations deliver better corporate performance, higher quality

services as well as financial savings. Indeed if organisations focus solely on costsavings they are likely to miss the change to improve service outputs by establishingbetter processes. Shared Services operations provide career opportunities,workforce development and introduce greater professionalism into corporate andtransactions functions by establishing centres of skills.

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Challenges and Issues

There are many challenges and issues to be faced when embarking on a SharedServices journey and the most common ones cited by experienced Shared Services

practitioners from both public and private sector are detailed below.

Lack of clear leadership and commitment to change

Having an effective Governance structure

Initiative fatigue

Unrealistic timescales

Politics Competing Resources

Culture Change Management Skills

Middle Management

Communication Employee Opposition

Long IT lead times

In addition, local democratic accountability and concerns around the impact on thelocations of the workforce are important factors for location decisions in some areasof the public sector. However, a balanced view of this will take account of thepotential for Shared Services to support the positive movement of public sectoremployment between areas of differing economic conditions (e.g. from fast growingurban areas, to rural locations).

As well as the issues raised above there are numerous legal issues to beconsidered. Below is a Top Ten List of legal issues to consider, this is not anexhaustive list.

1 Do the partners have legal capacity / vires to do what is proposed?2 Does the joint working fall foul of the doctrine of non-delegation/other

principles of public law.3 The choice of partnering structure4 Tax5 Governance6 Services Agreement

7 Procurement8 State Aid and Competition9 Information Sharing10 Employment law issues

Strategy, Process, People and Technology

How can these challenges and issues be tackled? Strategy, Process, People andTechnology are four key streams to be addressed on the journey to SharedServices. Each is important in its own right and addressed collectively will lead tosuccess. It is important that we tackle them in the right order. Shared Servicesshould not be seen from the outset as a technology issue. The combination of the

four should lead to standardisation, simplification and sharing successfully whilstachieving the organisation's overall vision.

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Strategy

It is critical to have a vision of what good looks like for an organisation and todevelop a strategy to deliver this vision. Some key questions need to be answeredat the start of a Shared Services journey e.g. how will the organisation engageShared Services? will it act as a provider of services ? will it be a user of Shared

Services from an external provider? or will it enter into partnership with others? It isimportant that the strategy embraces the operating structures and models and takesaccount of the local cultural and political environment.

ProcessOne of the most challenging and time consuming aspects of Shared Services isreviewing existing business processes. However if done correctly it can maximisethe benefits to be realised and can make the transition to Shared Services muchsimpler and smoother. Understanding the added value that each step in the processbrings to the overall outcome can be enlightening, and can ensure that the rightpeople are engaged in the process at the right time optimising the valuable skills

across the public sector where they are needed most.The perception is often that business processes must be tailored to local need todeliver local requirements. However, in order to deliver s.uccessfulShared Servicesfor a number of organisations standard business processes with effectivegovernance and change control in place will optimise the efficiency and effectivenessof the operation. The McClelland review of public procurement recommends a movefrom bespoke applications to packaged applications to take benefit of industrystandards and best practice processes.

In 2006, the previous administration conducted an ICT Infrastructure Scoping Studyacross public sector organisations which also indicated that many organisations

within each sector had implemented packaged applications software from the samesupplier.

There are various methodologies and techniques that have been adopted fromindustry for use in identifying opportunities and priorities for Shared Services andothers for supporting established Shared Services operations around quality andcontinuous improvement of business processes. These methodologies are also usedextensively for standardisation and optimisation of business processes whether theysit in a Shared Services environment or not, for example:

Opportunity

Value Chain Analvsis, the value chain categorises the generic value-adding activities of an organisation, identifying primary activities and supportactivities. Costs and value drivers are identified for each value activity withthe aim to maximise value creation while minimising costs. This goes hand inhand with the aims of increasing efficiency and effectiveness.

This customer centric, process based approach, allows an organisation togain a better understanding of how its resources are distributed across arange of generic activities, highlighting those that are of most value from thecustomer's perspective. When done across an organisation, or organisations,it helps to identify significant areas of duplication and overlap, which would

lend themselves to simplification, standardisation and sharing

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Continuous Improvement

Value Stream MappinQ is part of lean principles and complements sixsigma methods which were born out of manufacturing, but have since beenadopted and used in logistics, supply chain, and service related industries

including Shared Services. Many world class Shared Services organisationshave adopted these methods and principles. The aim is to improveprocesses and elimination of waste. It captures the whole process from endto end and uses a team approach and performance measures to critiqueactivity.

Six SiQma was originally developed by Motorola to systematicallyimprove processes by eliminating defects. A defect is defined asnonconformity of a product or service to its specifications. The core of the SixSigma methodology is a data-driven, systematic approach to problem solvingwith a focus on customer impact. Six Sigma asserts the following:

o Succeeding at achieving sustained quality improvement requirescommitment from the entire organisation, particularly from top-levelmanagement.

o Continuous efforts to reduce variation in process outputs is key tobusiness success.

o Business processes can be measured, analysed, improved andcontrolled.

PeopleWithout doubt the journey to Shared Services is a challenging one as it involvescultural, organisation and skill changes and effects people in all aspects and levels of

an organisation as well as its customers, and when dealing with 3m party suppliersand partners.

Careful planning of communication, addressing change management, and changereadiness, together with relevant and tim~ly training is vital to the success of SharedServices. They go hand in hand with strong programme management andexecution.

Our most valuable resource are the people who deliver public services at all levels.It is therefore vital from the outset of a Shared Services journey that the changemanagement strategy is clearly defined to ensure that those implementing change

and those affected by change are part of the process and can buy in to the benefitsthat Shared Services will bring to the organisation and individual.

Self-service, remote and mobile working have all provided increased flexibility andcan often address skill shortages and employment challenges within a geography orcommunity. However not all skills will be transferable and therefore it is vital that indeveloping Shared Services opportunities that the impact on the workforce isproperly assessed. Undertaking an equalities impact assessment is a helpful way ofunderstanding how different approaches might impact on areas of the workforce, andidentifying whether any particular groups are disproportionately affected. This allowsyou to consider the options for limiting the impact through redeployment or retraining

if appropriate.

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Shared Services can be a major change for some. A change management

programme that is well planned from the outset, with effective communication,

support, training and strong leadership needs to be invested in before and during the

journey. This may be a step too far for some and therefore the human capital issues

must be managed and planned for.

There are a number of tools that can help to do this including Kotter's Eight steps to

Successful Change and William Bridges' Managing Transitions Making the Most of

Change.

As with all aspects of public service reform, strong leadership is highlighted as key to

delivering a successful outcome that is truly transformational. Strong Leadership in

turn will ensure a culture of openness and engagement is in place, to deliver buy in

and allow people at all levels to drive change forward.

TechnologyICT provides the platform and foundation of Shared Services, advances in

technology and the reduced cost of deployment have allowed organisations to adopt

many differing operating structures and models to suit their circumstances.

Shared Services can be built by adopting integrated enterprise-wide solutions or

through best of breed business applications linked together with a Services

Orientated Architecture (SOA) providing the platform for streamlined and consistent

business processes and workflows. Additionally the reduced cost and availability of

Wide Area Networks (computer networks whose communications link across

metropolitan, regional or national boundaries) Virtualisation (combining of multiple

physical devices) of servers and disc technologies together with multiple access

channels e.g. Mobile, Desktop, Set-top (TV) Kiosks, Wireless etc. has resulted in

Shared Services being designed with maximum efficiency and effectiveness for

employees and customers alike.

Shared Services Consultation Analysis

In addition to the challenges and issues identified above, feedback from the Shared

Services consultation highlighted that VAT, Procurement and TUPE Transfer of

Undertakings (Protection of Employment) were areas of most concern to the

respondents. These are complex issues that require careful consideration and a

summary of our understanding of the latest position is covered below.

VAT - The key VAT issue is whether public bodies are able to recover VAT

incurred on goods and services received from their suppliers. If they can,involvement in Shared Services should not cause VAT problems. However, if a

public body has to restrict the recovery of VAT incurred on goods and services

received from its suppliers, it is likely that it will be less inclined to become involved

in Shared Services.

Section 33 of the Value Added Tax Act 1994 provides a special refund scheme

which allows local authorities to reclaim VAT incurred from its suppliers. Where

bodies listed in s33 of the VAT Act 1994 incur VAT in connection with taxable

business activities, they can recover the VAT as input tax subject to the normal rules.

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There are 199 Scottish Public Bodies covered by delegated authority to the ScottishParliament. There are also 66 education bodies making exempt supplies and notfalling within the provisions of s33. Consequently, unless there is a change in VATlegislation, VAT maybe a significant barrier to the delivery of Shared Services inScotland for some bodies.

The Cabinet Office has made representation to HM Treasury who are consideringthe VAT treatment of Shared Services arrangements on behalf of NDPBs and theEducation sector.

Procurement - There are a number of key questions to be addressed whenconsidering whether EU procurement rules require that Shared Services deliverymodels or other supporting contracts must be subject to competition.

Will the private sector be involved in supporting delivery of the service eitherthrough new or existing contracts? If so, are those contracts framed in away that allows the service to be extended to the contacting authorities thatwill use the service?

Are the relationships which are to be established between public bodiesand/or any delivery vehicle contractual in nature (e.g. are they service orservice concession contracts as defined in the Regulations)?

If they are contractual, are there any exemptions which would nonethelessallow the contracts to be awarded and performed without competition?

Will the private sector be engaged as an equity stakeholder in the proposeddelivery vehicle?

The Scottish Procurement Directorate produced its most recent guidance in July

2007 with the Scottish Procurement Policy Note "SPPN 01 2007 Covering Note onShared Services". The guidance goes some way to answering some of the issuesmentioned above. The European Commission's formal position on the issue isexpected to become clearer later in 2007. In the meantime, great care should beexercised in the establishment of Shared Services delivery models and specialistlegal advice should be sought in all cases where the EU procurement rules mightapply.

TUPE - TUPE or Transfer of Undertakings (Protection of Employment)regulations are an important plank of employment law in the UK and, under differentnames, in other EU countries. Introduced in 1981 they aim to ensure that an

employee whose employment transfers to another company (for example if thedepartment the employee works for is taken over by an outsourcing company), hashis employment rights respected. They also apply in some cases for work transferredto contractors. This includes hours of work, pay, pension entitlement and so on.

The Chartered Institute Public Finance and Accountancy produced a referencepublication The Commissioning Joint Committee guide to Service Sharing andEconomies of Scale 2007.

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SECTION 2: What?

What can be shared?

Although it is widely acknowledged that the industry definition of Shared Services

refers to the sharing of business processes, business functions or expertise, it isrecognised that many different aspects of an organisation can be shared, each inthemselves providing incremental benefits to a participating organisation. Sharingmay start with collaboration and adoption of best practice. The more detailed level ofsharing leads to greater levels of efficiencies, higher quality service and an increasedability to react to market or legislative change. However these benefits comecoupled with higher risk and need for a strong change management culture.

Shared Services is a journey without a fixed end point, but has an agreed vision ofwhat good looks like, for an organisation and the strategy defined to deliver thatvision. It needs measurable milestones to mark achievements and the journeyinvolves collaboration, change management, change of culture regardless of thelevel of sharing.

There are numerous areas and levels of sharing that can and do occur on a SharedServices journey. They start with collaboration and shared practices. Many stop atthe early stage as they entail the least risk and organisational and cultural change.Others go on in accordance with their strategy or build on their initial experiences toachieve the full level of Shared Services.

Most Shared Services efforts begin by focusing on Centres of Scale: volume-basedservices - transactional, processing and administrative, those that are delivered tomost employees or to external customers and can be maximised by aligning

economies of scale.

Glasgow City Council have implemented an internal Shared Service

for financial, HR and procurement processes

Typically, success in these areas leads organisations to search for other serviceswhere similar operational efficiencies and cost reductions can be achieved. Thelogical choices for this second stage are Centres of Expertise: knowledge-basedservices - specialised expertise, consultative and integrated solutions, supported bycommon business processes to provide consistent delivery.

The Advanced Procurement for Universities and Colleges

programme (APUC) is creating a centre of expertise for procurement

for further education and higher education institutions

Centres of Expertise and Scale are candidates for Shared Services because theyprovide the greatest opportunities for leveraging efficiency and effectiveness.

Listed below are examples of the types of sharing and collaboration that can occur,with different levels of benefits being achieved, depending on the nature and extentof the sharing. They all encompass many of the attributes and skills required to

achieve Shared Services, e.g. collaboration of requirements, negotiation, change of

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culture and process review, all of which are invaluable on the journey to Shared

Services and achieve incremental benefits as well as credibility and experience.

This is not intended to be an exhaustive list but should give an indication of the types

of sharing that can occur and further examples of sharing across the public sector in

Scotland are listed in Appendix B.

Category level of Sharing Scope Example

Common business Sharing of requirements, operating NSS Health

Business processes and model, design and ICT operational procurement

shared execution configuration. Commercial model,

Service Level Agreement, South

performance measures, Lanarkshire

Payroll Services

Common business Sharing of requirements and design Local Authority

process design (Best Practice) .CRM system

(Best Practice) procurement

Collaborative Sharing of requirements and remit e-Planning

Purchasing for tendering, producing one tender

document, lowering cost of

procurement

ICT Software and Operating Systems and application CustomerICT Infrastructure software and standards, executing First

Standards on a shared ICT infrastructure JANET, UK High

Provides common operational Performance

standards and practices, Computing

consistency in execution and Facilities

increased service levels, affords (Edinburgh Uni)

different working cycles up to 24n OSIAF Approved

Stds; SEAS

Property

Gazetteer;

Entitlement Card

ICT Infrastructure: Sharing of ICT skills and knowledge South

data centres, at a lower cost, less risk of attrition Lanarkshire ICT

hardware, effecting business Hosting

networks, Common operational standards and

telecoms, disc practices, consistency in execution

management, and increased service levels, affords

different working cycles up to 24n

Property, co- Sharing of building and utility costs, SEARSAssets location and sharing of services e.g. transport, Highland Service

sharing of buildings vehicle maintenance Point Network

and services

Skills Centres of Expertise, working to Excel; APUC;

standards, accreditation, providing National

expertise in subject matter e.g. Collections

Legal, IT skills, trading standards, collaboration

procurement, pension, IS, medical

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Definition of Terms for Service Provision

Shared Services

The industry wide definition of Shared Services can be summarised as theconvergence and streamlining of an organisation or organisations functions to

ensure that they deliver the services required of them as effectively as possible.Shared Services are more than just centralisation or consolidation of similar activitiesin one location. Shared Services mean running these service activities like abusiness and delivering services to customers at a cost, quality and timeliness that iscompetitive with alternatives.

South Lanarkshire Council provide a Shared Service delivering

Payroll services to several organisations within their community

Centralisation

Is the process by which the activities of an organisation or organisations, become

concentrated within a particular location and/or group. There are two types of

centralisation, the first involves organising workers into groups that support business

processes for the entire organisation or across multiple organisations. The second

organises workers by specific skill set and experience to provide services for the

entire organisation or across multiple organisations. Provides economy of scale,

reducing costs and overheads whilst providing resilience and can be used as a step

in the direction of providing a full Shared Services model or an end state operational

model in itself.

SEAS (Scottish Executive Accounting Service) provide a centralised

Financial service for Scottish Executive, Agencies and NDPBs

There are many and varied types of services that are often associated with SharedServices and sometimes confused as being Shared Services. The section belowdefines some of the most common service provisions and their definitions. All of theservices listed can be used to support a Shared Services operation, and equally allcan be used to support centralised and distributed operations as well.

OutsourcingBecame part of the business lexicon during the 1980s and often refers to thedelegation of non-core operations from internal production to an external entityspecialising in the management of that operation. The decision to outsource is often

made in the interest of lowering firm costs, redirecting or conserving energy directedat the competencies of a particular business, or to make more efficient use ofworldwide labour, capital, technology and resources. Fundamentally and historically,outsourcing is a term relative to the organisation of labour within and betweensocieties.

Over the years various forms of outsourcing services have evolved and provideservices for all type of business operations, eg Shared Services, Distributed andCentralised. Further definitions of outsourcing are as follows:

CapGemini provide ICT outsource services to customer across the

UK from the Highland Region

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Business Process Outsourcing (BPO) is the contracting of a specificbusiness process, such as payroll, to a third-party service provider. Usually, SPO isimplemented as a cost-saving measure for tasks that a company requires but doesnot depend upon to maintain its position in the marketplace. SPO is often dividedinto two categories: back office outsourcing, which includes internal business

functions such as billing or purchasing, and front office outsourcing, which includescustomer-related services such as marketing or technical support.

Use of a SPO as opposed to an Application Service Provider (ASP) usually alsomeans that a certain amount of risk is transferred to the company that is running theprocess elements on behalf of the outsourcer. SPO includes the software, theprocess management, and the people to operate the service, while a typical ASPmodel includes only the provision of access to functionalities and features providedor 'served up' through the use of software, usually via web browser to the customer.The most common examples of SPO are call centres, human resources, accountingand payroll outsourcing.

8T use Accenture and Xansa as 8PO providers for Financial

processes

Application service provider (ASP) is a business that provides computer-based services to customers over a network. Software offered using an ASP modelis also sometimes called On-demand software or software as a service (SaaS).The most limited sense of this business is that of providing access to a particularapplication program (such as medical billing) using a standard protocol such asHypertext Transfer Protocol (HTTP), a communications protocol used to transfer or

convey information on the World Wide Web.

The need for ASPs has evolved from the increasing costs of specialised softwarethat have far exceeded the price range of small to medium sized businesses. Aswell, the growing complexities of software have led to huge costs in distributing thesoftware to end-users. Through ASPs, the complexities and costs of such softwarecan be cut down. In addition, the issues of upgrading have been eliminated from theend-firm by placing the onus on the ASP to maintain up-to-date services, 24 x 7technical support, physical and electronic security and in-built support for businesscontinuity and flexible working. Customers of ASP services include businesses,government organisations, non-profits, and membership organisations.

The Covalent performance management system is used by a large

number of councils across Scotland and UK

Hosted Service Provider (Xsp) is a business that delivers a combination oftraditional IT functions such as infrastructure, applications (Software as a Service),security, monitoring, storage, Web development, website hosting and email, over theInternet or other wide area networks (WAN). An Xsp combines the abilities of anapplication service provider(ASP) and an Internet Service Provider (ISP).

This approach enables customers to consolidate and outsource much of their IT

needs for a predictable recurring fee. XSPs that integrate Web publishing give

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customers a central repository to rapidly and efficiently distribute information and

resources among employees, customers, partners and the general public.

Hosted Service Providers benefit from economies of scale and operate on a one-to-

many business model, delivering the same software and services to many customers

at once. Customers are charged on a subscription basis.

South Lanarkshire Council provide hosted IT services for the

Customer First programme and a University

Managed services is the practice of t ransferring day-to-day related

management responsibility as a strategic method for improved effective and efficient

operations. The person or organisation who owns or has direct oversight of the

organisation or system being managed is referred to as the client, or customer. The

person or organisation that accepts and provides the managed service is regarded

as the service provider. Typically, the client remains accountable for the functionalityand performance of managed service and does not relinquish the overall

management responsibility of the organisation or system.

City of Edinburgh City Council use BT to provide a Managed Service

for the majority of their ICT functions

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SECTION 3: How?

Shared Services Models

Operational Structures

When embarking on a Shared Services journey careful consideration must be givento the operational structures and models and sourcing options which reflect theorganisation's business strategy and vision. One of the early Shared Servicesdecisions to be taken is whether the organisation will be a provider of SharedServices, use an external provider or to form a partnership of some kind, thisdecision can be complex as it considers culture, political, financial, resource,capability factors and vision.

There are numerous operating structures (often referred to as commercial structuresor engagement models) for Shared Services which should be researched carefullyto determine the most appropriate. Different services may require differentstructures and it is important to think these through service by service and notnecessarily make one structure fit all. Operating structures each have their ownbenefits and risks.

Some organisations will naturally fall into one structure and others may start with onestructure and migrate through to other structures as the Shared Service matures andthis should be taken into consideration when building the business case. Equally thesize, scope and number of participants will also determine the type of operationalstructures 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 andcommunicate Shared Services best practice. As part of this work, the Buy IT forumidentified 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 businessservice 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 moreorganisations/departments to set up and operate Shared Services

NDPBs managing National Collections collaborate on joint

procurement and shared business processes

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Strategic Partnership (External): Contractual arrangement with 3rd partyprovided for range of seNices

Forth Valley GIS Limited, provides GISservices and skills to a range

of public sector and its partners

Joint Venture (JV) Joint Venture legal entity and between 'Authority' and 3

rd

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 andoperating seNice. The 3rd party can be another public sector organisation.

South Lanark Council provide hosted services for Customer Firstand a University

The range of Shared SeNices opportunities, actual working examples and the typesof governance and operating structures that exist are very broad. The seNicesprovided, and different relationships that exist between public sector organisationsallow a wide range of seNice offerings and organisational structures. The SharedSeNices Consultation feedback was for strong support for sector led approach.Equally a national or cross sector approach could be viable options depending onthe outcome of any business case or feasibility study. These range from the purelyinformal 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 SeNicesencompasses the seNice framework and the seNices provided, within the SharedSeNices. Each seNice having a functional operating model of how the seNice isdelivered identifying the use of seIf-seNice , centres of excellence, seNice centresand processing centres and the use of multi-channel access. The model will alsoidentify transactional, advisory and managerial roles and their organisationalstructure, seNice level agreements and key performance measure.

For example, a Procurement business process may have an operating modeldesigned that consists of the majority of transations being handled by a SharedSeNices Centre of Scale, and some of the transactions being undertaken bysuppliers and procurement officers in a self-seNice mode. A Human Resources (HR)process operating model on the other hand may have a large number of transactionshandled on a self-seNice basis by the employees and a Shared SeNices Centre ofSkills being available to provide specialist HR skills and advice to employees andmanagers. Both of these models having different operating models supported bydifferent ICT structures and procedural processes, workflow and seNice level

agreements.

Shared SeNices Centres of Scale and Skill can operate separately or together, and

processes can be outsourced or maintained in-house.

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SECTION 4: Where?

Sourcing and Location

The Scottish Government are committed to ensuring that we maXlmlse theopportunities to deliver services efficiently and therefore location is a key

consideration. Where possible the opportunity to co-locate and maximise the use ofpublic sector assets where they are most cost effective is a priority.

As a starting point, a short, sharp review of the anomalies, weaknesses andopportunities in the management of the Scottish Government's estate, has justcommenced. The Review is looking closely at all parts of the Scottish Government-around 80 recipients - comprising 'core' property centres, NDPBs, Agencies andnon-ministerial departments. The survey will ask key questions about the size legal,financial and management arrangements and suitability of their estate.

This Review may provide us with a range of options in terms of how we might

maximise the location opportunities available to the public sector to ensure we getvalue for money, from our buildings and land. While the first phase of the review isthe central government estate - that is those held and managed by the ScottishGovernment, this will inform our efforts to improve asset management across thewhole of the public sector - including local authorities and the Thi"rdsector.

Options

The physical location of a Shared Services should be related to sourcing and not tothe operating structure. There are three basic location variations for a SharedServices, i.e. where the work will physically be carried out, all three are usedextensively within the Private Sector with a move to off-shore locations beingpreferred due to skills, resources and labour costs. However in the Public Sector thecommon choice for location is on-shore local to the organisations.

On-shore - Work is carried out in the same country but at a different location

Near-shore - Work is carried out in a close location (e.g. continental Europerelative to the UK)

Off-shore - Work is carried out anywhere in the world that is not on-shore ornear-shore. This is not just to take advantage of wage arbitrage but to appreciatethe talents of particular economies in delivering specific service offerings.

The location variations can be applied to any of the operating structures and are notlinked to outsourcing. Current policy has no presumption in favour of outsourcing butnor should the option be dismissed out of hand. Each case should be subject to anoption appraisal to determine the most cost effective delivery mechanismcommensurate with the business and user needs.

Technology innovation and cost reductions have greatly assisted in extendingsourcing and location options for Shared Services, e.g. the reduction in cost andincreased resilience for networks together with multi-channel access has affordedShared Services organisations with many different options for operating anddelivering services to their customers.

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SECTION 5: Conclusion & Next Steps

Conclusion

The Minister in the Foreword highlighted the importance of Shared Services in the

efficiency agenda. Shared Services will be a key component in delivery ofefficiencies in order to improve the public service infrastructure for the benefit of the

customers (across all corporate I common functions); to improve service delivery

through understanding the best business processes; ensuring that the roles and

responsibilities that support the delivery of the business processes end to end add

value. Public organisations that do not collaborate will need to be able to justify this

on objective business grounds.

I hope the guidance and the references has been helpful in supporting decisions on

how to promote, develop and crucially implement a shared services approach which

can improve the customer experience.

There is a lot of good work happening already in this area and we must build on that

to maximise the opportunities for efficiency gains to deliver the results for the people

of Scotland.

Next Steps

The examples contained in the document are an indication of the activity in Shared

Services at the time of writing. There are a number of projects at various stages of

the Shared Services journey. In order to keep this document current we would like

to invite you to submit examples of Shared Services than we can develop into further

case studies and amendments to the framework as Shared Services develop.

Similarly the Shared Services Team will be happy to engage in discussion around

projects that have a business case to deliver significant continuous improvement and

fit with the overall agenda.

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SECTION 6:Information and Acknowledgements

There are a number of organisations that can assist with further material and advice

on Shared Services. Within the public sector, examples are:

Shared Services Team

The Scottish Government

Area 3H

Victoria Quay

Edinburgh

EH6 6QQ

Cabinet Office

http://www. cio. gov. uk/shared _ services/i ntrod uction/

Improvement Service for Local Government in Scotlandhttp://www.improvementservice.org.uk/

9 Regional Centres of Excellence in England ( South West web address below) lists

a number of useful addresses to obtain further information

http://www.swce.!:Iov.uk/usefulnational.htm

Public Audit Forum - Corporate Services

http://www.public-audit-forum.!:Iov.uk/publicat.htm

Ac kn ow led gem ents

This document has been compiled using many valuable sources of information and

case studies from a variety of public and private sector publications, information

bulletins as well as practitioner knowledge, these are acknowledged below

Scottish Executive:- document dated July 2007, entitled, Scottish Procurement

Directorate - Scottish Procurement Policy Note SPPN 1/2007

, Shared Services in the Public Sector: Impact of the EU Public Procurement Rules'

http://www.scotland.!:Iov.ukIT opics/GovernmentlProcu rementlPublicProcurementlpoli

cv-notes/sppnO 12007 covernote 1

Scottish Executive:- document dated April 2006, entitled 'a shared approach to

building a better Scotland, A consultation paper on a national strategy for Shared

Services. '

http://www.scotland.!:Iov.uk/Publications/2006/05/111 02023/0

Scottish Executive:- document dated October 2006 entitled 'Public display responses

to consultation document "A shared approach to building a better Scotland: a

consultation paper on a national strategy for Shared Services"

http://www.scotland.!:Iov.uk/Publications/2006/10/09105406/0

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Scottish Executive:- document dated March 2007, entitled Analysis of consultation

responses to A shared approach to building a better Scotland - a consultation paper

on a national strategy for Shared Services

http://www.scotland.Qov.uklPublications/2007/03/27145351/0

Shared Services Advisory Group BuylT:- document dated January 2006, entitled'Shared Services in the UK Public Sector - A Compendium of Best Practice

http://www .buvitnet. orQ/Best Practice Guidelines/SharedServicesPubSectlindex. sht

ml

Scottish Executive - document dated March 2006, entitled Review of Public

procurement in Scotland - Report and Recommendations

http://www.scotland.Qov.uklPublications/2006/03/141 05448/0

IPF and CIPFA Improvement Through Technology Network document dated April

2006, entitled 'Shared Services: The opportunities and issues for public sector

organisations. 'http://www.ipf.com/fileupload/upload/Shared services187200611542.pdf

CIPA, Capita and Oracle:- document dated 2007 entitled' Local Authority Financial

Administration Services, Emerging trends in the context of Shared Services.'

http://secu reocipfa. orQ.uk 1 C Q i-bin/C IPFA. storefrontlE N/prod uctlIT007

Socitm Insight:- document dated November 2006, entitled 'Modern public services:

Shared Services. Bigger, cheaper, better?'

http://www.socitm.Qov. uklsocitm/Librarv/Modern+public+services+shared+services. h

tm

Kable:- document dated 2006, entitled 'Shared Services in the UK public sector' and

2007 update, dated May 2007

http://www.kable.co.uklkabledirectlindex. php?option=com content&mCCountrvOrQ I

0=410&task=view&id=1180409

The Chartered Institute Public Finance and Accountancy produced a reference

publication The Commissioning Joint Committee guide to Service Sharing and

Economies of Scale 2007.

http://www.businesslink.Qov. uklbdotQ/action/laver?r. s=sl&topicld= 1074459745

Useful Links

I&OEA - Workforce issues in Shared Services, document dated September 2007

http://www.idea.Qov.uklidklcore/paQe.do?paQeld=6328944

The Heart of Change, Eight Steps to Successful Change, John Kotter

http://www.theheartofchanQe.com/home.htm I

Managing Transitions Making the Most of Change, William Bridgehttp://www.pfdf.ora/knowledaecenter/thouahtleaders/bridaes/manaaina-transitions.htm I

25
http://www.scotland.qov.uklpublications/2007/03/27145351/0http://www.scotland.qov.uklpublications/2006/03/141http://www.ipf.com/fileupload/upload/Sharedhttp://www.socitm.qov./http://www.kable.co.uklkabledirectlindex./http://www.idea.qov.uklidklcore/paQe.do?paQeld=6328944http://www.theheartofchanqe.com/home.htmhttp://www.pfdf.ora/knowledaecenter/thouahtleaders/bridaes/manaaina-transitions.htmhttp://www.pfdf.ora/knowledaecenter/thouahtleaders/bridaes/manaaina-transitions.htmhttp://www.theheartofchanqe.com/home.htmhttp://www.idea.qov.uklidklcore/paQe.do?paQeld=6328944http://www.kable.co.uklkabledirectlindex./http://www.socitm.qov./http://www.ipf.com/fileupload/upload/Sharedhttp://www.scotland.qov.uklpublications/2006/03/141http://www.scotland.qov.uklpublications/2007/03/27145351/0


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APPENDIX A: CASE STUDIES

Profiles I case studiesWe have collected a number of Shared Service case studies that cover a range ofShared Services profiles. There are nine detailed case studies in Appendix A that

cover private and public sector examples of Shared Services in operation.

We have also summarised examples of operational Shared Services together withexamples of sharing and collaboration within the Public Sector in Scotland. Furtherexamples of Shared Services operations out with Scotland across the Public Sectorand from the Private and Voluntary sectors are included in Appendix B.

We would welcome any further contributions if you are aware of them in yourorganisation. We will add them to our database. Further details on any of theprojects, including who to contact can be obtained from the Shared Services Teamat the Scottish Government.

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Case Study 1: South Lanarkshire Council

Profile: Public Sector, Local Government, Lead Or anisation cross sector delive

Why: Capital and Revenue cost avoidance, enhanced customer and service levels, risk

avoidance

What Shared Service Payroll Processes for over 20,000 staff across 4 organisations.

How: Lead Council, across 4 organisations, cross sector delivery model,

Where: Within South Lanarkshire Council, (Arms Length Body)

Governance ArrangementsThe Governance Arrangements for the service is by Formal Agreement inclusive of a formal

Service Level Agreement. Key Benefits include,

Formal Account Manager supervision of Service Provision

Formal review points and escalation methods

Service Uptime guarantees to participating organisations

Key Statistics Serves 4 cross sector organisations Provides standard payroll processing Shared Service model for over 20,000

employees across 4 organisations

AchievementsThe Shared Service Model ha.s achieved significant (cost avoidance) savings for the

participating organisations.

In addition the model allows the Lead Authority to enhance its Service levels, not only to

itself, but to the participating organisations.

The inherent reputation, business and technical risks associated with setting up a discreet

payroll service, has been avoided by the participating organisations.

The formal governance arrangements have enhanced confidence in the service both fromthe Lead Authority and participating organisations.

Other Services

In addition to providing a Shared Services for payroll, South Lanarkshire also provide hosting

services for the infrastructure supporting the National Infrastructure in support of Citizen's

Accounts and the National Land and Property Gazetteer.

Key ContactsKay Brown

Head of IT Services

South Lanarkshire CouncilCouncil Offices

Almada Street

Hamilton

ML30M

kav. [email protected]

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Case Study 2: Customer First

Customer First is a Scottish Government sponsored programme developed in partnership

with Scottish Local Authorities and managed with the support of Scottish Government,

COSLA and SOLACE, under the direction of the Improvement Service.

The Improvement Service is focused on delivering the efficiency, quality and accountabilityof public services in Scotland through learning, sharing knowledge and delivering

improvement solutions. It provides advice and support in the following areas: Best Value,

efficient government and performance management, elected members' development,

knowledge management, capacity building and management development, partnership and

joint working, Shared Services and the Customer First programme. The National

Entitlement Card Scheme is one of four Customer First sub-programmes.

Profile: National Entitlement Card Scheme, Local Government, Lead

Department/Organisation

Why: Improve choice and convenience efficiently and effectively

What: multi application smart card

How: Lead Authority with scheme shared across all 32 councils

Where: Improvement Service & Dundee City Council

Engagement and Operating Model - National Entitlement Card is a multi application smart

card to replace the various and numerous card schemes currently run by 32 local authorities.

Governance Model - managed under a lead authority - Dundee City Council. Project

Board reporting into the Improvement Service Board.

Key Statistics

Over 1.2 million cards in use, since April 2006 elderly & disabled citizens have been able to

use the card to access free bus travel. January 2007 working with Young Scot partners 11- ,26 year olds have been able to apply for card which offers discounts at restaurants and high

street outlets.

Procurement saving of 800,000

Objectives

Deliver more convenient and responsive public services

Encourage the take up of online (self service) access to services

Ensure that at least 75% of core service requests can be dealt with at first point of

contact

Benefits

A single Entitlement Card (smartcard), which can replace the many and incompatibleschemes that currently exist

Through the application process, citizens' consent for data sharing. Citizens will only

have to provide change information once and change will take place across all

systems

Once council transfer other services onto the card, for example leisure or library

membership, customers will only be required to carry one card.

Key Contacts

Jim Kinney, Improvement Service,

Jim.kinnev~improvementservice.or". uk

Sid Bulloch, NEC Manager,

Sid. bulloch~dundeecitv ."ov. uk

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Case Study 3 Forth Valley GIS Ltd

Profile: Public Sector, Local Government, Joint initiative initially then moved toStrategic Partnership

Why: Maximising the potential of geographic information to innovate and support the cost

effective delivery of public sector services

What: Innovative, high quality GIS Services and Solutions to the public sector and its

partners

How: Forth Valley GIS Limited is a Local Authority Company founded from a partnership

that existed between Clackmannanshire, Falkirk and Stirling Councils for over 10

years. As well as providing GIS services to the original 3 Councils, the company

delivers GIS consulting services to a wide range of public sector customers.

Where: Forth Valley GIS Limited is based in Viewforth, Stirling

Engagement and Operating ModelOriginally set-up as a joint unit providing leading edge corporate GIS services and solutions

to the neighbouring local authorities of Clackmannanshire, Falkirk and Stirling councils. In

July of this year and as a result of the continuing success and growth in services provided byForth Valley GIS, a new local authority company was created, Forth Valley GIS Limited, to

take forward the business. This change builds on the highly successful partnership between

Clackmannanshire, Falkirk and Stirling Councils over the last 11 years and marks a

significant episode in the ongoing development of shared GIS services. The new company,

limited by shares, is controlled under a shareholding agreement that will support other local

authorities or public sector organisations joining the company in the future.

Forth Valley GIS Limited will continue to offer the same high quality, market leading GIS

services to public sector customers across Scotland while extending the benefits of a new

business model.

Timing - 1996 to present

Key Statistics

A twenty + strong team of geographic information experts provide consulting services that

cover the whole GIS lifecycle ....

Strategy Development

Project Management

Technical Consultancy

Business Analysis

Systems Design

System Development

Data Management

Spatial Analysis Support and

TrainingFVGIS Limited has an extensive knowledge of the public sector and is continually building

strong and effective working relationships with a wide range of local and central government

organisations and partner agencies - promoting the benefits of shared GIS service delivery

to an increasing network of customers.

Key l e s s o n s

Geography is a unique thread that ties together information, processes and people -

because everything happens somewhere. Location, address and map data are commonly

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used throughout the public sector yet the real power of this geographic information to

provide strategic and wide-ranging business benefits is often unrecognised.

FVGIS Limited take an inclusive view of how geographic information and GIS can improve

service delivery - linking technology, processes, data and people to provide successful and

sustainable GIS solutions that provide real benefits.

Objectives

The overall goal for Forth Valley GIS is 'to maximise the potential of geographic information

to innovate and support the cost effective delivery of public sector services' providing

Extensive knowledge and experience of local government business drivers,

requirements and opportunities for GIS

Effective joint working with equal shares in costs/benefits

Best value with economies of scale for specialist services

Development and sharing of best practice

Strong emphasis on knowledge sharing and skills transfer across the partnership and

with external customers

Ac hievem ents and Ben efi ts

Forth Valley GIS has over ten years experience implementing public sector GIS solutions

with specialist skills in many areas including:

web solutions

spatial database administration

gazetteer management

systems integration

information management

The unique partnership approach to corporate GIS service delivery has realised significant

benefits for the partner Councils and their customers since the partnership was formed and

the range of geographic information services has continually developed to ensure alignment

with changing business requirements.

Continuous improvement of quality and range of services

Not for profit external income stream supports resource dividend for partner Councils

Enhanced reputation of the partner Councils

ICT cost savings and efficiencies by consolidation of 3 locations into one

Single source. of geographic data and quality management framework to support

effective data dissemination and use

Increased user confidence in the source, currency and accuracy of geographic data

Simplified process for data distribution and significant reduction in the time to

respond to customer requests

Opportunities to share regional geographic data with other agencies through an open

and interoperable infrastructure.

Service level management process

Forth Valley GIS Limited have established a three-year SLA with the original partner

Councils and bespoke SLAs with other public sector organisations. Key performance

indicators are developed in conjunction with the customer and reported on a quarterly basis.

In addition, project based work is governed by a tailored Prince 2 approach with regular

review meetings, risk and issue logs and an exception process.

Key contacts

Alan Moore - Head of Forth Valley GIS.

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CaseStudy 4: South lanarkshire Council and University of West of Scotland

Profile: Public Sector, local Government, lead Or anisation cross sector delive

Why: Capital and Revenue cost avoidance, enhanced customer and service levels, risk

avoidance

What: Hosted infrastructure for the newly created University of West of Scotland(Paisley

University, Bell College, Ayr and Dumfries Campus) )

How: Lead Council providing Sate of the Art Data Centre facilities for the University, cross

sector delivery model,

Where: Within South Lanarkshire Council, (Arms Length Body)

Governance Arrangements

The Governance Arrangements for the service is by Formal Agreement inclusive of a formal

Service Level Agreement. Key Benefits include,

Formal Account Manager Supervision of Service Provision

Formal review points and escalation methods

Service Uptime guarantees to participating organisations

Key Statistics

Serves a tertiary education organisation

Provides modern, secure data centre to host technology in support of organisation's

operation

AchievementsThe Shared Service Model will achieve significant savings for the participating organisation.

They have avoided the costs of building a proper fit for purpose data centre at a cost of

possibly 2m with the associated asset costs whilst the hosting authority reduces the unit

cost of the data centre.

The inherent reputation, business and technical risks associated with setting up a discreetdata centre service, has been avoided by the participating organisations.

The formal governance arrangements have enhanced confidence in the service both from

the Lead Authority and the participating organisation.

Other Services

In addition to providing Hosted Services for the Tertiary sector, South Lanarkshire also

provide a Shared Services for payroll and hosting services for the infrastructure supporting

the National Infrastructure in support of Citizen's Accounts and the National Land and

Property Gazetteer.

Key ContactsKay BrownHead of IT Services

South Lanarkshire Council

Council Offices

Almada Street

Hamilton

ML30AA

kav. [email protected]

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Case Study 5 COMPAS Authority Group

A joining of representatives from the Health Boards of Shetland, Ayrshire & Arran, Greater

Glasgow & Clyde, Forth Valley, Highland, the National Golden Jubilee Hospital and the NSS

with the aim of directing the future direction of the computerised Patient Administration

System (COMPAS) used throughout the hospitals in these health boards.

Profile: Public Sector, NHS Scotland, Joint Initiative

Why: Improve efficiency, ensure that future PAS needs are supported, ensure compliance

with NHS and Scottish Government reporting requirements, and reduce costs.

What: Governance of the future direction of the PAS used by these 6 Health Boards (and

the National Golden Jubilee Hospital).

How: Partnership model consisting of 6 Health Boards working with a skill centre of

supplier staff.

Where: Geographically dispersed governance group.

Governance ModelA committed development pool of resources that develop and maintain the application are

managed by an "Authority Group" that consists of representatives from all interested parties

who direct development direction in line with their changing priorities.

There is an Executive Group that monitors progress on a monthly basis to ensure

compliance with plan.

There is an agreed cost sharing protocol among all users of this system (managed centrally

via the CMT)

Key Statistics

Serves 6 Health Boards and the National Golden Jubilee Hospital Programme has benefited from Scottish Government funding

Programme has a formal governance structure with Board representatives from

partner Health Boards and the NSS.

Key l e s s o n s Build on the investments made to date

Exploit the knowledge base of the supplier

Take local responsibility for implementation and deployment

Objectives

Improve service efficiency

Meet reporting requirements Provide effective and meaningful Management Information

Seeking to develop the functionality and "join-up" the patient experience

Achi evement s and Benefi ts

Improve hospital efficiency - bed capacity management, compliance with Waiting List

statistics requirements

Key Contacts

Gordon Sommerville, Head of Contract Management Team,

National Services Scotland

Gordon. Sommervi IleCCi>-isd. csa. scot. nhs. uk

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Case Study 6: NSS e-Financials Service

This is an NSS procured and centrally hosted e-Financials system that can be made

available to all NHS users across Scotland.

Profile: Public Sector, NHS Scotland, Strategic Partnership

Why: Improve efficiency; reduce costs by encouraging convergence of common

technologies that address common functions across NHS Scotland

What: Provision of a nationally available e-financials software package (Cedar) with a

declining per-user charge as usage increases.

How: System is available now subject to Health Boards being able to adopt the version of

the software package delivered centrally.

Where: System is currently used by NSS staff but could be available across

NHS Scotland

Governance Model

Currently managed directly by the NSS as part of the overall contract with the ADA.

Key Statistics

Used by NSS currently

Could be used by any NHS Scotland area if required

Decreasing price per user as usage increases

o 1-300 concurrent users - 1060 per user








Key lessons

Build on the investments made to date

Exploit the knowledge base of the supplier

Need to encourage local take-up to ensure reduced per-user charges

Objectives

Improve service efficiency

Meet functional requirements

Service Level management process

Performance management reviewed by NSS Contract Management Team

Key Contacts

Gordon Sommerville, Head of Contract Management Team,

National Services Scotland

Gordon. [email protected]. nhs. u k

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Case Study 7: Glasgow City Council

Profile: Public Sector, Local Government Scotland, Unitary

Why: Improve efficiency, increase customer focus, reduce costs

What: 5 internal service departments, 4 arms length operating companies & 3 external

companies

How: Shared Service Centre & SAP Enterprise solutions for - Finance, Sales,

Procurement, HR and Business Intelligence

Where: Glasgow

Timing - Established 2004 -

Key Statistics

Glasgow City Council

Largest Scottish Authority, population of 600,000, wider city region of up to 2 million

Shared Service Centre 130 staff, (+16 dedicated technical staff); Directly supports over 2,500 SAP & Pecos

system users

Current scope of SSC back office processes:

o Record to Report (Finance) - 2.3bn revenue and 05bn capital

o Order to Cash (Sales) - 3280m sundry sales

o Procure to Pay (Procurement) - 750m (projected annual)

o Positions to Pay (HR) - 650m for some 40,000 employees

o Processes underpinned by business intelligence capability

Key Lessons

Ensure continued senior executive commitment and sponsorship Make significant investment in resources

Invest in a robust change management programme

Upfront design of key characteristics for SSC operations

Define, own and manage through documented processes I procedures

Objectives

Evolve from am non-integrated 'silo' business, to a lean enterprise driven by

standardised processes with fewer links in the chain

Embrace 'Business Excellence' and 'Lean' models

Enhance customer focus, including self service for managers and budget holders

Develop a Shared Service Centre model at the heart of back office services

Achieve 'Efficient Government' cost reduction on processing (5m pa) rising to 1OM

pa with better procurement

Ac hievem ents and Ben efi ts

Core SAP technology supporting key processes with further planned rollouts

Regular and systematic review of balanced scorecard measures

Delivered significant process improvements and ability to measure performance

across the full e2e business processes e.g. 80% customer invoices paid in 30 days

(over 100% improvement), 91% supplier invoices paid within agreed time with 83% of

supplier invoices processed electronically with no human intervention

Embracing new behaviours, leadership and culture to deliver ways of working

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Annual cash benefits delivered of c2.5m in process efficiencies with further c2.5m

realisable on completion of rollout programme and c6m in better buying delivered to

date

Shared Services capability now central to change and reform programme

Service level management process

Clear and specific service level agreements for all services

o E.g. recruitment applications processed from within 24hrs of closing date

Managing performance framework linked to business plan

Key Contacts

Glasgow City Council

Implementation partner - Serco

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Case Study 8: Scottish Government, Scots Connect

Profile: Public Sector, ICT Services, Lead Department

Why: Provisions of secure, flexible and cost efficient ICT infrastructure and services and

skills

What: ICT Managed Services and Skills to over 9000 public servants throughout Scotland

How: Lead Department, delivering to public sector organisations in Scotland

Where: From Edinburgh based Information Services and Information Systems business

area (ISIS) and their partners

Key Statistics

Over 9000 users from 25 organisations within Public Sector Scotland

Variety of services and skills provided from internal staff and external partner

organisations

14,000 items of IT equipment maintained

Objectives

Scots Connect offers financial and technical economies of scale, provides access to

common contracts, facilitates the sharing of knowledge and information across the public

sector, and delivers high quality value for money services.

Services available include:

Infrastructure Services

Telephone Services

ICT Training Services

Consultancy Services

Business Solutions Services

Information Management Services Departmental Security Services

Achievements and Benefits

Secure, flexible and cost efficient ICT infrastructure and services

Experienced and qualified professional staff

Utilising and sharing existing procurement contracts

Deployment of industry standards and practices

Key Contacts

Maxine ReidBusiness Manager

Telephone 0131 244 5276

Email: Maxine.reid2{(:Uscotland.asLaov.uk

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Case Study 9: Transport for London

Profile: Public Sector Trans ortation, Local Government, Unita

Why: Improve Efficiency, increase customer focus, reduce costs

What: 19 internal businesses across Transport for London

How: Internal Shared Services for 19 businesses for HR processes

Where: Separate location in London

Engagement and Operating Model - Centralised internal Shared Service for 19

businesses across Transport for London ( including London Underground ; London Buses ;

London Rail; Congestion Charge; Public Carriage Office ).

Governance Model - Service level targets reviewed Timing - 2003 to 2005

Key Statistics

Serves 19,000 staff, 60,000 pensioners, 19 businesses and 60,000 job applications per

annum

Efficiency gains of 30%Improvement in HR Efficiency Ratio from 1:64 to 1:97 employees

Programme commenced in 2003 and took 18 months to complete

Key lessons

Define the look and feel of the centre and invest as appropriate

Define characteristics of the existing service and" to-be" service at the outset

Invest in communication and relationships with all stakeholders

Adopt" service-led" design based on business requirements

Set challenging but realisable targets; realise further efficiencies after operations

start

Objectives Standardised systems, processes and training

Improve efficiency and customer service as well as reducing costs

Accommodate within one space a mix of contact centre staff, advisers and specialists

plus managers

Act as a showcase to enable external visitors to view the centre without

compromising security or confidentiality

Achievements and Benefits

Integrated HR service from recruitment to pensions in a single place of contact

Transparent performance information based on consistent data collection

Improvement in HR efficiency ratio from 1:64 to 1:97 employees

Net annualised benefit Year 1 of 8m ; Programme cost 7.5m (increase in volumeshas seen increase in costs)

Rent, rates, services and facilities savings of 20 per sq ft

Performance against clear and specific service level targets

Established capability for future" self-service" technology and services

Service Level management process

Operating performance against clear and specific service level targets e.g. 80% of

queries answered at first point of call

Key contacts

Transport for London

Implementation partners - Orion Partners and Lagan

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Case Study 10: LogicaCMG pic

Profi le: Pr

shared services guide

Documents