Driving efficiency gains through shared services
Unit4’s State of the Digital Nation research confirms a longstanding public sector trend: cost cutting is a top priority. 95% of the organizations we surveyed reported they’re looking to make cost savings – and the most common way they’re doing it is by making cuts to vital services.
The drive to reduce costs is also having a notable impact on staff. 35% of organizations are looking to make redundancies, 22% are considering pay freezes. A third are considering closing or selling buildings – which might be a reaction to the rise in remote and hybrid working.
But as we all know by now, cuts to services and staff are only ever a temporary solution, and have a tendency to lead to even greater challenges over time. An organization that saves on costs by making cuts to the services it delivers (and the people who deliver them) will damage its capacity to fulfil its function, creating a vicious cycle. Many lean organizations will also find reducing headcount any further to be impossible.
In an environment where preserving service quality and effectiveness are vital to organization’s success, switching to a shared service operational model represents a compelling alternative. But one of the oft-unsung benefits of shared services that make it an excellent option for public sector organizations is that it can enable further savings and improvements through the acceleration of your digital transformation initiatives.
Shared services’ impact on cost reduction
Just over a third of respondents in the State of the Digital Nation survey cite joining a shared service or outsourcing as methods they’ve either considered or embraced for cutting costs (36% and 35% respectively.) This makes them the second and third most commonly considered after direct cuts to service provision.
The capacity of shared services to help organizations realize large cost reductions has been proven for some time – both in and out of the public sector. According to one Change Associates report, private sector organizations have seen savings between 20% and 30% after switching to shared services, without having to resort to headcount reduction. Shared services are also cited as a key part of a strategy of reducing operational and administrative burden on both management and staff, allowing organizations to focus on delivering and managing a quality service.
In the public sector, shared services are far from new – significant opportunities for streamlining and automating workflows (as well as cutting costs) were identified as far back as the Gershon Review (2003.)
The potential for savings is well recognized – but increasingly the capacity of shared services to accelerate digital transformation and help create a better experience for users has also been a key priority for the public sector.
The UK Government’s Shared Services Strategy cites better user experiences and the ability to standardize processes and data visibility across the entire public sector as two of its three strategic goals.
What does shared services as a tool of transformation look like?
If we consider shared services as a single back-office environment shared by multiple organizations, it becomes easier to see how they can facilitate transformation. If multiple local authorities, central government departments, and other agencies all rely on the same provider for their HR, payroll, finance, and similar workflows, then only one organization has to undergo the transformation process in order for all users of its services to experience the benefits.
Over the past 10 years, our own customer Hoople has created a new model of shared services based on our solutions that serves the needs of 3 different local authorities. Originally created by Herefordshire Council and the Wye Valley NHS Trust as a shared service partnership, Hoople’s main objective was to combine core operational tasks like payroll, HR, and IT for its founding shareholders in order to eliminate duplication of effort and deliver efficiency savings.
This shared services partnership (which later became Hoople as an independent company acting for the benefit of its trustees) used Unit4 ERP to create a single platform capable of transforming and underpinning the operations of all shareholder organizations. This allowed them to meet demands to increase their provision of services while simultaneously making millions of pounds worth of savings. The model has proved to be a success, and Hoople are now they are looking forward to onboarding a new Council in 2023.
With support from Unit4, Hoople has not only implemented this platform for shared services for its original stakeholders, but has since packaged its services for a variety of external customers – including other local authorities and local authority service providers. They now provide shared services support to over 4,000 employees across multiple customer organizations, who can better meet service demands, and quickly adapt to funding restrictions.
Through Unit4, Hoople can offer many benefits to public sector companies. Self- service functionality means that reports that would previously have taken days to compile can now be achieved at the touch of a button. Decisions can be made more quickly using real-time, accurate and readily available data.
“It’s very important for new customers to achieve rapid return on investment” says Mark Pearson, Business and Corporate Applications Manager at Hoople. “This can be achieved with the built-for-sector template, a flexible system and the right support. The flexibility of Unit4 Business World (Unit4 ERP) is a significant benefit. Our internal support team and business users can configure it to adapt rapidly to changing strategy, without having to call upon expensive contractors.”
Ready to learn more?
To discover more about how Unit4 can help public sector organizations revolutionize their operations through shared services, check out Hoople’s customer story here. To learn more about what our solutions can do for the public sector back office and how we’re helping organizations like yours to transform, check out our dedicated industry pages here.
