How Not To Implement Shared Services

NAOA shared services centre to deliver HR, finance, procurement, IT and other services for the UK’s seven Research Councils. It seemed like a Good Idea when it was announced in 2006.

Five years on, a review by the UK’s National Audit Office (NAO) makes gloomy reading. Overspent £130m against a budget of £79m, and projected savings significantly less than expected.

How did it happen? The NAO report highlights three fundamental flaws:

Lack of Clarity

“A key factor contributing to escalating costs was the early lack of clarity about how the service would operate. An outline design, known as a target operating model, was not agreed until August 2008, nearly a year after implementation had begun, but it was incomplete and lacked detail. Some elements of design were still ongoing during transition and system launch.”

Confused Governance

“Early governance structures were complex. Reviews commissioned at various points during the project showed that responsibilities and accountabilities needed clarification.”

Poor Management of Outsourcer

“A contract with Fujitsu to design and build the systems and ICT was “poorly managed”. It was eventually terminated at an additional cost of £13m.”

Each of which could, of course, have been avoided, or at the very least mitigated, by the adoption of an appropriate process management platform.

No surprise that developing process maturity is an NAO theme – and runs through the NAO’s recommendations in this case: to harmonise processes further, to strengthen end-to-end process management, and to embed continuous improvement.

Hear stories like this and it’s bewildering how organizations can still be in denial about the need for a process management platform at the heart of any shared services project. As though it was a ‘nice-to-have’.

Whereas actually it’s the key to clarity at every level; to effective collaboration within a robust governance framework; to IT alignment; to drive process harmonization; to controlling a multisourced environment; to making life easier for the SSC workforce; and to enabling a culture of continuous improvement.

© Text Michael Gammage 2013

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