Shared back-of-house services
A guide for the community sector
Objectives of the workshop
• Inform: Present information on shared services in the NFP sector
• Share: Draw on the group’s experience to understand:
▪ Why organisations undertake shared services
▪ What does and doesn’t work
▪ How to test if shared services are right for you
▪ How to undertake the transition
• Brainstorm: Identify opportunities to overcome barriers to
implementing shared services
Slide 2
Your objectives for the workshop
•
Horizontal axis: how experienced is your organisation with shared
services.
•
Vertical axis: how prepared are you to undertake the change.
Slide 3
Agenda
• Part 1
•
Session 1: Information session (30 mins)
Different models and advantages & disadvantages of shared services
•
Session 2: Working session (60 mins)
Why consider shared services
BREAK
• Part 2
•
Session 3: Working session (45 mins)
How to assess the feasibility of shared services
•
Session 4: Working session (45 mins)
How to implement shared services
Slide 4
What are shared services?
• Shared services involves two or more organisations
working together to jointly manage and/or deliver
services. Benefits can include greater efficiencies in
back-of-house services through economies of scale,
making better use of skilled and physical resources or
reducing risk.
• Back-of-house services include any service that does
not directly support clients – for example, human
resources, finance, payroll, information and
communications technology (ICT), marketing,
procurement, legal advice, etc.
Slide 5
The shared services test
How do we know if a arrangement is shared services? What matters
is the intent of the arrangement and/or the existence of a joint
governance arrangement.
If the arrangement is shared services, your response should be yes to at
least two of the following questions:
Is the intent of the arrangement to create mutual benefits for two or more
organisations?
Will the benefits (or problems) of the shared services arrangement be
shared between organisations?
Does shared governance arrangements allow clients or staff who receive
the services to influence or control the design, management or delivery
the back-of-house services?
Slide 6
Types of shared services
There is a continuum of shared service governance arrangements.
Model 1:
Advice and
support
network
Simple
Model 3:
Traditional
provider/
supplier
(within
existing
organisation)
Model 2:
Shared
personnel,
asset or
facilities
service
Complex
Model 4:
Managed
Service
Organisation
Outsource
implementation
Implementation steps
Informal governance
arrangements
Formal governance
arrangements
You need to match the formality of governance arrangements with the importance of the service being shared.…BUT this may
not be the case with all arrangements – trust and relationships play a factor.
Slide 7
Motivations for considering shared services
Slide 8
Working session: what are the challenges and barriers to shared
services?
Instructions:
1. Individually, on A4 sheets of paper, write down the top two barriers you
think organisations face to implement shared services.
2. In table groups, share your barriers to shared services. The goal is for
each table to identify three common challenges.
3. As a group, discuss the challenges and barriers.
4. As a group, discuss possible mitigation strategies.
Slide 9
Common lessons
Challenges and mitigation strategies:
1. It takes time to implement change and it won't happen overnight
2. Change often brings anxieties and resistance from staff. Careful change
management is necessary from the outset.
3. Not all organisations have the trust and relationship networks that are
necessary for shared services.
4. Collaboration does raise the potential for conflict. It needs to be set up
for success with clear governance.
Slide 10
Next steps and break
• Shared services offer a lot of promise for the NFP sector.
• Implementing a new back-of-house service delivery model will
require investment and careful consideration of the benefits.
• After the break we will be discussing:
a. how to assess the feasibility of shared services
b. how to implement shared services.
Slide 11
Assess the value and feasibility of shared services
There are two threshold questions to determine the benefits of
shared services for each organisation.
1. The first is will there be any tangible value from transitioning to
shared services?
2. If there will be value in shared services the second hurdle is does
your organisation and your potential partner(s) have sufficient
resources and motivation to make the transition feasible?
Slide 12
1. Will shared services offer value?
Use self-evaluation form to assess your organisation’s:
1. Efficiency and effectiveness of existing services?
2. Operating environment changing? (e.g. NDIS)
3. Could increasing scale increase the expertise of your team? (e.g.
employing a highly skilled HR manager is difficult only 1-2 days
per week)
After reflecting individually for 5 minutes, discuss in table groups for
5 minutes.
Slide 13
2. Are shared services feasible?
Use self-evaluation form to determine:
1. Do you have strong working relationships with organisations you
can partner with?
2. Do you have the expertise to manage the transition?
3. Are your management committed to the change?
After reflecting individually for 5 minutes, discuss in table groups for
5 minutes.
Slide 14
How to strengthen the feasibility of shared services – suggested steps
• Relationships and trust
•
•
•
Build relationships with NFPs with similar vision, mission
Start small and build trust through collaboration
Have upfront discussion about strategic need to partner
• Access to expertise
•
•
Undertake market scan to identify relevant expertise
Develop cost benefit analysis for skilled advisers to implement
shared services
• Management commitment
•
•
•
Develop business case and risk management plan
Demonstrate alignment of shared services to strategic plan
Undertake market scan to identify how similar organisations are
sharing services
Slide 15
Implementation planning
Careful planning will be critical to the success. The basic steps are:
1.
Scope
options
2. Develop
business
case
3.
Implement
Change management
Key points:
• Implementation steps will differ depending on the model of shared services.
• Governance arrangements should manage the risks associated with the
services being shared.
• Change management needs to start early and be delivered throughout.
Slide 16
Step One: Scope options for shared services
1.
Scope
options
2. Develop
business
case
3.
Implement
The key questions to answer in this stage are:
1.
2.
3.
4.
5.
Why shared services? Confirm your mutual understanding and drivers.
What services will be shared?
What activities are in and out of scope?
What is the level of service required?
What do you want to change/improve about existing services?
Slide 17
Step Two: Develop business case for establishing shared services
1.
Scope
options
2. Develop
business
case
3.
Implement
The key steps in developing a business case are:
•
•
•
•
•
Identify the benefits of the project
Identify the implementation and ongoing costs
Determine success factors and risks
Confirm the governance arrangements
Develop a project plan with detailed accountabilities
Slide 18
Step Three: Implement shared servies
1.
Scope
options
2. Develop
business
case
3.
Implement
The key to successful implementation is:
•
•
•
•
•
Clearly defined roles, including project management and allocated activities
Schedule milestones and develop a monitoring and reporting schedule
Set performance targets
Develop a communication strategy
Identify and manage risk factors
Slide 19
Involvement and
ownership
Change management process
Build awareness
Define where we
are going and
why
Deepen
understanding
Equip and
activate leaders
to drive change
Create buy-in
Use leverage
and engagement
at scale to build
critical mass
Take action
Embed and
sustain the
change
Make it stick
Build and
mobilise
Engage for
action
Set direction
Elapsed time
The time frame required to manage change will increase as the complexity of the
shared service arrangements increase
Slide 20
Next steps and available resources
1. http://www.dhs.vic.gov.au/for-business-and-community/not-for-profitorganisations/publications-for-community-organisations: Get a copy of the
Shared Services Guide and access a range of other resources for
community organisations.
2. www.nfpcompliance.vic.gov.au: The Not for Profit Compliance Support
Centre is an online information resource for Victorian not for profit
organisations to assist them to comply with their regulatory requirements.
3. http://sspproject.wikispaces.com/: Online resource developed by Adult
Community Education Sector in Victoria in response to the Skills Victoria
reforms. This website includes guidance on undertaking shared services
projects, lessons learnt and project templates.
4. www.nfpbenchmarking.com.au: A three year study by thirteen not-for-profit
organisations in Victoria to benchmark the cost and quality of six back of
house services.
Slide 21