The United Kingdom Ministry of Justice has awarded Accenture a five-year, £22 million contract to implement a new world-class shared services solution to support the management of its human resources, payroll, finance and procurement operations.

The shared service will operate across the Ministry of Justice business network, including Her Majesty’s Courts and Tribunals Service, Her Majesty’s Prison Service and the Ministry of Justice Head Office, creating a common platform and increasing the speed and accuracy of the Ministry’s Enterprise Resource Planning (ERP) system.

The shared services program is expected to deliver savings of £28 million a year by 2014 and is one of the first pan-departmental shared service solutions in the UK central government.

Accenture has been selected as the overall systems integrator, to design, integrate and deliver the shared service system for over 80,000 employees. Accenture also has been engaged as the service management provider to run and maintain the Shared Services IT Service Desk for the duration of the five-year contract.

Accenture will work collaboratively with the Ministry of Justice and its chosen partners, Steria and Savvis, who will deliver the Oracle Enterprise Resource Planning (ERP) application development and the Infrastructure-as-a-Service platform respectively.

The collaborative environment that the Ministry of Justice is creating to manage delivery across multiple suppliers will ensure that expertise is drawn from many parts of the industry and integrated into a coherent solution and service.

Source:  Top-Consultant

Under this new, value-based arrangement, Accenture will have a proportion of its fees directly tied to the savings achieved to demonstrate its commitment and confidence in its ability to deliver savings. Accenture will initially focus on delivering strategic sourcing — savings from across the City’s diverse base of suppliers — and by transforming the way that the City manages its procurement operations.

A new central City of London Procurement Service will be created to undertake all procurement and procure- to-pay functions. This service will be delivered by a joint team from the City and Accenture for the duration of the contract.

“The City is seeking to achieve savings and drive efficiencies through the way in which it conducts its procurement and procure-to-pay functions,” said Chris Bilsland, the City of London Corporation’s financial director. “We selected Accenture because of its proven success in delivering procurement services to organizations across the world, although, of course, this new contract will complement our commitment to local procurement. The City of London Corporation will continue to enjoy the legacy of both the financial and non-financial benefits after the contract period.”

Change management will be central to this transformation program and Accenture will provide training for both the City staff that will be involved with the transformation as well as those who will take over the ongoing management of the centralized procurement service after Accenture.

“The aim is to save the City of London Corporation more than £30 million over five years,” said Mark Lyons, Accenture’s United Kingdom and Ireland managing director for Health and Public Service. “This innovative, value-based arrangement will ensure that both Accenture and the City of London Corporation are committed to delivering these savings. Accenture will bring its deep industry skills and insight across its global network to drive continuous improvement for the City.”

New technology will be deployed through the implementation of an eMarketplace and a buyer portal to assist departments in requisitioning and using the new service. This unified procurement function will help the City fully exploit the latest procurement techniques, such as category and demand management, and more effectively balance quality, price and operational costs.

Source:  Top-Consultant

Recent research by UK management and technology consultancy BearingPoint has shown that the financial services industry across Europe is increasingly looking to optimised Shared Service Centre (SSC) models – organisational units in companies that centralise, bundle and provide process oriented services – to improve efficiency and effectiveness.

According to the report, Shared Services Industry Specifics and Trends in the European Financial Services Market, nearly 80% of large companies that have looked to introduce and optimise SSC models have realised cost savings of over 20%. As a result they recoup the initial set-up costs within three years. Research by BearingPoint on eight leading UK retail banks and building societies suggests that, across the financial services sector, firms could save up to £8 billion by successfully implementing and optimising SSC models.

There is a range of ways SSC models can be optimised including new sourcing strategies, automation and process innovation. These can generate significant cost savings by improving processes and methods and lowering the cost per transaction. As a result there is more time available for the creation of value-adding services. A key trend is focus on optimising managed offshore services.

“Significant additional cost savings up to £8 billion are possible for financial institutions in the UK by optimising their shared service models,” said Stefan Spohr, Financial Services Partner at BearingPoint.

While a greater amount of business and IT processes could be moved to lower cost locations, the most valuable improvement can be gained from better integrating shared service centres with core operations, mutualisation of teams and better collaboration with third-party service providers.

According to BearingPoint’s calculations, moving beyond the traditional SSC and looking to optimise their models, would enable the top UK financial services organisations save around £3 billion in staff costs and £1 billion in administrative expenses. The rest of the £5 billion savings can be found by consolidating premises, equipment and other expenses.

“More and more of their global competitors are optimising their shared service models as a way to cut costs and deliver a better service for customers,” continues Spohr. “Despite the substantial savings on offer, the UK banks seem content on relying on the ‘lower-hanging fruit.

Despite the benefits on offer, optimisation of SSCs needs to be done carefully and thoughtfully in order to work effectively. The report found that processes with a relatively low complexity and a high level of standardisation prove to be the most effective in this format – according to the research, over 50% of financial services customer care and payment services across Europe have already been outsourced to SSCs.

Location is also key, with Eastern Europe proving increasingly attractive. Although only 23% of SSCs surveyed are currently located here, 35% of respondents cited it as their preferred future location, compared to 47% and 28% respectively for their home country, and 21% and 28% for Asia.

Source:  Top-Consultant News