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Shared Services Feasibility Study
Summary of Shared Services in the Charity Sector Feasibility Study October ‘99
The objective of this study was to assess the opportunity to establish a shared services centre for six organisations in the charity sector. The charities involved were all within the top 50 charities in terms of income. The scope of the project included six processes: Purchasing, Accounts Payable, Direct Marketing and Trade Fulfilment, payroll, Internal Audit and General Accounting. The study proved that there is a very strong case for shared services with financial payback for the project within three years.
It looked at the current situation in the sector where there is increasing pressure to maximise resources; an increasing drive for transparency; and more competition for funds and support. These factors all support the concept of a shared services environment for charities.
The study looked at the possible cost savings that were apparent when the six charities shared services. After the initial set up cost was accounted for, the charities would save over £2.5 million in three years. This represented a saving of a third of the whole finance costs. The savings can be made due to the use of economies of scale; a lower cost environment; the greater use of the latest technologies and the fulfilment of the capacity of indivisibilities such as office equipment and staff with very specific expertise.
The study assessed factors that would contribute to the success of a shared services environment. This included accessibility to skilled labour; economic growth and investment in infrastructure; an exit strategy; skills within the sector; and the desire to change. The obstacles to success were considered and were seen as resistance to change; limitations of existing systems; lack of executive commitment; unrealistic objectives – all situations we try to educate the sector about nowadays. The main barrier to achieving cost savings through shared resourcing was the cost and energy of educating those in the sector that it will work.
