Leading public sector and professional services organizations look to shared services model to improve core business functions, data compatibility and real-time analytics
Unit4, a leader in enterprise cloud applications for people-centric organizations, today highlighted key trends in shared services adoption among public sector and professional services organizations (PSO), drawing on data from the 2023 State of the Digital Nation and Pierre Audoin Consultants (PAC) Study: Professional Services - A Benchmark for 2023, both commissioned by Unit4.
The studies reveal there is already widespread acceptance of shared services among both PSOs and public sector bodies. However, it suggests that there is a clear focus on using shared services not only to drive cost savings but to improve operational performance, decision-making and agility, in order to achieve organizational resilience.
Moving beyond cost saving to shared resilience
Internationally, around half of the PSOs in the PAC Study say they have centralized project management, customer services, and sales and marketing, which indicates that shared services can be effective in streamlining key customer facing business processes. One fifth of PSO firms say that in the next three years they will focus on aligning core project, contract and resource management processes, which is similar in the UK. This could be in response to the impact of remote working, as well as PSOs recognizing the potential to develop global delivery models, which require critical functions to be simplified and co-ordinated across borders. Across all the markets, almost a quarter (24%) say they will centralize Financial Planning and Analysis (FP&A) in the next three years, but this is a lower priority in the UK (15%), which is possibly because 60% say they have already centralized finance and accounting. This demonstrates that PSOs plan to capitalize on the benefits they have achieved to-date with shared services, in order to create a single view of company-wide data using FP&A tools. It also reflects the understanding that the benefits of a shared services approach are not limited to removing costs, but also include the development of greater agility in responding to opportunities using real-time insights.
“PSOs are adapting quickly and they understand that shared services can help to build resilience against market uncertainty, which is critical if they are to remain competitive,” said Mike Ettling, CEO, Unit4. “During the pandemic, PSOs experimented with global delivery models and, for ambitious mid-market firms, this can act as a way to differentiate. To be successful, though, requires streamlined and aligned internal and external business processes. It is clear that the shared services model offers a more effective way to establish the right foundations for global delivery strategies.”
Belgian PSOs (37%) are ahead of the global average, intending to move finance and accounting functions to a shared services model in the next three years, compared to 25% in the Nordics and globally 38% of IT Services firms. The DACH region clearly illustrates the benefits of moving to a shared services model, as 77% of PSOs have already moved their project management teams to this way of working and they outperform their peers in terms of delivering projects on time. This can, in part, be attributed to having a holistic view of all the data within their organizations on project management.
There has been significant growth in the adoption of central and shared services, which has gone from 0% in 2021 to 33% in 2023, according to the State of the Digital Nation study. For those already using central and shared services, growing its footprint has been one of the top three changes that public sector organizations have seen in the last 24 months.
Canadian respondents place the greatest emphasis on it, but it drops out of the top three for UK respondents. In contrast, it is a top three priority for central government and healthcare bodies, but falls just outside for state/local/municipal authorities.
“There is an urgency to look at the shared services model in the public sector, not just because of budget constraints but because it is understood that service providers must collaborate to deliver services effectively to citizens,” Mike Ettling, CEO, Unit4. “Shared services are going through a perception change in that they are no longer just seen as a means of cutting costs, but as a strategic means to resolve fundamental challenges around legacy systems, data compatibility and delivering real-time analytics. The model has the potential to deliver on ambitious transformation goals to make the public sector fit-for-purpose in the 21st Century.”
In 2023, 29% of respondents say there is a need for wholesale improvement in data compatibility, while 34% say large improvements are needed. Canada has the highest percentage (41%) demanding wholesale change compared to UK (35%) and Sweden (17%). Central government respondents (43%) are most likely to say this issue requires wholesale improvement, compared to state/ local/ municipal bodies (29%) and healthcare providers (16%). Finance decision makers also say that accessing real-time data has become harder (54%), compared to the previous study in 2021 (40%). All these indications underline the importance of having centralized services where public sector bodies can streamline and integrate all sources of data within their organizations to form an accurate picture of priorities and respond with greater agility to optimize performance.