The biggest cause of shared services failure?

Holding open the gap between claims made for shared services (often by those involved with selling) and the arguments of those opposed, allow us to view a dialectic field and nothing else. We quickly get caught-up in a noisy world of claim and counter-claim, where truth (or reality) are quickly lost to view. The only way to move forward is to return to the actual object, organisations and the services they provide to people.

Failure and understanding

The study of failure can be a negative act if it doesn’t generate an understanding of why an event has actually happened. Missing a thorough understanding of the ‘why’, leads to repeated failures. Why did that happen? What actually caused it? What do we have to do to avoid making the same mistake/s?

If you don’t understand this thoroughly, any problem will bounce back. Deep understanding is difficult to get at. Applying sophisticated double-loop theories of analysis (Argyris) don’t work if we don’t have an adequate view of the actual problem.

Commonly reported symptoms 

Listing the reasons for shared services failures highlight symptoms.

  • High entry or up-front costs
 (IT, legal, staff)
  • Long time to realise small savings (years … if at all)
  • High failure rates (70%? Probably more like 100%)
  • Loss of local knowledge
  • Loss of service visibility
  • Large numbers of mistakes (increasing cost over time)
  • Loss of control & accountability
  • Loss of local jobs
  • Locking-in failure and waste
  • Worker dissatisfaction & union troubles (industrialization & standardization)
  • Costs of failure pushed onto service users
  • Costs pushed into other budgets
  • Providers complaining of low returns
  • Litigation between partners
  • Savings in one budget as costs are pushed into other parts of the system

The stock response of those selling sharing (to this failure), is to criticise implementation and argue that their services would have avoided the problem. It is not in their financial interests to highlight any other point of view. Others who believe that it must be implementation failure, believe that savings arise naturally from economies of scale and standardisation. They would say ‘If you do it right, everything else follows.’ Unfortunately, the evidence has yet to emerge to support this view.


I have come to think of shared services as a crude efficiency tool applied to an effectiveness problem. We believe that we must cut costs by becoming more efficient. And subsequently we apply a poorly understood and highly-troubled solution which regularly ends in failure and often amplifies the original problem. Layering an efficiency solution onto an effectiveness problem locks in waste and increases (not decreases) costs over time.

A different way of approaching problems

Once you have come to an understanding of the causes, you are able to take action to solve the problem/s. If you are forced to choose shared services, then you need to thoroughly understand how it actually works, and not how marketing people tell you it works. An important note is to improve before you share (or you’ll lock failure, waste and inflexibility into your system). Trying to share first is an example of ‘squeezing the balloon’ in service terms.

NB: Read John Seddon on issues relating to shared services and the theory of cost reduction through scale.

An example of what’s at stake?

Somerset denies outsourcing enquiry (2009, LGC) – relates to SouthWestOne (£)

Shared services agenda is sinister, says leading Tory (2009, the Guardian)

DfT shared service reverted to manual control (2009)

Failure through Shared Services, March 9th, 2009, Tripp Babbitt’s blog

Met Police Chief in Crisis Talks on overdue, over-cost IT systems (2010, The Times) – 6 months late, £10 million over budget

A series of botched IT projects has left UK taxpayers with a bill of more than £26bn (2010, The Independent)

Southwest One criticized in latest report (2011) – savings from SouthWestOne falling short of target

$2 billion dollars to shut down shared services (2011) West Australia shared services

The flawed mantra of shared services (2011, The Guardian)

Bill for DfTs replacement shared service centre could top £750 million (2011)

Shared services a failure say SA liberals (2011, CIO) – South Australia

IBM say Queensland shared services failure is not its fault (2010)

SouthWest One overpaid suppliers £4 million in SAP glitch (2011)

Shared services: occasional outbursts of crying (2011)

SSC shortlisted for award shock (2011) – relates to the appalling service from RCUk shared services

Inconvenient truth about shared services (2011)

Public sector not convinced on shared services (2011) – news that it takes a long time for small return, at high cost

West Dumbartonshire withdraws from shared services plan (2011) – Clyde Valley

Queensland abandons IT shared services model (2010)

Fire service reorganisation was a £500m failure, say MPs (2011)

IT failure leaves bureaucrats in black hole (2011)

Baillieu freezes big computer project … shared services blows budget by $20 million (2011)

Auditors criticise RCUK as budget for shared services project balloons (2011)

FireControl shared services – should PA consulting (paid £46million) share some responsibility for what happened? (2011)

Cheshire ICT shared services 11-12 predicted savings of £1.5m turn into £2.45m overspend. 70 jobs to go (2011)

Shared services under fire from faculty (2012)

Sometimes it is only when you try to make changes, the true cost of shared services comes clear. £25,000 to make license changes (2011)

CSC and NPfIT “taxpayers will foot the bill for a further £2bn on a failed NHS IT project”(2011)

South West One shared services: “staggering losses” of £31.5m and “failure to hit modest savings targets” (2012)

Readers skeptical of shared services (2012)

Shared services under fire (2012)

South West One shared services venture is failing says Somerset council leader (2012)

Ambos threaten strike over payroll blunders (2012)

Shared services: A licence to print money (2012)

NSW Govt may scrap IT shared services units (2012)

Information Blackout at Compass Point Shared Services (2012)

70 axed staff replaced by 68 others (2012)

Queensland Health Payroll shared services may need $837m more (2012)

Shared services project to save millions less than originally estimated (2012)

Shared services savings getting harder to find (2012)

Uncertain future for NSW shared services (2012)

Personality clash to blame for Yorkshire council’s shared services split (2012)

Redundancies at IT firm as reverberations from failed £8.5bn NPfit shared services program continue (2012)

Pooling office to save money cost in Whitehall cost hundreds of millions pounds MORE, MPs find (2012)

I could have thrown myself of a high window had we not been on the ground floor (2012)

The Shared Services disaster (2012)

Shared services centre is ‘below standard’ and new tasks won’t help improve, says STFC head (2012)

Somerset Council braces for lawsuit from Southwest One shared service venture (2012)

Railnetwork ends shared services to increase accountability for financial and operational performance within each business (2012)

If Liverpool council finished the shared services contract in 2012, it would save £82m over the next four years (2012)

Queensland ICT shared services face 80 job cuts to try and stop operating losses (2012)

The Confusion of Fusion Part 1: Achieving a better definition of shared services (2012)

MP calls for government investigation of Southwest One shared services deal (2012)

WA shared services due to close in 2013 (2012)

A mega-outsourcing plan in Cornwall beset by naive fanaticism? (2012)

“No confidence” in decision and doubts over appropriateness of Cornwall council shared services (2012)

Canadian Government Shared services: The wrong solution for a bigger problems (2012)

Conwy and Denbighshire councils scrap shared services after it was found it would cost between £750,000 to £1.3m to save just £300,000 (2012)

Locality: Scaling-up not always best (2012)

What Competition means for Cornwall (2012)

“Criminal neglect”: Queensland Govt IT fices to cost up to $6 billion (2012)

Gladewater ISD withdraws from county shared services group citing quality and cost issues(2012)

IBM sats it “successfully delivered” Qld health payroll in shared services project which blew it’s budget by 20,000% and will cost taxpayers $1.3bn + (20122)

Outsourcing is broken and it is costing YOU personally money (2012)

Operation Elimination coming soon to you this fall, June 12th 2013, Reclaim UC

‘No business plan, forecast, or details on how x-amount will be saved’ (2012)

Australian shared services pay blunder “we’re talking in amounts in excess of $40,000″(2012)

Billion dollar ERP shared services project shot down by US air force (2012)

Well, now we can add New South Wales to the list of Australian states with disastrous IT shared services implementations (2012)

Is the NPfIT shared services still doing damage within the NHS – and to taxpayers? (2012)

Emma Brennan, Suffolk: Benefit payments mistakes soar, Sept 19th 2012, Ipswich Star

The Back Office: A Train crash coming to a town near you (2013)

Brighton hospital bucks trend by moving from shared services to in-house IT (2013)

2e2 a provider of IT shared services to the NHS and wider public sector goes into administration (2013)

Government dumps ERP shared services after £1.4bn spent (2013)

The cost of implementing Australia’s worst IT failure is due to rise to more than $1bn (2013)

Shared services centralisation leads to wide-scale disruption, 23rd March 2013, Star Gazette

Shared services and outsourcing: Aren’t we just moving the deck chairs around?, 27th March 2013, ACCA accounting

Mergers aren’t the answer, 27th March 2013, The Times Union

Tony Collins, Somerset County Council settles IBM shared services dispute [for £7m] – who wins?, 28th March 2013, Campaign4change

Shared services savings exaggerated and often take over 6 years, April 3rd 2013, The Ubyssey

Australian shared services program that cost $48m more than it has saved, is under scrutiny, 4th April 2013, ABC news

American town doubtful of case for savings from shared services and outsourcing, April 4th 2013, North

IBM Australia on the stand for $1bn shared services blowout, 11th April 2013, The Register

Rosie Cooper, One Connect, more like disconnect! Is One Connect Limited in chaos? Asks Rosie Cooper MP, 15th April 2014, Rosie Cooper MP

NHS SBS announce shared services payments for the whole of the UK suspended due to a fault, 16th April 2013

Andrew Hurst, Compass Point struggles to attract business in uncertain financial climate, 30th April 2013, Skegness Standard

David Boyle, Call centre menus: reach for your hatchet, 19th May 2013, The Real Blog

Victoria abandons IT shared services, 22nd May 2013, Delimiter

Simon Sharwood, Oz shared services collapse looks bad for NetAp, 23rd May 2013, The Register

Tony Collins, How to cost-justify the NPfIT disaster – forecast benefits a decade away, 7th June 2013, Campaign4Change

More than £600,000 spent after local authority shared services scheme collapses, 11th June 2013, The Northern Echo

Derek Du Preez, NHS still set to spend £600m with ‘rotten’ CSC on ‘hopeless’ NPfIT systems, 12th June 2013, Computer World UK

NHS clients of NHS Shared Business Services should be aware that SBS are currently experiencing difficulties with their IT system, 14th June 2013

Chris Cobb, Anger greets secret private Library and Archives Canada deal, 13th June 2013, Ottawa Citizen

Liz Evanstad, NHS run up £31.5m Fujitsu dispute bill, 15th June 2013, E-health insider

That wasn’t supposed to happen! Information shared services staff increase 15% under Harper, 23rd June 2013, CBC News

Helen Hunt, Merseyside hospitals threaten private firm hired to do their payroll work after litany of failings, 11th July 2013, Liverpool Daily Post

Tony Collins, Hospitals accuse Capita of failings, 12th July 2013, Campaign4Change

Sofia Lind, NHS England ‘chaos’ results in practices receiving late, incomplete and unidentifiable payments, 13th July 2012, Pulse

Thomas Bridge, Legal dispute with Southwest One cost Somerset £5.9m, 17th July 2013,

David Orr, Southwest One: The complete story, 11th July 2013, Spend Matters

Tony Collins, Sandwell Council terminates 15 year, £300m outsourcing & shared services deal with BT, 23rd July 2013, Campaign4change

Rich Bolstridge, The Unforseen risk of shared services DDoS, 5th August 2013, egov innovation

Simon Sharwood, IBM committed ‘ethical transgressions’ to win botch shared services project, 6th August 2013, The A Register

Tony Moore, Queensland and IBM shared services: Worst failure of public administration in this nation: Payroll services, 7th August 2013, Brisbane Times

Allie Coyne, Paris Cowan, WA to pay $370m to scrap shared services, August 12th 2013,

Sofia Lind, NHS SBS profits up 88% … but read the comments, 19th August 2013, Pulse

Tony Collins, Sandwell Council and BT to aree “exit plan” on shared services contract, August 28th 2013, Campaign4Change

Capita Payroll error leaves 550 paid incorrectly, 6th September 2013, Payroll World

A Capita NHS payroll contract already under threat due to repeated “minor failings” could be put under further strain following fresh mistakes, 10th September 2013, Payroll World

Rajeev Syal, NHS IT described as ‘the biggest IT failure ever seen’, £10bn and rising, 18th September 2013, The Guardian

Councillor ‘lost confidence’ in system after maths blunder turns £26.5m saving to taxpayer into £2.7m bill, 18th September 2013, Slough and South Bucks Observer

Regarding EWS lab performance issues, 20th September 2013, Engineering at Illinois

Chris Evens, One of the oldest cloud storage companies is about to go out of business, 24th September 2013, Architecting.IT

Loss of local jobs to UK Shared services becomes a political issue, 24th September 2013,   The Barnet Eye

Paris Cowen, NSW IT manager confirms outsourcing agenda for ServiceFirst shared services, 25th September 2013, IT

Tony Collins, Taunton council to bring some outsourced shared services back in-house, 27th September 2013, Capaign4change

Apology as IT problems affect patients in Glasgow health board area, 2nd October 2013, BBC News

Another projected shared services savings turns into a $6.8m loss, leading to the shedding of 600 IT jobs, 2nd October 2013,

‘Cash-strapped’ Birmingham City Council paid Capita £1 billion in just six years, 3rd October 2013, The Chamberlain Files

Graeme Brown, “This shows what a hugely lucrative money-making machine this has become for Capita. And we’re all paying for it.” 3rd October 2013, Birmingham Post

Tony Collins, Capita has a duty to ‘promote’ the success of the One-Barnet outsourcing shared services contract, 3rd October 2013, Campaign4change

Ben Farmer, Army facing crisis after outsourcing and shared services deal to Capita results in massive drop in recruitment, 7th October 2013, The Telegraph

Peter Smith, Barnet and Capita shared services, some unusual contractual conditions?, 9th October 2013, Spend Matters UK/Europe

Paris Cowan, SA shared services to fall $85m short of savings target, 16th October 2013, ITnews

Renai LeMay, Surprise! SA Govt, too, has problems with IT shared services and project delivery, 18th October 2013, Delimiter

Shared services members in DWP and DEFRA to strike next week, 18th October 2013, PCS Union

Tony Collins, Who polices police IT reports?, 24th October 2013, Campaign4change

David Bailey, Shroud of secrecy around the £342,000 a day we pay Capita, 24th October 2013, Birmingham Post

Sarah Neville and Gill Plimmer, Thousands of UK shared services jobs given green light by cabinet office for offshoring to low wage economies, November 3rd 2013, Financial Times

Adam Tallman and Dana Cloud, Shared Services is not transparent. Accenture was paid $960,000 for the work they did to produce a report that relies on undisclosed research, 7th November 2013, The Daily Texan

Robyn Ironside, Sarah Vogler and Kay Dibben, IBM has always rejected any suggestion it should be held accountable for the $1.2 billion cost to remedy the shared services system, 8th November 2013,

Abbie Lewis, Philippines outsourcing & shared services sector “definitely affected” by Typhoon Haiyan,  11th November 2013, Shared Services Link

Kellie Woodhouse, University of Michigan staff ‘demoralised’ in downsizing effort, 12th November 2013, Michigan Live

Sam Gringlas, Faculty raise concerns over shared services consolidation, 21st November 2013

John Seddon, Can Tony Abbott avoid ‘deliverology’?, 24th November 2013, Online Opinion

Ry Rivard, Shared services backlash, 21st November 2013, Inside Higher Ed

Anthony Mora and Alexandra Minna Stern, Corporate Values, 25th November 2013, Inside Higher Ed

Christopher Knaus, ACT Govt breached workplace laws in overpaying ambulance workers, 25th November 2013, Canberra Times

The cenITex shared services agency has long been a thorn in the side of the Victorian government, 26th November 2013, IT news Australia

Lean is mean, 26th November 2013, Moostateu

Gill Plimmer and Jim Pickard, Cabinet minister warns over offshoring civil servant jobs, 27th November 2013, Financial Times

Shared Services in the USA and it’s probably not quite what they were hoping for, 2nd December 2013, Registrarism

Chris Breese, The abandoned fire control centre that’s costing YOU £100,000 a month, 3rd December 2013, Nottingham Post

U. of Michigan Delays Controversial ‘Shared Services’ Plan, 3rd December 2013, Inside Higher Ed

Sam Gringlas, In wake of outcry, University to rethink shared service plan, 3rd December 2013, The Michigan Daily

Mark Ludlow, IBM says Qld govt making it a scapegoat over payroll claim, 8th December 2013, Financial Review

Greg Ruland, The problem is, shared news programming overall reduces governmental accountability, 8th December 2013, The Daily Sentinel

Jennifer Calfas, Protest voices staff qualms over shared services center, 10th December 2013, The Michigan Daily

Rachel Stretton, Council workers believe Shared Services Partnership has led to ‘takeover’, report finds, Dorset Echo, 11th December 2013

Paul Geater, Suffolk: Flawed regional fire control centre has cost taxpayers more than £30million, 15th December 2013, East Anglian Daily Times (EADT24)

Jobs to go as £300m BT Sandwell contract finishes, 6th January 2014, Express and Star

Capita’s flawed IT scheme costs MoD millions, 14th January 2014, Telegraph and Argos

Tony Collins, Did NPfIT flag-bearing trust lose track of 2,000 patients?, 23rd January 2014, Campaign4Change

Lizzie Jesperson, Shared Services or Shared Suffering: UT’s Plan to Cut 500 Jobs, 24th January 2014, Austin Chronicle

Chris Hughes, Army recruits in training chaos after Ministry of defence switch to private company, 24th January 2014, The Mirror

Sophie Barley, Steria criticised for giving zero-hour contracts to staff answering 999 calls, 24th January 2014, Gazette Live

Tony Collins, When “life and death” NHS IT goes down, 29th January 2014, Campaign4change

“I wouldn’t buy a used car from a University President”, 10th February 2014, Academe Blog

Mike Da Souza, Union raises security concerns over $400-million federal email deal with Bell Canada, 10th February 2014,

UT should have more carefully vetted Accenture in Shared Services deal, 11th February 2014, The Daily Texan

Students, faculty march against shared services plan, 11th February 2014, The Horn

Renai LeMay, Victoria Police links IT failure to tragic death, 14th February 2014, Delimiter

Daniel O’Brian, Capita hands 130 ex-council workers redundancy notices, 14th February 2014, Barnet Today

Angus Young, Callers to the Hull City Council 300300 advice line left frustrated by delays, 14th February 2014, Hull Daily Mail

Lizzie Jesperson, Students protest UT’s ties to Accenture, 14th February 2014

Neil Elkes, City’s Capita contract slashed by £20 million as more council cuts announced, 14th February 2014, Bimringham Post

Kathleen Hall, Watchdog warning for troubled MoJ IT project, 14th February 2014, Law Society Gazette

How Capita treats workers?, 14th February 2014, Independents on Politics blog

Jonathon Owen, Army needs ‘miracle’ to keep up numbers, 16th February 2014, The Independent

Chris Hewett, Capita takeover of Barnet Council serves set to claim 130 jobs, 18th February 2014, Local London

Jack Tappin, Petition calls for £128,000 to be returned to Haverhill, 18th February 2014, Haverhill Echo

Tony Collins, Somerset council publishes “lessons learnt” from IBM contract, 18th February 2014, Campaign4change

Samantha Harman, Echo investigates council gagging orders, 19th Febuary 2014, Dorset Echo

Readers says idea of shared services has a built in flaw, 20th February 2014, The Ridgewood Blog

Birmingham Council seeks to trim outsourcing budget, 20th February 2014, Professional Outsourcing Magazine

Tony Collins, Somerset council publishes “lessons learnt” from IBM contract, 18th February 2014, Campaign4change

Tony Collins, BT earns £1.3bn extra from NHS IT scheme – for what?, Campaign4change, 25th february 2014

Deborah Linton, Fears jobs could go overseas as NHS trust plans to outsource roles to NHS SBS, 27th February 2014, Manchester Evening News

Protests greet meeting on police shared services, 28th February 2014, Ispwich Spy

Karl Flinders, Liverpool council to end BT IT joint venture, 28th February 2014, Computer Weekly

Let’s reclaim ‘community’!, 1st March 2014, Stop the privatisation of public libraries

Paul Kunert, back office battle may see British Justice offshored, 4th March 2014, The Register

Kelly Williams, GP letters blunder: Thousands of notices sent to the wrong patients, 4th March 2014, Welsh Daily Post

500 ex-civil service jobs ‘to go’, PCS union warns, 4th March 2014, BBC News

Renai LeMay, Madness? Govt considers ERP shared services scheme that failed states, 5th March 2014, Delimiter

Kylie Maclellan, UK army cuts may leave army unable to handle threats – MPs, 6th March 2014, Reuters

Allister Hayman, Balfour Beatty spend £17m implementing shared services in the UK and US, 6th March 2014, Building

Mark Smulian, 11th March 2014, Liverpool set to scrap BT joint venture in savings dispute, LGC (£)

David Williams, Exclusive: NHS England challenged over primary care support redundancy plans, 13th March 2014, Health Service Journal … [READ THE COMMENTS] [£}

Tony Collins, Should Liverpool Council smile now it’s ending BT joint venture?, 14th March 2014, Campaign4change

Thousands of payments affected as practices face fresh cash-flow worries, 1st April 2014, Pulse

Mark Waddington, Liverpool council and BT agree deal to break up LDL partnership, 1st April 2014, Liverpool Echo

BT switches jobs back to council – but deal is safe, 7th April 2014, The Shields Gazette

Stephanie Dalzell, Office of Shared Services, set up to save money on admin and payroll, axed after massive cost blowouts, 9th April 2014,

Terry Pedwell, CRA cuts off public access to electronic services over security worries, 10th April 2014, Yahoo Finance

Lizie Jesperson, UT’s ‘Shared Services’ Begins Sharing … Layoffs, 18th April 2014, The Austin Chronicle

David Williams, NHS England faces ‘unfunded’ redundancy costs, 17th April 2014, Health Service Journal

David Mally, UT, protesters don’t plan to back down on Shared Services, 24th April 2014, The Horn

Paul Dale, Sir Albert Bore faces ‘vote of confidence’ as Barry Henley announces joint ticket leadership bid with John Clancy, 25th April 2014, The Chamberlain Files

Daniel O’Brien, Phone problems plaguing Capita call centre, 30th April 2014, Barnet Today

Lizzie Jesperson, Shared Services Uproar: Students Busted in Tower Sit-In, 2nd May 2014, The Austin Chronicle

Renai LeMay, Commission of Audit backs high-risk shared services schemes, 5th May 2014, Delimiter

Fran Foo, Claims debt collectors knocking at schools after glitch, 6th May 2014, The Australian

Thomas Barlas, Controversy slows review of Vineland shared-services agreement with sewer authority, 8th May 2014, The Press of Atlantic City

AU: ‘Digital by default’ – efficient eGovernment or costly flop?, 8th May 2014, Potsdam e-Government Center

Mark Williamson, Planned job cuts at Barclays likely to affect shared services base in Glasgow, 9th May 2014, Herald Scotland

Daniel O’Brien, Pensioners get £100k tax codes, while Capita error leaves staff unpaid, 7th May 2014, Barnet and Whetstone Press

Ashley Wassall, MPs cite regulatory sprawl behind £100m ‘disaster’, 7th May 2014, FT Advisor

Bill Tanner, Herefordshire Council to review its future with Hoople, 9th May 2014, Hereford Times

Sofia Lind, GP support services could be ‘offshored’ to India, 9th May 2014, Pulse

Vivienne Russell, Northern Ireland PAC slams costs of shared financial services scheme, 14th May 2014, Public Finance

David Oxenford, NAB Files Court Challenge to FCC’s Shared Services Agreement Interim Policy, 14th May 2014, Broadcast Law Blog

Alex Matthews-King, GP leaders consider issuing breach notices to NHS managers over missing payments, 15th May 2014, Pulse

Charlotte Gee, Major Projects Authority ducks out of rating Universal Credit, 23rd May 2014, Computer World UK

Personal information of Home Office staff may be ‘off-shored’…, 29th May 2013, PCS Home Affairs

Charlotte Gee, MoJ staff threaten strike action over shared services, 3rd June 2014, Computer World UK

Mark Smulian, Chief sharing in question at hung council, 4th June 2014, Local Government Chronicle

Rob Davies, Sorry Saga of missing cash: Investors in flotation of over-50s firm left waiting for thousands of pounds of refunds after Capita blunder, 4th June 2014, This is Money

Mayor has to apologise as Crapita draws a blank for public, 4th June 2014, Inside Croydon

Has anyone tried to get any sense from Shared Services yet? … TR Day three, 5th June 2014, On probation blog

Dawn Marsden, Capita Poland relocation threat sparks jobs fear, 6th June 2014, Oldham Evening Chronicle

Órla Ryan, Staff at Cork office made redundant, asked to train replacements, 6th June 2014,

Jon Vale, Council projects £3.5m future shared services savings, but it cost £3.7m to set up, 7th June 2014, Thetford and Brandon Times

David Bailey, What had been anticipated at the outset of the whole deal to cost £55m ballooned to over £120m a year, 18th June 2014, Birmingham Post

Crispin Dowler, Trusts exodus from Capita HR shared services contract, 18th June 2014, Health Services Journal (£)

NZ Auditor General, New Zealand Central Agencies Shared Services report poor service and inability to evidence savings, 18th June 2014, Office of the Auditor General

John Hilderbrand, Experts: Shared services don’t always [often] lead to cost savings, 20th June 2014, Long Island Newsday

Paris Cowan, State’s shared services scheme had still yet to break even, after five years of reforms and expenditure exceeding $86 million, 20th June 2014, ITnews

Neil Elkes, Further £4.5 million business to Capita shared Services Birmingham, 20th June 2014, Birmingham Post

Civil servants to strike over privatisation and offshore plan, 23rd June 2014, PCS Union

Emma Mackintosh, Union fears 1,000 civil service jobs could leave Newport, South Wales Argos

Tony Collins, NHS trusts exit £27m Capita deal, 24th June 2014, Campaign4change

Service Birmingham costs to fall by £150m after Capita takes a ‘pragmatic view’ to council contract renegotiation, 24th June 2014, The Chamberlain Files

Mike Benke, Swindon Council renegotiate Capita back-office deal brining call centres services back in house, 24th June 2014, Swindon Advertiser

Martin Lewis, People are reporting in their droves that they are having payments taken by direct debit even though they are deferred, 25th June 2014, Martin Lewis Money

Rob O’Neil, Shared services ‘leadership’ effort flawed, says NZ Auditor-General, 25th June 2014,

PCS to strike over outsourcing of MoJ shared services to Steria and the likelihood of offshoring work to India, 25th June 2014, Home Affairs

Mark Leftly, Capita makes £100m in army recruitment fiasco, 26th June 2014, The Independent

Paul Kunert, Steria, the MoJ and a £56 MILLION Shared Services write-off, 27th June 2014, The A Channel

Tony Collins, Are passport officials hiding IT problems?, 8th July 2014, Campaign4Change

Tony Collins, Stop filming! That’s the IBM exit strategy we’re discussing, 10th July 2014, Campaign4Change

Gareth Iacobucci, GP payment system and support services are to be privatised, 16th July 2014, British Medical Journal

Neil Merrett, Union raises MoJ outsource data protection fears, 24th July 2014, Government Computing

Tony Collins, Has Fujitsu won £700m NHS legal dispute, 24th July 2014, Campaign4change

Will Hazel, Manchester trust calls for suspension of Healthier Together consultation, 28th July 2014, Local Government Chronicle

Paul Kunert, Fears of cuts when shared services move to Steria, 29th July 2014, The Channel Register

Peter Smith, Exclusive! Delays hit arvatos government shared services centre, 4th August 2014, Spend Matters

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11 comments on “The biggest cause of shared services failure?

  1. Pingback: Cornwall Council – a model of local democracy | Campaign4Change

  2. FreeBalance (@freebalance)
    January 8, 2013

    Shared services comes from the belief that economies of scale can be achieved in government IT with little or no loss in aggregate effectiveness.

    The scale for handling peak activities from multiple organizations often requires enormous data centres with the expectation of phenomenal SLAs. Governance and coordination become unmanageable. Shared services promises the performance and reliability of Amazon or Google with the ability for organizations to determine product requirements.

    Government organizations have mandates and differ in size and domain. Shared services for complex processes like financial or human resource management assumes that all processes can be standardized. There are diminishing returns here as complex processes are imposed on smaller organizations. These types of shared services reduce efficiency and effectiveness through massive standardization.

  3. calchaspss
    January 8, 2013

    I spent a little time reflecting on your post. I think by mixing the ‘belief that shared services achieves economies … ‘ with the examples of sharing the sale of different products through a portal (amazon) and a shared information provision and retrieval system with individually loaded (google) you go too far. I accept that amazon and google work, it is at this point that the immutability of scale begins to break down.

    The nature of human systems is inherently different from retail and simple information flow networks. I include in this definition all services where a human beings tries to obtain a service from an organisation (and this includes HR, IT etc). Treating these as anything other than human systems, standardising them, dislocating them in a shared space, routing them through IT systems, has huge drawbacks. It locks in cost. Makes the service less flexible. Makes the service dislocated from the front-office. Undermines the whole. Carries inherent up-front costs (IT etc). Makes the whole system dumber. Finally, over time (even given the tier 1 savings through less of a common resource) it is the problem of tier 2 efficiency through industrialised that pushes cost back into the system through failure.

    Google and Amazon work for a reason. But the laws are not immutable and they are subject specific.

  4. FreeBalance (@freebalance)
    January 8, 2013

    Maybe I didn’t make my point clear. The people who think that Shared Services are the way to go in government believe that they can achieve:

    The same or better reliability than Amazon or Google despite
    1) A smaller infrastructure
    2) More complex software deployments (typically)
    3) Software designed initially for the private sector
    4) The need to govern software deployment, feature requests etc. with organizations

    • calchaspss
      January 8, 2013

      Ah. sorry get you now. Mind you, when you examine the definition of shared services, the number of university shared services courses uncritically discussing shared services, the huge marketing drive behind sharing, you can understand why you would think that.

      People do suffer from a confusion of fusion.

  5. Barbara Hodge
    February 20, 2013

    Interesting comment and I have to take exception to a few points made. First of all: the high failure rates (“70%? Probably more like 100%”) quoted are unheard of. I cannot track any real numbers (what was your source?) but from the near two decades SSON has spent speaking to SSO leaders and consultants to the industry, these kinds of numbers have never arisen. Now BPO may be another issue – still not to that extent, though.

    The second point I’d counter vehemently is that of “locking-in failure and waste.” As you quite rightly point out, it’s down to implementation. What you are describing sounds a bit like “old school centralization”. Shared Services has evolved and today, combining insights to data with a business partnering model, is definitely supporting strategic operations. I recently spoke with someone who leads Vodafone’s Finance operations who offered a brilliant analysis: yes, individual customers may complain that the service does not 100% suit their needs, but it’s not about being a democracy … it’s about what is best for the business (Check it out:

    If you follow this line of thought (and dare I say it, implementation), shared services are more often than not a very positive resource for any organization.

    Barbara Hodge, Editor, Shared Services & Outsourcing Network

    • calchaspss
      February 24, 2013


      The failure rates for shared services are not mine – I merely quote other people’s claims for shared services failure. The claim comes from Dominic Macdonald-Wallace (consultant selling shared services, turned lecturer).

      He writes:

      ‘What can be learned from the 60-70% of private sector shared services projects that fail to deliver on expectations?’

      He sources the evidence to – ‘HEFCE 2012, Harvard Review 2011, Oakleigh Consulting HE Shared Services Review 2010, Audit Commission 2008, and many, many, others’ [his words].

      Additionally, when you take into consideration the book ‘Dangerous Enthusiasms’ by Robin Gauld and Shaun Goldfinch, whose evidence-based study argues that 30% never see the light of day, and a further 60-70% costs stacks and never come right/

      Which doesn’t leave much does it?

      I listened to the Vodaphone podcast. What it does is tell you what they did, not what it cost, or offer up any other evidence.

    • Despairing public servant
      March 13, 2013

      “I recently spoke with someone who leads Vodafone’s Finance operations who offered a brilliant analysis: yes, individual customers may complain that the service does not 100% suit their needs, but it’s not about being a democracy … it’s about what is best for the business ”

      …and there we have it, from the horse’s mouth. This is precisely why it doesn’t work for public services, because they are not a business.

  6. Pingback: Shared Services – why it’s a failure for many organisations, and why we need to respect diversity when aiming for simplicity | Welcome to Catalyste

  7. Pingback: Shared Services – why it’s a failure for many organisations, and why we need to respect diversity when aiming for simplicity | Catalyste

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