Model 4: Steps to establish a Managed Service Organisation
Sharing services through a Managed Service Organisation (MSO) offers the benefits of sharing services including economies of scale and sharing of ideas, whilst overcoming the challenges of dominance of a single organisation. The steps to establish an MSO arrangement will largely follow the process followed in setting up complex shared services. However, due to the complex nature of establishing a legal entity it is recommended that external advice is sought to enact the change and develop the formal arrangements.
As detailed in the previous section above, it is necessary for all of the partner organisations to agree to a clearly defined scope of works. This will set the group’s expectations around a realistic set of back-of-house services to be shared. The next step is to document the anticipated benefits, risk, the appropriate governance model and the implementation plan. An MSO by its nature involves a degree of shared financial liability and effort to establish a separate legal entity. To establish a MSO it will be necessary to seek external expertise.