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.

Figure 7: Steps for establishing complex shared services and MSO 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.