© UK SBS 2014

UK SBSA Shared Services Success Story?

4th February 2014

Dr Clive Grace OBE Chair, UK Shared Business Services

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This session….

• Interest in shared services and outsourcing is increasing, mainly as a result of financial pressures

• But……reticence to consider options?• Evolution of UKSBS a positive story……• …of overcoming (considerable) challenges (with setbacks)….• ….creating a valued and successful service (with a long way

to go)….• …and demonstrates that the research sector is already

developing sector-led shared services providing for others beyond the HE sector.

• Raise awareness of potential opportunities – either through UKSBS or another vehicle

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Challenges for you • Deliver ‘more for less’ by improving efficiency of working practice,

sharing resources and working smarter

• Reduce the impact of funding shortfall and rising operating costs

• Manage the impact of declining UK student numbers due to rising tuition and living costs

• Exploiting potential revenue streams – i.e. attracting overseas students, raising individual profiles to attract students – commercial world

• Prove ‘value for money’ as well as deliver it

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Provide the public-sector with modern shared business services that reduce costs, improve quality, and free public sector organisations to focus on their core missions

Rooted in the Research Councils and (now) BIS

£60m pa turnover, 1,000 employees on 3 sites

Public-sector mutual, owned by its customers

Our History

Research Councils ‘encouraged’ to set up a shared services centre

2006 2007 2008 2009 2010 2011 2012 2013

RCUK Shared Services Centre Ltd incorporated

Launched first live system based service -HR for EPSRC

The Company starts to deliver strategic procurement services to Research Councils

Roll out of Oracle based HR, payroll, finance and procurement services completes

Company fully operational. Selected by BIS as preferred shared services partner

Board reconstituted to reflect new model and ownership. The Company delivers service to BIS and some Partners and becomes multi-site.

Revised Governance and ownership model implemented. Company name changes to reflect new business model

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Our Services

• Grants

• Finance

• Human Resources

• Procurement

• Property Asset Management (PAM)

• Information & Communications Technology (ICT)

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Our Customers

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Our position in the landscape

• We are a Shared Business Services company, not a shared services centre

• Rooted in the public sector and acting in the public interest - the company is a not-for-profit

• Procurement offer is both strategic and strategic+operational• Founded in effective category management• Cumulative Savings (validated!) of £100m plus• Close working with Russell Group (£5m benefit through

access to more favourable contracts) • Close working relationships with GPS and Crown Commercial

Service. Aligned with the wider Government efficiency and effectiveness drivers

• Keen to grow – and add new owner-customers - for reasons of efficiency and impact, but on a measured and low-risk basis

Results

40

30

20

10

0

£ M08/09

FY09/10

FY10/11

FY11/12

FY12/13

FY

£108 M savings against a target of £102 M.

5.8

12.2

24.8

33.132.0

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Procurement Metrics

• Savings:– 2012/13 = £32m– 2013/14 = £80m– 2017/18 = £640m

• Spend under management:– 2013/13 = £0.7bn– 2013/14 = £1.5bn– 2017/18 = £8.0bn

• Sourcing cycle c80 days (government target 120 days)• E-route spend 70%+• On-boarding supplier 2013/14 = 7 days, by 2017 = 3 days• Spend with SMEs = 30%+

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DISEASE

Cancer Research

UK

Medical Research Council

University of

Cambridge

University of Oxford

University of

Liverpool

University of

Edinburgh

Genome Sequencing Equipment

“In a very short time since the inception of UK SBS there has been a dramatic sea-change within our scientific community, from initial concerns over the prospect of the Company interfering with our science to one of active engagement.”

Andrew NorthropMRC Laboratory of Molecular Biology, Cambridge

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Enabling efficiencies through sharing resources and

knowledge

Creating opportunities for inward funding at MRC

Procureweb

Helping our customers realise

‘more for less’

antibody database

Facilitating scientific equipment exchange

Collaboration benefits

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Lessons learnt

• Procurement is an enabler not a policeman• Building contact and relationships is key -

collaborative procurement doesn’t mean compromise

• It does mean understanding the needs and diversity of the customer base

• Agreeing governance and decision making• Willing partners….or very clear mandation• Information and transparency• Adaptability is key to achieving maximum

benefits

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Doing it better….

• Concentrate on value. Change the way that procurement actually functions. Engage early with the customer, keep them involved during and post contract. Engagement is the only way to ensure customers get what matters to them.

• Use the supplier as an asset. Harness the experience, resources and knowledge possessed by the supply base to advantage.

• Make it easy for the customer. E-marketplaces like Science Warehouse and SciQuest speed-up the buying process through direct access to on-line catalogues and buying on-the-spot. BUT they are not yet as sophisticated or as user-friendly as exchanges such as Amazon. That “experience” needs replicating in public sector procurement.

• Make it easier for the supplier. eg Eliminate the need for the Pre-Qualifying Questionnaire process in sub-£100k procurements. Increase the proportion of Small-to-Medium Enterprises (who tend to be more innovative) into government contracts.

• Raise commercial awareness across the public sector. Masses to do across the public sector to make managers more commercially aware.   

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UK SBS added value….

• Understand the challenges and environment

• Scalable ownership and governance model

• Teckal company – easy to become part of

• Cost driven

• Right mix of people, capacity and capability

• Flexible service portfolio

• Effective use of technology and digital culture

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Useful to you?

• Diamond Report demonstrates great progress in the sector

• Flexible service provider

• Customers maintain control

• Harness synergies to deliver mutual benefits

• Outcome focused

• ‘We focus on what do well’ – allowing customers to focus on their core activities

• Develop your own vehicle?

© UK SBS 2014

Clive.Grace@uksbs.co.uk