Woman who ran successful NHS shared service talks about the cross government opportunity

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Ruth Ormsby headed up the Department of Health's Shared Business Service (SBS) before switching to Capgemini a few weeks ago.

I met her yesterday to ask her about the government and shared services.

With the coalition set on cutting the cost of government a strategy to move to shared services seems inevitable. After all, many public sector organisations use the same business processes, but currently have separate IT and staff doing the work.

A contact recently told me that "anyone with an ounce of intelligence can see that shared services are a good idea in government."

And SBS, according to many experts I speak to, is one of the few successful shared services in the public sector. The joint venture between the Department of Health and Steria now runs the back office processes for 100 NHS trusts.

It uses a single Oracle system and one set of processes. It guarantees 30% cost savings for its NHS trust customers. In 2009 the joint venture, which began in 2005, made its first profit and this year paid £1m back to the NHS. Money that can be invested in the front line. More doctors less back office staff.

No wonder Capgemini was keen to get Ormsby on board. Not the only supplier that was interested either.

Ormsby felt her work was done at SBS and wanted another challenge. Convincing civil servants to move to shared services, and as a result make redundancies, would have been impossible in the past. But things have changed.

"We are in a completely different place now because of the new government and the financial problems. The public sector is now recognises the need for shared services."

She says there is more activity at the moment.

Although Ormsby believes there is a shared services opportunity across government she thinks that it will gain momentum in parts of the public sector "where there is a family."

She is referring parts of the public sector such as the police and education, which are similar to the NHS in that they are made up of lots of local organisations. "These organisations have the same back offices but do it differently."


 

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So, Ormsby is cashing in on her (team's?) taxpayer-funded success by moving to the heavily taxpayer-subsidised consultancy Cap Gemini.

Meanwhile, anybody want to guess which (Indian ?) consultancy with government clients will be hiring departing government CIO John Suffolk in the near future?

Sinking ship...?

The evidence for shared services arises almost predominantly from within the shared services industry.

In comes particularly from those organizations selling shared services (including NHS SBS), IT companies, legal firms organizing contracts and some think tanks such as the NLGN who are funded by around 20 shared services providers.

The majority of the evidence is based upon assumptions, projections and estimates. One particular trick to make the savings sound big is to project out to 10, 20 or 30 years.

The second argument is economies of scale. Scale is service organizations is a myth. Any savings coming from shared services are from one-off savings from the sale of buildings or jobs terminated. It is still necessary to be sited somewhere.

The third argument is standardization. Standardizing services means that they are less able to respond to the complex needs of human beings trying to get their problems solved. The more times they try the more the costs increase or are pushed into other budgets and systems absorbing failure.

The work of John Seddon described these problems in great detail.

Howard Clark
Researcher and editor The Systems Thinking Review

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This page contains a single entry by Karl Flinders published on November 10, 2010 6:13 AM.

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