Shared services - the limitations
A recently published report by the New Local Government Network says what we've been saying for some time - that shared services applied to the back office achieve little by way of savings. The report has found that back office functions account for only 8.9% of total local authority expenditure - so even a very significant reduction in these costs would have only a minor impact on the overall budget. Clearly Eric Pickles' claims about sharing back office functions being able to protect front line services are nonsense.
We've been saying for some time that the big potentail savings from shared services will come from sharing front line services - a shared contact centre, shared infrastructure supporting web self-service, shared public offices (shared between public and civil society organisations locally), shared children's services etc - all offer large potential for savings that are substantial.
Socitm Consulting offers a complete shared service support - including legal specialists (with the support of the Law Society) able to advise on legal entities and agreements, procurement specialists to advise on the options for sharing, insourcing, outsourcing, technical specialists to advise on the infrastructure needed to support shared working, and business specialists with experience of shared service working to advise on the business change processes needed to achieve deep transformation - to the level needed for achieving big savings.
shared back office services
- if you take two services and just put them together, and they are already working at maximum output, then why would you expect any more savings than at management level? But is that not worth doing? If you want more then ask the people doing the job, and empower them to make changes.
- the banks did a lot of sharing of back office functions, and then moved a lot of the front office work to the back (can you remember being able to go into your branch to pick up a cheque book, and there was always one waiting for you?) They also managed expectations of what needed to be at the front line, and what did not.
- very little seems to be happening on the join between back and front office - there does not need to be a distinction, a well delivered CRM and mobile technology will make this happen, and allow the service to be across the board. Not sure I understand what you mean when you suggest that shared infrastructure is a front line service, it sits in the back, and shared IT, not just delivering systems but committing to actually using them to best value - truly shared IT systems is a long way off happening, and this is where much savings can be made
Sometimes we concentrate too much on strategic, and never get around to the simple changes that can save money too - the old adage was "look aftern the pennies and the pounds look after themselves"