Next Generation Back Office Shared Services for Government

Supplier Conference

21 November 2011

John Collington – Chief Procurement Officer and Director General, Shared ServicesPaul Marriner- Acting Director , Shared Services

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The Current Shared Services Landscape

2 Options Considered

Option 1 - Crown Oversight

• Current services remain ‘as is’ BUT• A Crown body is set up to oversee and govern the future direction of those services, including:Performance standardsCollaborative approach taken to Oracle R12 upgrade to reduce overlap and associated spendEstablishing benefit targets and subsequent delivery

Option 2 - Crown Managed Shared Services

• Consolidation of current shared services in to a small number of ‘hubs’ which service all Department requirements• Crown body governs delivery and strategy , including the following:

Common performance standardsActs as contracting body for all major

suppliersManages transition programme from

current to new

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Recommended Target Operating Model

Crown Shared Service

Governance

Strategy Development

Contract Management

Business Assurance

Performance

Management

MI and Analytics

Shared Service

F&ATransactions

Case Management

Systems and Support

Performance Management & Reporting

Case management and telephony solutions

Contact Centre

SS

CM

anage

ment

Service Management

Customer Relationship

HR & PayrollTransactions

Case Management

ProcurementTransactions

Case Management

Management Information &

Analytics

MI and Analytics

Shared Service

F&ATransactions

Case Management

Systems and Support

Performance Management & Reporting

Case management and telephony solutions

Contact Centre

SS

CM

anage

ment

Service Management

Customer Relationship

HR & PayrollTransactions

Case Management

ProcurementTransactions

Case Management

Management Information &

Analytics

NHS\DH JVOracle

c. 100,000

Outsourced ISSC 1Large & Small Orgs – c.40-50,000

Joint Venture ISSC 2ERP c. 175,000

MI and Analytics

Shared Service

F&ATransactions

Case Management

Systems and Support

Performance Management & Reporting

Case management and telephony solutions

Contact Centre

SS

CM

anag

em

ent

Service Management

Customer Relationship

HR & PayrollTransactions

Case Management

ProcurementTransactions

Case Management

Management Information &

Analytics

MI and Analytics

Shared Service

F&ATransactions

Case Management

Systems and Support

Performance Management & Reporting

Case management and telephony solutions

Contact Centre

SS

CM

anag

em

ent

Service Management

Customer Relationship

HR & PayrollTransactions

Case Management

ProcurementTransactions

Case Management

Management Information &

Analytics

MI and Analytics

Shared Service

F&ATransactions

Case Management

Systems and Support

Performance Management & Reporting

Case management and telephony solutions

Contact Centre

SS

CM

anag

em

ent

Service Management

Customer Relationship

HR & PayrollTransactions

Case Management

ProcurementTransactions

Case Management

Management Information &

Analytics

MI and Analytics

Shared Service

F&ATransactions

Case Management

Systems and Support

Performance Management & Reporting

Case management and telephony solutions

Contact Centre

SS

CM

anag

em

ent

Service Management

Customer Relationship

HR & PayrollTransactions

Case Management

ProcurementTransactions

Case Management

Management Information &

Analytics

HMRCSAP

c. 75,000

MI and Analytics

Shared Service

F&ATransactions

Case Management

Systems and Support

Performance Management & Reporting

Case management and telephony solutions

Contact Centre

SS

CM

anage

ment

Service Management

Customer Relationship

HR & PayrollTransactions

Case Management

ProcurementTransactions

Case Management

Management Information &

Analytics

MI and Analytics

Shared Service

F&ATransactions

Case Management

Systems and Support

Performance Management & Reporting

Case management and telephony solutions

Contact Centre

SS

CM

anage

ment

Service Management

Customer Relationship

HR & PayrollTransactions

Case Management

ProcurementTransactions

Case Management

Management Information &

Analytics

MI and Analytics

Shared Service

F&ATransactions

Case Management

Systems and Support

Performance Management & Reporting

Case management and telephony solutions

Contact Centre

SS

CM

anage

ment

Service Management

Customer Relationship

HR & PayrollTransactions

Case Management

ProcurementTransactions

Case Management

Management Information &

Analytics

MI and Analytics

Shared Service

F&ATransactions

Case Management

Systems and Support

Performance Management & Reporting

Case management and telephony solutions

Contact Centre

SS

CM

anage

ment

Service Management

Customer Relationship

HR & PayrollTransactions

Case Management

ProcurementTransactions

Case Management

Management Information &

Analytics

MOJ\HO Oracle

c.150,000

MI and Analytics

Shared Service

F&ATransactions

Case Management

Systems and Support

Performance Management & Reporting

Case management and telephony solutions

Contact Centre

SS

CM

anage

ment

Service Management

Customer Relationship

HR & PayrollTransactions

Case Management

ProcurementTransactions

Case Management

Management Information &

Analytics

MI and Analytics

Shared Service

F&ATransactions

Case Management

Systems and Support

Performance Management & Reporting

Case management and telephony solutions

Contact Centre

SS

CM

anage

ment

Service Management

Customer Relationship

HR & PayrollTransactions

Case Management

ProcurementTransactions

Case Management

Management Information &

Analytics

MOD Oracle

c.75,000Ex SPVA

NHS\DH JVOracle

c. 100,000

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These Include:

1. Performance monitoring of ALL SSCs

- performance through competition.

2. Independent delivery - no Department will deliver services from the two ISSCs

3. Crown Management and Crown as the Contracting Authority for the 2 ISSCs

3. Private Sector involvement through divestment

4. A service for Smaller Departments

3. Implement a single, Value for Money, ERP solution in ISSC 2; and

3. Operate on a single set of processes to ensure performance can meet upper quartile benchmark levels.

Key Strategic Principles

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Core and Optional Service Offerings

The key principles of the Service offerings are:1.Only pay for what you need. i.e. Grants admin is optional2.Need to take all core processes that are end-to-end i.e. P2P3.Consultancy type services is optional to preserve VAT refund for Core services

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Proposed Transition Governance

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Proposed Transition Plan

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Taking Advantage of ERP in the cloud

Hardware Hosting Layer

Support Layer

Software Layer

(Finance / HR / Payroll/ CRM/ Procurement)

Tier 1 or 2 ERP

Multiple Installations

Multiple Support Orgs

Private Cloud

SingleSupport Org

Estimated Potential Saving 65-70%

3rd Party Single

Support Org

SingleOn-Premises Installation

ERP “Software as a Service” (SaaS)

“Pay per use”

Estimated Potential Saving

??%

Estimated Potential Saving

40%

Public Cloud

Multiple ERPs

Single ERP

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What Do Suppliers Need to Consider?

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Shared Services is about raising performance but also aboutsaving money. This means we will:

1. look to consolidate services 2. look to use new technology and services such as

Cloud which drive better VFM – what is the opportunity?3. re-use before we re-buy4. not be ‘Gold-Plating’ our services.

But there will be opportunities around:• BPO for Back Office functions within ISSC 2• ERP transition services– both Tier 1 and 2• BPO Transition services