Shared Services - Making the Most of Your IT Spend

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Executive Summary

In this white paper we will look at how adopting a strategy of shared services for public and private web systems can reduce costs and improve efficiency. We will show how the concept of shared services is becoming more and more important for companies operating in an increasingly strict financial climate. The paper looks at practical examples of shared services, and the benefits and challenges of operating web systems in this way. The paper concludes with an overview of Squiz's offering and experience in this area, and details two case studies showing how Squiz has helped organisations to implement shared service systems.

The Demand For Shared Services

The economic crisis of the last few years has forced many companies and organisations to reassess their business practices and look to make cost savings. Nowhere have these cuts been felt more than in government and public sector organisations. The coalition has pledged to cut public debt significantly, with the Deputy Prime Minister Nick Clegg stating that the government must act now to reduce this debt, or risk losing its ability to protect people in need:

“We are going to see through the deficit reduction that is an absolute prerequisite for turning Britain's fortunes around.”(1)

The government has set out a strict spending plan for the next 4 years, and this has forced a majority of public sector bodies to make considerable cuts. Government departments have been told to find savings of 25% to their budgets. Quangos (nongovernmental bodies who receive funds from the government) have also been hit hard, with hundreds axed and hundreds more merged or reduced (2). The Association of National Park Authorities is one such body that has suffered, with its member bodies being forced to make cuts (3). We shall look at the Association of National Park Authorities in more detail later is this paper.

Whilst this financial pressure has lead to the inevitable reduction in staff and services for many of those groups affected, many public sector organisations are responding to pressures on budgets with more innovative approaches. One of the more creative ideas is to implement a concept called 'Shared Services'. Though this concept was proving popular before the credit crunch, it has seen a dramatic increase in popularity, especially amongst local councils, since the crisis took grip.

Often shared services are implemented between two councils, though it can be between councils and other public sector partners; e.g. shared social care and health between a council and a local NHS trust. Typically it will start with back office functions like HR, Finance, or IT. This can mean the HR team is shared between two councils, or the payroll IT system is adapted so it can be used for two sets of employees.

A National Audit Office (NAO) report, published at the end of 2007 (4), felt considerable savings could be made by organisations implementing shared services:

“The Cabinet Office estimates there is scope to save 1.4 billion from annual expenditure on finance and human resources functions, and to improve service quality, by implementing shared services across the public sector.”

The NAO also felt shared services could be achieved in a number of ways:

“There are a wide range of implementation options for shared services, from provision that is in-house or shared among related public bodies to fully outsourced arrangements.”

What do Shared Services Look Like?

At its most basic, a shared service can be defined as two organisations sharing one, or both, of two things:

• A person, or people, carrying out a specific job or function
• A system or process to achieve a particular goal, or support a particular outcome

In the context of shared services for public and private IT web systems - the focus of this white paper - this means:

• An IT manager, or IT team, being responsible for the systems of multiple organisations
• An IT platform being shared and supported, across multiple organisations

To illustrate the typical use of shared services let us use an example. Consider the case of a number of fictional charities. Each exist as separate bodies, raising money for different causes in isolation of each other. Each charity has a number of staff who either fund-raise with the general public, or support the process back at the office. Money is raised by staff collecting on the streets, and via the Internet where each charity has a dedicated website to attract visitors and collect donations. Each charity can manage perfectly well on their own, in a perfect world. However people generally give less in recessions(5), so our charities need to make cuts and improve efficiency. Less people rattling tins on the high street will mean even less donations, so a move towards increasing online donations and shared IT services is considered as a potential solution.

Each of our fictional charities operates an IT department, as part of the back office support. The IT department carries out a number of functions, but the one we are interested in here is the operation of the charities individual websites. Each website is available to members of the public, and is designed to educate visitors about the charity and encourage donations to be made online. Each website runs on a different technology platform, and is supported by an IT manager from that charity. The IT manager maintains the site, understands and supports the technology platform, and makes improvements to the system as and when they are needed.

Shared services can make a real impact here in a number of ways:

• The charity could share services 'internally' by only collecting donations online, and changing its staff profile. This would likely reduce staff costs, though more effort would need to be invested in the website to encourage an increase in donations from this channel.
• A single IT manager, working across all charities, could look after all of the websites. This reduction in head count would reduce costs, though it would increase the complexity of the remaining job role.
• A single technology platform could be used to run all of the separate websites. This single platform would offer the opportunity to cut ownership and maintenance costs, and to be even easier for a single person to look after.

The approaches above offer a number of different benefits, which we will discuss later on in this paper. But they also present a number of different challenges, challenges that are common to any shared services scheme.

What are the Challenges of Adopting Shared Services?

A Change in Culture

Implementing a shared service is always going to change the status quo of the organisations involved. It will mean new ways of doing things for many people, a new system or process, and possibly a change in staff. This will affect the company culture, which existing staff may find challenging. These changes will require effective management from all parts of the business, and staff may require specific coaching.

A Change, or Reduction, in Personnel

Services are generally shared to save money. The biggest cost in many organisations is staff salaries, and often shared services can target jobs that aren't needed in the new reshaped model. A change in staff profile can often be biggest contribution to changes in culture, and again this needs to be carefully managed and communicated.

Relying on a Central Supplier, Process, or Technology

Some organisations are wary of relying on single sources of failure, especially when it comes to IT systems or suppliers. If 10 local councils use the same payroll system, then a problem with that system will affect everyone. Similarly if a single IT contractor supplies websites and Intranets for a group of pubic sector bodies, then they will all suffer from any project delays or software glitches. This challenge needs to be assessed in the context of the possible benefits of such an approach, which are outlined later in this paper. In simple terms, a rigorous selection and review process at the tendering stage can help to mitigate future issues.

Collaborating Across Different Physical Locations

Shared services often result in an increase in collaborative work between existing teams, or entirely new teams being formed to work together. Often people are asked to work along side each other when they don't sit in the same office, or even the same geographical location. Travel can be expensive, and disruptive to existing working practices. Digital collaboration is often seen as the answer to these types of problems, and it can be if implemented in the right way, but it is still challenging in its own right.

What are the Benefits of Adopting Shared Services?

Cost Savings and Efficiency

There are a wide range of benefits to adopting a shared services strategy for public and private web systems. The single most important benefit is that of reducing financial spend. As we have already seen, the credit crunch and general climate of financial austerity has resulted a spike of interest in shared service strategies. This is because such strategies can be seen to have a positive effect on organisation's bottom line. Fundamentally, sharing services means doing more with less, and it is the 'less' that generally reduces capital outlay.

Savings can be seen in a number of areas. Staff tend to be the biggest outlay in most organisations, so a reduction in numbers is a common side effect of a shared service strategy. One IT department can build and manage the websites for a number of organisations, for example, or the hours of larger teams can be reduced.

As we have seen, one example of shared services is to run a number of websites and intranets on a single platform. Cost savings can be made here. A single platform is often cheaper to purchase than multiple different systems. It is certainly cheaper to maintain and support. A single skill set is required to work with a single system, allowing multiple roles to be combined if moving away from a larger number of systems. Cost savings can also be made on hardware, as configuration and scalability considerations are likely to be more straightforward when considering a single platform.

Financial savings can also be realised in other areas:

• Administrative overheads - Tasks like support of the Intranet, or help desk functions, can be shared and thus reduced.
• Property costs - An overall reduction in the IT team may mean a particular member group of the shared service collective can reduce their property requirements.

Training budgets can also be reduced, if there are less people to allocate the budget to. However training and knowledge management are both areas where shared services offer clear benefits, benefits that go beyond simply reducing costs. Combining jobs, whilst at the same time requiring careful management of workload and responsibilities, can result in a highly skilled, motivated workforce. This does often require additional, more tailored, training and professional support for staff upfront. But this training tends to be given to less people overall, hence a lower cost. The end result is often a highly skilled workforce that feels invested and highly motivated.

Knowledge Management

Knowledge management is another important area of shared services where there can be significant benefits. Our previous charity example had a number of separate IT managers running separate websites. A single IT manager, or team, can channel their knowledge and experience of best practice across all of the previously separate charities. Rather than siloed departments of expertise, with each charity doing some things well and some less well, a single website strategy can utilise the best ideas from each individual organisation. Shared services can give best practice the opportunity to grow and flourish.

Strategic Benefits

Finally there are more strategic benefits to gain from multiple organisations working together. Future partnerships can be built that, whilst obviously having immediate benefits, can be put to good use in the long term. Working relationships can be built between IT teams, that will ultimately lead to other team working together, scope for more shared services, new work, and new opportunities. Networking is all important in a climate where new work and opportunities are harder to come by.

How Can Squiz Help Implement Shared Services?

Squiz is an open source web experience management solutions company, originally founded in 1998 in Sydney Australia, with offices in the UK, Australia, New Zealand, Europe and the USA. Squiz has over twelve years of experience in delivering successful open source web solutions - including websites, intranets, extranets and portals - and a great deal of experience working to help companies adopt shared service IT strategies.

The Squiz Suite is a web experience management suite, incorporating a revolutionary content management system, analytics capabilities, highly effective search, and a robust platform for integrating applications and data. These elements combine to form a usable, yet powerful platform for the creation and maintenance of a wide range of online experiences. The suite is particularly suited to working in a 'shared services' environment, where multiple systems or sites are run from a single platform instance. Squiz, and the Squiz Suite, offer a number of key benefits for shared services organisations:

Consolidate IT Suppliers

The Squiz Suite delivers CMS, analytics, search and integration and it can be used for multiple websites, so clients can reduce their reliance on multiple IT contractors. This means one tender process, a reduced number of project teams, and an account management team that are able to more closely understand specific client needs. This approach allows the sole supplier to align itself more with the clients work and objectives, offering time to really understand specific business needs. Whilst reliance on one supplier can be seen as a risk by some, a more in-depth selection and review process at the tendering stage can help to mitigate the chances of future issues. Selecting a supplier, such as Squiz, with extensive experience of the shared services market, can also reduce the chances of experiencing issues in the future.

One Platform, Running Multiple Systems

From an IT perspective this is a key advantage to moving toward a shared services strategy. Rationalising back-end technology, across groups or organisations, can offer a range of substantial savings and efficiencies in a number of areas. Staff only need to learn and support one system, with one particular way of operating. This can reduce the time it takes to get new projects live and working efficiently - project teams will already understand how to get the most out of the system each time it is put to a new use. Groups can confidently invest time and money in harnessing the platform, safe in the knowledge that these skills will be used across a range of systems over a period of time. Existing in-house knowledge can be put to good use, rather than relying on often expensive external expertise.

Ongoing training needs are also simplified as Squiz offers training packs which can be used across shared services organisations.

A Reduction in Initial Outlay

The Squiz Suite is supported open source software. Unlike other systems there is no charge for the software, it is free from any license fees or purchase charges. In these challenging financial times, a product that is free to acquire whilst still maintaining best in class functionality, is difficult to ignore. Often a requirement for significant capital outlay can kill shared service projects before they get off the ground. The Squiz Suite allows the client to get up and running for a much reduced cost, compared to many other systems. What is more, as the suite is open source the client actually owns the platform. They are free to develop it further and adapt it for their specific needs - with no fear of license restrictions.

Multiple Systems, One Platform, One Service Level Agreement (SLA)

Modern IT systems require technical maintenance and specialist support, and when used across multiple organisations and platforms a comprehensive SLA is especially important. Squiz offers a mature and tested incident severity and resolution management system. Squiz SLAs guarantee system up-time to the clients desired level, and Squiz can resolve incidents in a time-frame that works for them. What is more, using Squiz across multiple systems means a single SLA can be used to support each one of them. Not only reducing costs of multiple SLAs, but also simplifying the management of support - on both sides of the agreement.

Squiz can deliver services on an individual or a shared basis. Eg: Support and/or training packs can be purchased and assigned to one organisation or across a number of organisations that are working together.

Collaboration Out of the Box

As previously discussed sharing services amongst different organisations or groups can often be difficult due to the physical location of each team. Geographical distance, and cost, can make regular physical meetings impractical or undesirable. The Squiz Suite helps to alleviate these problems with collaboration and publishing features including:

• Collaboration - Collaborate online using a familiar 'tracked changes' style system. Review comments, 'approve' and 'reject' as needed, and combine with advanced versioning for total control.
• Work-flow - Create custom work-flows quickly and easily using the drag and drop interface. Ultimate flexibility with multiple approval streams for each work-flow, and a flexible permissions system.
• Publishing - Publish with confidence using the Squiz 'dependencies' feature. This tool will check all dependencies on a particular piece of content and help you make informed decisions about your publishing process.

Squiz Understands Shared Services

Helping the Association of National Park Authorities

Squiz works with the Association of National Park Authorities (ANPA) on a shared services project. ANPA is made up of 15 members of the National Parks family in the UK. Each park is looked after by its own National Park Authority. There are 10 parks in England, 3 in Wales, and 2 in Scotland. The 15 members work together under the umbrella of the ANPA. Each National Park Authority has a responsibility to promote its own park to members of the public. Many of the authorities do this using a dedicated park website. One of the key aims of the ANPA is to:

“…work together to share experience and manage joint training projects, public relations activities and special events.” (6)

In the spirit of this aim the ANPA has decided to migrate its websites to a common platform, to improve how they are built and maintained and reduce costs. Squiz is helping to rebuild their websites - all of which are going to be using the Squiz Matrix CMS platform. By adopting this approach, the different authorities can share the workload in building and maintaining their websites, and share best practice amongst the teams.

Working with the West Kent Council Partnership

A classic example of how shared services can make a real difference, the West Kent council partnership is a combination of four previously separate local councils. It is an economic and strategic partnership operating across Sevenoaks District, and the boroughs of Tunbridge Wells and Tonbridge & Malling. One of its key reasons for being is through the belief that partnerships and shared services can be used as a power for good:

“Many of the issues which affect local quality of life cannot be solved by one organisation alone. Increasingly, public sector organisations are working together to deal with issues which cut across the responsibilities of several bodies. Partnership working in our area is led by the West Kent Partnership. This group of senior public, voluntary, community and private sector representatives looks at issues which affect the quality of life enjoyed by people in the West Kent Area.” (7)

One of the ways in which the partnership is putting these principles into practice is by combining its resources across the various councils, and putting them towards building a new web presence. Squiz is facilitating the build of four websites in one instance of the Squiz Matrix CMS platform. The councils have a variety of in-house skills to utilise for the project, based on the specific strengths of staff members in each of the councils. Sharing these resources means that all of the councils can benefit and the end result is a 'best in breed' team pulled from the separate councils, capable of working together and developing 'best in breed' websites.

Conclusions

The current economic climate is in an unfortunate position of slow growth and high inflation. Businesses, both public and private, are doing all they can to survive and prosper in these most difficult of circumstances. In order to do this they must look at their operations, processes, and day-to-day running, and ask themselves some serious questions. Efficiency savings must often be found, and whilst 'standard' cost cutting will help, often a more imaginative solution needs to be sought. Shared services can be an answer for many companies, especially in the area of IT and IT spend.

Advances in IT processes and IT systems have meant this area has become a strong candidate for adopting a shared services approach. This may mean sharing staff or premises, but more typically it will mean sharing back-end applications and systems. Squiz has the technology, support and services to allow companies to implement shared service approaches to their website, intranet, and collaboration systems. The Squiz Matrix CMS platform offers the power and functionality to address the most demanding requirements. The software also offers specific features for collaboration – perfect for shared service organisations that need to enforce governance and achieve brand compliance across geographic and organisational boundaries.

More than this, Squiz brings with it the experience and proven track record to tackle the unique challenges of shared service projects. Squiz has a history of working on these complex projects, with multiple stakeholders and conflicting requirements, and getting the right results for the long term health of the client.

For more information on Squiz, Squiz products and Squiz services, please contact us

References

1. http://www.bbc.co.uk/news/10312121
2. http://www.publicpropertyuk.com/2010/10/14/cabinet-office-list-of-quangos-to-be-axed/
3. http://www.peakdistrict-news.co.uk/national-park-authority-feeling-financial-pressure-i64.html
4. http://www.nao.org.uk/publications/0708/improving_corporate_functions.aspx
5. http://www.guardian.co.uk/society/2009/sep/23/charity-donations-down
6. http://www.nationalparks.gov.uk/aboutus/about_anpa.htm
7. http://www.tmbc.gov.uk/cgi-bin/buildpage.pl?mysql=905