| 16 March 2007 |  |
| To | Heads of HEFCE-funded higher education institutions |
| Direct Line | 0117 931 7300 |
| Direct Fax | 0117 931 7203 |
Circular letter number 09/2007
For further information contact Stephen Butcher, tel 0117 931 7425, e-mail s.butcher@hefce.ac.uk
Dear Vice-Chancellor or Principal
Shared services: invitation to submit expressions of interest
1. This letter invites expressions of interest from higher education institutions (HEIs) in:
- Leading feasibility studies.
- Participating in shared services where these are being developed or might be developed in the future.
2. Circular Letter 20/2006 reported on the Government's plan to promote shared services as a means of improving the quality and cost effectiveness of public services, and explained how HEFCE was planning to support the sector in building on existing good practice.
3. We have established an Advisory Group to help us to take forward shared services in the sector. With the help of the group, we have identified initial areas for feasibility studies where we now wish to assess the level of demand. If the feasibility studies demonstrate a strong business case the next stage would be to set up pilot projects with partner institutions. We have funding available for feasibility studies and pilot projects.
4. In addition we wish to test the level of demand for a range of possible shared services drawn from the outcome of the Liverpool Shared Services project funded by the Leadership, Governance and Management Fund.
What is a shared service?
5. Definitions of shared services vary. Typically they describe a model of providing services in a combined or collaborative function, sharing processes and technology. In the private sector this is usually within the same group of companies, but in other sectors it will most often be between separate entities. The most sophisticated models involve establishing a completely new organisation, run and managed as an autonomous business.
6. The usual definition of a shared service concentrates on bringing together support functions, often from geographically disparate areas, into a separate organisation. However, a broader definition could offer wider opportunities. The term 'shared service' does not necessarily mean outsourcing. There are other forms of sharing and partnering arrangements which do not necessarily involve a private sector provider; all options are included.
Feasibility studies
7. There will be two phases of feasibility studies:
- Phase 1: the Advisory Group has identified a number of areas which have the potential to benefit from shared services. These are listed in Parts 1 and 2 of the questionnaire at Annex A:
- Part 1: we are inviting offers to lead feasibility studies in these areas. We also want to know whether you would be interested in participating in a mature shared services offering in these areas, should these be developed.
- Part 2: there are a number of potential shared services where proposals for feasibility studies are in development. We would like to know whether you would be interested in participating in a mature shared services offering in these areas, should these be developed.
- Phase 2: we have identified a number of institutional processes, drawn from the Liverpool Shared Services LGM project report, for which shared services could be developed, in full or in part. These are listed in Part 3 of the questionnaire at Annex A. We would like to know whether you would be interested in participating in a feasibility study, pilot, or mature shared services offering in these areas. This will inform the development of Phase 2 of the feasibility studies.
It is not necessary to complete every box in every column – a positive indication of areas of interest is sufficient.
8. Annex A may not fully cover all the areas of activity at your institution – there may be other areas which have potential for shared services development. If you are interested in an area that is not covered, please indicate this in the box at the end of the questionnaire.
9. If your institution has no interest in participating in shared services, please indicate this in the box at the end of the questionnaire. This is important information for us and we would be interested to understand your reasons for this.
How to offer to lead a Phase 1 feasibility study
10. If you are interested in leading a feasibility study in any of the areas listed in Part 1 of Annex A, please complete and return the template at Annex B. We expect to commission Phase 1 feasibility studies in June and Phase 2 feasibility studies in October 2007.
11. All HEIs funded by HEFCE are eligible to apply. Consortia of institutions and representative bodies are eligible to apply, but they will need to identify an HEI through which funds can be routed. Where relevant, we would expect HEIs to demonstrate in their application that they have the active support of the relevant professional bodies.
12. Further education colleges directly funded by HEFCE are not eligible to apply as lead institutions, but may participate in a project in collaboration with a lead HEI.
13. Please complete the Annex A questionnaire and Annex B expression of interest template electronically. Completed questionnaires and completed feasibility study templates should be e-mailed to sharedservices@hefce.ac.uk by 27 April 2007.
14. We will use the responses to the questionnaire to determine the level of appetite for shared services in the sector; to inform us which areas are considered to offer most potential, and to guide us on where we should concentrate our resources.
15. We are developing a communications strategy to keep the sector informed about shared services developments. This will include communicating outcomes from feasibility studies and pilot projects; as well as supporting and encouraging HEIs to adopt shared services where the pilots have shown that they deliver value.
Yours sincerely
Professor David Eastwood
Chief Executive
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Annex A
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Annex B
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