Quote of the week
“Departments have invested significant cost and effort in implementing shared services.”
— UK National Audit Office (NAO) report
The U.K. National Audit Office has done a review of the British government’s shared services initiative.
To begin: the U.K. has been working on implementing shared services related to the corporate functions of HR, finance, procurement and payroll for seven years, creating five Centres to provide them to department and agency clients.
A couple of interesting findings from the report:
First, the departments – supposed beneficiaries of the shared services – have not “realized the planned benefits.”
One of the reasons for this is that they “have not acted as intelligent consumers.” They made little effort to understand the cost drivers and didn’t demand better cost information and benchmarks.
Another reason is that services were over-customized – again driven by the demands of client departments – thus making things more complex and expensive, and making it more difficult to gain the efficiencies expected.
A second finding is that central controls on the implementation were inadequate. Performance was not monitored and barriers to participation by departments were not removed.
The report notes that the shared services initiative in the U.K. has not yet given value for money. But there is good news: the Cabinet office has a new plan that has got the tentative blessing of the NAO.