We need to talk about Shared Services

Mary McCarthy explores the issue of Shared Services and how these services should function and be structured, resourced and governed.

Mary McCarthy
Mary McCarthy

In early 2009, the Cabinet Committee on Transforming Public Services decided that arrangements be advanced as a matter of urgency to second staff from the four main sectors: Health, Local Government, Education and Justice, to the Central Programme Office on Transforming Public Services (TPS) to support this work.

One of the work streams that crossed all of the sectors was the development and testing of appropriate Models of Shared Services across the various public services. Shared services is the provision of a service by one part of an organization or group where that service had previously been found in more than one part of the organisation or group. Thus the funding and resourcing of the service is shared and the providing department effectively becomes an internal service provider.

The management thinker Professor John Seddon in his book Systems Thinking in the Public Sector (page 57), claims that shared service projects based on attempts to achieve ‘economies of scale’ and shared back-office are a mix of the plausibly obvious and a little hard data, brought together to produce two broad assertions, for which there is little hard factual evidence. He argues that shared service projects fail (and often end up costing more than they hoped to save) because they cause a disruption to the service flow by moving the work to a central location, lengthening the time it takes to deliver a service and consequently creating failure demand (demand caused by a failure to do something or do something right for a customer).

A Shared Service like any other institution can become an end in itself defensive to critics, inflexible, increasingly larger and more costly to run.

Research papers on the concepts and models of shared services in other jurisdictions were prepared and discussed in the Programme Office. Exemplars of best practice from the Public and Private Sectors were analysed. There was some early wins in the area of procurement in terms of cost savings and these have been largely implemented by the health sector. The voluntary health sector was an early adopter of this process.   However models that presented as having merit in certain part of the public sector such as Education or Justice were found not to adapt well to others. Then there was the vexed question of how much work the staff that originally had responsibility for the work would retain. While the original plan might have been to move all the workload and activities to the centre, it can often be found that it makes more sense to conduct work locally as heretofore. Unfortunately by then, typically, the original group of local staff have been redeployed to the central function leaving those who remain without the capacity to fulfil this role along with perhaps, a modicum of resentment.

While there are undoubtedly great benefits to the use of models of Shared Services, there are also pitfalls. How can the customer hold the shared service provider to account? A Shared Service like any other institution can become an end in itself defensive to critics, inflexible, increasingly larger and more costly to run and actually begin to lose original benefit in terms of economies of scale.

The hallmark of success of any Shared Service is its ability, capacity and commitment to meeting the service needs of the customer. In the modern world this needs to be a safe service but it also needs to be responsive and focused on meeting the needs of the service user and taxpayer.

Mary McCarthy, HR Manager was seconded from the Health Sector to the Department of An Taoiseach from June – December 2009