Why shared services for the higher education, but why not?

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WHY SHARED SERVICES FOR THE HIGHER EDUCATION? BUT WHY NOT? How to leverage self-service, sponsorship, and collaboration to drive VALUE across public sector institutes of Higher Education

Copyright © Chazey Partners 2014, All rights Reserved. │ www.chazeypartners.com

DAVID O’SULLIVAN, CO-FOUNDER & PARTNER, CHAZEY PARTNERSIAN HERBERT AND ANDREW ROTHWELL, LOUGHBOROUGH UNIVERSITY, CENTRE FOR GLOBAL SOURCING AND SERVICES


In an executive report for Universities UK, Dr Andrew Rothwell and Ian Herbert explain how collaboration and shared services improve efficiency and effectiveness in Higher Education.

Here, they question David O’Sullivan of Chazey Partners about the transformation of Higher Education in the UK.

The potential and possibilities for shared services in Higher Education: a practitioner’s view


Answer: David O’Sullivan:

“The fact is that the shared services model is capable of delivering a lot more. The adoption of leading practices, the constant search for improvement, robust governance, etc., all contribute to providing much better quality and control, thus improving the overall ‘customer experience’ in a cost efficient manner. Getting that part of the story over to stakeholders can be challenging – but it can be done via tangible examples of what can be achieved. Whilst headline cost reductions can be seductive, the shared services scene is maturing. People are starting to appreciate that, on the one hand, implementation needs careful thought; but on the other, the rewards of a wider transformation of the organisation driven by a new systems platform and new ways of working can deliver significant benefits. In most organisations, stakeholders will not likely be convinced by crude, cost-based objectives – they have to visualise a world where better service and quality are achievable.”

Question 1: It is clear that to many stakeholders that the value of shared services appears to be limited to the “cost and efficiency” paradigm. How do you convince senior management to see beyond cost cutting?

# The Value of Shared Services



“ Again, a popular but unfortunate notion in shared services is that once certain activities are “removed” from the operating units,they essentially devolve into an “out of sight, out of mind” reality. Nothing could be further from the truth! Indeed, shared services is, in essence, a new way of doing things and this requires more rather than less active governance. The model also requires active involvement from the operating units – but a well-designed governance framework based on negotiated Service Level Agreements can provide transparency and mutually beneficial adjustment between the SSC and its customers.

In our experience, senior management sponsorship and ongoing attention to change management are the two most prevalent “points of failure”. These are often relegated to afterthoughts, involving little more than communication and training. Another point to consider is that if change management is weak, stakeholders will complain. The outcome of this will definitely be weakened sponsorship in response to noise factors and lack of success. The spiralling impact will undoubtedly undermine the programme.

In reality, change management is a very comprehensive and time-consuming activity that requires significant stakeholder engagement, education, involvement and participation. It is critical not only to making the transition work, but also to ensuring the change is sustainable. This has to be managed through a comprehensive governance and service management framework that we call the Client Interaction Framework (CIF) – see Figure 1.”

Question 2: Whilst academics love to moan about administration problems, the back office is always going to be a ‘Cinderella’ issue; it needs to be there, it needs to work but, at the end of the day, you don’t want to see it! How do you persuade senior management to follow through into the critical stages of implementation?

# Sponsorship & Change Management


Figure 1: Client Interaction Framework – 9 Critical Components



“These are the essential ingredient that distinguishes shared services from simple centralisation as figure 2 & 3 illustrate.”

Question 3: One of the paradigms of modern management is decentralisation and empowerment, how do you respond to someone who says “the shared service model is just new centralisation – nothing more”?

# Re-centralisation

Figure 2: Shared Services vs. Centralisation Figure 3: Structures have benefits and challenges



“Certainly I agree with both the sentiments and perception. However, a strong counter argument is that self-service is, to a great degree, providing a better way for managers and employees to do what they have to do already. A great example of successful self-service has to be airline booking systems. Today, it is often far easier to book a flight online rather than through a travel agent. In an organisational context, if I need to change my bank details for payroll purposes, I usually have to contact someone in HR and send multiple emails. With modern day self-service, I can simply log onto an employee portal and make the change immediately, precluding the need for any other action. So, in all likelihood, I am using less effort. The transaction also has a much higher chance of being “right first time” when compared with traditional procedures.”

Question 4: One of the most significant aspects of business transformation is the notion of creating ‘intelligent’ customers able to draw on a range of ‘self-service’ applications. Unfortunately, ‘self-service’ can also be a euphemism for transferring work (and its associated cost) from where is can be seen (and measured) to front-line units, where it becomes both ‘lost’ and perhaps even more costly. What is referred to as ‘squeezing the balloon’. What is your experience?

# Self-Service



“You make a good point about frequency of usage, and the reality is that, too often, self-service applications are not properly designed with the end-user in mind. As a result they can be clunky. Again, fault often lies with ineffective change management – for example, rolling out a self-service application without educating and explaining the benefits to users will often be met with resistance – and lack of adoption. In a previous life, I had to re-engineer an e-Procurement system that required the user to make as many clicks to buy a pencil as it did to buy an expensive laptop. The problem lay in the fact that the Procurement people designed the system in a manner that suited their needs and not the user’s, who needed to buy goods or services to do their job. “

Question 5: I can see appreciate the airline ticket example, but I do that because I save time because I book flights quite often. In the HR example, it’s just one of a couple of dozen different applications that, whilst all might be ‘simple’ enough, I only use the majority of them once in a while. It’s difficult to see that there is any benefit for me as a user when I’m trying to remember how I did something a year or so ago!

# Self-Service



“We are currently working on a number of assignments in the US HE sector and in many respects the challenges are similar to the UK, albeit they have been facing these challenges for a longer period of time. HE colleges and universities in the individual States may come under an overall governance framework, but they experience similar issues when it comes to competitive forces. And their instinct is often to work independently on requirements rather than collaborate on common needs. But there are some very good examples of collaboration.

At the moment, we are involved in an initiative to replace a 30-year old payroll/personnel system, which no longer meets the evolving operational needs of the university (which has 10 campuses). It will feature a single payroll, benefits, human resources, and academic personnel solution for over 200,000 employees supported by 400-500 employees. While it might be argued that the overall governing structure of the university was the primary means of establishing such collaboration, this does not reflect the reality. Indeed, by generating a strong value case for all stakeholders, the benefits of the new model became obvious and brought people together at the table. The challenge was always going to require meeting the self-centred needs of each of the campuses. And I say this without any cynicism intended.”

Question 6: A key tenet of the success of shared services in the private sector is that SSCs talk freely with each other to benchmark progress and share best practice. This is because, as semi-autonomous units at a ‘distance’ from the core operating divisions, they are not in the position of compromising competitive advantage. However, there are relatively few examples of organisations that are in direct competition with each other actually sharing services. In an increasingly market-driven HE sector dominated by performance league tables, competition between institutions is increasing, thus reducing the willingness for management to collaborate with their perceived competitors.

# Shared Services Collaboration


David O’Sullivan Co-Founder & Partner, Chazey Partners Tel: +353 (0) 86 384 [email protected]

David has over 20 years’ experience at a strategic and operational level in driving business change and transformation with multinationals in a broad range of industries. He has established and optimized business critical operations, implemented global ERP applications, and outsourced and offshored other functions.

Prior to Chazey Partners, David has held a number of top level roles including COO of a Technology company and Corporate Controller of a global Consumer Goods company. including Project Director and global Head of Shared Services for He has also been at the forefront of leading significant global change for Thomson Reuters.

Ian Herbert & Dr Andrew RothwellThe main objective for The Centre for Global Sourcing and Services’ (CGSS) at Loughborough University is to undertake an independent research on the trends and practices in global sourcing of IT and business services and to improve sourcing practices through on-going engagement with managers and policy makers.

Ian Herbert and Dr Andrew Rothwell are based at The School of Business and Economics, Loughborough University. Their research report on shared services in higher education in the UK has been supported by the UK Efficiency Exchange and their wider research project by the Charitable and General Trust of the Chartered Institute of Management Accountants.

[email protected]@lboro.ac.uk

mailto:[email protected]




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