One tip for … Shared services. Pay attention to business.

It’s a seductive plan – one organisation delivers common services to a number of organisations. Reduces overhead and duplication, increases knowledge and expertise.

Not a lot of shining examples of this working well within the public sector – but industry does it every day.

In fact it is the essence of business: one provider, multiple customers. Why does it work in business and not the private sector:

  • Products are key. If its going to be a one-to-many service then product definition and management is key. Define the product – which isn’t just what you do now, but what the largest proportion of the market needs. Biggest effect for minimum cost.
  • Control the product. Products, including service products, have defined core functions.  Sometimes you can pay extra for additional functions. Rarely can you pay for tailored functions. Minimise the product. Users might be able to configure the services, they may be able to pay for add-ons, but they can’t change the core functionality. In business we tend to adapt to the product, find ways to work with it rather than try to define it.
  • Launch with minimum viable product. Business, of course, needs revenue. In the public sectors, change needs momentum.  Don’t be bogged down with solving every issue, there will always be one more that will stop you launching. Launch with the essential needs that makes the solution viable and go!
  • Product roadmaps. Products don’t stay still, they develop over time – in accordance with a product roadmap that takes into account user needs, competition and value for the effort.  The product roadmap develops over time by engaging stakeholders and prioritising improvements, with regular upgrades.

But there is a fundamental flaw in the public service shared service model: the services are primarily about leveraging services an agency provides itself. The focus is on self and the customer comes second. Businesses that do that, die. That’s the value of competition, but you lose that tension in mandated shared services.

A better understanding of how to manage a service product is insufficient by itself. A good outcome also requires transparency and a commitment to service levels.  Without that clear commitment, equivalent to what you would require of your contractors, the model breeds discontent and distrust.