Business Plan. Executive Summary UK Shared Business Services Ltd

Transcription

1 Business Plan Executive Summary UK Shared Business Services Ltd Published June 2013

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3 Contents I Introduction 3 II Executive Summary 6

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5 Introduction: Geared for Growth in the Service of our Customers The challenges facing UK public services call for ambitious plans to increase efficiency, improve service quality, and reduce expenditure. This business plan for our re-named Company gives effect to that ambition for a wide range of business services for the Research Councils, Department for Business, Innovation and Skills (BIS) and its other partner organisations, and for an increasing range of additional clients. Across 2012/13 the Company grew in turnover from 44.7M. to 55.2M. as we took on new clients and developed the business. Within that growth we: Reduced the Research Councils back office charges from 32M. to 31.3M. Saved 33M. for the Research Councils in verified procurement benefits, being greater than the entire cost of the services we provided to them Increased the number of SLA targets to over 90% met Grew our clients from 7 to 22 (this will likely grow by a further 10 in 2013/14) Grew our customer user base from 11,000 to 18,000 and will likely expand to 23,000+ in 2013/14 Were independently judged to be the best performing shared services centre in government Became a multi-site centre 2012/13 was also the year in which our service was fully stabilised and service quality was enhanced, most notably through 20 successfully implemented Business Improvement Projects. We took on Phase 1 of the BIS Shared Services Programme, and also BIS Procurement through an agreement to provide cross government capacity and capability, and we signed a strategic MOU with the Government Procurement Service to deliver on two major procurement categories (construction and research) across Government. As the year ended we reconstructed the Company s governance and ownership to better reflect our business intentions and mission, and to ensure that our governance is flexible and scalable, and encourages employee participation and involvement. We also strengthened our executive capacity, including creating Directorate teams for our newest business services of Transition and Property Asset Management. In short, across all major dimensions of the business we are now geared for growth. But what does that mean for our owners and customers, and for the Company and its employees? The Year Ahead: The business fundamentals for 2013/14 are as follows: Overall we expect to grow revenues from service charges to 38.0M. (2012/13: 35.1M.). We expect our core employee base to grow from 740 as at April 2012 to an average of 870 in 2013/14 reflecting the increasing scale and scope of the Company s activities during both 2012/13 and 2013/14, but also reflecting greater resource efficiency. In line with Government Policy, any increase in employee numbers will be based on a clear and compelling business case. In procurement we will deliver 80M. (2012/13: 32M.) of validated savings, including 36M. to the Research Councils (again more than the entire cost of the services provided to them by the Company) In property asset management we expect to establish the function fully and firmly within the Company, and make significant inroads to a target of 100M. in year on year savings 3

6 In ICT we will extend the Direct ICT Services (managed services such as desktop and hosting) to new clients, generating savings to clients greater than 5M. pa In HR and finance we will focus on continual process improvement including emphasis on innovation, standardisation, simplification and automation. In 2013/14 this will reduce the cost per customer of standard transactional services by some 16% compared to 2012/13, in-line with Cabinet Office targets In grants we will ensure the unique end to end service remains as a core offering to our customers and continue to administer research grant awards in excess of 2.4bn, in accordance with our customers needs and in light of a current review. This Busines Plan also sets the course for UK SBS to be a leading player in grants delivery across government In transitioning we will build on our experience of moving the first BIS Partner Organisations to our services, and develop a flexible and professional delivery mechanism which can ultimately be offered as a new business service to others. By the end of 2013/14 this delivery mechanism will have supported a 28% increase in the number of UK SBS users We expect to appoint one or more strategic partners from the private sector to strengthen our transition capability and enable us to address new markets and wider challenges for our services We will strengthen our focus on our people and ensure our organisational development drives our ambition to become a great place to work We will maximise the value add we provide to our clients procurement and estates alone are set to deliver 100M. value to clients during 2013/ /14 will be a year of transformation to a fully-fledged business services Company that partners with our clients, offering broad services with high impact to help deliver Government strategy on economy, efficiency and reform. Whilst we will expand our service lines and client base, we will equally strengthen the value and service proposition for our existing clients. We will improve efficiency, economy and quality (these are not mutually exclusive) in the services we already provide, and also provide new services further up the value chain where that serves their missions and business objectives. Business model: Although an independent legal entity, the Company is a mutual service provider, owned and controlled by its clients, and also includes specific provision for employee participation in its ownership. We charge our clients the full cost to serve, including in-year investment needs, and no more. Our business model is focussed on developing a wide range of high quality and efficient business services to Central Government and its partners, especially BIS, and to other public entities. All clients will participate in the Company s client governance arrangements, and if they are themselves separate legal entities they will also where appropriate share in the ownership and direction of the Company. This gives effect to the Teckal opportunities within the European procurement regime for public bodies which is at the heart of our business model. We aim to grow both turnover and the range of business services we provide in a managed and measured way. A cardinal principle of all our business growth is that it improves the efficiency, quality, effectiveness, and economy of the services a client takes, or an optional combination thereof. This starts with a rigorous and specific business case, translates into demanding SLA targets, and is then transparently monitored against published private and public sector benchmarks. We operate in the public interest but are held to providing commercially competitive services by the knowledge that our clients are free to take their services from the open market. 4

7 The Period : Across the remainder of the business plan period we will continue to improve services, reduce unit costs, and grow both revenues and service range. The full business plan which follows sets out our current projections in these respects. However there are two important themes which may influence these projections. First, our recent experience has been of strong and developing demand for our current service by potential new clients, and for the Company to take on or develop new lines of business. The pace has been very fast, reflecting the scale and the urgency of the challenge faced by UK public services. For example, the new Property Asset Management Directorate of the Company moved from initial thoughts to Board approval of the Business Case and initial implementation in less than five months. We expect this pace to continue. However we are aware of the risks associated with such pace and are consciously taking a careful approach to implementation. Secondly, the Company s services and their development need to be seen in the wider context of Government Shared Services policy. We are keen partners with the Cabinet Office across a number of key areas of activity. Part of the Company s service provision (primarily certain of the transactional services we offer) relate to the Cabinet Office initiative known as ISSC2 and subject to a positive business case we expect to commit the relevant part of our business activity (some 15% volume of in scope transactional services) to that enterprise. The business plan: Our overall objective is to optimise our impact as a valued partner to UK public service in facing daunting service and financial challenges. This final version of the UK SBS business plan 2013/18 has been prepared jointly by the Board and the Senior Executive, and it reflects our shared ambition for the Company of gearing it for growth in the service of our customers. It has been approved by our Shareholders. It includes amendments from earlier drafts to relect all the comments they made; which we will give full effect to in implementing the plan. Dr Clive Grace OBE Chair Jonathan Preece Chief Executive 5

8 Executive Summary This business plan marks a new direction for RCUK Shared Services Centre Limited as it transforms into a provider of shared business services and re-names as UK Shared Business Services Ltd (UK SBS) Up until 2012, the Company has successfully focused on building business processes, systems and services to support its Research Council stakeholders. The Company currently provides a wide range of business services, in addition to transaction processing, and has the capacity and intent to develop these further, and to a wider cross-government client base. In addition, over the past 12 months the Company has implemented a number of changes to its corporate governance arrangements that provide a suitable and strong platform to allow growth. The Company is taking this opportunity to signal its uniqueness and new direction reflected in the change in name to UK Shared Business Services Ltd. UK SBS is uniquely positioned as an entity to complement Government strategy for shared services and this business plan aligns with the Government efficiency and reform agenda The Cabinet Office efficiency and reform agenda is focused on delivering high volume transaction processing across multiple Government departments through a single shared service entity (ISSC2) under the Next Generation Shared Services programme (NGSS) published in December The Cabinet Office has published an invitation to tender in the OJEU and the Company s transaction volumes have been included within the OJEU notice. The volumes in scope represent approximately 15% of the Company s activities and the outcome will be subject to a full business case. The Company recognises that it can differentiate itself from other Government-wide shared service providers of transaction based services because of the wider selection of business services that it currently provides and that has the potential to provide. There is further opportunity to develop the emergence of the business services engine to provide integrated cross-government services beyond and complementary to the transactional nature of the entity (ISSC2) identified in the NGSS programme. Given the developing nature of the Cabinet Office Next Generation Shared Services Strategy (ISSC2) at the time of publication of the UK SBS business plan, ongoing detailed consideration will be given to relationships with the company and its existing clients at the appropriate juncture. During the lifetime of the plan the Company will become recognised as leading the Government agenda in procurement, grants and property asset management. Over the life of this business plan UK SBS will substantially grow its procurement, property asset management, ICT, HR and Finance, and Grants offerings to add value to client businesses UK SBS provides a range of services broader than straight forward transactional processing; in this way it differs from the NGSS programme. UK SBS will seek to grow its services in both existing core transactional services along with growing and developing business services, in a measured and carefully managed way. In transactional services the Company will focus on delivering services at a lower cost and more efficiently to a greater number of customers. 6

9 Over the life of this plan: The number of users primarily as a result of BIS Phase 1 and 2 business cases will grow from 23,000 to 35,000 by 2015/16. By 2018 the number of users is expected to grow further to 50,000 The cost of a payslip will reduce from the current level of 3.00 to 1.90 by 2015/16 and 1.70 by 2017/18 The cost of an accounts payable invoice will reduce from the current level of 3.87 to 2.70 by 2015/16 and 2.50 by 2017/18 By 2015/16 all but one of the 16 performance metrics will be achieving upper quartile performance. By 2018 all performance metrics will be in the upper quartile Core business services that will deliver growth The specific service lines currently leading change and influencing strategy have ambitions in the following areas: Procurement UK SBS will become a central vehicle for cross Government procurement, increasing its capability from over the business plan period and delivering an average 8% savings per annum. The estimated rate of return ration increases from 13 per 1 cost to 58 over the course of the plan period. The function will make Newport a second procurement centre By 2015/16 the procurement service will be delivering the service for 34 client organisations, this is compared to 20 organisations and 68 heads in 2013/14 By % of the people working in procurement will be qualified as members of the Chartered Institute of Purchasing and Supply. Currently this is 44% Property asset management Rationalising the BIS property portfolio to deliver major cost reductions to the BIS administrative budget of 100M. by the end of the spending review By 2015/16 the number of offices under management will be rationalised from 192 to 70 Space per person in the offices under management will drop from 13.8 m2 to 10 m2 by 2015/16 The service will seek to grow across BIS and the wider public sector ICT The Central Government strategy on consolidation and sharing of ICT services offers an opportunity to expand the currently provided service already shared between current clients The business plan builds the ICT offering initially within the BIS estate, but in conjunction with Cabinet Office, with a view to providing a wider, cross-government offering By 2015/16 the Company will be providing Direct IT Services to 20,000 users and 30,000 users by This is compared to 2,300 users in 2012/13 By providing Direct IT Services to BIS UK SBS will generate savings in excess of 5M. per annum 7

10 HR and finance UK SBS is well positioned to lead and develop innovative propositions for unique business services currently within the capability of the Company but not offered across Government for example, specialist immigration and VAT tax advisory service lines Other service lines such as training, direct sourcing, headhunting, and financial technical updates will be developed Grants Utilising the Company s unique grants offering to lead the Government strategic agenda for grants growth In addition to the services outlined above, the Company will look to develop services in transition, programme and portfolio management to provide growth from new and existing clients. UK SBS s growth will be underpinned by a fundamental increase in operational effectiveness of its service offerings. The Company will focus on continual process improvement including emphasis on innovation, standardisation, simplification and automation of processes through the implementation of a formalised continuous improvement programme and a technology investment programme that will bring its costs to serve broadly into line with Cabinet Office targets and upper quartile performance benchmarks. This will be underpinned by supporting and enabling strategies. As a cost recovery company UK SBS s revenue will grow from 55M to 79M over the life of the plan. In addition, the Company will deliver value back to the taxpayer of in excess of 1.5BN through client savings. The ambitious growth plan of the Company is reflected through the increase in income from 55M to 79M over the life of the plan. The growth in budgeted revenues will be created through the increase in number of services offered alongside attracting new clients to use UK SBS services. This is not growth for growth s sake. It will either lead to reduced unit costs, or to the provision of additional services on a value for money basis. UK SBS will deliver value back to the taxpayer in excess of 1.5BN during this plan, through the contribution to procurement, property asset management, and IT savings. What is the Shared Business Service (SBS), how does it differ from the Shared Service Centre (SSC), and why should the Company make the change? UK SBS will offer a wide portfolio of corporate business services, including transaction processing, which will enable clients to focus on the management and development of their own core business UK SBS will work with its clients to enable their core business strategies, and in doing this UK SBS will add value to clients and reduce unit costs. The increased revenue for the Company will reflect greater value for our clients UK SBS will invest in skills and capabilities which are needed to fulfil client business opportunities and its growth aspirations 8

11 RCUK SSC Limited provided a high volume, transaction focused service supporting the Research Councils, which drove efficiencies from standardisation, together with a BIS-wide procurement service offering driving value from savings. The service offering and client base of the Company now and in the future will be much broader than this There has been a shift in Government policy which has changed the emphasis of transaction service delivery to a very few large scale shared service centres. The consequence of this policy will limit the opportunity for growth in the transaction services market place Therefore, to ensure continued growth and revenue generation, new and existing lines of business across the corporate business spectrum, initially within BIS and subsequently across Government, are being pursued by UK SBS, and these are identified in this business plan The Company is well positioned to take advantage of these other opportunities, within Government and beyond BIS, which will offer growth complementing the Company s current offering What is the opportunity? Across Government, the landscape and appetite for consolidation of professional services is changing, particularly in sectors such as Central Government, Education and Healthcare, and smaller public entities, all of who are living with budget constraints and facing the same efficiency and value-for-money challenges. This is driving their need to seek efficiencies using different and competitive solutions. The Company s service lines support and will further enhance the delivery of key Government strategies which enable economic growth and deliver efficiencies supporting deficit reduction. UK SBS is well-placed as the leading provider of business services within the public sector and offers an attractive proposition to Central Government. Key factors that contribute to the Company s unique position include: Being a company operating in a commercial manner whilst being part of and serving exclusively the public sector Providing a service complementary to Cabinet Office policy Breadth and depth of professional business services offered Quality and value focussed professional service lines Proven track record of diverse benefits delivery Provision of commercial and customer focussed solutions Effective integration of new customers into the business Deep understanding of the UK public sector including specialist knowledge of the public sector scientific market place 9

12 The breadth of the Company s service is the key differentiator and is highly attractive to organisations seeking new and innovative ways to offer improved quality of service alongside reduced cost. The Company is ideally placed to capture this and additional appetite for new business solutions and this business plan includes plans to grow professional service lines in these markets. As identified above, UK SBS has an ambitious growth plan with the number of users set to grow to 35,000 by 2015/16. To support the delivery of this ambitious growth plan, UK SBS has created a Transition Directorate. The future vision of the Transition Directorate is that of a centre of excellence for portfolio, programme and project management that partners new clients on their journey to new or existing service offerings. A critical success factor of this Directorate will be the ability to deliver the Growth Strategy in a way that is aligned to new clients needs whilst upholding the integrity of the service to the existing client base. The Company has developed both enabling and supporting strategies to match the ambition of the plan The company has developed a set of enabling and supporting strategies to match the ambition of the plan. There is an important distinction between the two sets of strategies: Enabling strategies cut across all aspects of the Company and provide the necessary capability to deliver the plan The supporting strategies have each been developed to achieve one of the goals of the organisation The enabling strategies are as follows: Technology Strategy the success of the Company now and in the future will be ensuring the best use is made of existing technology assets and innovatively viewing the emerging technology landscape to add value to clients and UK SBS Communications Strategy communications will be clear and easy to understand; designed with the intended user in mind and with an understanding of their needs, interests and likely reaction. Stakeholders will be informed of progress and activities through an innovative use of channel mix Transition Strategy the delivery of portfolio, programme and project management, transformation and technical solutions will ensure that the Company transitions and integrates new services and clients effectively and with repeatable and scalable approaches Governance Strategy strong and appropriate governance and ownership arrangements will provide the Company with an engine for growth and support the Company ambition to be an effective, commercially run organisation rooted in the public sector. 10

13 The supporting strategies are as follows: Continuous Improvement and Innovation delivering cost effective and value for money services - continuous improvement will be embedded across the Company specifically concentrating on process improvement and automation Customers continually improving customer satisfaction with services they receive - the customer need will feature across all activities conducted across the Company, this includes - Gaining a deep understanding of customer needs - Building a culture where there is a focus on the customer s needs and expectations - Providing timely and accurate information - Delivering high quality services Growth growing for sustainability and efficiency - the Growth Strategy has been developed to take forward a partnership model that allows client businesses to flourish but also allows UK SBS to mature and grow at the same time. The approach to growth will be strictly in line with the Company s ownership model and maintenance of the Teckal exemption Organisational Development making UK SBS a great place to work - the Organisational Development Strategy ensures that the appropriate structures, capability and operating environment are fit for the new strategic purpose as the Company focus turns to establishing a business service model. It is also the intention to reward good performance and as such the Company will develop rewards for the leaders and other people employed by the Company Further consideration will be given to the enabling and supporting strategies to ensure explicit potential within each business area is recognised specifically transactional services, professional business support services and IT infrastructure systems. This will fit within the overall business model and ambition set out within this plan. Under the supporting and enabling strategies we will ensure all current and proposed activity is included prior to implementation with specific regard to observations made by shareholders. 11

14 Risks and Opportunities Key business risks and opportunities will be considered throughout the implementation of the Plan. UK SBS Leading shared business services in the public sector This business plan has been created for the five-year period from 2013/14 to 2017/18. While the majority of the key initiatives identified in this plan relate to the three years to 2015/16, the effort put into these initiatives will build capability and capacity for the future and guide the Company s needs after this point. In a rapidly changing operating environment, the Company will need to demonstrate flexibility while achieving the core aims of the strategy set out in this plan. By 2018, the Company will have reached maturity and be demonstrating the following characteristics: Cost efficiency levels and service benefits which are competitive with the open markets Be established as a business partner for a wide ranging client base Be a centre of excellence for collaborative Government procurement and leading category management across a wide range of products and services Provide a range of professional services to clients that add value to their organisations Be the leading provider of grants provision in the UK public sector Be recognised as an employer of choice Maintain position and status of being in the Top 30 Companies to work for in the not-for-profit sector This business plan clearly outlines and articulates the vision and goals of the Company and how these will be achieved. The programme of initiatives that has been identified will place UK SBS at the forefront of the public sector shared services agenda and provides a stable platform for growth and efficiency. 12

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16 North Star House North Star Avenue Swindon, Wiltshire SN2 1FF Concept House Cardif Road, Newport South Wales NP10 8QQ Queensway House West Precinct, Billingham Stockton-on-Tees TS23 2NF UK Shared Business Services LTD (UK SBS). Registered in England and Wales as a limited company. Company Number Registered Office: North Star House, North Star Avenue, Swindon, Wiltshire SN2 1FF