Improve Operational Profitability

Finance Shared Services

Three government bodies had joined with a private sector partner to realise benefits from shared service in Finance & Accounting.

The first task of their joint venture was continuity of delivery to end users whilst rapidly reducing over-capacity by closing sites and amalgamating functional activities into new centres of excellence (CofE). It was anticipated that waste existed in the systems of work due to inefficient processes, duplication and inconsistent standards of performance.) A goal was set for the first year to realise benefits of over 200 full time equivalent (FTE) headcount savings, thus bringing operational costs to acceptable levels. Six months into the programme it was still unclear as to:

• What progress was being made towards the target operating model (TOM)
• What reported numbers could be relied upon by senior management
• Which approaches were proving to be effective and should be further supported.

Of most concern was the lack of clarity on which sites were to remain as CofE. It seemed increasingly likely that the TOM would not be achieved for these sites with significant risk of financial and consequential losses. These sites were anticipating new workloads from the closing sites but also losing some existing functions to other CofE. Many people had accepted offers to leave over the coming year. It was unclear if those leaving were:

• The right people, from a skills and corporate memory viewpoint
• In the right numbers to achieve the TOM
• From the right functional areas to underpin functional capability
• At the right dates, aligned with work movement and seasonal variations in customer demand
• Jeopardising capacity for change management

Future operational capability was clearly at risk…

Reinvigoration put in place a small team to work on the ground with management and staff at those sites designated CofE. The first requirement was to establish the baseline position:

• Savings already identified
• Performance against standards
• Proposed changes to structure and resourcing
• Process opportunities and limitations

The approach was characterised by: interviews; analysis; checking; validation; relationship building; frequent feedback; deep dive into issues; guidance on best practice; challenge / iconoclasm. The Tools and Techniques used included:

• Review of structure & spans of control
• Assessment of risk & failure modes
• Process Analysis
• Forced distribution of effort
• Structured Interviews
• Introduction of a tracking system

The team produced reports on all the findings including management information and recommendations for further action.

The results of the project were significant with all project targets and deliverables achieved

• Target Net Capacity Release Achieved and Verified
• A reduction in the FTE count of 24% at one site and 29% at the other by target date and detailed forecast of further reductions into the next year due to efficiency / productivity gains.
• A host of implementation plans and recommendations for risk reduction and further improvements
• Vulnerabilities were removed, recommendations made and plans established to run services using the new operating model – including training, recruitment, knowledge capture, process change and the elimination of waste.
• Crucially, the project’s success under-pinned and informed strategic plans for further technological and operational development.

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