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Outsource magazine: thought-leadership and outsourcing strategy | May 1, 2017

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Reflections from Chicago: Public Sector Shared Services

Reflections from Chicago: Public Sector Shared Services
Nick Mellors

Like Chicago’s famous Cloud Gate, the Shared Services & Outsourcing Network’s (SSON) annual conference on Shared Services in the Public Sector provided plenty of opportunity to reflect and look at the topic of public sector shared services from different points of view.

Whilst some argue that the lack of a precise and agreed definition of the phrase “shared services” hinders debate and muddies the water in comparing the value and benefit of these initiatives; the conference showed shared services are thriving under a diverse set of models – all with the common starting point that working collaboratively (often but not always sharing common processes) and sharing resources generates both financial and organisational benefits.

Perhaps because of the sheer scale of operations in North America, many of the shared services case studies on show were internal to single large organisations like States, federal bodies and universities. The UK approach to look to share between similar organisations was less prevalent, although we saw cases of State and local government bodies sharing common services in Ohio and in the Canadian province of New Brunswick and health bodies such as Northern and Interior Health establishing a common shared service centre in the Canadian province of British Columbia. At federal level the Interior Department provides HR and payroll services to around 150 government agencies.

I was struck by the level of interest from the Higher Education sector, a sector which in the UK seems slow to move into the area of shared services. Although the stereotypical problems of the administrative/academic divide in the HE sector were clear in the US examples too (it’s hard to tell a Nobel Prize-winning academic that they aren’t supposed to buy things the way they choose) there seems a real sense of enthusiasm in the sector at the moment. There are positive case studies coming out of universities as far flung as California, Washington, Illinois, Oregon State and Yale. The key message emerging from them was the essential importance of engaging with all areas of the university and delivering a very clear and balanced message about what the new service would deliver and its benefits to university life (rather than how it would make, say, the HR department more efficient).

Looking forward and speaking to delegates at the early stages of developing their own shared services organisations it is clear that the same issues are driving public sector organisations in the UK and North America: money and citizen services.

In the USA the ‘fiscal cliff’ (a combination of both significant tax rises and spending cuts triggered by political stalling which many analysts – apart from Warren Buffet – are suggesting will drop the USA into recession) is driving major spending cuts in all public sector organisations whilst demographic changes and increasing citizen demands are increasing pressure to support front line services by streamlining back office services.

A lack of investment funding for new initiatives is forcing a ‘brownfield site’ approach to setting up shared services with more emphasis on using the people and resources that are already in place and taking a pragmatic approach to both the scope and scale of the services provided – textbook theorists may blanche at the thought, but the reality is it’s working.

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