Shared services

Shared services are nothing new. The sector has been collaborating to deliver services for mutual benefit for a very long time. Some of those services, such as JISC and the JANET network, are the envy of the world. Others, such as the system of inter-library loans, tend to be types of collaboration that are taken for granted and have never been branded ‘shared services’ as such.

The prominence of the shared services agenda in the public sector stems from a 2004 review for HM Treasury (Gershon 2004) and the approach to ‘Transformational Government’ outlined in 2005 (Cabinet Office 2005). The attitude of the education sector was initially cautious: the HEFCE response to the Cabinet Office consultation noted ‘Our experience of shared services is that they can create more problems than solutions …’ and it described some of the assertions made in the consultation document as ‘over-simplistic’. HEFCE nevertheless took action and commissioned a report (KPMG 2006) and a series of feasibility studies. The landscape of shared services across FE and HE and the potential for future development was further analysed in a series of reports for JISC by Duke and Jordan in 2008 (Duke & Jordan 2008a-c). In 2010 KPMG looked at shared services as one aspect of a value for money study (VFM) commissioned by the Learning and Skills Council for the FE sector (KPMG 2010) and in 2011 the Scottish Funding Council commissioned an analysis across FE and HE, using a slightly broader scope encompassing ‘Above Campus’ services (see definition below) from a Scottish perspective (Kay & Philips 2011a,b).

The landscape has thus been well mapped and the issues aired many times. This resource serves only to give an overview of what has gone before and to reflect on it in the context of more recent developments. These developments include large-scale change in the education sector as a result of a changed economic climate and new developments in technology. In particular the JISC Flexible Service Delivery programme (2009-2011) included a strand on shared services and cloud computing and commissioned a series of case studies of examples from the UK and beyond (Clark et al 2011).

Developments such as cloud computing and SOA offer opportunities to collaborate and to share services in new and different ways. We explore those topics elsewhere: here we try to separate out the issues that are pertinent to sharing from those that pertain to specific technical approaches.

The definitions below give an indication of how the meaning of shared services has been interpreted, particularly in relation to the education sector, over recent years.

Definitions of Shared Services

Shared services provide public service organisations with the opportunity to reduce waste and inefficiency by reusing assets and sharing investments with others.

Cabinet Office 2005 ‘Transformational Government – Enabled by IT’

Definitions of shared services vary. Typically they describe a model of providing services in a combined or collaborative function, sharing processes and technology.

HEFCE Circular letter 09/2007 ‘Shared services: invitation to submit expressions of interest.’

Shared services is a business model whereby multiple organisations converge and streamline some of their business functions in order to deliver services as effectively and efficiently as possible. It often involves creating a standalone organisation whose sole objective is to process the high volumes of administrative ‘back office’ transactions that are common to each organisation.’

Learning & Skills Council website 2008

By shared services we mean institutions cooperating in the development and delivery of services, so sharing skills and knowledge, perhaps with commercial participation.

Duke & Jordan 2008a

Adoption of the term Above Campus was a signal that this feasibility study should consider as wide a range as possible of IT related services and levels of collaboration. The scope was therefore much wider than simply shared data centres and much more strategic.

Kay & Philips 2011a

‘The distinction between a shared service and a cloud service has more to do with governance and financing than technologies.’

Clark et al 2011

The agenda around ‘back-office’ functions and transaction processing (with the resultant implications of standardisation) did not readily find favour within the sector. This can be partly attributed to organisational culture and partly, perhaps, to the absence of really pressing financial imperatives at the time. It is only with Duke and Jordan’s study in 2008 that terms such as ‘knowledge’ enter the definition and more recent work undertaken in Scotland (Kay and Philips 2011a) begins to talk about collaboration in order to gain strategic advantage. Although direct cost savings are now firmly on the institutional agenda, it is perhaps only in terms of exchanging knowledge capital and strategic collaboration that the sector can fully embrace the agenda in a way that is truly beneficial.

In other sections of this resource we explore the potential of shared services in the sector, given the technologies available to support such collaborative activity in the second decade of the new millennium, but first we must tackle the ‘Elephant in the Room’.