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

SHARED SERVICES & OUTSOURCING| TECHNOLOGY ENABLEMENT | BUSINESS TRANSFORMATION
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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 PARTNERS
IAN 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

Answer:
David O’Sullivan:
“ 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

Answer:
David O’Sullivan:
“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

Answer:
David O’Sullivan:
“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

Answer:
David O’Sullivan:
“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

Answer:
David O’Sullivan:
“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 8573
davidosullivan@chazeypartners.com
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 Rothwell
The 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.
I.P.Herbert@lboro.ac.uk
A.T.Rothwell@lboro.ac.uk

ABOUT CHAZEY PARTNERS
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We bring together a unique wealth of experience, empowering our clients to strive for world class excellence
through Business Transformation, Shared Services & Outsourcing, Technology Enablement, Process Enhancement
and Corporate Strategy Optimization. We pride ourselves in having built, operated and turned around some of
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Copyright © Chazey Partners 2014 All rights Reserved.

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