Technology identified as key factor in public sector migration to shared services

Technology is a key factor in the adoption of shared services among public sector organisations, according to new research from leading provider of workforce solutions, MidlandHR.

The findings revealed that three quarters (73%) of public sector organisations believe that supporting technology is ‘important’ or ‘very important’ when implementing a shared service for HR and payroll.

The research, HR and payroll shared services in the public sector – perceptions and realities, examined the opinions of over 100 UK public sector representatives, from functions spanning HR, payroll, finance, purchasing and IT.

According to the findings, the most important attribute of technology in supporting shared services was the ability to facilitate process efficiency. Flexibility of processing for different service users; high performance in volume; cross organisational analysis and workflows and scalability were also rated as important. In organisations already sharing services, two of the three top challenges identified were based around technology, namely: developing new skills to accommodate the software and technical issues. The third challenge was the time needed to get everything running smoothly.

Of those sharing services, two in three (63%) organisations share services internally, whereby multiple departments share a centralised service or services. One in five (18%) operate a joint service shared with another organisation, while 12% are the lead organisation supplying services to other organisations. The majority (84%) felt it was very important to redesign processes as part of a shared HR and payroll service.

Karen Bull, product strategy manager at MidlandHR, comments: “With two in five organisations (37%) planning to implement shared services in the next two years, they’ll need to ensure that their supporting technology is process driven and highly configurable. This will enable multi-organisational processing in one environment. Systems without this high level of configurability will dictate generic, homogenous processes that don’t fit any of the organisations’ needs. It’s vital to allow organisations the option to be individually configured. The fact that 86% of those sharing required individual configuration demonstrates how critical it is to the success of shared service ventures.

“The flexibility of MidlandHR’s single web solution, iTrent, enables provision of the full range of shared service operating models. Prospective customers find this to be a great advantage because they need the reassurance that they are buying into an underpinning technology solution that will enable them to develop a shared service model that is right for them, and will deliver the goals of each of the organisations in the partnership.

“It is interesting to see that almost a third (30%) of organisations perceived payroll as an easier service to share compared with HR. The main reason stated for this was that it is more of a transactional process for which well established systems are available at a reasonable cost. Whether for HR, payroll, talent management and workforce planning, MidlandHR’s iTrent solution was built to support a shared service environment. This has been further honed from experience of our outsourcing services, which use iTrent as the platform. As iTrent is process driven, it enables multi-organisational processing in one environment, which has been critical to our success in securing shared service business.

“MidlandHR’s experience suggests that the best results are achieved from sharing services internally first. This aligns with the research which showed that the majority of organisations sharing externally had indeed shared internally first. For those not already sharing, 58% would choose an internal shared service as their first option. The research further illustrates that a large proportion of public sector organisations are currently sharing internally only. These organisations are in a prime position to realise further efficiencies through sharing their HR and payroll services externally. It is therefore no surprise that MidlandHR is receiving more customer enquiries regarding the external rollout of shared services. We’re pleased to be at the forefront of HR and payroll shared services providers, offering our customers the support and technology needed to maximise the opportunities available to them.”

To download a copy of the full report, HR and payroll shared services in the public sector – perceptions and realities, please click here. For more tips and recommendations about sharing HR and payroll services, keep an eye out for MidlandHR’s guide to HR and payroll shared services in the public sector, coming soon.

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