Introduction to Shared Services at Scale within the NHS

There is a growing trend among government organisations, including the NHS, to implement scaled shared services in light of current financial challenges. This presents an opportunity for ICS's to achieve synergies and financial benefits. Shared services involve the consolidation of common back-office functions, such as Finance, HR, Procurement, and IT, into a single entity that serves multiple organisations. This approach helps organisations to reduce costs, improve efficiency, and standardise processes with the aim of unleashing productivity and reducing duplication and rework on the front-line of care.

The NHS has been exploring the use of shared services for many years, with various initiatives launched to improve the efficiency and effectiveness of enabling functions. However, the uptake of shared services in the NHS has been slow, and there are still many challenges to overcome to achieve the benefits of shared services at scale.

Drivers for change:
 

ICS's have created the opportunity for systems to work closer together to drive organisational benefits. However, the NHS faces challenges in accessing value from shared services, which can be categorised into three main areas:

Strategic misallocation:
 

• Lack of understanding of system-wide demand and cost
• Misallocation and scheduling of staff and resources
• Unattainable strategies and plans
• Fragmented delivery of back-office services
• Difficulties in creating a business case for automation and digitisation
  

Operational inefficiencies:
 

• Manual processes
• Low productivity
• Inefficient operating models
• Fragmented data systems lacking a single source of truth
• Underutilised investments in systems such as the integrated single financial environment (ISFE) and Electronic Staff Record (ESR) upgrades

Cost control challenges:
 

• Ineffective cost centre controls and reporting
• Unfitting cost allocation approaches
• Limited long-term budgeting
• Inadequate sourcing controls for third-party spend
• Overlooked opportunities for shared procurement at scale

Benefits:

Implementing shared services within the NHS can bring about various benefits, tailored to each organisation's key objectives:

Cost savings: The NHS is facing significant financial challenges, and cost reduction is a key objective across the country. By implementing shared services, the NHS can consolidate back-office functions, such as finance, HR, and IT, into shared entities, achieving significant cost savings. Benchmark return on investment of 10x should be expected from successfully scaled shared back-office services¹.

Improved productivity: Shared services can improve productivity by standardising processes, reducing variation, and streamlining corporate operations. This can result in faster processing times, fewer errors, and have fundamental implications for improved front-line delivery. NHS England has recently published their aim to agree standard sets of metrics that all executive teams and boards should use to track productivity alongside service delivery², a further driver for shared service implementation.

Improved quality: Shared services can help to improve the quality of services by providing greater understanding of service challenges and better allocation and planning of resource. This can result in better service delivery, improved satisfaction, and better outcomes for patients.

Enhanced resource allocation: Shared services can specifically help organisations to allocate resources more effectively by providing greater visibility, control and planning of resource usage. This can help organisations to identify areas of inefficiency and to redirect resources to areas of greater need. NHS England has recently reiterated the coming 2024/25 year will require continued focus of temporary staffing cost reduction2, a challenge in which scaled shared services as scale can help solve.

Increased collaboration: Shared services can promote greater collaboration between organisations by providing a common platform for communication and coordination. By pooling funds and resource, NHS services can take advantage of new technologies and innovations that would be too expensive or complex to implement within singular entities.

Enhanced flexibility: Shared services can provide greater flexibility by allowing organisations to scale up or down their operations as required. Expanding options to work-from-home, for example, can build flexibility to help retain talent in challenging labour market conditions within back-office functions.

Standardised data: Shared services bring about significant benefits in terms of data sharing, improved decision-making, and transparency. If common data platforms and IT infrastructure can be implemented, NHS organisations can create a unified and standardised approach to data management. This would enable seamless sharing of information across systems and functions, facilitating better collaboration and coordination. Additionally, shared services could help to reduce costs associated with maintaining multiple IT systems and data platforms, freeing up resources for other critical areas of healthcare delivery.

Setting up for success:
 

Implementing shared services requires careful planning and execution to ensure success. There are a number of considerations to ensure an organisation maximises the available benefits and overcomes potential challenges.

Set the governance early: Effective governance is critical to the success of shared services implementation. It is important to establish clear roles and responsibilities, decision-making processes, and performance metrics. This includes a formal SRO to take on the challenge and agreeing organisational hosting for some/all elements of the shared service implementation. This can help to ensure that the shared service is managed effectively and that the needs of all organisations are met.

Set an achievable roadmap: It is crucial to establish an achievable roadmap that outlines the vision for short, medium, and long-term shared service changes. This roadmap should be led by the SRO who can provide strategic guidance and oversight. For instance, the short-term focus may be cleansing and standardising data systems within each organisation. This would lay the foundation for the medium-term goal of consolidating data system-wide, ensuring seamless information sharing and interoperability.

Be deliberate in your chosen model: Deliberately design the function of the corporate services needed and don’t start with the form – form follows function. Designing the operating model around this principle will ensure success, buy-in, and ultimately deliver more value to end users.

Design services around users: Employ User Centred Design (UX) to wrap services around end users and drive the value-add of corporate services for front-line NHS users. Putting digital first, making it simple, driving process that work for users improves the corporate service offering and offers a reduction in non-patient facing bureaucracy.

Involve stakeholders in the journey: It is essential to ensure that all stakeholders understand the benefits of shared services and their role in the implementation process. Communication should be regular, transparent, and tailored to the needs of different stakeholders. The journey from initial planning through to implementation requires the involvement of all stakeholders, including staff, management and external partners. This can help to build trust, gain buy-in, and ensure that the needs of all stakeholders are met.

Invest in managing the change: Effective change management is essential to ensure that colleagues are engaged and motivated throughout the implementation of new processes, technology, and governance – this encompasses both users and those delivering the services. This can include training, coaching, and support to help teams adapt to new processes and systems.

Conclusion:
 

Implementing shared services at scale within the NHS presents a significant opportunity to address nationwide challenges and drive positive change within the healthcare sector. By consolidating back-office functions, such as finance, HR, and IT, shared services can deliver cost savings, improved productivity, enhanced quality of services, better resource allocation, increased collaboration, and enhanced flexibility.

At Deloitte, we understand the challenges and complexities faced by the NHS. With our expertise in strategic cost transformation, process improvement and shared services design and implementation, we are well-positioned to support the journey towards implementing shared services at scale.

Footnotes:
 

¹ Evolution of shared services | Deloitte Insights
² NHS England » Update on planning for 2024/25

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