“Nothing is permanent but change”, as Heraclitus once said. This quote often comes to mind, especially in today’s uncertain world and this is a pertinent philosophy to remember if you’re considering embarking on the shared services journey.
The commercial sector embarked on the shared services journey earlier than the public sector, however, in response to budget cutbacks, the government is increasingly urging the public sector to follow suit and they are now catching up. Local authorities have been subject to especially high budget cuts in recent times and are ideally placed for sharing services. In fact, there has never been a more crucial time for them to do so.
Setting off on the shared services journey involves considerable transformation. As with any transformation, there are barriers to overcome but you shouldn’t let this put you off as long-term cost and efficiency savings make it worthwhile. Some of our local government customers that have embraced the shared services opportunity have gone onto save millions of pounds whilst maintaining and improving services.
The barriers to implementing successful shared services within local government are often political, people related and technological, as follows:
Local authorities may have to overcome two types of political challenges. Firstly, neighbouring authorities may have different political allegiances, making sharing services a challenge. Elections will also be a barrier to start a shared service as coping with the negative press may impact votes.
Secondly, there is likely to be internal politics around who, from the two or more councils, are going to be the ‘leaders’ taking forward the shared services program and if there is a shared management team, how the roles will be shared between the councils. Knowing that there will be unwanted competition for management team places could well make councils reluctant to approach sharing services in a gung ho way.
Sharing services with one or more local authority involves having to overcome trust issues. To alleviate these issues, it is important for local authorities to carefully consider their partnerships and not to rush into a situation that may not be the right fit. Therefore research is key. Once satisfied with the chosen partner/s, there is no reason not to trust them. In fact, trust will be key to the success of the project.
Sharing services typically means consolidating resources into one central shared function and so there are potential job losses and the inevitable involvement of unions. The expected fallout may seem an insurmountable barrier. To overcome these people issues, it’s important to have strong leadership, a clear vision and robust communications with both staff and unions.
Training and skills
A local authority may be happy to share their services but it may not be an easy sell to a new partner if the right training and skills are not in place. For instance, the financial director (FD) in a local authority shared service will need to be able to effectively market their financial skills and knowledge when trying to convince another public sector body to use their resources. Some FDs will see this new marketing and sales requirement as an enormous challenge and may require additional training.
Effective shared services requires the right IT infrastructure and if this is not in place, managers may think that moving to a suitable platform is too costly or troublesome. It needn’t be this way. The key is to choose a quality IT provider that has experience of shared services and has a track record of successful implementations.
When implementing a shared services model, it’s vital for managers to do their background research, choose the right partners and providers, and seek out advice on how to overcome the challenges. If these guidelines are followed, you will alleviate key concerns and avoid wasting time. There will be barriers, but if in doubt, take some comfort in Heraclitus’s wise words and take the leap.