Assess the feasibility of a shared services arrangement

Up to this point, you have determined which back-of-house services offer potential value based on their efficiency and strategic and workforce opportunities. For those services that do offer potential value, you should now realistically evaluate the feasibility of transitioning these services to a shared arrangement.

Three characteristics are important indicators of feasibility when seeking to successfully establish a shared services arrangement: 

  1. Strong working relationships and trust
  2. Access to expertise
  3. Management commitment.

Each is discussed in turn below. 

Strong working relationships and trust

Shared services depend on your ability to work with another organisation or a group of organisations and make decisions that will ultimately affect the success of your organisation and your staff. A good relationship with a like-minded partner (or partners) is an important element for success.

Secondly, it is important to partner with organisations that have a similar values and a similar appetite for risk and openness to new ideas. If this is not the case, you are likely to encounter contrary values or difficulty agreeing on key issues (e.g. the scope of the shared service arrangement).

Use the following questions as a guide to assessing the strength of your relationships. 


Figure 5: Self-assessment of relationships


Access to expertise

Establishing shared services requires expertise. The level of expertise required increases with the level of complexity of the shared service arrangement. This expertise can be provided by a partner organisation (such as traditional supplier/provider model) or outsourced to another organisation.

Secondly, organisations embarking on shared services must have access to project management expertise and, if it is a more complex arrangement, change management. Many NFPs that have been through the process have re-enforced the value of an independent external advisor or project manager.

Some examples are included below: 

Examples of expertise 

  • Project management skills – A group of organisations hired an independent project manager to lead the establishment of their consortium. He was excellent at negotiating and spent time understanding each organisation’s perspective. He was also able to ‘push back’ against organisations when they resisted change or acted in their own interests, instead of thinking about the consortium
  • Change management expertise – Two organisations co-located without considering how to manage the change process. A lack of change management capability meant that the transition was very difficult. The reason for the move wasn’t clearly explained, staff grievances went unheard and many staff resigned. 

Use the following questions as a guide to assessing your current level of expertise or ability to ‘buy in’ expertise. You may need to place greater weight on one or more of the questions, since they may be more relevant for your potential shared service arrangements. 

  • Does your organisation or the organisation that will provide the service have sufficient expertise to provide a quality service?
  • To manage the transition, do you or your partner have sufficient project management expertise to make the implementation a success (and can this resource be made available for the establishment of the arrangement)?
  • If implementing the shared services arrangement is a significant activity, do you have access to change management expertise within the partnership or can you source this expertise externally?

Management commitment

Shared services require sustained energy and focus. Commitment (on paper and in practice) is critical to the success of shared services arrangements. If your management and/or Board are not open to examining the potential for shared services, more work is required to educate them of the potential benefits and costs.

If your organisation is undergoing significant change, it may be unwise to establish a shared services arrangement. For example an organisational restructure or large scale projects of the kind may divert management’s commitment to the transition to shared services. Alternately, if your organisation is under-going significant changes due to a change in the external operating environment (such as the introduction of the NDIS) you may not have a choice but to proceed with shared services. 

Use the following questions to guide your assessment. 

  • Does your management (and the management of your potential partner/s) understand the benefits and challenges of shared services?
  • Does your management and Board possess the energy and focus to ‘see a new arrangement through’?
  • Is your Board likely to support the development of a business case for shared services?
  • Overall assessment – do you have commitment from management (average of the above scores)?