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

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.

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

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

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

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

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

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

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.

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.