SharedServicesStartupKit
GuidetoDevelopinga
SharedServicesAlliance
March1,2016
www.opportunities-exchange.org
GuidetoDevelopingaSharedServicesAlliance
TheprocessofstartingaSharedServicesAlliancecanseemdaunting.PotentialAlliances
oftenask:WhatshouldIdofirst?Howlongdoesittake?Whoshouldgetinvolved?While
everygroupandeverymarketisdifferent,theworktodevelopanAllianceusuallyinvolves
thefollowingsteps:
• ResearchtodeterminewhichservicespotentialAlliancemembers(centersand
homes)wouldfindmostcompelling,whichproviderswouldbemostlikelytojoin
theAlliance,andwhichtaskscouldmostappropriatelybeshared
• IdentificationofoneormorepotentialHuborganizations,includingthepossibilityof
organizationsoutsidetheECEcommunity
• ClarificationofmembershipcriteriaandAlliancemission
• IdentificationofanappropriateAlliancelegalandgovernancestructure
• IdentificationoffunderstosupportAlliancestartupandongoingcosts
• DevelopmentofanAlliancebusinessplanandfinancialprojections
WhatisSharedServices?
SharedServicesisaframeworkthatallowsmultipleearlycareandeducationsitestopool
needsandshareresources–includingstaff,information,skillsandfunds–inorderto
improvethecapacitytoprovidehighqualitycare.
ThisStartupKitisprimarilyfocusedonhelpingsmall,independentchilddevelopment
programsformanAlliance.However,theSharedServicesframeworkcanalsohelpamultisiteearlycareandeducationcorporation(non-profitorproprietary)strengthenprogram
qualityandsustainability.SeethisMulti-SiteGuidetoSharedServicesforinformationon
thestepsinvolvedinapplyingtheSharedServicesframeworktoamulti-siteorganization.
WhatisaSharedServicesAlliance?
ASharedServicesAllianceisamembershiporganization,oramulti-siteECEorganization,
throughwhichSharedServicesareprovided.Alliancemembersarecenterand/orhomebasedECEproviderswhoreceiveSharedServicesthroughtheirmembership,oraspartofa
multi-siteECEorganization.ThedesignofeachSharedServicesAllianceisuniquetoits
participants,butallsharethegoalofstrengtheningbusinessandpedagogical(teachingand
learning)leadershipacrossparticipatingsitesbycreatingstructuresthatenablesharingof
staff,informationandresources.
WhatisanAllianceHubandwhatdoesitdo?
AnAllianceHubisanentitythatprovidesoneormoreSharedServicestotheAlliance
members;thehubcouldbealargecenter,anothertypeoforganizationsuchasaResource
andReferralagency,oracentraladministrativeoffice.AllianceHubsgenerallycharge
membershiporcontractfees,and/orreceivegrantsupport,forprovidingtheseservices.
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Alliancehubsofferarangeofsharedservicesandpurchasingoptionstotheirmembers,
suchas:
• Bookkeeping,billingandfeecollection
• Enrollmentmanagement
• Marketingsupport
• Professionaldevelopment
• Qualitysupportstaff–mentorteachers,assistancewithQRISoraccreditationor
HeadStartperformancestandardsorlicensingcompliance
• Fundraisingandfunddevelopment
• Datacollectionandgrantreporting
• Staffrecruitmentandsubstitutepool
• Shared‘floating’teachers(sometimeshiredaspermanentsubstitutestobeshared
amongclassroomsand/orsites)
• Janitorialandmaintenanceservices
• Jointpurchasing
GettingStarted
ThepurposeofthisguideistoprovidepotentialAllianceparticipants,bothhub
organizationsandothermembers,withageneraloutlineoftheworkrequiredtodevelop
anAlliance.EachgrouplookingtostartanAllianceisdifferent,butgenerallythefollowing
stepsarerequired:
1. IdentifyAlliancegoals
2. Identifyinterestedandlikelypartners
3. Identifyoneormorehuborganizationstoprovidecentralizedservices
4. IdentifypotentialservicestoofferAllianceparticipants
5. EstablishSteeringCommitteetoleadAlliancedevelopmentandbusinessplanning
6. AgreeonanAllianceservices,structure,governanceandmembershipmodelmostlikely
tobeeffective
7. Developfinancialprojectionsofrevenueandcostanddeterminefundingneededfor
launch
8. Identifyfunder(s)willingtofundstartupandongoingAlliancecosts
9. Developabusinessplan
TheamountoftimerequiredtostartanAlliancevariesbasedonthemanyfactorsthat
makeeachcommunityunique.Basedonexperiencetodate,youshouldplanthatitwill
takeatleast6–12monthsfromthetimethatadecisionismadetopursueAlliance
developmentuntiltheAllianceislaunched.Dependingonwhoisinvolved,andtheextentof
servicesoffered,thebusinessplanningprocessandlaunchcouldtakemuchlonger.
1.IdentifyAllianceGoals
ThefirststepincreatingaSharedServicesAllianceistoarticulateyourgoals.Whatdoyou
wanttoaccomplishthatyoucouldnotachievebyactingalone?Somepossibleexamples
mayinclude:
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• Raisethequalityofteachingandlearningthrough:
o More/betterprofessionaldevelopment
o Regularsupportforclassroomteachers,e.g.coachingandmentoringfromsite
directorsorembedded,sharedstaff
o Morequalifiedstaffandsubstitutes
o Sharingideasandresourceswithotherprograms
• Reducestressoncenterdirectors,sitemanagersandhome-basedprovidersby
enablingthemtoaccessateamofexpertsinbothbusinessandpedagogical
leadership
• CreateaCommunityofPracticewithinandamongstaffparticipatingintheAlliance
• Improvebusinessmanagementtostrengthenrevenues,improvecompliance,boost
efficiencyandfreeuptimeandfundingthatcanbereinvestedinteachingand
learning
• Findvaluableservicesandproductsthatareunaffordableorunderutilized,e.g.
facilitiesmanagement,HumanResourcesandemployeebenefits,accountingservices
• Improvewagesandbenefits
• Savemoneyonpurchasing
Articulatingyourgoalswillhelpyoudeterminewhichstrategiestopursue,andhowto
prioritizewhattopursueinitiallyvs.overthelongerterm.
Onecaveat:AnentitythatisconsideringservingasanAlliancehubshouldNOTexpectthat
aSharedServicesAlliancewillprovidetheHuborganizationwithanongoingsourceof
revenue.ThepurposeofanAllianceHubistocreatealegalandadministrativestructure
thatenablesservicesatscale,sothatparticipatingcentersandhomescansharethecostof
bothbusinessandpedagogicalleadershipandgeneratesavings(inbothtimeandmoney)
thatcanbereinvestedintoclassrooms.Ideally,anestablishedAlliancewill,intime,beselfsupportingandabletogenerateenoughrevenuetocovercosts.However,intheshort
term,startupfundingwillbeneeded.Dependingonwhatservicesareofferedandhowthe
Allianceisstructured,itmayalsobenecessarytosecureongoingthirdpartyfundingfor
someaspectsofAllianceoperations(e.g.comprehensiveservicesforhigh-needchildren
andfamilies,moreintensiveprofessionaldevelopment,etc.)Becauseoftheworkand
fundingrequiredtodevelopanAlliance,youshouldonlypursuethisstrategyifyouroverall
objectiveismission-related:tohelpparticipatingcentersandhomesbuildcapacityto
providesustainable,highqualitycare,includingincreasedwages,benefitsandworking
conditionsfortheteacherswhoworkintheirclassrooms.
2.IdentifyInterestedandLikelyPartners
Thekeytostartinganallianceistounderstandthatitisessentiallyapartnership.Assuch,
youwillwanttoidentifypeopleandorganizationsthatshareyourinterests(forexample,
thedesiretoimprovequalityofcare)andvalues(forexample,theimportanceofemployee
jobsatisfaction).Itisoftenhelpfultobeginwithorganizationsyoualreadyknowandwork
with,perhapsthroughacommunityorganization,learningcircle,orECEsupportnetwork.
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Whocanyouseeyourselfcollaboratingwith?Sometimesitmakessenseto“startsmall”–
thatis,youcouldbeginwithapartnershipof2-3providersworkingonalimitednumberof
sharedresources,andgraduallyexpandthepartnership/Allianceasyoudevelopexperience
andconfidence.
AcommonmisperceptionistoassumethatECEprovidersinyourgeographicvicinityare
competitors,andthereforenotviablepartnersinanAlliance.Onthecontrary,centersand
home-basedproviderswhoparticipateinAlliancesquicklylearnthatfellowprovidersoften
sharesimilarneedsandresources,andthatitispossible–andindeedcouldbebeneficialto
everyone–toworktogethertowardcommongoals.
ItisimportanttodefinecriteriaforAlliancemembership,bothnowandastheAlliance
grows.AkeyrolethatanAlliancecanplayistodemonstrate–toconsumersandfunders–
howitsmembersdifferfromotherprovidersbecausetheyarepartofalargerwhole.To
effectivelydifferentiatebyquality,itisimportanttoselectameasurethatarticulatesthe
differenceclearly.InstateswithQualityRatingandImprovementSystems(QRIS),an
AlliancecanrequireallmemberstoparticipateintheQRISandselectaspecificstarrating
asthestandardtowhichallmembersshouldaspire.SelectingQRISasthequalitystandard
oftenhastheadditionalbenefitofensuringthatAlliancemembershaveincreasedaccessto
technicalassistanceandfundinglinkedtoquality.InstateswithnoQRIS,orwhereQRISis
voluntaryandnotwidelyutilized,otherqualitymeasurementscanbeused,suchas:
• EnvironmentalRatingScales(ITERS,ECERS,andFCCERS)
• QualitymeasurementsimplementedbystateorlocalgovernmentECEagencies
• Accreditationbynationalorganizations,suchasNAEYC,orparticipationinan
accreditationfacilitationinitiative
3.IdentifyoneormoreHubs
IdentifyingoneormoreHubsmighttakeplacesimultaneouswithStep#4below,“Identify
potentialservices.”Thisisbecause,nomatterwhichservicesareimportanttoproviders,a
successfulAllianceneedsanorganizationthatcanprovidethoseservices.Soitishelpfulto
focusfirstonwhichorganizationshavethecapacitytobeaHub.Onewaytoapproachthis
questionistolookattheorganizationsworkingintheECEfieldinyourcommunity,and
identifytheone(s)thathavekeystrengths–onthepedagogical(teachingandlearning)
side,onthebusinessandadministrationside,orboth.Anotherapproachistolookat
organizationsthatarestronginadministrativeandbusinesspractices,whomaynotbein
theECEfieldbutwhohaveinterestinbuildingcapacityamongnonprofitsand/orsmall
businesses.Somepotentialexamplesinclude:
• Alargechildcarecenterwithastrongadministrativecapacity,orastrong
professionaldevelopmentfunction,orboth
• Amulti-sitechildcareorganizationthathasalreadycentralizedseveralfunctions
amongitscentersand/orfamilychildcarehomes
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• ACCR&Rorotherchildcareorganizationthathasstrongexperiencewithfunctions
suchaschildcarebilling,professionaldevelopmentandmentoring,USDAfood
programmanagement,etc.
• Aback-officeorpropertymanagementorganization,outsidetheECEfield,withstrong
expertiseinbilling,accounting,maintenance,HR,andrelatedadministrative
functions.
IfyouarethinkingofbecomingaHub,dosomeself-assessmenttodetermineifyou’rea
goodfit.SuccessfulAllianceHubswillhavemostorallofthefollowingcharacteristics:
• Leadershipandmarketcredibility–Trustedleaderinthecommunity,orableto
quicklybuildtrustamongprovidersandfunders
• Accesstoproviders–Knowstheprovidercommunitywellandhasthecapacityto
reachouttoandsuccessfullyengageprovidersinanetworkapproachtoservice
delivery
• Financialreachandstability–Hassoundfiscalmanagementcapacity,withdedicated
andskilledfiscalmanagementstaff
• Accesstoavarietyoffundingstreams–Alreadyhas,orisabletotap,multiplefunding
streams
• Innovation–Leadership,boardandstaffareopentonewideasandapproaches,
willingto“thinkoutsidethebox,”andexperiencedindevelopingpromisingnew
approachestooldproblems
• Commitmenttoexcellence–Leadership,boardandstaffarewillingtodotheinternal
andexternalworkneededtoraisethebaronqualityservicedelivery
• Entrepreneurial–Leadershipembracesanentrepreneurialwayofthinkinganduses
thisentrepreneurialenergytoeffectivelyengagethestaffandboard
• Risktolerance–Leadership,boardandstaffarewillingtotakerisksandorganization
isstableenoughtolaunchanewendeavorthatmaynotpayforitselfintheshort
term
4.IdentifyPotentialServices
OftendonesimultaneouslywithStep#3above(“Identifyoneormorehubs”),itisimportant
toresearchwhatserviceswillbemostattractivetopotentialAlliancepartners.A
combinationofresearchtoolsmaybeuseful,includingthefollowing:
• Surveys–Ifyouneedinformationfromalargegroup,surveyscanbeuseful.For
example,asimpleonlinesurvey(suchasthroughSurveyMonkey)canbeconducted
earlyintheprocesstogenerateinterestinSharedServices,andperhapsinvite
providerstoparticipateinafocusgroup.
Afewtipsforeffectivesurveys:First,makeitasshortaspossible.Noonewantsto
spendalongtimefillingoutasurvey,andtheeasierthesurveyistotake,themore
likelyyouaretogetahighresponserate.Second,makethequestionsveryclearand
easytounderstand,especiallyifyouuseanysortofratingscale.Third,minimizethe
numberofopen-endedquestionsyouask,sincetheycanbetime-consumingand
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difficulttoanalyze.Andfinally,makesureyouandatleastafewotherstakethe
surveyasatest,beforeyousenditouttoproviders.Oftenmistakesinhowyou’ve
askedthequestionareonlyapparentinthisstep.
• FocusGroups–Focusgroupscanprovideaneffectivewayforasmallergroupwho
sharecommoninterests–suchasagroupoffamilycareproviders,oragroupof
providersinaparticulargeographicarea–toexploreideastogether.Thisisagood
foruminwhichtodiscusschallenges,havethemhearadescriptionandexamplesof
SharedServiceAlliances,andtheninthatcontexthavethemreacttoalistof
potentialproductsandservicesthatanAlliancemightoffer.Onecaveat:focusgroups
shouldbedesignedandledbyanexperiencedfocusgroupfacilitatorwhoisskilledat
managingagroupandshepherdingadiscussiontogetthedesiredinformation.
• Sitevisits–Thereisnosubstituteforthelevelofdetailanddepthofexplorationthat
canbegainedfromaface-to-facediscussionatasitevisit.Thisallowsissuestobe
exploredinmoredepththaninsurveysorfocusgroups,respondentscanspeakfreely
andconfidentiallyaboutsensitivesubjects,anditprovidesanopportunitytoobserve
theprogramanditsmanagement“inaction.”
5.EstablishaSteeringCommittee
EstablishingaSteeringCommitteetoleadAlliancedevelopmentandbusinessplanningis
important.ThemembersoftheCommitteeshouldincluderepresentativesfromeach
potentialAlliancepartnerwhoareempoweredtorepresentthepartners’interestsinkey
decisions.Thepurposeofthecommitteeistoagreeongoals,rolesandprocessforworking
togethertoplantheAlliance(suchashowdecisionswillbemade,expectationsfortime
commitmentsandconfidentiality,etc.),providethemeansforbuildingsupportamong
partnersandwithpotentialfunders,anddevelopthebusinessplan.
InadditiontotheAlliancepartners,theCommitteecouldinviteotherpartiestoparticipate
inoneormoreCommitteemeetingsasappropriate,inordertobuildsupportforthe
Alliance.Theseinviteescouldincludethefollowing:
• Funders,suchasrepresentativesfromcommunityfoundations,theUnitedWay,or
localbusinesscontributors
• Stateand/orlocalchildcareadministrators(thoseinvolvedinsubsidyadministration
andprogramregulationareparticularlyimportant)
• Childcareproviderassociationleader
• Boardmemberfromparticipantorganization(s)
• StrongECEproviderandthoughtleader
6.AgreeonAllianceServices,Structure,andGovernance
DeterminingwhichservicestheAlliancewillprovide,bothinitiallyandoverthelongterm,
shouldbebasedonattractivenesstopotentialmembersandcapacitytodeliverthe
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services.Atthesametime,itisnecessarytodevelopascenarioforhowtheserviceswillbe
delivered–inotherwords,howtheAlliancewillbestructured.Forinstance,servicescould
beprovidedthroughacentralHubofferingawiderangeofservicesasamenuor
“package”;throughanetworkofcenterswithmorethanoneHub;bycontractingwithan
externalorganization,orbysomecombinationofthese.Thedecisionofwhatservicesto
offerandhowtodeliverthemisuniquetoeachAllianceandwillevolvefromtheresearch
describedabove.TheHubactivitiesmustbeanalyzedtodeterminepotentialcostsand
staffingrequirementsfortheHub(s),aswellasaroughestimateofpotentialincome,and
theresultsreviewedwithallrelevantstakeholders.
Next,howwilltheAlliancebegoverned?Itcanbehelpfultolookatexamplesofexisting
SharedServiceAlliances,availableatopportunities-exchange.org.Decisionsinclude
whethertherewillbeanewentitycreatedand/orwhethertherewillbea“sponsoring
organization”(forexample,alocalcommunityfoundation)thatwillprovidethephysical
and/orfinancial“home”fortheAlliance.[Itshouldbenotedthatsomefundersprefer
utilizinganexistingorganizationratherthancreatinganew501c3,ifpossible].Members
needtodeterminehowAlliancememberswillparticipateindecision-making,i.e.througha
contract,asacollective,asBoardmembersofanewentity,etc.Andfinally,thereshouldbe
aprocessforaddingadditionalorganizationstotheAllianceafteritsinitiallaunch.
7.DevelopaBusinessandFinancialPlan
TheBusinessandFinancialPlanisablueprintformanagementactioninlaunchingthe
Alliance.Youwillneedtothinkabouttheexperienceandskillsneededinamanagement
teamtosuccessfullylaunchtheAlliance.Evenifyouworkwithoutsideconsultantsto
developtheplan,itisimportantthatstaffresponsiblefortheAlliancelaunchpreparemuch
ofthedetail.Therearetworeasonsforthis.First,havingstaffpreparethedetailskeeps
theconsultingcostsdown.Secondandmoreimportant,havingAlliancemanagementdraft
thedetailsmeansthattheywillbeintimatelyfamiliarwiththeroadtheyareabouttotravel,
andtheywillhaveownershipovertheresults.
TheBusinessandFinancialPlanshouldincludeatleastthefollowingelements:
• Operatingmodel,includingstaffing,roles,responsibilitiesofpartners
• Benefitdelivery(e.g.viaweb,in-person,orboth)
• Geography
• Timing
• Membershiprequirements,includingqualitycriteria
• Membershipbenefits
• Membershippricing
• 3-yearfinancialprojections(seeopportunities-exchange.orgforexamples)
8.IdentifyFunders
MostAlliancesneedstart-upfundinguntiltheyattainsustainability(whichcantakefrom13yearsdependingonthecircumstances.)Eventuallymembershipfees(perhapsaugmented
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withotherthirdpartyfunds)willsupporttheAlliance,butittakestimetobuildupthe
membershiptothepointwherefeesoffsetAlliancecosts.Alliancecostdriverstypically
includepersonnel(suchasanAlliancemanagerand/orstaffforfiscalmanagementand
otherqualitysupports)andtechnologycostsforactivitiessuchasimplementingautomated
financialandinformation-sharingsystems.
Ongoingfundingmaybenecessary,dependingontheservicesyourAllianceoffers,the
revenuesourcesyourmembercentersareabletotap,andthedegreetowhichAlliance
costsandmembershipfeescanbeoffsetbycostsavingsinmembercentersandhomes.For
example,Alliancesthatincludesupportssuchascomprehensivehealth/mental
health/socialservicesordeeperpedagogicalleadershipoftenneedtosecureadditional
thirdpartyfundingbeyondwhatcanbegeneratedfrommembershipfees.
ExistinganddevelopingAllianceshavegainedsupportfromlocalandregionalfoundations,
churches,privatecontributions,andgovernmentgrants.Experiencetodatesuggeststhat
themostlikelyfundersforSharedServicesarelocalfoundationsandbusinessesthat
understandyourmarketandwillberesponsivetothefinancialandqualityimprovements
thatSharedServicesoffers.WhileafewnationalfundershavehelpedpromoteShared
Services,theylookforevidenceoflocalfundingsupport,generallyonlymakestart-up
grantsintargetedcommunities,andshouldnotbeassumedasasource.
KeepinmindthatSharedServicesis,atitscore,amanagementframeworkandnota
project.AnimportantcomponentofaSharedServicesfinancingplanisidentifyinghow
existingrevenuesandpersonnelcanberedirectedorrestructuredtosupporttheAlliance.
Thekeytosustainabilityiskeepingoverheadandadministrationcostslowbybuildingon
existingstaffandinfrastructure.Ifthisgoalisachieved,theAllianceismorelikelytohave
theresourcesneededtoraiseteacherwages,purchaseemployeebenefitsorinvestin
intensivestaffdevelopmentandotherqualityimprovements.
Finally,itisimportanttounderscorethattheAlliancedevelopmentprocesscantakealong
time,andoftentakestwistsandturnsthatcannotbepredictedinadvance.Alliancesare
partnershipsthatrequirebehaviorchange,creating/buildingtrust,andworkingtogetherin
newways.Itisimportanttobeabletohaveanintentionalstrategytoaddressthechange
process,andbeabletoreframe,refineorreimagineplansasthestartupprocessproceeds.
MoreResourcesandExamples
TheOpportunitiesExchangewebsiteincudesmanytoolsandresourcestohelpyoustarta
SharedServicesAlliance,aswellasprofilesofexistingAlliances,linkstotheirwebsites,etc.
Inaddition,OpportunitiesExchangesharesnewsandupdatedinformationthroughour
FacebookpageandTwitterfeed(@OppExforECE).
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