Archive for the ‘Shared IT service’ Category

Why do shared services fail?

September 19, 2012

There are a plethora of reasons why Shared Service models fail. However, understanding the key reasoning should help an organisation navigate what is often thought of as a painful and costly process. It is this thought which often persuades organisations to steer clear of 3rd party suppliers and adopt or continue with more costly and less efficient models.

Reading a piece of news about a shared IT service which failed to produce the expected cost-efficiencies or even created extra costs is far from unusual nowadays – the latest concerns being the Government’s new shared models, but many other cases have populated the press. However, this doesn’t mean the model is wrong: if implemented correctly and with the right metrics in place, it can deliver a whole new world of efficiencies, cost savings and value to organisations in both the public and private sectors. But to understand how to achieve success we first need to ask ourselves: why does a shared service fail?

Business Demand

The first consideration needs to be the driver for changing the existing Service. If the driver is purely cost then a Shared Service model will work for any organisation; however, it will be at the expense of quality of Service.

As we are all aware the current financial climate is proving a major constraint to all business sectors. This is especially apparent within the Public Sector and has led to a demand for low cost Service at the sacrifice of quality. Whilst it should not be the case (certainly given the critical nature of aspects of the sector such as the NHS), there is view that the user communities are more accepting to a low quality of Service. This enables a supplier to construct an operation which will provide a Single Point of Operation (SPO), but to meet the demands for cost savings they will often provide staff who can be either under-skilled, underpaid, unmotivated or a combination of the three. Typically such Services will be shared by a large number of organisations operating across different specialist areas. It will also be driven by the largest participants as they provide the greatest source of income for the organisation. This is likely to see an SME participant suffer due to the revenue extraction from a much larger organisation. This is by no means a slight on any such supplier – after all they are filling a void in the market place, and as long as an organisation understands these basic elements, this should alleviate many concerns.

Whilst the Private Sector is certainly not immune to the downturn, the demand for quality remains, just at a lower cost. This has led to the upturn in the number of household names investigating all possible efficiency savings. From Off-Shoring to Near-Shoring the options are many; however, the favoured from the user still remains within our own shores, just at a more efficient price. The success of shared models within the Private Sector is linked to a restriction on the number of active participants and a commonality in user demand.

Commonality

Where participating organisations share synergies such as profile/type of User demand and common infrastructure, the success of a Shared Service Model has a head start. The more diverse each participant’s environments, the more complex the solution and the harder it is for a supplier to deliver a consistently high quality of Service at an efficient price.

One Size fits all?

There are suppliers that will lead you to believe they have the exact solution which will meet your requirements and will roll out a price list of the Services provided and the cost of each aspect of the Service.

The simple answer is: One Size does NOT fit all! Every organisation is different and it is this approach which has led to Outsourcing being given a bad name in certain quarters. Every Service has to be built from the ground up and if a supplier is happy to quote you a price without having a clear understanding of your business drivers, infrastructure & strategic roadmap then you should be considering whether they are a suitable partner.

Wrong metrics

To understand if a shared IT service is being successful and creating benefits, you need to decide which metrics to use to assess its success. The cost savings of a shared service are normally calculated on a cost-per-call basis. Of course if you only take that into account, the savings are evident – but that is not the only factor to take into consideration. By sharing IT Support with a number of other organisations, with different systems, environments and requirements, it is difficult to enjoy the same levels of service a dedicated service can provide. You will typically get a reduced commitment from a supplier compared to what you would have in a one-to -one relationship; so things like first time fix rates, percentages, response and resolution time will be generally lower.

Delays, downtime and other inefficiencies actually increase or create new costs even if the general expenditure related to the service is low. That might be why the expected cost savings are not met by many organisations – expectations have to take into account many other factors as well. This does not mean there aren’t any benefits and cost savings compared to a dedicated service; they just have to be more realistic.

Hidden costs

On paper, a shared service will always be the cheaper option as it is designed to be marketed on a cost per call basis. However, expect additional costs for anything else you want on top of that. You buy a volume of tickets for a cheaper price, but when you break your threshold, you pay more per call – like going overdrawn in your bank account. If you’re a major organisation and you want to be able to control your costs, you are stepping into an unknown when entering a shared service model. It is important that the supplier is transparent on any additional costs you might encounter so that you are able to calculate a realistic expenditure that you can expect from the service.

Also, in a shared service, there is a very heavy reliance on process and knowledge coming through to the supplier from each customer, and any break in that knowledge will cause issues – and there is going be costs associated with that. So make sure your supplier talks you through and documents how such activities will be handled.

The successful shared service

There are definitely benefits in using a shared IT service, but in order to achieve them it is important that the model is implemented correctly. Generally speaking, a golden rule is that shared services work best when there are just a small number of organisations sharing, of similar type and sector and with similar environment, systems and needs. A good example of a successful shared service is one shared by similarly-sized legal firms which will have the same issues – mainly supporting standard devices, Document Management, email, digital dictation and so on, but without being in competition with each other on what concerns their technology offering, such as banks.

As for the service provider, it is important that the company used is transparent with what concerns cost and service expectations, and that they are committed to align their service to the customers’ existing SLAs at the very least, if not make an improvement.

Thanks to this, organisations can use the shared service in a cost-effective way to gain more efficiency, access higher skills for a lesser price, and at the same time not have to worry about the day-to-day management of their IT function as it will be well taken care of by another company. This way, they can focus on the core of their business and on how to use IT more strategically to enjoy even greater success.

Pete Canavan, Head of Support Services

This article was published on Sourcingfocus: http://www.sourcingfocus.com/site/opinionscomments/6270/

Shared services: a problem shared is a problem halved

May 1, 2012

A problem shared is a problem halved’ – This idiom generally refers to a person feeling better simply by sharing their woes with another, and most of us would agree that this phase is more often than not, very true.  From an IT perspective, this common saying is profoundly relevant when applied to Shared Services, and in more ways than one.

To make my point, I would draw on three words from this old saying:

  • Problem
  • Shared
  • Halved

IT support typically addresses the day-to-day, on-going management of ‘problems’.  In fact, a more popular (best-practice aligned) word these days might be ‘incident’ or ‘fault’.  Whatever they’re called, IT problems are an inconvenience to all businesses, are a distraction from the business’ core competency and interrupt the effected users from their work.  Furthermore, such problems do not contribute to the successes of the business, and worst still, are a costly overhead.

In this context, ‘shared’ has a double meaning.  By engaging with another to share your troubles, the weight of that trouble is somewhat lifted.  This, in itself, is welcome relief.  But ‘shared’ can also form part of the solution if an IT Shared Serviced is properly considered as an alternative to managing problems, incidents or faults, in-house.

Halved’, not be taken literally, is a reference to the measure of gain achieved by sharing the problem.  Use of a shared service can (and should) lead to a measurable improvement in service and reductions is cost.

As a result of the recent economic downturn and period of unprecedented financial uncertainty, providers of shared IT services have had to become very, very good at what they do.  Without stepping up to the mark, and indeed, extending the mark, IT service providers would simply slip by the wayside (and many of them have).  It is, therefore, a good thing for businesses that IT service providers have been forced to compete so aggressively with one another because it has led to new levels of service excellence and reductions in cost.

So, by referencing (for one last time) the proverb – ‘A problem shared is a problem halved’, businesses do have a chance of sharing the burden of IT support with others who are better placed to manage it whilst at the same time improving on service and reducing cost, but only if they are willing to consider the possibility of outsourcing their IT support needs.

Jon Reeve, Principal Consultant

Visit Plan-Net‘s website and learn more about what we do and how we can help your business: http://www.plan-net.co.uk

NEWS: Plan-Net expands UK’s only 24/7/365 shared, legal-dedicated IT support service

April 17, 2012

News release – for immediate release

17-04-2012

Service Provider Plan-Net Plc. is extending its unique 24-hour legal-dedicated IT support service to include more clients. After successfully running it with selected organisations for a period of time, the shared service is available to a limited number of City law firms.

Plan-Net’s central London legal-dedicated service centre caters for all of the requirements of a modern law firm; 24-hour availability, including weekends and bank holidays, high levels of customer service and security, high response rates, specialist knowledge of legal technology, and global reach.  The service is also modelled to align with each client’s individual IT support operations.

Plan-Net are restricting the number of firms that can participate in order to maintain quality levels of response, fix-rate and customer service.

Richard Forkan, Director at Plan-Net, said:

“Speaking to our clients in the legal sector over a number of years, it has become clear that a gap in the market exists for a legal-dedicated service that can meet the unique requirements of this sector.

With law firms under increasing pressure to maximize chargeable hours, the need to keep fee earning lawyers productive is not just limited to standard working hours.

We’re also seeing more and more UK law firms expand internationally and specifically in the middle and Far East requiring IT support to be truly 24/7.

The only options available to law firms in the UK at the moment are either to invest in their own in-house out-of-hours capability, which is a huge expense, or use a generic service which doesn’t accommodate the unique service models, applications and customer service requirements of individual legal firms.

Our legal-dedicated service has been built in specific response to the market, combining the cost savings of a shared service with the specific expertise and service levels needed in the legal sector.”

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Notes to the editor

  • There are limited places available in the Shared Service Centre. Law firms that are interested in participating should contact Plan-Net on 020 7353 4313 or send a message through this Contact Us form: http://www.plan-net.co.uk/contact-us
  • About Plan-Net

A specialist in transforming IT operations into high-performance, cost-efficient platforms for business success, Plan-Net is the service provider of choice for organisations in need of a tailored solution to suit their specific needs. Its focus on achieving high levels of availability, capability, response and customer service benefits clients demanding tangible competitive business advantage from their IT.

Plan-Net’s Support and Consultancy Services have helped clients enhance IT performance, flexibility, security, cost-efficiency and user-productivity for over two prosperous decades.

Website: www.plan-net.co.uk

Blog: https://plannetplc.wordpress.com/

Twitter: www.twitter.com/PlanNetplc

  • Press contact:

Samantha Selvini

Press Officer, Plan-Net plc

Tel: 020 7632 7990

Email: samantha.selvini@plan-net.co.uk