Professor John Seddon appeared on a live online discussion on the Guardian Wednesday 20th 2011.

Click on this Live LInk: Shared services. The Future of Local Government? to view the outcome.

Examinations of the literature on shared services show that all of the 'evidence' for sharing comes from estimates, projections (to make the savings sound big) and surveys. No of which represent actual evidence. Additionally all of the evidence is being generated from within the shared services industry (IT software sellers, private BPOs and consultancies). In recent years thinktanks have become vehicles to wash the evidence clean of any bias, reports been produced that are flawed and do not take the facts into account or are based upon reports from those services already sharing.

Seddon says that there are two arguments for sharing services. The ‘less of a common resource' argument and the ‘efficiency through industrialisation' argument. The former argument is ‘obvious': if you have fewer managers, IT systems, buildings etc; if you use less of some resource, it will reduce costs. But the reductions are often minor and one-off.

The second argument is ‘efficiency through industrialisation’. This argument assumes that efficiencies follow from specialisation and standardisation – resulting in the creation of ‘front' and ‘back' offices. The typical method is to simplify, standardise and then centralise, using an IT ‘solution' as the means.
The problem with the industrial design is simple - it doesn't absorb variety in demand. Because of this, costs soar as the IT system has to be modified and customers ring back again and again because they can't get what they want.

Worse still once shared, costs can be locked-in by contracts, SLA agreements and other un-evidence and poor management practice.

The consequences of this flawed theory can be found everywhere. In HMRC or South West One shared services which predicted savings of $176 million over 7 years and actually recorded a pre-tax loss over its three financial years. Duplicate payments sitting at $772,000 and a struggle to manage $12.9m in outstanding debts.



This year Western Australia followed Queensland in ending its shared services. It was claimed that it would save $58 million a year and instead cost $444 million dollars (no savings). It is estimated that it will cost taxpayers between $1 - $2 billion dollars to rectify.

Handfull of articles by Professor John Seddon

Private Sector paid for Failing Public Services (2012)

Shared Illusions Public Finance (2012)

Q & A with John Seddon, Vanguard consulting (2012)

Is a group of MP's focusing upon outsourcing and shared services a waste of time? Inside Outsourcing (2011)

Public Sector roundtable: To share or not to share? Outsource (2011)

Shared services will deliver greater efficiency (2006)

A commentary on the CIPFA / PWC report (2008)

Spanner in the streamlined works (2009, The Guardian)

Why do we believe in economies of scale? (2010)

Small handful of articles on shared services in the press

Somerset denies outsourcing enquiry (2009, LGC) - relates to SouthWestOne (£)

Shared services agenda is sinister, says leading Tory (2009, the Guardian)

DfT shared service reverted to manual control (2009) 

Met Police Chief in Crisis Talks on overdue, over-cost IT systems (2010, The Times) - 6 months late, £10 million over budget

Southwest One criticized in latest report (2011) - savings from SouthWestOne falling short of target

$2 billion dollars to shut down shared services (2011) West Australia shared services

The flawed mantra of shared services (2011, The Guardian)

Bill for DfTs replacement shared service centre could top £750 million (2011) 

Shared services a failure say SA liberals (2011, CIO) - South Australia 

IBM say Queensland shared services failure is not its fault (2010)

SouthWest One overpaid suppliers £4 million in SAP glitch (2011) 

Shared services: occasional outbursts of crying (2011)

SSC shortlisted for award shock (2011) - relates to the appalling service from RCUk shared services

Inconvenient truth about shared services (2011) 

Public sector not convinced on shared services (2011) - news that it takes a long time for small return, at high cost 

West Dumbartonshire withdraws from shared services plan (2011) - Clyde Valley

Queensland abandons IT shared services model (2010) 

Fire service reorganisation was a £500m failure, say MPs (2011) 

IT failure leaves bureaucrats in black hole (2011)

Baillieu freezes big computer project ... shared services blows budget by $20 million (2011)

Auditors criticise RCUK as budget for shared services project balloons (2011)

FireControl shared services - should PA consulting (paid £46million) share some responsibility for what happened? (2011)

Cheshire ICT shared services 11-12 predicted savings of £1.5m turn into £2.45m overspend. 70 jobs to go (2011)

Shared services under fire from faculty (2012)

Sometimes it is only when you try to make changes, the true cost of shared services comes clear. £25,000 to make license changes (2011)

CSC and NPfIT "taxpayers will foot the bill for a further £2bn on a failed NHS IT project" (2011)

South West One shared services: "staggering losses" of £31.5m and "failure to hit modest savings targets" (2012) 

Readers skeptical of shared services (2012) 

Shared services under fire (2012)

South West One shared services venture is failing says Somerset council leader (2012) 

Ambos threaten strike over payroll blunders (2012)

Shared services: A licence to print money (2012)

NSW Govt may scrap IT shared services units (2012) 

Information Blackout at Compass Point Shared Services (2012)

70 axed staff replaced by 68 others (2012) 

Queensland Health Payroll shared services may need $837m more (2012) 

Shared services project to save millions less than originally estimated (2012)

Shared services savings getting harder to find (2012) 

Uncertain future for NSW shared services (2012)

Personality clash to blame for Yorkshire council's shared services split (2012)  

Redundancies at IT firm as reverberations from failed £8.5bn NPfit shared services program continue (2012)

Pooling office to save money cost in Whitehall cost hundreds of millions pounds MORE, MPs find (2012) 

I could have thrown myself of a high window had we not been on the ground floor (2012) 

The Shared Services disaster (2012) 

Shared services centre is 'below standard' and new tasks won't help improve, says STFC head (2012) 

Somerset Council braces for lawsuit from Southwest One shared service venture (2012) 

Railnetwork ends shared services to increase accountability for financial and operational performance within each business (2012)

If Liverpool council finished the shared services contract in 2012, it would save £82m over the next four years (2012)

Queensland ICT shared services face 80 job cuts to try and stop operating losses (2012) 

The Confusion of Fusion Part 1: Achieving a better definition of shared services (2012)

MP calls for government investigation of Southwest One shared services deal (2012) 

WA shared services due to close in 2013 (2012) 

A mega-outsourcing plan in Cornwall beset by naive fanaticism? (2012) 

"No confidence" in decision and doubts over appropriateness of Cornwall council shared services (2012)

Canadian Government Shared services: The wrong solution for a bigger problems (2012)

Conwy and Denbighshire councils scrap shared services after it was found it would cost between £750,000 to £1.3m to save just £300,000 (2012)

Locality: Scaling-up not always best (2012)

What Competition means for Cornwall (2012)

"Criminal neglect": Queensland Govt IT fices to cost up to $6 billion (2012) 

Gladewater ISD withdraws from county shared services group citing quality and cost issues (2012)

IBM sats it "successfully delivered" Qld health payroll in shared services project which blew it's budget by 20,000% and will cost taxpayers $1.3bn + (20122)

Outsourcing is broken and it is costing YOU personally money (2012)

'No business plan, forecast, or details on how x-amount will be saved' (2012)

Australian shared services pay blunder "we're talking in amounts in excess of $40,000" (2012)

Billon dollar Oracle ERP project shot down by US airforce (2012) 

Well, now we can add New South Wales to the list of Australian states with disastrous IT shared services implementations (2012)