Shared Services In The NGO Sector: Lessons we can learn from other sectors

1. Shared Services In The NGO Sector:Lessons we can learn from other sectors Dr Cameron Newton The Australian Centre for Philanthropy and Nonprofit Studies Queensland University of Technology Brisbane, Australia

2. Introduction • Shared services literature is lagging behind the practice of forming shared services arrangements. • Empirical investigation of the related elements required to ensure sustainability, and the outcomes that can be optimally expected.

3. Purpose and Some Warnings • Briefly take a look at shared services in the private and public sector and what we can learn from these experiences • Warnings • Diverse area • Generalizations for simplicity and condensing information inevitable but be aware that there are always exceptions • Many models • May not fit with your experience • Be critical

4. Shared Services – Private Sector • Emerged in private sector in late 80s • Stand alone unit to focus on delivering particular business services • Larger corporations • Cost cutting motivations • Primary focus – concentration of transaction-orientated services – repetitive/same across units • Types of services – financial, procurement, HR including payroll, property and facilities management, IT operations, org development, communications

5. Schulman and Associates • Concentration of company resources to serve multiple internal partners with lower costs and higher service levels. • Business units can maintain control of business decisions and deliver economies of scale through common business systems and consistent standards • Goals • Displacement of non-value adding/non strategic processes supporting core business from core business providers

6. Lessons from the Private Sector Implementation • the need for top management support and leadership • determining which services to move into a shared services arrangement • people management issues • ensuring there is an effective governance arrangement in place • balancing business process redesign and reshaping of roles and technology • building a new culture

7. Lessons from the Private Sector Ongoing operations • monitoring and managing costs • accountability issues • use of service level agreements • performance accountability

8. Public Sector • Public sector approaches largely emulate private sector • Qld Treasury (2002) • Multiple agencies share common corporate services through a dedicated service provider • Partnership approach to providing services with responsibilities, accountabilities and authority clearly understood • Facilities continuous innovation and quality improvement, and cost effectiveness of services • NSW Public Service • Reviews – benefits slow to follow

9. Lessons from the Public Sector • Establish services on a full cost recovery basis • Recognise the impact the varied and often incompatible systems, applications, processes, procedures and governance arrangements have on benefits • Maintain service quality and customer satisfaction during transition (and after…) • Establish service level agreements that define service types, costs and timeframes • Be able to adapt to diverse customer needs and changes in customer profile arising from mergers and restructures.

10. Some Concluding Observations • Many lessons that can be carried over to NGO sector • Lessons learned from both sectors relating to agreement, accountability, system integration, governance arrangements, understanding the effects on clients • Need to be aware of NGO context however • How to assess performance and accountability – cultural and normative changes may be required • Shared services that include just a part of another organisation – difficulties – commitment to SSA • NGO sector made up of committed people – how are human resources consulted, engaged, informed and supported about the changes related to SSA.