Keywords: shared services, finance shared services, local government, National Audit Office, NAO, shared services operations

Does shared services work better on a local government level than a national one?

Susie West | News | 11 May 2012

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Shared services operations could be expanding on a local government level, proving greater success than central government has so far achieved, it has been suggested.

Some local councils are utilising shared services so well that their work could help to show larger organisations where they can pick up best practices.

One such local government is Hampshire County Council, which is involved in a number of shared services with local authorities.

It is now crossing county boundaries through a partnership with Oxfordshire County Council, Guardian Government Computing reported. It will support Oxfordshire's SAP system, saving the council an estimated £1m over the next three years.

Describing the benefits of shared services, Chief Information Officer at Hampshire County Council Jos Creese told the news provider that these intra-local government arrangements allow councils to operate in a "very transparent and semi-commercial way".

They can jointly set out clear pricing structures and deliverables, he explained, and provide greater flexibility, removing the need for service level agreements.

However, while this works on a local level, Mr Creese suggested that central government has different challenges, which could be among the reasons why shared services have not been well-received.

Indeed, last month a report from the National Audit Office claimed that government shared services are not delivering the value for money they had expected. It concluded that the investments made to create the facilities outweighed the savings being generated.

Mr Creese added: "The challenge perhaps for central government departments is that some are very large indeed and probably the model in the past is one where the very big do it to the smaller using whatever mechanisms they have in place. That is a little different from what we're trying to do in Hampshire."

Other concerns raised by central government that could be hindering take-up of shared services regard data handling and VAT revenue.

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David Turner, Harrogate, UNIT4 Business Software Ltd | 17 May 2012

You're probably right that there are good shared services examples at a local level, and few at a central government level. But ther are also many failures. The reason it why - I don't believe there are any fewer political or emotive territorial issues at a local level. The report you refer to gives one big clue - which is the technology used by central government. They have slavishly adopted huge, monolithic ERP systems in recent years in projects that often overran and under delivered. This has left them unable to accommodate change without massive cost and upheaval. The report pointed to the inflexiblility of their ERP systems as a key contributor to the lack of shared services success. Yet I could point to governments where shared services has succeeded spectacularly. The Norwegian Government runs around 115 different departments on a single shared ERP platform. (It happens to be on an Agresso ERP that my company UNIT4 provides - ironically the same one used by Hampshire CC in your example above). There are other examples in Sweden and elswhere. So it seems that shared services can succeed for government organisations of all shapes and sizes - but the ability of their technology platform to support the necessary massive ongoing change is a critical factor in its success.