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Shared Services in the Public Sector

5 Key Benefits of Shared Services in the Public Sector

Posted by  Marco Rolla

Since the financial recession in 2008, public sector budgets have been tightened, and organizations are looking for ways to save money. One of the best ways that many public organizations have opted to save money is by switching to a shared services model. In a shared services model, standard back office processes (such as HR, payroll and more) are handled by a centralized provider, leaving more time for employees of organizations to handle important client-facing work. However, switching to a shared services model doesn't just help fit budget constraints. It can also provide public sector organizations with the following benefits.

1. Lower Costs

As mentioned above, using a shared services model for public sector organizations can help cut costs. Moving back office services to a centralized office reduces the money an organization needs to spend on both staff and capital. Agencies that are able to both centralize IT services and standardize their process typically save at least 25 percent of costs associated with those services.

2. Greater Efficiency

With the move to shared services comes a boost in efficiency for public sector organizations. Within a shared services model, multiple partnered organizations can automate standard business processes, drive self-service capability for both staff and customers, and eliminate low-value activities (e.g., manual input, multiple reconciliations, multiple authorization processes, etc.) Shared services also help boost efficiency because they help centralize and cohere otherwise dispersed organizations.

3. Catalyst for Business Process Change

Rather than looking at shared services as a solution to simply automate existing processes, the move to shared services can also serve as a catalyst for business process change. When groups move to shared services, they can remove old, outdated and bureaucratic processes -- and also gain the benefits of investments in new systems and technology.

4. Improved Productivity

Ultimately, the shared services model helps agencies do the same jobs but better and faster -- freeing up employees from having to do mundane, routine tasks. In fact, shared services have been proven to increase productivity at public sector organizations. According to a Deloitte Consulting Global Shared Services Survey, more than 90 percent of organizations using shared services centers achieved consistent annual productivity improvements. Further, more than 70 percent of the organizations surveyed reported that they had achieved at least 5 percent improvement annually. Using shared services gives employees time to focus on higher-value and more important client-facing tasks.

5. Access to Top Talent and Best Practices

If multiple organizations choose to use a shared services center, all of these organizations have access to the same top talent -- which is helpful for all organizations and keeps the playing field even. Also, organizations can learn from processes used by the partner organizations that are sharing the same services center, and they can choose to adopt the practices that are proving to work the best. Also, ultimately, shared services centers are service-based, so they are able to respond to the needs of organizations more quickly, which is beneficial to any organization that chooses to get involved.

Learn more about how Unit4 can help your company save money, become more efficient and function more smoothly by downloading our public services solution brochure.

Marco Rolla

Marco is an industry researcher who focusses on global business, finance and the public sector. Marco aims to free service organizations from excessive administrative work.