Efficiency Innovation Fund Research Report

Research & Evaluation of Shared Services Projects

4529_AoC_research_report_AW2.indd 1 2/15/12 11:39 AM

For more information and guidance on AoC Shared Services see:www.aoc.co.uk/en/policy-and-advice/aoc-procurement-team/shared-services

Executive Summary 3

1. Introduction 7

2. Issues and Programme 8

3. Method 13

4. Key Considerations 16

5. Types 31

6. Outcomes and Lessons Learned 37

Bibliography 46

Annex A: Self Assessment Tool 48

Annex B: Scoring Matrix 53

Annex C: Scores Allocated to Case Study Colleges 55

Annex D: EIF Projects – Lessons Learned 61

Contents


Research & Evaluation of Shared Services Projects | 3

This is the executive summary of an evaluation of the shared services supported by the Further Education (FE) Effi ciency Innovation Fund (EIF), which was undertaken by Centrifuge Consulting on behalf of the Association of Colleges (AoC). It should be noted that this report is an initial stage report that will require follow up. The report is based on the initial fi ndings of research with EIF projects and as such it focuses on their experiences to date. Further work will be undertaken to build on this research, identify further lessons from the ongoing experiences of these projects and to translate these into resources to support colleges looking to develop shared services.The specifi c objective of the study was to undertake a formative evaluation of EIF supported projects to identify and understand wider lessons about the nature of college collaboration in terms of: Leadership and Governance; Process; and Culture. The evaluation method comprised: a review of documentation from the projects; a self-completion on-line questionnaire sent to all project leads; and interviews with the partners involved in 12 case study projects. The EIF supported 41 projects involving over 180 Colleges across the FE sector in England to develop shared service projects. Shared Services are defi ned by the AoC as:

“The�shared�provision�by�more�than�one�organisation�of�a�specifi�c�service�or�function”.

Projects vary signifi cantly across a number of factors, including: number of partners (ranging between 2 and 8); activities covered (from a single function, such as human resources, to full merger); and stage of development (from initial feasibility to implementation start). Developing organisational resilience is at the core of shared services. The fi gure below provides an overview of the various potential benefi ts of developing a shared service, within the three overarching categories of: effi ciencies; improvement; and growth.

Potential Benefi ts

Executive Summary

Effi ciencies Improvement Growth

Cost savings and streamline processes

More joined up services/functions Increased capacity and benefi ts from scale

Reduced duplication Improved services/function effectiveness

Improved reach of services

Shared risk Knowledge exchange, shared and improved skills and learning

Widened experience and growth opportunities


4 | Research & Evaluation of Shared Services Projects

The study identifi ed all of these benefi ts accruing across the case studies, with concentrations in experience and knowledge, and in cost savings and joining up services. While some projects are able to quantify anticipated benefi ts, it is not possible to assess the extent of programme cost benefi ts at this stage. Where cost benefi ts have arisen to date, they tend to arise from joint senior management posts or joint procurement of services.A review of the key themes across the programme led to the identifi cation of a series of barriers to, and enablers of, progress. Communications was a central theme, as was trust between partners. These are summarised in the fi gure below.

Barriers Enablers

Leadership Abrogating control to external consultantsPressures on management timeLarge number of partnersLack of commitment from all partners

Personal relationships between key playersClear leadership role (“champion”)Collaborative working with shared valuesExternal support (but not ownership)Active Governor involvementGood communications channels

Culture Perceived Loss of controlCompetitionEntrenched management systemsDifferent institutional traditions

Good communications channelsGeographical or functional similaritiesInstitutional and personal trustCommon interestsShared learning

Process Lack of resource/timeInsuffi cient planningUncertainties among staff over futureUnclear objectivesLack of observable outcomesFocus on administrative obstacles (e.g. VAT)

Allocating college time and resource in addition to EIF fundsClear and transparent agreement between partnersTrust between partnersCommunicating the objective to all staffLearning from othersClarifying costs and benefi tsCelebrating success



From a review of the case study projects, a number of other factors emerge. Those showing fundamental change:

• all have strong leadership with collective participation;• are slightly more likely to have an internal focus;• have costs as a signifi cant factor, although two were entirely service driven;• tend to have strong institutional linkages;• have some basis in pre-existing personal relationships; and• exhibit strong additionality in terms of bringing existing plans forward.

with low level change:• have less focused leadership;• uncertain, or differing aims;• tend to have an internal focus;• have cost as their main priority;• have limited pre-existing relationships; and• are more likely to be funding-driven.

The fi gure below summarises the key lessons that arose from the evaluation, and their relationship to the three investigation themes. Further detail on lessons learned can be found in section 6 of the report.

Key LessonsKey Lessons

Theme Lessons Learned Addresses

Open and Continuous Communication

Between leaders & organisations: • To ensure clarity of purpose and ensure complete agreement on

direction of travel.• To ensure ongoing commitment.• To maintain trust between partners.

Within organisations:• To ensure leader and Governor buy-in and awareness of intentions

and direction of travel.• To ensure staff participation and awareness of change.• Requires consideration of organisational decision making procedures

and timescales.

Leadership

ProcessCulture

Leadership

CultureProcess




Preconditions & Development Time

Preconditions:• Need for shared organisational ambitions and ethos.• Benefi ts of a history of collaboration among partners and an

established direction of travel.• Need to be aware of organisational starting points.• Concerns regarding independence and competition are considerable

barriers.• Careful consideration should be given to the number of partners

involved.• Need for complete commitment and buy-in from partners.

Development:• Pre-bid information/induction and training to ensure partners are

aware of what they are signing up for.• Need to spend considerable time up front developing

relationships, having open and honest communications and developing a shared vision.

• Need to develop and maintain trust. • Establish rules, roles and responsibilities at an early stage.

CultureLeadership

CultureCulture

Process

Leadership

Process

Leadership

CultureProcess

Timescales & Resources

• The active involvement of smaller/leaner organisations has been effected by signifi cant capacity issues.

• Many partners experience capacity issues as staff are required to continue do their day jobs while simultaneously driving this forward.

• The investment required to share back offi ce functions can be considerable, particularly where ICT based solutions are central.

• Projects may underestimate resources required to implement shared services. What appears simple at a superfi cial level will involve numerous layers of complexity.

• It takes time to explore, develop and implement shared services and show results.

Process

Process

Process

Leadership

Process

Unexpected outcomes

• Developing shared services is a learning process for all involved with signifi cant contributions to personal and professional development.

• The process results in signifi cant knowledge transfer both within and across individuals and organisations.

• Stimulates a sense of strategic critical refl ection in participating organisations.

• Can lead to improved relationships with specifi c partners and generate spin-out collaborative activities.

Culture

Culture

Culture

Process



1.1 The StudyThe specific objective of this study was to undertake a formative evaluation of a sample of Efficiency Innovation Fund (EIF) supported shared services projects to identify and understand wider lessons about the nature of college collaboration in terms of:

• Leadership and governance;• Process; • Culture.

1.2 The ReportThe remainder of the report is structured as follows:

• Section 2 provides an overview of the shared services context and agenda and the FE Efficiency and Innovation Fund;

• Section 3 discusses the method used within this study;• Section 4 examines the experiences of Efficiency and Innovation Fund supported projects

against key considerations and critical factors in the development of shared services in FE;• Section 5 examines the ways in which these key considerations and critical factors impact

upon FE shared services projects, and describes a typology for understanding this; and• Section 6 reviews key outcomes identified through this study and the key lessons learned

by Efficiency and Innovation Fund supported projects.

In addition, there are three Annexes:• Annex A, shows the on-line self-assessment tool (SAT) that representatives from all

Efficiency Innovation Fund supported projects were invited to complete;• Annex B, shows the scoring matrix that was utilised to assess the sample of Efficiency

Innovation Fund supported projects in terms of leadership, process and culture; and• Annex C, shows the scores allocated to the anonymised sample of Efficiency Innovation

Fund supported projects that have informed this study.

1. Introduction



2. Issues and Programme

2.1 What are Shared Services?Collaboration has increasingly moved up the public services agenda as the funders and deliverers of these services have sought to address the challenges of maintaining and improving service levels and standards amid decreasing resources. Within this context the term “shared services” has becoming increasingly used to describe the process of collaboration by which organisations work collaboratively to develop and deliver a specific service strand, process or function.

Shared Services are:

“�The�shared�provision�by�more�than�one�organisation�of�a�specific�service�or�function”� – Association of Colleges (2011)

“�Where�two�or�more�organisations�work�together�to�deliver�services�through�new,�joint�delivery�restructures”�–�Chartered Institute of Public Finance & Accountancy (2010)

“�Institutions�cooperating�in�the�development�and�delivery�of�services,�so�sharing�skills�and�knowledge”–�JISC (2008)

“�a�model�of�providing�services�(not�just�so-called�‘back-office’�services)�in�a�combined�or�collaborative�function,�sharing�processes�and�technology”�–�KPMG (2006)

Therefore shared services do not by definition threaten the independence or sovereignty of organisation. Nor does it necessarily involve the outsourcing of services or functions to an external provider or a first step in a process towards inevitable merger; although in one instance observed in the case studies, the exploration of shared services has led to both parties agreeing that merger is the optimal option.

2.2 Why Share Services? A range of external and internal factors drive the shared services agenda. Principal among these is the need to generate efficiencies and do ‘more for less’ due to reductions in funding levels. Therefore at a superficial level the rationale for shared services appears simple. By sharing services and functions it is assumed that partners will be able to eliminate waste and reduce inefficiencies (Cabinet Office, 2005).

“�Shared�services�is�more�than�just�centralisation�or�consolidation�of�similar�activities�in�one�location,�it�is�the�convergence�and�streamlining�of�similar�functions�within�an�organisation,�or�across�organisations,�to�ensure�that�they�are�delivered�as�effectively�and�efficiently�as�possible”�–�Scottish Government (2011)

However, while reduced funding is one of principal drivers and generating efficiencies one of the main potential benefits of the sharing process it is by no means the only reason for this activity. Improved service delivery and development of functions are also important factors.



While the potential benefi ts of shared services are diverse they can be broadly classifi ed within one of the following three categories:

• Effi ciencies;• Improvement; • Growth.

Developing organisational resilience is at the core of this agenda with the other three potential benefi t categories serving to enhance the sustainability of the organisations involved in developing shared services. Table 2.2 below provides an overview of the various potential benefi ts of developing a shared service, within the three overarching categories outlined above.

Table 2.2: Potential Benefi ts

Sources: Bland (2010); CIPFA (2010); JISC (2008); NAO (2007); CBI (2010)

The potential benefi ts of shared services illustrate that this approach can form an important part within strategies for growth, by driving innovation, opening up new commercial opportunities and potentially leading to sustainable service transformation. Consequently shared services should not simply be seen as part of a cost saving agenda or as a purely reactive process.

“�a�means�to�deliver�effi�ciencies,�service�improvement�and�organisational�resilience”– AoC (2011)

Growth

ResilienceResilience

Effi ciencies

ResilienceResilience

Improvement

Figure 2.1: The Benefi ts

Sources: Bland (2010); CIPFA (2010); JISC (2008); NAO (2007); CBI (2010)



More joined up services/functions

Increased capacity and benefi ts from scale







However, despite their potential it is important to recognise that shared services are not a panacea and will by no means be appropriate in all circumstances. Instead they should be seen and utilised as part of a blend of approaches available to drive improvement and efficiency within organisations.

2.3 What Services can be shared and how?While definitions over the term may differ it is clear that there are a range of services, business processes and functions, areas of expertise and various other aspects of an organisation that can be shared among partners. This is particularly true where organisations are operating within the same sector and dealing with similar processes and functions. When identifying potential areas that are most suited to a shared services solution many have traditionally focused on so called ‘back office’ functions that are transactional or rules based in nature. For example research undertaken by Bland (2010) on behalf of the then Learning and Skills Council identified the following areas as possible appropriate workstreams:

• Human Resource Management; • Finance; • Student Services; • Information Technology;• Procurement.

All of these areas are reflected within the activities funded through the AoC Efficiency Innovation Fund.Although these areas clearly have considerable potential for shared service development they are by no means the only areas in which such a solution may be appropriate. In some cases the sharing of ‘front office’ services, such as curriculum development and delivery, may be appropriate. Therefore all areas of an FE College’s operations can and should be considered for the development of shared services. However, it should be noted that not all processes or services will be open to sharing in every circumstance with a range of contextual factors at play, including for example competition between colleges or technology costs of alignment, or the wider funding climate. Given the array of functions and services that can be shared, shared services should be seen as a continuous process. Indeed the experiences of the projects used as case studies to inform this research have revealed a wide range of starting points which in turn impact upon the proposed and actual partnership end points in terms of what is being shared and how. This will be considered in detail throughout the remaining sections of this report.

2.4 How can Services be shared?The actual process of delivering shared services is equally open with a range of potential models and levels of sharing that can occur with the shared services journey of an individual organisation or partnership. Figure 2.3 is taken from Bland (2010) and outlines a continuum of potential approaches and structures for College collaboration alongside associated risks and barriers.



Third party provider takes full responsibility for managing and operating services.

Member organisations operate within a shared governance umbrella. Each organisation retains independent legal status, but is fully accountable via local boards to federal governance structures.

A contractual arrangement with a third party provider to provide Shared Services (e.g. College A and a Private Company).

Joint procurement of services based on a shared strategy and harmonised business processes and designed to provide shared service provisions to its members (e.g. the LSC Collaboration Fund projects were mainly focused on this model).

An agreement between two or more organisations to set up and operate Shared Services (e.g. College A and College B establish a separate Shared Services department).

Centralising a business service that will be shared by other organisations (e.g. College A shares Finance with College B; College B shares HRM with College A).

The acquisition of one college by another .

A single organisation centralising business services.

Figure 2.3: FE Collaboration Structures

However, the experiences of colleges suggest that there are a range of other potential structures and approaches that sit across and between those outlined above. For example, one particular project is moving forward with a more informal collaborative model in which services and functions such as continuous professional development (CPD) training and specialist staff skills such as virtual learning environment development are shared between partners on an in-kind basis. Yet another project is focused on entirely transforming the organisational model upon which colleges are traditionally based.

Third party provider takes full responsibility for managing and operating services.

Member organisations operate within a shared governance umbrella. Each organisation retains independent legal status, but is fully accountable via local boards to federal governance structures.

A contractual arrangement with a third party provider to provide Shared Services (e.g. College A and a Private Company).

Joint procurement of services based on a shared strategy and Joint procurement of services based on a shared strategy and harmonised business processes and designed to provide shared service provisions to its members (e.g. the LSC Collaboration Fund projects were mainly focused on this model).

An agreement between two or more organisations to set up and operate Shared Services (e.g. College A and College B establish a separate Shared Services department).

Centralising a business service that will be shared by other organisations (e.g. College A shares Finance with College B; College B shares HRM with College A).

The acquisition of one college by another .

A single organisation centralising business services.

Outsource

Federal Structure

Strategic partner

Commissioning

Joint Initiative

Lead Department

Merger

Unitary

Greater control less risk/barrier

Signifi cantly less control more risk/barrier

Col

labo

ratio

n



2.4 The Programme The Shared Services agenda in Further Education is being taken forward at a number of levels. A central component of this work has been the first two rounds of the Efficiency and Innovation Fund through which AoC provided funding support to ensure that partners are working towards the delivery of agreed outcomes. Through these projects Colleges are being supported to test a range of potential collaborative model for frontline services or back office functions with a range of partners, including other Colleges, Schools, Higher Education Institutions and Local Authorities in order to:

• Identify ways of improving service delivery of both back office functions and frontline services;

• Determine where efficiency savings can be made; and• Find solutions to barriers and problems that collaborating groups can come up against.



3.1 ApproachThe approach undertaken in the evaluation comprised four components:

• A review of documentation held by AoC;• The selection of a sample of projects for detailed follow-up;• The circulation of an on-line self assessment tool, which was circulated to all those selected

for case studies, and subsequently to all remaining project leads; and• The development of a scoring system around the three key areas of: Leadership; Culture;

and Process; drawn from the data collected in interview with the case study projects.

These are described below.

3.2 Documentation ReviewThe programme has generated significant information resources for AoC, comprising project proposals, updates, and, where completed, business cases. A particularly helpful piece of information was that the projects were required to return a ‘lessons learned’ form. The ways in which information was presented varied across projects, with, for example, some projects producing detailed business cases in excess of 100 pages and others supplying more limited information.

3.3 Case StudiesA series of projects were recommended by AoC for follow-up as part of the case studies to inform the evaluation. These were not chosen on any shared sampling approach, but were simply selected by AoC on the basis of potential interest. The scope of this sample shifted over the study with, sufficient information being collected on 12 projects to enable more detailed analysis and scoring (see Section 3.5 below).Since the current evaluation is of the programme as a whole, rather than individual projects, the case study projects are not identified, and all interviewees were given the assurance that their projects, and individual responses, would not be identified in this report. As part of a separate exercise, publicly available case study documentation will be published on the AoC website for approximately half of the 41 participating projects.Interviews were undertaken with project leads of the case study colleges either face to face or by telephone. In addition, interviews were held with project contacts in participating colleges, where this was possible. However, the detailed qualitative information obtained through interview provided a key insight into the practicalities of project development, and plays an underpinning role in the analysis contained in this report.

3. Method



3.4 Self-Assessment ToolIn addition to interview, project participants were invited to complete an on-line self assessment tool (SAT), which is reproduced as Annex A.The SAT was a short survey incorporating 24 closed questions which aim to gather partner perceptions of key enablers and inhibitors in the development of their shared service. The SAT was structured around the four critical factors in the development of successful shared services, with communication a common theme throughout. These four factors are shown in Figure 3.1, below.

Figure 3.1: SAT Factors

The SAT contained a single question for each of the 24 sub-categories or building blocks shown above. The SAT was completed by 41 individual respondents, representing 32 separate projects (78% of all projects). Analysis of these responses has informed the report.

3.5 Scoring SystemThrough the interview process, a scoring system was developed to assess whether or not there was an emerging typology of the key factors under investigation. This built on, and simplifi ed, the strands in the SAT described above, focusing on Leadership, Culture and Process, and developing sub-categories arising from observed behaviours and responses from the case study interviews.The categories and behaviours are summarised in Figure 3.2 below, and the full scoring system is reproduced as Annex B to this report. The impact of these considerations is discussed in Section 4.

Figure 3.1: SAT Factors

Leadership & Governance

Culture & Climate Process Externalities

Shared vision & objectives

Readiness or openness to change

Partner Selection Tax

Co-operative and collegial

Staff motivation and commitment

Creating awareness Existing contracts

Key individuals Personalities and relationships

Change management Pensions and employment law

Universal ownership Organisational cultures Memorandum of understanding

Competition and procurement law

Willingness to "share" Appetite for risk Resources and timescales Systems compatibility and connectivity

Transparent decision making and clear roles and responsibilities

Trust Project management Sector environment



Figure 3.2: Scoring Categories

The scores allocated in the case studies are summarised in Section 5, below.

3.6 SummaryThe analysis in this report is therefore based on the synthesis of four separate information sources, summarised in Figure 3.3 below.

Figure 3.3: Method

Case Study Interviews

Scoring System

Documentation Review

Self-Assessment Tool

Figure 3.2: Scoring Categories

Category Sub-categories Description

Leadership Command & Control Strong, directive leadership, often coming from a single source

Transformational Inspirational and distributed

Collective/Functional Task oriented and co-operative

Process Defensive Reaction to external threat (e.g. competitors)

Transformative Using change to develop strategic response (e.g. to reposition the offer)

Cost-driven Using change to manage costs

Culture Institutional Built on organisational compatibilities (e.g. geography; function)

Personal Built on personal relationships (e.g. between principals)

Responsive Opportunist – built on developments



4. Key Considerations

4.1 Critical FactorsThe logic for sharing services appears self-evident. However, developing shared services is not without its challenges and as cannot be viewed as a quick fi x or easy solution. Neither will they be suitable for all services or processes within all partnership confi gurations in all circumstances. Therefore shared services should be considered as one of a suite of options for driving effi ciency and improvement within FE.

“�the�deeper�you�go�the�more�complex�and�diffi�cult�it�becomes”�– EIF funded project partner

The shared services development process alone presents a number of potential leadership, culture and process related issues, alongside external challenges to do with issues such as taxation and law which have been highlighted in some detail among other AoC publications (Eversheds, 2011; Mills & Reeves, 2011) Therefore despite the potential benefi ts summarised in Section 2, the evidence base and the experiences of EIF supported projects show that there are a number of challenges and barriers that partners need to be aware of and take steps to address, if collaboration and shared services are to prove successful. These challenges are numerous and can relate to organisational structures, processes and cultures, logistical and external demands as well as personalities and relationships. Figure 4.1 below provides a summary overarching framework for understanding the key considerations associated with collaborative working and the delivery of shared services.

Figure 4.1: Key Considerations

These key considerations will be discussed in some detail below.

Process CultureCultureProcess

LeadershipLeadershipLeadership



4.2 LeadershipThe shared services agenda creates new and diverse challenges for FE leaders, at a time when they are simultaneously dealing with the challenges and pressures associated with reductions in funding streams. Additionally the ways in which leadership is structured or demonstrated within the development and delivery of shared services is a complex issue which has considerable implications for such activities.

“Leadership...is�about�coping�with�change” – Kotter (2001)

In order to ensure that leaders in the sector are able to respond to these challenges and leadership is both structured and exercised appropriately within shared services environments it is important to gain an understanding of what constitutes effective leadership in this context. There is no one single effective approach to leadership. It can, and is, exercised through a variety of means and has been conceptualised in numerous different and constantly evolving models. However, discussions of leadership largely locate these models on a spectrum ranging from traditional top-down command and control approaches to collective or distributed models of leadership. For the purposes of this research we will be focusing on the following three specifi c leadership models:

• Command and control or transactional leadership;• Transformational leadership; and• Collective or distributed leadership.

Figure 4.2, below outlines some of the core components of these three models. It should be noted that with the exception of ‘command and control’ the terms used for the categories below are by no means universal with various different terms used to describe what are widely accepted as relatively distinct models of leadership.

Figure 4.2: A Spectrum of Leadership Models

Sources: Govindji & Linley (2008); CEL/LSIS (2008); Burns (1978); LSIS (2010); Collinson & Collinson (2007).

• Focused on the power of senior leaders

• Relies on hierarchy • Assumes that work is

done because of reward and penalty structures

• Leadership is more participative, distributed and devolved

• Leaders shape organisational goals and inspire staff to achieve them

• Places an emphasis on the charismatic qualities of ‘leaders’

• Leadership embodied in a group of people rather than an individual

• Leadership as, dynamic and task oriented

• Leadership not restricted to specifi c organisations or structures

Collective/Distributed/FunctionalTransformationalCommand and Control



Each of the above models has their own advantages, disadvantages and challenges and it is important to acknowledge that no one model of leadership is appropriate or fully effective in 100% of circumstances. Here it is important to recognise the significance of the conditions in which leader-led relations and practices are occurring with interactions around the shared services agenda occurring within shifting contexts. Research conducted by Collinson & Collinson (2007) suggests that staff in FE prefer models based on consultation and distribution wherever possible, suggesting that collective or distributed leadership models are most appropriate for the sector. However, the same research discovered that despite a preference for these models, FE principals and other senior managers feel that they sometimes have to adopt more controlling and directive styles that are close to the command and control model. This points to the potential importance of what Collinson & Collinson (2007) term ‘blended leadership’:

“�an�approach�that�combines�specific�elements�of�traditional�‘top�down’,�hierarchical�leadership�with�more�contemporary�aspects�of�‘distributed�leadership‘”.�

‘Blended leadership’ can therefore be understood as harnessing the structure and strategic clarity of command and control approaches with the shared responsibility, empowerment and task oriented nature of distributed models. The concept of blended leadership in FE is supported by recent research by the Learning and Skills Improvement Service (2010):

“�during...challenging�circumstances...it�may�be�necessary�for�leaders�and�managers�to�adopt�a�style�that�blends�elements�from�different�models”.�

Our research with a sample of EIF supported projects has shown that shared services projects are likely to involve a range of complex relationships and developments within and across each of the organisations or institutions involved. Successfully delivering such projects therefore requires leaders to be willing and able to operate within a devolved and collective leadership environment rather than through direct authority. This is especially the case in partnership working, since each college is autonomous, and any change requires agreement from the leadership teams in each organisation. The tendency, exhibited in four of the case studies, for some partners to ‘wait and see’ before commitment points to the scale of this challenge.Therefore the model of leadership that is variously labelled as ‘collective’, ‘distributed’ or ‘functional’ is paramount here, as this views leadership as action centred and task oriented through a set of behaviours and processes that help a group perform their task or reach their goal rather than leadership as being related to a specific person or role. By emphasising team working and communication alongside a shared sense of purpose, responsibility and achievement, our research to date suggests that distributed approaches to leadership are fundamental to the successful delivery of change both within and across organisations. Indeed, stakeholder consultations suggest that such a people and task centred approach often increases in importance when dealing with organisational change. This is particularly the case when the pressures of such change begin to impact on staff. Open communication, trust and a sense of empowerment are key here and these are integral attributes and outcomes of processes led in a distributed manner.



However, it is important to recognise that ‘leaders’ may often be required to drive through change and champion the shared services agenda against some resistance among staff, with one project leader suggesting that partners had to already be “lean” before committing themselves to further change. In such circumstances some of the characteristics of the ‘command and control’ leadership model are desirable. However, leaders operating a purely command and control approach to leadership may be resistant to the shared services agenda, viewing the development of any such services as a loss of sovereignty, although it could alternatively be seen as a means of widening influence. It is clear, however, that there is a need for clear direction of shared services projects.

“�commitment�from�the�‘top’�is�necessary�to�drive�the�[shared�services]�project�forward” – EIF supported project partner

It is important to recognise that collaboration can neither operate in a vacuum or be imposed, as it requires the full support, buy-in and commitment of all members. Evidence from EIF supported projects shows that for this reason, projects with larger numbers of partners (5-8) take longer to develop than those with only two, and are more likely to experience partner drop-out. Representatives of organisations involved in EIF supported projects emphasised the importance of leadership buy-in for the successful development of shared services. Where this is lacking shared services projects are destined to fail. This requires all partners to take an active role in the leadership process, which in turn requires organisational leaders who are willing and able to operate in a collective or functional leadership environment. For some FE leaders this may be challenging, with the experiences of the EIF projects suggesting that some leaders may equate their participation in such an environment through the development of a shared service as in some way constituting a loss of sovereignty or organisational independence. Clearly this represents a considerable challenge for the sector. In governance terms this generates a requirement to ensure that clear and equitable governance arrangements are in place within shared services partnerships to ensure that transparent decision making is embedded within the development process. Evidence from across EIF supported projects suggest that such approaches are largely commonplace, although there are some exceptions.While all leaders need to take an active role in the leadership of the shared services development process many consultees emphasised the need for a specific ‘champion’ or champions to drive the project. In particular consultees felt it was important to recognise that those charged with developing and delivering shared services are doing so while simultaneously delivering their “day�jobs”.

“�Somebody�really�needs�to�drive�the�project�forward.�Without�a�driving�force,�projects�will�fail�as�we�all�lead�very�busy�and�complicated�lives�with�changing�agendas”� – EIF supported project partner

Often this driving force comes from the lead institution with a number of the partners consulted speaking highly of the role they play. For example, one consultee spoke highly of their lead institution in terms of the “very�strong�and�charismatic�leadership...of�people�with�a�long�term�interest�in�shared�services”. However, in at least one case it was proposed that there was a lack of leadership among partners with an externally appointed consultant effectively acting as the driving force for that particular project:



“�There�is�a�slight�reliance�on�external�support,�and�sometimes�the�ownership�rests�more�with�external�advisors�than�college�staff”.�

This highlights the importance of active leadership by college leadership teams throughout the shared services development process, as while the external project manager can manage a process, they do not have the authority to deliver the actual shift within individual colleges. In another of EIF supported projects it was proposed that engagement and the cascading of information between operational staff charged with the practicalities and intricacies involved in translating an overarching shared vision into something tangible and the principals and governors of the participating colleges has been insufficient. As a consequence there is a suggestion that these leaders are not fully aware of the precise nature and details of the proposed shared service evolving out of this project. These examples highlight the significance of communication and capacity. In many cases smaller colleges and private sector providers face challenges in providing the leadership necessary to drive shared services due to their leanness as organisations and the subsequent restrictions on their ability to allocate resources and time to additional activities. As a consequence a number of these smaller organisations have been unable to play as active a role in this process as they have desired.

“�Leadership�is�split�where�appropriate,�however�the�smaller�colleges�in�the�project�do�not�have�sufficient�resources�to�commit�to�taking�up�leadership�roles”� – EIF supported project partner

The role of Governors/members of corporations is an important consideration here with approaches to engaging these groups differing relatively significantly among the EIF projects. For example, one consultee described the involvement of governors as follows:

“�A�shared�vision�was�developed�by�the�Principals�of�the�partnership�in�agreement�with�Chairs�of�Corporations.�Documents�were�discussed�during�development�at�Corporation�meetings�–�both�committee�and�full�corporation�and�an�event�was�held�to�bring�together�all�Principals�and�Chairs�of�Corporations�together�and�to�agree�a�common�way�forward.�This�was�followed�by�a�Leadership�and�Management�conference�for�senior�and�other�management�within�colleges,�bringing�together�some�40�plus�staff”

Another project with a number of partners has put significant resources into bringing Governors together, with three joint meetings over the initial development of activities, in order to ensure understanding and commitment. In one case, the Principal had to help pace an enthusiastic governor’s group, who wanted to move the project forward more quickly than the tempo for change within the institution, or the stage of development of the project, would allow. By contrast another consultee stated that the Governors of the colleges involved in their shared services projects have not been actively engaged by those leading the process and as such “they�[the�governors]�do�not�know�what’s�going�on”, casting doubt over whether any transformational change could actually be achieved and presenting significant challenges to proposed implementation timescales. Clearly this has significant implications for the successful development of shared services as any change will require at the very least, Governor consent, and ideally, active commitment.



Figure 4.3 below summarises the primary barriers and enablers identifi ed in relation to leadership within projects.

Figure 4.3: Leadership – Barriers and Enablers

4.3 Culture“�Culture�involves�both�the�explicit�way�of�working�–�the�formal�systems�and�processes�in�place�and�how�they�operate,�and�the�tacit�level�of�operation�–�the�informal�and�semi-formal�networks�and�other�activities�that�people�employ�to�get�things�done�and�by-pass,�subvert�or�seek�to�infl�uence�the�more�formal�processes”�– JISC (2011)

While culture is often cited as a key challenge in the development of shared services (CIPD, 2010) and as a key issue in the college merger process (CEI, 2003) there is often a degree of opaqueness around what it is that the term is actually being used to encapsulate. Indeed some question as to whether any organisation can claim to have a distinct and integrated pattern of shared beliefs or behaviours (Martins, 2002). However, there is a considerable body of support for the idea that asserts that culture both exists and that its management and direction is an integral part of the development of successful organisations and partnerships (Peters and Waterman, 1982; CIPD, 2010). Indeed consultations with partners involved in the delivery of EIF supported projects used the term often when discussing the enablers and barriers encountered within their project. In this context the term ‘culture’ is essentially used to describe the environment or context in which shared services are being developed. It therefore involves both the formal ways of working through the operation of an organisations specifi c systems and processes as well as more informal or unstated ways of working through networks and activities that are utilised in order to achieve objective in a manner which may circumvent or infl uence the formal processes in place. In this sense culture can be permeated through a variety of means, including:

• The ethos and philosophy of the College;• The mission statement;• The criteria for evaluating and rewarding performance;• The approach to change which is adopted;

Barriers Enablers

Abrogating control to external consultantsPressures on management timeLarge number of partnersLack of commitment from all partners

Personal relationships between key playersClear leadership role (“champion”)Collective leadership/collaborative working with shared valuesExternal support (but not ownership)Active Governor involvementGood communications channels



• The way in which leaders act; and• The informal history of the College (JISC, 2011).

Essentially culture is therefore about the development of shared narratives and processes. Given the multiple drivers and determinants of an organisation’s culture it is important to recognise that there is no one generic culture across the FE sector, with different organisations having different cultures. Clearly leaders have a central role to play in nature of an organisations culture, which in turn impacts upon the ways in which it engages with the shared services agenda. It is this which makes organisational culture particularly signifi cant, playing an integral role in determining how partners operate within a shared services environment and in turn the ways in which those shared services develop or otherwise. Therefore in the context of exploring, developing and implementing shared services it is important to consider the culture within a partnership as well as that of the organisations the partnership is comprised of. Within partnerships relationships are essential, effectively forming one of the key variables which determine the development of and outcome of the partnership process.

“�we�have�a�shared�educational�ethos�and�are�looking�to�drive�institutions�in�similar�directions”�– EIF supported project partner

Figure 4.4 below highlights some of the key elements of organisational and partnership culture within a shared services context.

Figure 4.4: Culture – Key Considerations

Organisational culture • Ethos • Mission, ambitions and intentions• Enthusiasm for collaboration• Commitment to change• Staff motivation and commitment

to organisational agendas

Partnership Culture• Partner history and relationships• Personal history and relationships• Compatability of organisational cultures• Trust

The experiences of EIF supported projects have illustrated that an organisations ethos, ambitions and commitment to change are key determinants in its willingness and commitment to the sharing of services, with those Colleges that are committed to continuous improvement and look to innovation as a principal driver of this process, the most likely to be open to sharing. Where there is a lack of compatibility here this creates challenges for the partners involved, as highlighted by a representative from an EIF supported project:



“�There�are�differences�in�the�organisational�cultures�of�the�three�colleges�in�my�judgement.�These,�in�part,�stem�from�their�recent�different�experiences�of�inspection�where�one�of�the�colleges�failed�its�Ofsted�inspection.�This�led�to...�change�in�[leadership�and]�culture�of�the�organisation�which�arguably�was�transformational,�leading�to�a�very�good�recent�inspection.�The�other�two�colleges�haven’t�experienced�these�major�changes�and�there�is�perhaps�less...�transformational�zeal�[in�these]�colleges.�”

This highlights both the important role leaders play in determining the culture and subsequent direction of travel of their organisation and the significance of the current circumstances or position of the institutions involved. Here it is important to recognise that partners enter collaborative relationships from a range of different starting points, an issue which often has clear implications for the development and outcomes of the partnership. The experiences of EIF supported projects reveal a number of learning points and issues for consideration around this issue. For many EIF supported projects a history of collaboration between partners has been a strong determinant of more transformational shared services proposals. This in turn highlights the significance of a ‘journey of collaboration’ between partners and the strength in developing shared services through a process of evolution rather than revolution. For example one project partner identified a “history of working together and a shared ethos and culture” as a key enabler for their project. The experiences of all projects have highlighted the importance of lead times in building relationships and a shared direction of travel. A number of projects should be seen as having evolved as part of a long term process of collaboration between partners. Indeed where partners have lacked a history of collaboration the shared services agenda is often being taken forward in a phased approach in which service integration and sharing will be explored and implemented in a gradual manner in order to build mutual confidence in the approach. That is not to say that a lack of previous collaboration is an insurmountable obstacle. In fact a number of consultees outlined the positives of such an approach:

“�Some�colleges�in�the�group�had�not�worked�together�before�and�so�had�the�opportunity�to�learn�from�partners�that�they�perhaps�wouldn’t�have�considered�working�with�previously.�”

However, even where there is a history of collaboration the ‘clash of cultures’ can be seen as detrimental to progress with a project partner involved in one such project suggesting that:

“the�wide�disparity�in�culture�between�the�six�partners�has�been�a�barrier�to�progress”

By contrast collaboration between partners with differing cultures has been seen as a positive outcome for a number of project partners with one consultee stating that:

“�bringing�together�public�and�private�organisations,�has�been�a�major�positive�feature�of�the�[shared�services]�project”

Indeed knowledge and even culture exchange was seen as a positive outcome of the shared services process by a number of partners:

“the�opportunity�to�learn�from�your�peers�is�vast”



“�collaboration�can�potentially�make�colleges�a�bit�more�like�private�providers�enhancing�their�commercial�edge�and�private�providers�a�bit�more�like�colleges�by�enhancing�their�social�responsibility�and�commitment�to�their�locality”

In recognition of the potential positives to arise as a result of the cross-fertilisation of different cultures some projects actually actively sought to bring together a diverse group of partners with differing organisational cultures within their shared services project:

“�[bringing�together�different�cultures]�was�something�that�the�partners�were�keen�to�develop�and�the�reason�why�the�partnership�was�made�up�of�the�various�sectors�of�the�further�education�sector...in�order�to�anticipate�the�needs,�differences�and�requirements�of�each�of�the�different�organisations.�This�has�also�enabled�other�spin�off�partnership�working�as�the�different�organisations�began�to�work�together�on�this�particular�shared�services�project”

History between partners is one of a range of factors that determine the compatibility of partners. Issues relating to the increased emphasis on markets and competition within the sector can have a significant impact on organisations openness to collaboration and the relationships and levels of trust between specific organisations. The experiences of EIF supported projects reveal that market forces and issues relating to competition are an important issue within the shared services context and should not be underplayed. For example, one partner cited specific concerns over sharing services with a college they see as a “direct competitor”, while another identified competition as a “significant�risk” that “has to be addressed�overtly”. Indeed a partner college from another project highlighted the importance of a lack of competition between partners in driving their shared services project forward:

“�The�colleges�involved�in�the�project�are�not�competitors�which�has�helped�the�development�of�supportive�relationships.�”

However, while there is some evidence of a reluctance to share due to competition it is by no means the prevailing sentiment in the sector, with EIF projects also revealing an appreciation that collaboration through shared services can also serve to enhance the competitiveness of colleges and strengthen their position in the marketplace. For example, one particular EIF project is focused on bringing work based learning providers together to enable them to bid for and manage larger, more complex projects in a collaborative manner with an aim to:

• Drive growth;• Broaden the provision offered in the area; and• Increase knowledge and expertise across all partner organisations.

In another project, it is clear that the project is also seen as a direct response to competing colleges around the project partners, with an explicit acknowledgement of the need to unite to compete.Issues related to concerns over competition and a history of collaboration between partners are closely allied to the trust agenda. All consultees agree that a culture of trust among partners is fundamental to the successful exploration and development of shared services.



“�It’s�about�trust,�you�have�to�be�trusted.�It�takes�time�and�you�need�to�live�it�as�well�as�say�it”�–�EIF supported project partner

“�[trust]�has�to�be�demonstrated�on�an�ongoing�basis”�–�EIF supported project partner

Smaller organisations can be particularly susceptible to a lack of trust when working with larger colleges due to a fear of shared services being a precursor to merger or takeover. Additionally the area of service being shared also has significant implications for trust levels among partners, as highlighted by one consultee from an EIF supported project:

“�[trust�is]�an�absolutely�essential�element�–�particularly�where�the�sharing�of�deep�operational�level�performance�data�is�to�take�place.�Colleges�must�have�trust�in�each� other�and�not�feel�that�information�is�going�to�be�used�to�market�one�college�over�another.�Trust�and�confidence�in�each�other�are�absolute�key�elements”.

Consequently effective communication, transparency and clarity of purpose and intentions are essential to the successful development of shared services. Indeed, the development of these relationships within the context of the programme has led in at least one case to further examples of bilateral collaboration between partners. This requires both upfront investment in developing relationships and an ongoing commitment to demonstrating trust. One college leader highlighted the fact that levels of trust are fluid within any partnership and as such requires continuous attention:

“�[trust]�has�been�strongly�tested�at�times�however�the�early�investment�in�building�strong�relationships�and�trust�between�principals�has�meant�there�was�sufficient�trust�‘in�the�bank’�for�when�the�bigger�challenges�emerged.�”

The above quote also serves to highlight the potential significance of personal relationships within the collaborative working environment. While shared services are based on the principle of organisational collaboration it is important to recognise that individuals are charged with the responsibility of developing and implementing these services. Consequently individual agency and the impact of personal relationships must be considered.

“�Effective�collaboration�is�first�and�foremost�a�human�and�political�challenge”� – CIPFA (2010)

However, while the presence of strong relationships between leaders can be a positive within this context it is important that projects and collaborative relationships are not based entirely on this. For example, existing institutional college networks play a strong part in building trust, as does commonality of focus, for example in land based or 6th Form colleges.Directing change through existing cultures while simultaneously changing this culture should it pose a challenge or threat to the development of shared services requires effective leadership. This section has illustrated that with cultural and human factors to take into consideration the development of shared services is by no means simply a technical issue, particularly with regard to the early stages. Therefore this requires successful leaders to have social and political skills and awareness and an ability to anticipate and manage sensitivities alongside an ability to operate within a collective leadership environment and an ability to secure support and commitment outside of hierarchical relationships in order to reach consensus.



Figure 4.5 below summarises the primary barriers and enablers identifi ed in relation to culture within projects.

Figure 4.5: Culture – Barriers and Enablers

4.4 Process The point of the programme is to encourage positive change through sharing services. While leadership and culture underlie the ways in which the tasks are addressed, the processes involved are subject to a range of other factors, not the least of which is organisational capacity. A signifi cant factor impacting on the processes involved was the timescale allowed for project development and implementation. In many cases, the proposed projects were about deep seated shifts in practice across complex functions, and required involvement across a range of roles and functions, many of which, like corporation meetings, have their own timescales. This has meant that a number of projects are still at a very early development stage, making it diffi cult to assess the extent to which any service or effi ciency gains will be achieved.

“�This�is�a�strategic�initiative�–�early�wins�are�likely�to�take�2�years�not�the�three�months�that�was�expected.�”�– EIF supported project partner

While it is understood that funding programmes such as EIF are driven by external considerations, not least by the ultimate funder requirements, this factor points to a need for ongoing monitoring of the programme in order to assess the ultimate benefi ts. Evaluation at this stage is very much of a work in progress, with the outputs from many projects being the identifi cation of potential ways forward, rather than immediate implementation. In at least two of the case studies, where effi ciency savings have been identifi ed, it has been through the creation of shared senior management posts between colleges, and it could be suggested that these arise from seizing the opportunity to fi ll vacancies in an effective manner, rather than being directly attributable to the programme, although participation may be an enabling factor.

Figure 4.5: Culture – Barriers and Enablers

Barriers Enablers

Perceived loss of controlCompetitionEntrenched management systemsDifferent institutional traditions

Good communications channelsGeographical or functional similaritiesInstitutional and personal trustShared history of collaborationCommon ethos, interests and ambitionsShared learning



The timescale also impacts on the resources required. In one case, a participant reported that they felt:

“�Rushed�to�implement�project�under�terms�of�funds�from�outset.�Resources�requirements�underestimated�….�Could�have�done�with�more�resources�to�implement�shared�procurement�to�establish�trust�from�colleges”

As within any funding programme, externally imposed deadlines can conflict with internal processes and the evolving requirements of the project.As the discussion over leadership and culture has shown, the very act of partnership creates issues within itself. The case study partnerships vary widely in size and geographical proximity, from a project that essentially involves one college, to another involving eight. The larger the partnership, the more agendas have to be taken into account. This is especially the case where a project has been simply overlaid on an existing relationship. In the words of one participant:

“�Membership�was�decided�amongst�Principals�within�an�existing�forum.�There�are�six�partners�and�this�is�widely�accepted�to�be�too�large�a�group.”

While there are also examples of effective partnerships involving a larger number of colleges, a view was expressed by some that 3-4 is around an optimal size, although it is clear that the closest working relationships are those where it is bilateral, as direct contact between two organisations is easier to manage. There are examples within the case studies of shared posts being developed between two colleges within a larger partnership, suggesting that project development can lead to different levels of participation.This has also been illustrated by drop out from partners who were included at application stage. This has especially been the case for private sector partners, for whom the VAT issues arising from collaboration with colleges proved particularly problematic, as well as wider cultural issues. In one case, the levels of commitment involved proved too great for the private sector partner, perhaps an indication of the speed by which the original application was put together. In other cases, however, there is evidence of initial care being put into the selection of partners and the creation of the partnership. Less commonly, there has been inclusion of additional partners after project start, although this has been actively resisted in some cases until the projects fully develop.

“�Prior�to�the�launch�of�the�project,�the�group�supplied�a�great�deal�of�data�and�research�in�order�to�establish�their�suitability�for�being�part�of�the�project.�All�partners�were�of�a�similar�size,�with�similar�challenges�and�that�contributed�positively�to�the�dynamic�of�the�project�group.”�– EIF supported project partner

All projects stress the need for commonality across projects. Earlier in this report, the concerns of smaller colleges in relationships with larger colleges were highlighted. However, this works two ways. In the words of one participant:



“�It�is�also�most�likely�that�the�successes�from�collaboration�and�joint�working�will�be�realised�where�the�sharing�colleges�are�of�similar�‘size’.�This�similar�‘size’�aspect�of�collaboration�balances�the�perceived�gains�that�the�colleges�will�each�achieve�and�encourages�the�colleges�to�work�together�more�closely.�Were�one�college�to�significantly�smaller�than�a�sharing�partner�it�is�likely�that�the�benefits�of�joint�working�and�sharing�services�for�the�smaller�college�would�be�significantly�greater�than�those�likely�to�be�seen�by�the�larger�college.�The�larger�college,�though,�is�likely�to�have�contributed�many�of�the�tools�and�techniques�(best�practice,�volume�processing,�professional�specialists)�to�achieve�those�gains,�and�thus�perceived�benefits�are�less�well�‘shared’.”

Geographical proximity is significant for some projects, but not all, with some specifically choosing more distant partners to counter issues of competition. Where geography is a prime factor, this is generally built on existing partnership arrangements, in a number of cases with sub-groups emerging from larger regional entities to take the project forward. This appears to be strengthened where there is a commonality of function, for example between community-based 6th form colleges.In the majority of cases, the project has been established around a Memorandum of Understanding (MoU) between participants. These documents vary from generalised commitments to collaborate, to detailed agreement over representation at meetings and time commitments required. However, some felt that the partnership had yet to reach this point, and others preferred to use more formal project management techniques such as Prince2:

“�An�official�MoU�was�not�established�from�the�outset.�Instead,�a�project�plan�with�a�risk�register,�roles�and�responsibilities,�timelines�and�expectations�was�produced�that�was�updated�throughout�the�life�of�the�project.”

Others adopted a more informal approach, but recognised the ultimate need for a formal arrangement:

“�No�formal�MoU�exists.�The�organisations�exchanged�vision�papers�and�a�proposal�for�merger�was�put�forward,�though�deferred.�In�hindsight,�the�MoU�would�have�been�a�useful�document�but�will�be�created�as�and�when�we�move�to�form�a�Joint�Steering�Group.”

Clearly, all the partnerships involved in the programme are evolving over time, with changes of emphasis developing with experience. The differing scope of the projects, ranging from a tight focus over one service aspect, such as HR, to major organisational and transformational change within institutions, also means that the impacts of participation will be uneven. However, the process of participation enabled most colleges to take a critical look at aspects of their activity, an aspect further discussed in the final section of this report.

“�This�project�was�largely�a�feasibility�study�rather�than�an�implementation�project.�The�change�management�aspect[s]�that�came�out�of�the�project�were�internal�changes�that�the�partner�colleges�recognise�need�to�take�place�as�a�result�of�sharing�best�practice�with�the�other�partner�colleges.�The�project�has�supported�those�colleges�in�how�they�can�effect�those�changes�internally�going�forward.”�–�EIF supported project partner



Projects have taken differing approaches over the use of external support. In some cases, an experienced FE practitioner, either operating from a college or as an external consultant, has taken the project manager lead, providing an additional resource to the colleges’ management teams. In at least one case, the partnership explicitly stated that they “didn’t�want�consultants�involved”, preferring to use a senior internal appointment to drive the partnership forward. Others saw the consultant as an essential part of the team, with no “baggage” with any one college involved, and seen as an independent voice. This was particularly important in one case, where a benchmarking study was undertaken, highlighting issues with one of the partners. The principal of this college was able to take this analysis on board as coming from an independent source, rather than a secondee from one of the other partners. There were general concerns, however that the use of external consultants “exposed�some�issues�of�ownership”. A central part of the programme was seen as an opportunity to strengthen the capacity for change management and process engineering within participating colleges, although it was recognised that, especially within smaller colleges, management time is a precious commodity that needs to be carefully marshalled.

“�Change�capability�–�the�level�of�change�capability�and�capacity�in�the�colleges�is�VERY�LOW�–�this�needs�to�be�taken�into�account.�If�the�AoC�wanted�somewhere�to�provide�some�national�benefit�it�would�be�in�a�programme�to�build�this�capacity�and�capability�–�it�would�make�a�huge�difference!”�–�EIF supported project partner

The use of events to discuss the approaches, exchange experience and clarify roles and expectations was viewed as invaluable support by more than half the case studies, with one respondent stating that they thought that this type of support should be offered more widely to enhance capacity. A number of projects also became actively involved in “business tourism”, visiting other institutions to learn from others’ experience. Interestingly, however, there was limited evidence of exchange of views between other projects participating in the programme, apart from existing informal contacts.One of the most problematic considerations was the extent to which the project permeated through all the staff in participating colleges. A number saw this as a “work in progress” over which there was still “much�to�do”. Others put dissemination and involvement at the heart of the project, while there was concern over how much to share at an early stage when decisions were yet to be made. In the words of one participant, “there�is�only�so�much�uncertainty�that�an�organisation�can�withstand.”To a major extent, these concerns are understandable given that many changes that FE faces. While the majority of projects have embraced the programme as an opportunity for supported change management, suspicions remain:

“�Agendas�such�as�this�need�to�be�driven�in�the�‘good�times’.�Trying�to�commence�this�project�during�funding�cuts,�redundancies�etc�has�had�a�serious�negative�effect�by�increasing�suspicion�amongst�partners�and�also�switching�focus�to�an�internal�one.”

Overall, apart from externalities, process was the category within the SAT where there was a higher propensity to disagree with positive statements. While the majority of those completing SATs were satisfied with the processes involved, a significant minority saw a need for greater staff involvement and more formal understanding between partners.



Figure 4.6 below shows where those disagreeing with SAT Process statements exceed 10%.

Figure 4.6: SAT Process Responses

This view is strengthened by the average scores given over process to the case study sample. It suggests overall:

• An internal focus;• A shift in small to medium sized services and functions; and• Cost savings as a signifi cant factor.

Clearly, this average over a small sample disguises signifi cant variation across the group, but is does suggest that the processes adopted in project implementation could benefi t from further guidance and transfer of experience.Figure 4.7 below summarises the primary barriers and enablers identifi ed in relation to process within projects.

Figure 4.7: Process – Barriers and Enablers

Figure 4.6: SAT Process Responses

SAT Statement % Disagrees/Strongly Disagrees

Partners have sought to create awareness of the need for the shared service among their staff at all levels

27%

A structured approach to change management has been adopted and implemented from the outset of this project

14%

A memorandum of understanding between all partners was established at an early stage

27%

Timescales and resources available in terms of time, skills and money are suffi cient to ensure the successful delivery of this shared service

12%

Barriers Enablers

Lack of resource/timeInsuffi cient planningUncertainties among staff over futureUnclear objectivesLack of observable outcomesFocus on administrative obstacles (e.g. VAT)

Allocating college time and resource in addition to EIF fundsClear and transparent agreement between partnersTrust between partnersCommunicating the objective to all staffLearning from othersClarifying costs and benefi tsCelebrating success



5.1 TypologyFigure 5.1 below shows the scoring allocated to the case study projects. The rationale for each score is summarised in Annex B. The scoring system takes fi ve different factors within the different categories included in Leadership, Process and Culture, and allocates a score. Broadly, the higher the score, the ‘better’ it fi ts the category, although there is scope for interpretation on whether the highest score is most desirable, for example where cost is the sole project consideration.

Figure 5.1: Case Study Scores

The scores for the each of the case study colleges are illustrated in graphical format in Annex C. Clearly, every college and partnership is different, and each illustrates different tendencies across the nine scoring points. However, the programme is focused on delivering transformative change, and it is this score that is most relevant to assessment of programme impact.Taking this as a starting point, the fi gures show:

• Three projects involved in low level change (case studies 4, 11, & 12);• Four in fundamental change of small/medium sized functions (case studies 2, 6, 7, & 8);• Four in a fundamental shift of front/back offi ce functions (case studies 1, 3, 5, & 10); and• One merger (case study 9).

5. Types

Figure 5.1: Case Study Scores

Key Factors Case Studies

1 2 3 4 5 6 7 8 9 10 11 12 Av

Leadership Command & Control 4 4 4 1 4 5 5 4 4 5 3 2 4

Transformational 5 4 3 2 5 5 4 5 5 5 2 3 4

Collective/Functional 5 4 2 2 5 3 3 4 4 4 4 3 4

Process Proactive or Reactive 2 2 2 4 1 1 4 3 5 1 2 2 2

Transformative 4 3 4 2 4 3 3 3 5 4 2 2 3

Cost-driven 4 5 4 5 1 1 3 4 3 3 4 5 4

Culture Institutional 1 5 5 2 5 5 4 5 2 3 3 1 3

Personal 2 4 4 5 4 4 4 3 4 5 1 2 4

Responsive 3 3 3 5 3 2 5 5 1 2 4 4 3



As would be expected in a programme intended to support transformative change within college practice, none of the sample projects exhibit no change.If one ignores the merger as an outrider arising from specifi c circumstances, there are therefore three types of change exhibited within the case studies, two of which lead to fundamental change in college practice.Figure 5.2, below, shows the relationships of these three types to other factors within the scoring system.

Figure 5.2: Change and other factors

While there is no absolute correlation between the level of change and other factors, and also acknowledging the small size of the sample and the qualitative nature of the scoring, the analysis suggests that:Projects showing fundamental change:

• all have strong leadership with collective participation;• are slightly more likely to have an internal focus;• have costs as a signifi cant factor, although two are entirely service driven;• tend to have strong institutional linkages;• have some basis in pre-existing personal relationships; and• exhibit strong additionality in terms of bringing existing plans forward.

Command & Control

Transform Collective/ Functional

Pro/Re-active

Cost-driven

Inst. Personal Responsive

Low level change to delivery of small scale services/functions

1 2 2 4 5 2 5 5

3 2 4 2 4 3 1 4

2 3 3 2 5 1 2 4

Fundamental shift in delivery/organisation of small to medium sized services/functions

4 4 4 2 5 5 4 3

5 5 3 1 1 5 4 2

5 4 3 4 3 4 4 5

4 5 4 3 4 5 3 5

Fundamental shift in front or back offi ce service delivery/organisation

4 5 5 2 4 1 2 3

4 3 2 2 4 5 4 3

4 5 5 1 1 5 4 3



Those with low level change:• Have less focused leadership;• Uncertain, or differing aims;• Tend to have an internal focus;• Have cost as their main priority;• Have limited pre-existing relationships; and• Are more likely to be funding-driven.

It is therefore possible to suggest an ‘ideal’, change driven, project as illustrating the tendencies shown in Figure 5.3, below.

Figure 5.3: Change-oriented project

In contrast, the ‘typical’ project showing low-level change is more likely to be displayed as Figure 5.4.

Command & Control

Transformational

Collective/Functional

Proactive or Re-active

Cost-driven

Institutional

Personal

Responsive

5

01

2

3

4



Figure 5.4: Low level change project

This suggests that the key differences on which successful change are built are:

• Strong, integrated leadership;• Good institutional linkages; and • An approach in which cost and savings are only one factor.

5.2 Other FactorsIn addition to the factors incorporated in the scoring system, three separate motivations for sharing were identified among the change-oriented case studies. These are:

• Sharing for efficiency;• Sharing for growth/improvement; and• Sharing for resilience.

5.2.1 Efficiency

The current funding environment within FE has a clear impact on expectations over innovation for efficiency. However, as one participant pointed out, ”most�colleges�are�already�quite�‘lean’”, and generating additional savings is a challenging task. In addition, the projected savings from projects, while significant, are generally dwarfed by the recent rounds of cutbacks within the sector.Having said this, the programme has clearly acted as a spur to review activities in many of the projects. Interestingly, the benchmarking process that many projects went through identified early stage changes for some participants, directing some participants towards more efficient solutions already applied by colleagues.

Command & Control

Transformational


Cost-driven

Institutional

Personal

Responsive

Proactive or Re-active

5

01

2

3

4



Also, the identification of benefits as projects developed helped to increase the direction of change. For example, one participant noted:

“�We�started�to�transition�from�a�research�project�to�an�implementation�project�once�we�started�to�see�the�size�of�the�prize.�Ideally,�the�direction�of�travel�would�have�been�clear�from�the�outset,�but�at�that�point�we�had�not�built�consensus�on�where�we�were�heading.”�

Against this needs to be set an acknowledgement that most projects are still at a very early stage, and will take some time to implement, especially where systems investment is an issue. The projects exhibiting early gains are generally those that have established joint posts.

5.2.2 Growth/Improvement

Cost and efficiency is not the only motivator for programme participation. In some cases, the programme is being used to reposition colleges, and in one instance, leading to a merger. For example, one project arose out of a college recognising a need to adapt in a new environment, and had already commissioned independent consultants to identify potential collaborators. This approach was used as the basis for partnership development between colleges that had previously seen each other as competitors, but who now share posts.In another, the funding has been used to research the potential for fundamental change in internal organisational practice that has far-reaching implications for the development of FE services, in terms of ownership, contracting and delivery.

5.2.3 Resilience

Some colleges very explicitly identified competitor colleges, who were seen as a real threat to development. Collaborating with others was seen as a way of dealing with these threats and developing an offer that would enable the institutions to overcome external challenges, including funding shifts.This can lead to complex change management. In one instance, a college was simultaneously: moving to new premises; participating in a shared service project with two other colleges; and merging with a smaller college.Underpinning this was recognition that the organisational and funding context has made it necessary to find new solutions. In the words of one participant:

“�All�recognised�that�the�external�market�and�in�particular�the�arrival�of�Minimum�Contract�Values�from�the�SFA�requires�new�ways�of�thinking�and�working.”

5.3 SummaryThe experience of the project to date has highlighted some success factors to be taken into account in future activities of this type. In particular, it identifies some key behaviours and motivations that underpin effective joint working. Unsurprisingly, effective projects require good leadership and understanding of the direction of travel.



The factors that exhibit themselves in case study projects that are likely to manifest fundamental change are those that have strong, transformational leadership that is balanced by a collective approach to implementation. This is, in part, built on inter-personal and institutional relationships, where the project has developed from some pre-existing plans or ideas. The motivation for change comes from a combination of three factors: effi ciency; growth; and resilience; with effi ciency being most common, although those motivated by growth may exhibit the greatest transformational change. Seeking to be resilient is a common response to the many challenges facing the FE sector, but can, in some cases, be categorised as a solely defensive motivator, although as an outcome, it is clearly valuable.Figure 5.5, below, summarises the inter-relationship of these factors within change projects.

Figure 5.5: Motivators and characteristics of change projects

Change Project Characteristics• strong leadership with collective participation• costs balanced with service drivers• strong institutional linkages• basis in pre-existing relationships• strong additionality in terms of bringing existing

plans forward • some internal focus

Resilience

Shared Service

Growth/ Improvement

Motivators



6.1 OutcomesFigure 2.2 highlighted potential benefi ts arising from shared services, drawn from the literature. Evidence drawn from the case studies suggests that the benefi ts accruing, while spread over all those anticipated, are particularly concentrated in experience and knowledge, and in cost savings and joining up services. Figure 6.1 below shows the frequency of these anticipated benefi ts.

Figure 6.1: Benefi ts Exhibited in Case Studies

6.2 Critical Externalities As highlighted in Section 4.4, the highest concentration of disagreements with the positive statements within the SAT concerned externalities. While this study is focused on more nuanced issues around leadership, culture and process it is important to highlight these issues due to the degrees to which they remain either a barrier or a cause for concern among a number of Effi ciency Innovation Fund supported projects. Figure 6.2 over shows the proportion of respondents disagreeing with SAT statements related to externalities.

6. Outcomes and Lessons Learned

Benefi ts



More joined up services/functions

Increased capacity and benefi ts from scale

Case�Studies�showing�this�benefi�t

1,�2,�3,�4,�7,�9,�10,�11,�12 1,�2,�3,�5,�6,�7,�8,�9,�10,�12 5,�6,�8,�9




1,�3,�4,�5,�6,�7,�8,�9,�12 1,�3,�5,�7�,9,�10 5,�6,�9�




1,�3,�5,�9,�11 All All



Figure 6.2: SAT Externalities Responses

Clearly issues relating to taxation, and more specifi cally VAT, continue to be a concern, with more than six out of ten respondents highlighting this as a key barrier. Here, it must be recognised that revisions to existing legislation are highly unlikely in the short term and that HMRC will not make any decision regarding VAT exemption until sometime after recent consultation on the matter which closed on 20 September 2011. Guidance on issues of taxation and other legalities can be found via the AoC website: www.aoc.co.uk/en/policy-and-advice/aoc-procurement-team/shared-services/

6.3 Investment for ChangeIt is important to recognise that implementing the changes and processes required through the sharing of services requires upfront investment. Clearly the nature and levels of this investment will be dependent on the shared service being developed. However, required investments among the sample of Effi ciency Innovation Fund supported projects, includes investment in:

• ICT infrastructure, including systems, software and connectivity;• Training costs;• Legal costs, administrative fees and registration; and• Staffi ng costs for process involvement and redundancies.

The costs of these investments can be substantial with one project identifying anticipated upfront costs of c.£1.1 million for the purchasing of shared transactional fi nance, HR and payroll and MIS systems. While projected effi ciency savings are signifi cant for this project it is important to recognise that such costs represent a signifi cant investment by partners and is not without its risks as there is no guarantee that the savings projected will be realised by the proposed shared service.

SAT Statement % Disagrees/Strongly Disagrees

Issues related to taxation have been resolved in this project 61%

Issues relating to pensions and employment law have been resolved in this project

56%

Issues relating to competition and procurement law have been resolved in this project

36%

Issues relating to existing contracts have been resolved in this project 44%

Issues relating to systems compatibility and connectivity and data sharing have been resolved in this project

41%

Wider issues of the environment facing the sector have been resolved in this project

37%



6.4 AdditionalityAdditionality, namely whether the changes occurring would have happened without the support of the Efficiency and Improvement Fund and whether the Fund is replacing activities from elsewhere, is an important issue to consider in this context. A number of supported projects examined as part of this study exhibit an element of deadweight, since they were previously committed to the exploration of shared services with the partners involved in their project or had existing plans to move towards this. However, it is also the case that the resources made available through the Fund have enabled a substantial range of additional activities that have resulted in widening the scope of shared services exploration and accelerating this process considerably. For example, project representatives highlighted the positive impact of the Fund as follows:

“�[the�Fund�acted�as]�a�catalyst�that�enabled�us�to�bring�in�the�necessary�support...the�project�wouldn’t�have�happened�in�the�same�way�without�it”

“�[the�Fund]�provided�vital�additional�resources�and�capacity�to�enable�staff�to�have�the�time�and�space�to�really�explore�and�understand�shared�services�and�what�they�should�look�like�and�achieve�for�the�partnership”

“�a�pump�primer�that�accelerated�the�process�rather�than�being�an�actual�catalyst�for�it”

“�acted�as�a�catalyst�that�has�enabled�partners�to�explore�and�take�forward�a�number�of�their�medium�and�longer�term�ambitions�for�collaboration,�sooner�than�would�otherwise�have�been�possible”

Indeed those projects in which the Fund acted as a catalyst for accelerating the direction of travel among existing partnership are generally those proposing more integral change. By contrast a small number of projects did have these preconditions and were formulated in response to the funding being made available:

“interest�[in�shared�services]�was�spawned�by�the�offer�of�funding”

In such circumstances the partnerships involved are generally weaker and the changes and shared services being proposed relatively small in scale. The importance of these findings raises major issues for the future sustainability of the shared services approach should such pump priming funding not be available.Displacement is not an issue, since there are no directly comparable initiatives for the Fund to replace, and many of the activities undertaken are directly or partially attributable to programme inputs.It is therefore the case that the programme exhibits a significant level of additionality.



6.4 LearningThe experiences of the Effi ciency Innovation Fund supported projects reveal a number of key learning points for the sector that cut across leadership, process and culture. They draw on the experience both of wider consultation over the evaluation, and the specifi c information obtained through interviews with the case study projects.Success factors vary across the motivation for the project, although ultimate success is measured by achieving the objective set for the project. As these vary widely from investigation across a range of collaborative themes to fundamental organisational restructure, it is not possible to have a simple measure of success across even the case study projects, as all still have some way to go to come to full fruition, although there have been some quick wins and further benefi ts are anticipated.Analysis of the principal considerations in Section 4 has led to the identifi cation of key enablers for each category, which are summarised in Figure 6.3 below. These underpin the positive interventions observed in the course of this evaluation.

Figure 6.3: Enablers

Leadership• Personal relationships between

key players• Clear leadership role (‘champion’)• Collective leadership/Collaborative

working with shared values• External support (but not ownership)• Active Governor involvement• Good communications channels

Culture• Good communications channels• Geographical or functional

similarities• Institutional and personal trust• Shared history of collaboration• Common ethos, interests and

ambitions• Shared learning

Process• Allocating college time and resource

in addition to EIF funds• Clear and transparent agreement

between partners• Trust between partners• Communicating the objective to

all staff• Learning from others • Clarifying costs and benefi ts• Celebrating success



From this analysis flow a number of critical factors that impact on project success, focusing on:

• Open and continuous communication;• Preconditions and development time;• Timescale and resources; and• Unexpected outcomes.

These factors provide an indication of the central considerations for existing and proposed shared services projects, and are summarised in Figure 6.4 over, by:

• Theme;• Issue; • Factor addressed.

Annex D shows the key lessons logged by EIF supported project leads and reported to AoC. This excludes those referring to externalities such as VAT.





Between Leaders & Organisations: • To ensure clarity of purpose and ensure complete agreement on direction

of travel This is essential to ensuring successful and focused project development.

Where this is lacking projects have encountered mission drift and delayed progress which has at times resulted in partners disengaging from the process.

Leadership

• To ensure ongoing commitment Shared services rarely develop in a linear fashion and entirely as originally

envisaged. Organisational agendas and external pressures can result in a shift in focus of activity and can effect partner commitment. Therefore, it is essential that communication channels ensure complete transparency in terms of project development and partner commitment.

Process

• To maintain trust between partners A culture of trust is essential to any successful partnership and open and

continuous communication is essential to developing and maintaining such a culture. This should ensure that all partners both have, and feel that they have, an equal responsibility in project decision making structures as well as a complete understanding of progress and direction of travel. Where this is lacking projects are looking to implement a lower level of change than those in which it is present.

Culture

Within organisations:• To ensure leader and Governor buy-in and awareness of intentions and

direction of travel It is essential that any college representatives involved in a shared services

partnership maintain effective communication within their own organisation. Within some of the shared services projects there is evidence of a lack of ongoing communication with governors, resulting in their lacking an awareness of the precise direction of travel of the project being developed. Partners involved in these projects have voiced some concerns regarding the impact of this on project development and timescales when they progress to taking proposals through internal decision making processes.

Leadership

• To ensure staff participation and awareness of change The development of shared services requires change. Much of this change,

particularly within projects focused on effi ciency will impact on staff. The experiences of these projects show that such organisational change requires open communication, trust and a sense of empowerment to staff within the participating organisations.

Culture

• Requires consideration of organisational decision making procedures and timescales

Many shared services will require corporation consent prior to implementation. College corporations generally meet on a limited number of occasions throughout the year. In a number of cases project partners have suggested that the timings of these meetings have not been factored into planning and implementation timescales. In these instances this represents a barrier that will affect the ability of partners to commit to change and provide capital for the purchasing of resources required to facilitate the proposed sharing of services at the same time as their partners.

Process

Figure 6.4: Key Lessons





Preconditions:• Need for shared organisational ambitions and ethos The EIF projects have shown that where partners posses shared organisational

ambitions and ethos their strategic fi t as collaborators is greater than projects in which this is lacking. This is particularly relevant where partners are seeking to share for growth or resilience.

Culture

• Benefi ts of a history of collaboration among partners and an established direction of travel

While it is not essential for partners to have a history of collaboration, EIF projects have shown the benefi ts of such a history with those projects in which partners have a shared past generally exhibiting a commitment to greater levels of change in terms of the scale of their proposed shared services. Where such a history is lacking partners have encountered considerable challenges in agreeing their direction of travel.

Leadership

• Need to be aware of organisational starting points No to organisations are the same. Each college operates within a specifi c

geographical, culture and organisational context and has its own ways of working. Where partners have not recognised the presence of such diverse starting point projects have encountered diffi culties at early stages in their development.

Culture

• Concerns regarding independence and competition are considerable barriers

It is important to recognise the competitive environment in which colleges operate. In a number of cases partners perceived the development of a shared service as a threat to their sovereignty or organisational independence. This has been particularly challenging for smaller colleges involved in partnerships with larger organisations. In many of these cases these pressures have had an impact on the level of change proposed through shared services. The experiences of EIF supported projects reveal that market forces and issues relating to competition also remain an important issue within the shared services context and while by no means the prevailing sentiment in the sector it should not be underplayed.

Culture

• Careful consideration should be given to the number of partners involved There is some evidence of effective EIF projects involving a large number of

colleges it is important to recognise that the challenges involved in developing shared services rise exponentially with the number of partners involved.

Process

• Need for complete commitment and buy-in from partners Full participation and commitment is required by all partners. Where this

is lacking projects have encountered considerable diffi culties in continuing to drive their project forward. Among the EIF projects there is at least one example of where the lack of full commitment by all partners has led to one partner leaving the project due to frustration at a lack of ongoing progress.

Leadership

Continued...

Development:• Pre-bid information/induction and training to ensure partners are aware of

what they are signing up for Developing shared services requires a considerable amount of work both

within each partner organisation and collectively. In a small number of cases partners have suggested that they did not fully appreciate the level of time resource they would be required to input into the project. Indeed this has resulted in some partners withdrawing from their project.

Process





• Need to spend considerable time up front developing relationships, having open and honest communications and developing a shared vision

This report has illustrated the central role that people and relationships play in the shared services development process. Equally the experiences of the EIF projects has further emphasised the importance of ensuring considerable time is devoted to developing a shared vision through constructive discussion on what will, or will not, be shared. Where partners have not allocated suffi cient time to developing these relationships and a shared vision this has caused considerable challenges in the future.

Leadership

• Need to develop and maintain trust As mentioned above, the development of a culture of trust is essential to any

successful partnership. However, once earned it must also be maintained. Where this has not be addressed on an ongoing basis partnerships and the outcomes of the shared services development process have weakened.

Culture

• Establish rules, roles and responsibilities at an early stage The experiences of the EIF projects have shown the importance of establishing

transparent and democratic governance structures and a structured approach to project management and delivery from the outset. Where these have been absent projects have suffered from mission drift and inconsistent buy-in or participation from project partners.

Process


• The active involvement of smaller/leaner organisations has been effected by signifi cant capacity issues

A number of smaller partners involved in EIF projects have struggled to provide the time resources required to actively participate in driving their shared service project both at a partnership and an organisational level. In some instances this has resulted in these organisations struggling to meet partnership deadlines for internal process mapping activities and can result in partners withdrawing from the shared services development process. It is important for partners to be aware of this potential issue before embarking on this process.

Process

• Many partners experience capacity issues as staff are required to continue do their day jobs while simultaneously driving this forward

Smaller organisations are not the only partners that have experienced capacity issues. It is important to recognise that all staff members that are involved in the development process are simultaneously required to carry out their “day jobs”. In a number of cases this has proved challenging and the availability of EIF resources has been important here.

Process

• The investment required to share back offi ce functions can be considerable, particularly where ICT based solutions are central

In a number of cases the proposed shared service solution requires considerable upfront investment. Despite projected returns on such investments, this presents a notable challenge that may prevent some project implementing the scale of shared services that they hope to. The investment of such resources in the current funding climate is felt to be a particularly acute issue for a number of partners.

Process

Continued...

• Projects may underestimate resources required to implement shared services. What appears simple at a superfi cial level will involve numerous layers of complexity

This lesson builds on that identifi ed above, to incorporate the considerable amount of activity involved in the detailed design and implementation of the fi nal shared services solution. This requires considerable resources in times of time and capital and a number of projects have identifi ed this as an important lesson to share with others.

Leadership





• It takes time to explore, develop and implement shared services and show results

Shared services are not a quick fi x solution. A number of the EIF projects require considerable development and implementation time and investment. In addition the proposed benefi ts of these approaches will not be felt overnight with some projects requiring up to two years or more before partners begin to realise effi ciency savings or growth through their investment.

Process

Unexpected outcomes

• Developing shared services is a learning process for all involved with signifi cant contributions to personal and professional development

EIF project partners report knowledge transfer as an important unexpected outcome from their participation and AoC should recognise this as an important outcome for the programme. Even where projects do not result in the development of a shared service the partners involved possess the skills, capacity and understanding to enable them to explore the potential of such approaches with other partners and/or in other service areas.

Culture

• The process results in signifi cant knowledge transfer both within and across individuals and organisations

Participating colleges have implemented to their working processes and other areas of activity as a result of having learned from partners involved in their project. As with above this is an important outcome from the EIF programme.

Culture

• Stimulates a sense of strategic critical refl ection in participating organisations

The shared services development process stimulates a process of internal and collaborative refl ection among and between participating partner colleges. This is an important process for any organisation as it enables them to consider their relative strengths and weaknesses and their strategic aims, ambitions and approach. While important to any organisation, many do not often have the time or space to engage in this process and by providing this, the EIF programme has enhanced participating organisations understanding of their current location and future ambitions.

Culture

• Can lead to improved relationships with specifi c partners and generate spin-out collaborative activities

By generating and strengthening links between participating organisations EIF projects have resulted in developing spin-out collaborative activities among some colleges that had no previous history of collaboration. While these have been small in scale they can only serve to strengthen collaborative activity and may evolve into something larger over time.

Process



ReferencesAnderson (2007) Organisational Culture in English Further Education: Chimera or Substance. [online] Available at: http://wrap.warwick.ac.uk/1115/1/WRAP_THESIS_Anderson_2007.pdf

AoC (2011) Colleges and Shared Services – The Benefits and Barriers. [online] Available at: www.aoc.co.uk/en/policy-and-advice/aoc-procurement-team/shared-services/

Bland (2010) Shared Services: Further Education-Centric.

Burns, JM., (1978) Leadership.

CBI (2010) Shared Services in Local Government. [online] Available at: http://publicservices.cbi.org.uk/uploaded/SharedServices_Report_October_2010.pdf

CEL/LSIS (2008) Research Programme 2066-08. HE Research Reports

Centre for Education and Industry (CEI), University of Warwick (2003) An Evaluation of Mergers in the Further Education Sector: 1996-2000. [online] Available at: www.dius.gov.uk/assets/biscore/corporate/migratedd/publications/r/rr459.pdf

CIPFA (2010) Sharing the Gain: Collaboration for Cost-Effectiveness.

Collinson, M., & Collinson, D., (2007) Research Overview: Effective Leader-led Relations.

Collinson, M., & Collinson, D., (2007) Blended Leadership: A Case Study.

DeLobbe, N., Haccoun R.R., and Vanderberghe, C., (2004) Measuring Core Dimensions of Organizational Culture.

Govindji, R., and Linley, A., (2008) Exploring the Leadership Strengths of Inspirational Leaders in Further Education,

Eversheds (2011) Eversheds Reports on Shared Services VAT, Employment, Pensions and Procurement Issues.

JISC (2008) Shared Services in UK Further and Higher Education. [online] Available at: www.jiscinfonet.ac.uk/infokits/shared-services/shared-services-briefing-paper.pdf

JISC (2011) Culture. [online] Available at: www.jiscinfonet.ac.uk/infokits/change-management/culture/index_html

Kotter, J., (2001) ‘What�Leaders�Really�Do’ in Harvard Business Review, December 2001.

Bibliography



KPMG (2006) Shared Services in the Higher Education Sector.

LSIS (2010) Leading and Managing in Recession: Same or Different Skills?.

Martin (2002) Organizational Culture: Mapping the Terrain.

Mills & Reeves (2011) FE Shared Services.

NAO (2007) Improving Corporate Functions Using Shared Services. [online] Available at: www.nao.org.uk/publications/0708/improving_corporate_functions.aspx

Peters, T., and Waterman, R., (1982) In Search of Excellence.

PwC Public Sector Research Centre (2009) Freeing the Front Line: Where next for Corporate Shared Services in the Public Sector.

Scottish Government (2011) Shared Services. [online] Available at: www.scotland.gov.uk/Topics/Government/PublicServiceReform/efficientgovernment/SharedServices



Shared Services: Inhibitors and Enablers Self-Assessment Tool

We want to learn more about your experiences in developing a shared service.

Centrifuge Consulting has been appointed to undertake an evaluation of Association of Colleges (AoC) supported Shared Services projects with the aim of identifying wider lessons about the nature of college collaboration in terms culture, leadership and governance.As part of this process we will be focusing on a sample of projects. Your project has been selected among this sample and this self-assessment tool (SAT) will enable us to gather some initial insight into your perceptions of a number of key areas in the development of your shared service. The SAT gathers data about the shared services project by collecting answers to a simple questionnaire. Individuals from each partner organisation involved in your shared services project are being asked to respond to the 24 statements within this SAT, by reflecting on their experiences throughout the project and selecting from a range of possible responses. On its own the SAT will provided limited insight. However, the findings will be used to inform in-depth consultation during a subsequent interview with a member of the Centrifuge team.

Please note that:• The anonymity of participants will be preserved with any material handed to clients or

included in reports, anonymised and no comments, information or outputs attributed to any individual participants.

• No participants will be cited as having participated without their permission.• No confidential information will be disclosed without permission.• Information or outputs from this tool and subsequent interviews will only be used for the

purpose agreed at the time of data collection.• All participants will receive a summary of the final research report.

1. Name

2. Organisation

3. Project name

4. Project lead organisation

Annex A: Self-Assessment Tool



Q. Statement Strongly agree

Agree Disagree Strongly disagree

Comments

5.1 All partners are agreed on a shared vision and objectives for the project

5.2 The project has a co-operative and collegial structure with leadership distributed among partners

5.3 Key individuals and processes are in place to make the project happen/deliver

5.4 All partners feel a sense of ownership over the project and are fully engaged in the process

5.5 All partners are committed and willing to share services, information and responsibilities

5.6 Decision making processes are open and transparent with clear roles and responsibilities for all partners

5. Leadership & GovernancePlease�answer�the�following�questions�based�on�your�experiences�throughout�your�involvement�in�the�project.To what extent do you agree with each of the following statements about the shared services project you are involved in? (please�tick�the�appropriate�box). Please briefl y explain your decision within the corresponding comment box.





Comments

6.1 Members of staff within partner organisations are ready for, and open to, change

6.2 Members of staff within partner organisations are committed to the development of the shared service

6.3 Personalities and relationships between partners have contributed to the success of this project

6.4 Bringing together different organisational cultures has added to this project

6.5 All partner agencies understand and accept the risks that come with developing and delivering shared services

6.6 There is a strong culture of trust among all partners involved in the project

6. Culture & ClimatePlease�answer�the�following�questions�based�on�your�experiences�throughout�your�involvement�in�the�project.To what extent do you agree with each of the following statements about the shared services project you are involved in? (please�tick�the�appropriate�box). Please briefl y explain your decision within the corresponding comment box.





Comments

7.1 Adequate procedures were put in place at the outset to ensure that the correct type and number of partners were involved

7.2 Partners have sought to create awareness of the need for the shared service among their staff at all levels

7.3 A structured approach to change management has been adopted and implemented from the outset of this project

7.4 A memorandum of understanding between all partners was established at an early stage

7.5 Timescales and resources available in terms of time, skills and money are suffi cient to ensure the successful delivery of this shared service

7.6 There is a clearly defi ned plan for achieving the project’s objectives and performance and progress are effectively monitored and evaluated

7. ProcessPlease�answer�the�following�questions�based�on�your�experiences�throughout�your�involvement�in�the�project.To what extent do you agree with each of the following statements about the shared services project you are involved in? (please�tick�the�appropriate�box). Please briefl y explain your decision within the corresponding comment box.





Comments

8.1 Issues related to taxation have been resolved in this project

8.2 Issues relating to pensions and employment law have been resolved in this project

8.3 Issues relating to competition and procurement law have been resolved in this project

8.4 Issues relating to existing contracts have been resolved in this project

8.5 Issues relating to systems compatibility and connectivity and data sharing have been resolved in this project

8.6 Wider issues of the environment facing the sector have been resolved in this project

8. ExternalitiesPlease�answer�the�following�questions�based�on�your�experiences�throughout�your�involvement�in�the�project.To what extent do you agree with each of the following statements about the shared services project you are involved in? (please�tick�the�appropriate�box). Please briefl y explain your decision within the corresponding comment box.



Leadership

Command & Control

1: No clear leader, unclear aims

2: Competition over leadership

3: Central direction on only some aspects of project

4: Core leadership team direction

5: Centrally directed by lead partner

Transformational

1: Unclear direction of travel

2: Mixed or uncertain aims

3: Differing aims across partners

4: Developing leadership team, drawn from different parts of partner colleges

5: Shared leadership with clear responsibilities and direction


1: Guidance left to external consultant

2: ‘Opt in/out’ by partners

3: Mixed ownership by partners (e.g. one or two ‘observing’)

4: Collective leadership with all partners sharing

5: Leadership distributed across functions

Process

Proactive or Reactive

1: Outward looking, with focus on service and growth

2: Internal focus

3: Awareness of potential threats

4: Concerns over external infl uences

5: Response to identifi ed threat (e.g. rival colleges)

Transformative

1: No changes to service delivery

2: Low level change to delivery of small scale services/functions

3: Fundamental shift in delivery/organisation of small to medium sized services/functions

4: Fundamental shift in front or back offi ce service delivery/organisation

5: Merger

Cost-driven

1: Cost savings not an issue

2: Cost savings a minor consideration

3: Cost savings a consideration amongst others (e.g. service improvement; change management)

4: Cost savings a signifi cant factor

5: Cost savings sole consideration

Annex B: Scoring Matrix

AoC: Scoring System



Culture

Institutional

1: New partnership with no pre-existing relationship

2: Limited institutional contacts

3: Normal FE institutional linkages

4: Some geographical or functional linkages

5: Built entirely on existing geographical or functional (e.g. rural; 6th form) relationship

Personal

1: No previous individual contacts

2: Limited pre-existing professional contact

3: Some relationships in past

4: Personal relationships a factor

5: Built entirely on individual contacts (e.g. between principals)

Responsive

1: Built on already developed project

2: Some pre-existing plans to be developed

3: Plans brought forward because of funding

4: Availability of funding a major factor

5: Project put together solely to bid for Shared Services funds



Annex C: Scores Allocated to Case Study Projects

CS1

01

2

3

4

5

Command & Control

Transformational



Cost-driven Change

Institutional

Personal

Responsive

01

2

3

4

5

CS2

Command & Control

Transformational



Cost-driven Change

Institutional

Personal

Responsive



01

2

3

4

5

Command & Control

Transformational



Cost-driven Change

Institutional

Personal

Responsive

CS3

Command & Control

Transformational



Cost-driven Change

Institutional

Personal

Responsive

CS4

01

2

3

4

5



01

2

3

4

5

Command & Control

Transformational



Cost-driven Change

Institutional

Personal

Responsive

CS5

01

2

3

4

5

Command & Control

Transformational



Cost-driven Change

Institutional

Personal

Responsive

CS6



Command & Control

Transformational



Cost-driven Change

Institutional

Personal

Responsive

CS7

01

2

3

4

5

Command & Control

Transformational



Cost-driven Change

Institutional

Personal

Responsive

CS8

01

2

3

4

5



3

Command & Control

Transformational



Cost-driven Change

Institutional

Personal

Responsive

CS9

01

2

3

4

5

Command & Control

Transformational



Cost-driven Change

Institutional

Personal

Responsive

CS10

01

2

3

4

5



Command & Control

Transformational



Cost-driven Change

Institutional

Personal

Responsive

CS11

0

1

2

3

4

5

Command & Control

Transformational



Cost-driven Change

Institutional

Personal

Responsive

CS12

01

2

3

4

5



Theme Lessons Learned


• The Principals vision group should metamorphose into a project STEERING Group, identifying general direction.

• Cascade the vision within the partnership – cascade to second level management (SMT and Heads of Departments) and through them to staff.

• Cascade the vision to those with responsibility for corporate governance. Ensure that Corporations buy into the vision and are prepared to support development, even though this may result in reduction of their role.

• Develop the relationships created at the Leadership and Management conference to form specifi c and targeted working groups. The Principals Steering Group should determine the general direction for these groups and then let the groups discuss and develop their own projects.

• Do not forget to include the key stakeholders – the students or others at the receiving end of service delivery.

• Communication is absolutely essential to any project.

• Set up communications to facilitate group working.

• Communications across project groups is useful and an opportunity to share progress, lessons and problems.

• Conversations and open communication between principals and key partners is the key to success. Regular engagement (through whatever medium possible) is crucial for momentum, decision making and project progress.

• Nervousness linked to size of organisation with smaller colleges being more nervous than the larger.

• In establishing protocols for new ways of working, draw up a Memorandum of Understanding and get all members to sign up.

• Have a detailed project plan with clear tasks, targets, milestones and monitoring.

• Importance of steering group.

• Involve stakeholders, communicate well but sparingly (don’t set hares running until you have something to say).

• Have a clear follow up (at each stage).

• The composition of a Governing Body can have a real impact upon the strategic position adopted by colleges considering shared services.

• Establishing clear ‘project house rules or ‘rules of engagement’ in order to drive commitment.

• Ensure there is a representative group and specialist committed to the project to ensure honest and impartial feedback.

• Set up a project reporting and accountability structure which engenders a culture of project delivery and success.

• Getting trust and alignment of the Principals early is vital. It will provide the necessary ‘money in the bank’ for the times when things get more challenging.

Annex D: EIF Projects – Lessons Learned

Continued...





• Getting ALL of the senior leadership team members of the fi ve colleges on-side and supportive of the aims of the federation is/was vital. There were a few that remained unconvinced for a reasonable period of time and this caused challenges later on in the project.

• It was important to go through some form of ‘trust and reconciliation’ process that enabled past history between participating colleges to be raised and aired.

• It is vital to ensure that there is a relentless focus on the target impact and benefi ts – there is a real risk of these projects being side-tracked into ‘nice to have’ activities that do not deliver signifi cant and sustainable benefi ts.

• Ensuring that there is widespread and effective engagement with key members of staff early.

• Communication – keeping everyone informed.

• Leadership/Ownership – Principals need to own this agenda for it to have impact.

• Commitment by the partners to meet the expectations placed upon them is crucial.

• Roles and responsibilities need to be clearly defi ned and assigned from the outset.

• Accept the project will evolve from the original remit.

• Non-attendance in meetings has a detrimental effect on the progression of the project.

• High engagement is required throughout the project by those with key areas of knowledge.

• Appropriate governance structures required to provide resolution to issues arising.

• Communication of the project needs to be disseminated effectively, so that staff are aware of the project and possible benefi ts.

• Set ground rules at the start of the project; we found this fundamental and had to backtrack quite far to start back again on the right footing.

• Always set a rolling venue for meetings and a rolling chair so that no partner feels railroaded and that all partners are equally engaged in the direction of the partnership.

• Get your board of governors engaged; keep them briefed and constantly present updates for Corporation minutes.

• Accept that your start and end goals will change. This is a journey and therefore you can deviate from the original course.

• Partner participation.

• Be clear about the objectives of any proposal before starting to deliver.

• Trust is the key to success.

• Trust is the most important commodity in any collaborative partnership. People state at the time of a proposal that they trust one another, but that is not the same as meaning it.





• Early stage meetings to determine a common vision.

• The shared vision may result in fundamental organisational changes. For these to be effective they must be planned with careful implementation.

• The more partners you have the greater the level of complexity.

• Ensure that partners are able to demonstrate recognisable similarity – there is a common binding philosophy.

• Important that the organisations concerned have similar strategies, priorities, cultures and requirements before entering into sharing services.

• Thorough benchmarking is key to a clear understanding of partner organisations structures, staffi ng roles and levels of activity.

• Open discussion with partners, about their initial reasons for involvement in the project enabled the project to proceed, but with certain amendments to planned outcomes, and with revised timescales. In the event, not having an immediate MCV concern, enabled partners to explore in a more considered way the genuine benefi ts of partnership, collaboration and development of new entities.

• Thinking through the legal implications for each organisation, from the outset of the project and re-visiting this at every stage during the development of the project.

• Each partner is at a different place, in terms of their objective position and their perceptions. It was assumed at the outset that an honest, open dialogue should lead to a shared outcome. Whilst this did result, to some extent, not all partners can travel as far or as fast.

• Absolute shared clarity on project remit, objectives, roles and responsibilities at the very outset is fundamental to success.

• Trust between partners which are both partners and competitors in different sphere of engagement is diffi cult to ‘create.’ It has to be earned, and has to exist in a forum of candid conversation if it is to survive and thrive.

• Need to be able to deal with cultural barriers.

• Importance of identifying opportunities for shared services.

• It is vital to closely specify from the outset precisely what services are in scope for sharing/providing as a managed service.

• For each in-scope service, it is important to specify exactly what is included in the service, such that partners/customers are clear on service standards.

• Cultural integration and agreement is essential before the start of the project.

• Clearly defi ne what is expected of partnership members.

• Ensure outcomes are understood by all involved with the project to prevent withholding of funds.

• Recognise the time it takes to get the concept of sharing and bringing colleges together needs to include the scheduling of governors meetings.Continued...





• It is also most likely that the successes from collaboration and joint working will be realised where the sharing colleges are of similar ‘size’. This similar ‘size’ aspect of collaboration balances the perceived gains that the colleges will each achieve and encourages the colleges to work together more closely. Were one college to signifi cantly smaller than a sharing partner it is likely that the benefi ts of joint working and sharing services for the smaller college would be signifi cantly greater than those likely to be seen by the larger college. The larger college, though, is likely to have contributed many of the tools and techniques (best practice, volume processing, professional specialists) to achieve those gains, and thus perceived benefi ts are less well ‘shared’.

• Apart from one other partner there wasn’t a sense of shared services having a strategic imperative. Governor involvement within partners has been non existent.

• Pre bid education would have helped to formulate strategy and ensured commitment of potential partners.

• Create a Vision before embarking on a management of change journey and be clear of the objectives.

• Have really clear objectives – don’t let ambiguity mask different/irreconcilable agendas.

• Keep the door open to new players.

• It is important that the project is scoped very precisely in order to ensure focus and achievability.

• Clearly agree system specifi cations prior to fi rst development stage.

• Strategic commitment at principal level is essential to ensure a project can be embedded in a college.

• When undertaking initial pre-project research make sure the need for the project is identifi ed and bought into by the project participants.

• Agendas such as this need to be driven in the ‘good times’. Trying to commence this project during funding cuts, redundancies etc has had a serious negative effect by increasing suspicion amongst partners and also switching focus to an internal one.

• Governors should have been empowered to challenge their Executives around this agenda.

• Ensuring that the project is positioned as something that will indeed deliver cost savings and performance effi ciencies but that these will ultimately fl ow through to deliver an improvement in teaching and learning.

• Need to be able to build the conditions and permission to challenge pre-conceptions.

• Scope of project too wide from outset which resulted in an inability to fully deliver all tasks in an effi cient and timely manner.

• Fewer partners works best.

• Work with partners with whom you have established good working relationships.

• Obtain broad agreement at the outset on the objectives.

• Not everyone will share the common vision and contribute – some will drop out.

• Work incrementally – Establishing a common understanding of the aims and benefi ts was crucial.

• Use external facilitation when issues get complicated. We found this helped to depersonalise the problem and to see from a business objective rather than from your own personal concern/viewpoint.





• Do not underestimate the time that the development of shared services and approaches will take.

• These are NOT rapid changes but represent fundamental and long-reaching changes to processes, procedures and delivery.

• It is essential that Corporations are able to approve changes to organisational structure and where these might impact on standing regulations etc.

• Everything takes so long.

• Set achievable deadlines.

• Functional administrative tasks are crucial: for example, on a basic level fi nding time for seven exceptionally principals in their pressured schedules is hard. Early engagement facilitates the process. Project timelines dictate progress, so early identifi cation of key engagement points (e.g. events, reports, meetings) are all keyed in well in advance.

• Need to improve staff competence to embrace technological solutions.

• Importance of developing staff and providing clear progression routes.

• Shared services considerations make considerable demands on all parties, not just the lead provider. Managed services can provide a route in for partners/sharers tied up with other matters (such as schools becoming an academy).

• There is little readily-available information on pricing of the sorts of products that are likely to be shared, certainly at a product line level.

• Regularly check project plan is adhered to. Allow catch up time within the plan to allow for slippage.

• When developing software ensure major part of payment is at the end of project on handover of a tested and working system.

• The impact of implementing one or more of the steps on the ‘journey’ toward Shared Services is principally fi nancial with potential annual gains from the low hundred thousand pounds to over one million pounds.

• Use of a credible third party to facilitate initial discussions was helpful in removing some barriers.

• Process Re-engineering Workshops went really well in the end, but members were shocked by the amount of time required to undertake the work.

• Pick the right consultants.

• Technology issues.

• This is a strategic initiative, early wins are likely to take 2 years not the three months that was expected.

• Smaller organisations do not have key staff with the necessary specialisms to implement strategies of this nature.

Continued...

• Change capability – the level of change capability and capacity in the colleges is VERY LOW – this needs to be taken into account. If the AoC wanted somewhere to provide some national benefi t it would be in a programme to build this capacity and capability – it would make a huge difference!


66 | Evaluation of Shared Services Projects



• The Summer is a write-off!

• Failure to identify specifi c resource.

• Lack of delegation to enable expedited decisions.

• Do not expect in year savings as the costs of development are high. Effi ciency to be measured in terms of improvement to the service in year 1 and savings in year 2&3.

• The potential for QCF units sharing based on ILR data analysis needs local interpretation by Heads of Curriculum to take potential for shared design and delivery from theoretical to actual.

• Do not underestimate the time required for discussions and bringing parties at all levels on board.

• Where possible, have a dedicated senior resource to the project.

• Understanding the complexities of the problem. The spend with awarding bodies would appear on the face of it to be an area where savings could be realised. However this is not as simple as it fi rst seems, spend with awarding bodies is a lot more complex and includes many issues such as value for money and clarifi cation of how much money is spent on what.

• Need accurate information and data.

• Takes Time – to work incrementally.

• Managing Expectations – that there is such a thing as a quick win on saving money.

• Timing of the projects not to coincide with busy times within the college calendar and summer holidays.

• Due to the dynamic nature of creating a shared services company as part of a Federation, the fi nal scope of the business case produced still contained some uncertainties due to lack of decision from regulatory/government departments.

• Implementation issues between College and Academy partners not fully explored yet due to lack of resources following the completion of the business plan.

• Initial report on Social Enterprise or employee share ownership options not yet fully explored due to lack of resources to move passed business plan stage.

• Plan for partner resource availability well in advance and allow for slippage.

• Time of year and timescales to undertake a project of this nature need to be carefully considered.

• Ensure adequate professional support exists to undertake any installation or confi guration exercises of new or existing infrastructural equipment.

• The time taken to complete a project is determined by factors other than just the commitment of those involved.


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Or visit our web sitewww.aoc.co.uk/en/policy-and-advice/shared-services

Designed by Bentley Hollandwww.bentleyholland.co.uk

With thanks to all project partners who contributed to the development of the research reports and Lesley Templeman Project Manager – Shared Services Effi ciency Projects at the AoC.
