Working Together: 3 Key Benefits of Shared Services for the Public Sector

Jun 16, 2017

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We’ve all heard people talk about “red tape” when giving out about processes that take too long. The original “red tape” was used to bind official documents in the British Empire for centuries but it’s since become a metaphor for unnecessary bureaucracy.
It’s an accusation that’s still sometimes used to criticise the public sector or excessive official complexity. There are many challenges to operating in the public sector, not least of which is coordinating the efforts of multiple departments or branches across a wide geographical area.

We may have moved on from documents wrapped in red tape but consolidating information and harmonising efforts within the public sector continues to be a challenge. Reform can be notoriously difficult to implement but digital disruption has certainly opened the doors of possibility.

Technology has given us an unprecedented chance to revolutionise the way the public sector operates and shared services centres (SSCs) can provide a solution to many of the problems it faces. SSCs can provide common corporate services that were previously carried out by individual departments. So an SSC for HR and Payroll reduces unnecessary duplication of effort, harmonises policies and consolidates any relevant data under a single umbrella platform.

This allows public sector bodies to streamline their HR and Payroll processes and controls, which saves both time and money. It also frees up management resources to deal with strategic activities and provide a better service to the public. It’s all about fulfilling a vision of efficient, effective services based on accountability and best practice.

SSCs aren’t a short-term efficiency measure although they can offer immediate gains. Adopting an SSC can take time and political commitment but ultimately it’s a journey worth taking. Here are some of the main reasons it makes sense.


SSCs achieve cost savings


Costs for Payroll and HR functions can be greatly reduced if they are centrally handled by an outside specialist. Outsourcing these services reduces overheads and the need for a large headcount to carry out basic tasks that can be easily automated using technology. Centralising your efforts can also help you harness economies of scale which can lead to further savings.

It’s about transforming the way these departments operate and channelling human expertise and resources into the right areas. Having multiple HR and Payroll professionals operating independently across multiple bodies and locations is not a good use of your talent in today’s digital society.

The other obvious area where savings can accrue is in terms of technology costs. Using an SSC means that you don’t have to worry about the costs of maintaining, upgrading or fixing any potential issues with your HR and Payroll technology.

That means you get cutting-edge tech without having to devote vast financial and human resources to this aspect of your business. It also protects your data security, which is more important than ever with the incoming GDPR legislation concerning the accuracy, security and retention of sensitive data retention.


Increased process efficiencies


Using an SSC means that administrative functions can be centralised and important data can be consolidated. That makes HR and Payroll functions more efficient and leads to standardised procedures and core processes.

This can be particularly beneficial in these areas as managers can easily access performance data and where savings can be made. This all helps to ensure that Service Level Agreements can be met by giving decision makers the means to make data-driven strategic decisions to continuously improve the service for customers.

It also allows management to make qualified judgements on the likes of compliance monitoring and reporting. Naturally, policy development is easier when you aren’t dealing with multiple stakeholders across a range of locations.

SSCs transform what can be disparate or conflicting approaches into a single harmonised effort within a single organisational structure. In an age where data analytics has become a functional necessity, it ensures that policy makers and organisational leaders can access all the necessary data to see where operational improvements can be made.

That facilitates greater consistency and accuracy in HR and Payroll activities and any necessary reforms to existing processes. It also helps to improve structural flexibility and makes it easier to adapt to changing business needs going forward.


Improvements to knowledge expertise


Technology is now driving change rather than just facilitating it. HR and Payroll systems can now carry out functions and services that would have been unimaginable just a few years ago.

Adopting this software now provides an integrated solution that lets you harness the true potential of HR and Payroll professionals by relieving them of time-consuming admin functions that could be digitally automated. This allows them to move into more strategic management roles, like their peers in the private sector.

SSCs encourage this process so the people with the necessary skills and expertise can assume centralised roles with greater influence. That means that HR and Payroll leaders can start to look at better ways to address recruitment, employee engagement, talent management, workforce efficiencies and other higher value-added activities.

By allocating qualified people with the necessary expertise to oversee these functions, it leads to a more effective, business-orientated service that ultimately benefits the customer. It eradicates wasteful practices like duplication of effort and gets the most from your available talent pool.

It also makes it easier to introduce continuous training to ensure that a public sector workforce is able to provide the best possible service and that they’re equipped to deal with changing business needs. Digital disruption also impacts on customer expectations and it is important to continuously adapt to, and cater for, their changing needs.

Ultimately, SSCs can transform service delivery by streamlining public sector operations, saving costs and increasing productivity. It’s no surprise that many countries are already adopting this approach to improve their public sector.

The “red tape” inefficiencies and sprawling structures that plagued public sector services in the past could yet be relegated to history by a streamlined, digital vision of operational excellence.

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