Session Summary: Shared Services

Chris Cobb, Pro Vice Chancellor of Roehampton University, began by defining “shared services”, which he described as a seductive, altruistic term, which belies what others would call outsourcing. He highlighted that it can mean centralisation within one organisation, sharing between institutions or outsourcing.

He outlined the origins of the term in the UK following the Gershon Review (2004/2005), which was followed by a cabinet office Transformational Government Technology Review in 2005 – one of the results of which was the NHS shared data system linking 150 health care trusts, which is now fully operational and saving the government £225million.

Following on from this, HEFCE (Higher Education Funding Council for England) commissioned KPMG to write a report into shared services in HE, which identified the barriers that still exist. Cobb highlighted some of these barriers, including the additional costs of shared services, which are subject to irrecoverable VAT. However, the more over arching barrier was the need for HEIs to maintain their independence given that they are in competition with one another so any move away from academic or operational independence, or towards shared student services would be viewed as a threat to the individual institution’s competitive advantage.

The KPMG report did identify some very good examples of shared services that already work well. UCAS, JANET and the Student Loan companies are just some examples of services which are shared across the sector. There were also examples of institutions supporting each other on a smaller scale. Some of these came out of economies of scales and some provide critical mass, bringing additional skills and security to the service.

HEFCE has also been sponsoring feasibility pilots and examining different institutional experiences, but many of these have not yet really got off the ground due to various factors. Despite good will at a high level, the devil often proved to be in the detail of the business plans and many of these services sharing opportunities have not flowed through as was hoped.

Cobb went on to cite other work in this area, which has been conducted by University of Liverpool and Liverpool John Moores University. These two institutions commissioned a study looking for areas of commonality which could be exploited with shared services. However, the results identified few areas with strong synergies, generally in finance and HR.

Cobb then moved onto libraries and library management systems, where work is being conducted to examine the potential of modularising and disaggregating library management systems into different component parts, which can then be put into the cloud; developing standards and shared licensing agreements with publishers.

JISC has been supportive of shared services through two different routes. Cobb described how they have commissioned reports of their own which go further than the KPMG report. These were conducted by Duke and Jordon, who looked at the appetite and barriers for shared services in ICT in universities. Amongst their key findings, they identified a dominance of a small number of shared suppliers, many bought over a decade ago in response to the Millennium bug, and stagnation in the market. Again, JISC’s approach has been to look at disaggregating the various elements of these services and creating modules using cloud computing to create a different architecture. They recognise the need for commercial suppliers and this approach is designed to push the suppliers in a different direction and avoid complacency.

When examining the drivers for using shared services, Duke and Jordon found that the continuity and resilience argument was the most compelling from an ICT perspective. The efficiency arguments were also significant, but Cobb found it particularly interesting that it was the critical mass argument that was strongest, not the economies argument.

JISC has also been sponsoring the Flexible Service Delivery Programme, which has a number of pilot projects, the core goal behind all of them is the disaggregation of systems, sourced through suppliers or open source.

In conclusion, Cobb described the current situation as disappointing, but noted that the fiscal crisis is making people more receptive to the idea of outsourcing shared services, so there are lots of opportunities. The new government is pushing for efficiency, and they have provided a £20m stimulus package to fund shared data centres, e-procurement and extending funding for the Flexible Service Delivery Programme, so there will be further work in this area.