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How Do Your Shared Services Stack Up To The NHS?

How many people go underutilized because they were brought in to provide a specific skill-set, but there simply isn't sufficient meaningful work for them? Certainly, you may have your highly qualified DBA writing SQL five hours per week - but is he or she simply running simple queries for people the rest of the time? Are your top web developers really pushing the envelope, or are they simply prolonging the move to a proper web content management system? Do you really need that full-time network administrator to write a couple of login scripts per year, and to simply "be there" just in case something happe... you know... like a meteor hitting your primary data center! These and countless other scenarios drive companies to invest in shared services. When you want access to dedicated personnel with key IT skill sets, but you don't want to carry the full-time cost of those people, shared services is the way to achieve both.

In the outsourcing world, shared services fall into 2 groups: supplier administered and client administered. In general, supplier administered services are generally well defined utility or service models. There are transparent shared services, such as managed internet hosting, where there is generally little to no visibility to the actual people or resources working on your particular account. There are more structured shared services, such as an outsourced level 1 help desk, where a pool of resources may work on a small number of different client accounts. Client administered services can be much more elaborate. Large enterprises with complicated organizational structures will implement shared service models to leverage their scale and provide top level service at a *generally* lower price for all participants. It really starts to get interesting when semi-autonomous or completely independent organisations throw in their lots to create a shared service.

Indeed, what greater shared service exists than in health care. Aside from the very fortunate few, people cannot afford to hire a personal GP (General Practitioner) or PCP (Primary Care Physician)... no less the litany of specialists, emergency workers and other staff necessary to ensure the health of a single individual. Moreover, the benefits go well beyond the mere manpower. Incredibly expensive plant and equipment - hospitals, scanners, you name it - all investments that are only possible because a large enough number of 'clients' have agreed to participate in a "health care shared service", rather than go it alone. Some parties benefit a bit - some much more so - but just about everyone aside from Howard Hughes can benefit from a health care "shared service". Whether or not the government should be the primary administrator of such a "shared service" is an entirely different matter!

For better or worse, the NHS can highlight a few key principles in administering shared services:

1. Draw Clear Lines Around The Service: In order for a shared service to remain balanced for all parties, there must be clear lines around what the client and service provider can do. For example, if the NHS allowed people to make direct referrals (rather than via a GP), specialist physician usage could well be dominated by a small group of hypochondriacs. Likewise, "problem clients" can dominate a technical or support team at the expense of other participants.

2. Price So That Everyone Wins: The income-cap on National Insurance (aside from the 1% flat tax above the cap), means that some people pay very little, but also that very few people pay an extraordinary amount. Although many wealthy people will obtain private insurance, the NHS' services are still there if ever needed. Still, the vast majority of people gain access to infinitely better health care than they could have afforded otherwise. In IT shared services, you have much greater flexibility to implement a charging model that is more in-line with each participant's benefit. An equitable method is to determine the minimum fixed price amount (few services can be purely utility), and charge a flat participation fee to cover this amount. Usage fees can be assessed on each participant by the number of tickets, projects, changes, etc. they request.

3. Encourage Proper Usage: While shared services are created with the hope that participants will make the most out of the programme, steps must be taken to prevent abuse (or overuse) as this can disincentivise clients from joining. Health care can be very tricky, because one would not want to have measures that could prevent a person from receiving care that they truly need. The NHS combats this challenge with restrictions on "discretionary" care, and co-pays on certain doctor visits and prescriptions. In IT, a much more analytical view can be taken. While a good pricing model can certainly address overuse, the bigger challenge lies in prioritization. It is necessary to invest time in defining clear priority levels, escalation paths and governance models. A participant with a mission critical outage should get top priority, but one should not get top priority for every single request.

4. Sponsorship & Leadership: One might argue that sponsorship is not needed to ensure success, but the reverse is quite true. Sponsorship by millions of voters is necessary to keep the leadership (i.e. government) in place to keep the NHS alive. The same is true with shared services. Shared services administered by one client (i.e. a large corporation to its subsidiaries) can often get by for quite a while with leadership alone. However, if there isn't a good balance, or if value isn't being realized by enough subsidiaries, it will eventually fail. Shared services administered across entities (say, a group of councils), will need much more sponsorship as the leadership is generally an "advisory committee" of delegates with little autonomous power. Either way, in cases where the participants are similar in size and projected usage, sponsorship will need to come from a majority of the participants. They must make regular commitments to the advisory committee, and work to ensure that the majority of participants are satisfied. In cases where there are a few large participants - every effort must be made to bring these on board as their sponsorship can be enough to make or break the service.

Shared services can be an incredibly effective way to drive efficiencies and lower costs across any number of entities. Additionally, they allow organizations access to a much greater pool of technical talent, services and infrastructure. While the administration of successful shared services has it's challenges and detractors - see the NHS - they open a world of possibilities to keep your IT organization healthy.

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