SSON Awards – Runner-up: NHS & Steria
By: Barbara Hodge, SSON
NHS Shared Business Services (NHS SBS) is a 50:50 joint venture between the Department of Health (DH) and Steria, and has established an innovative business model for the delivery of public sector outsourced business processes.
Formed in 2005, the primary objective of NHS SBS is to deliver £250 million savings back to NHS Trusts over 10 years. Currently, over 21 million people in England have Healthcare delivered to them by NHS SBS clients. This is being achieved by huge economies of scale, industrialisation, standardisation, innovation and shared best practice using a unique shared services business model for the delivery of back office functions such as Payroll, Finance & Accounting, Family Health Services and e-Procurement.
Highlights of our outsourced service delivery include:
Hackett global benchmarking — top quartile performer for the second year; acknowledged as world-class alongside global brands such as Marriott Hotels, Diageo and Cadbury.
Continuous Improvement practices using Lean and Six Sigma methodologies; empowering our people to innovate and promote best practice.
Cited in HM Treasury’s 2009 Operational Efficiency Programme final report for delivering 20-30% of savings to the NHS on like-for-like services.
The offshore delivery of many back office services has been keenly observed by a public sector traditionally resistant to the idea of offshoring. The initial contract with NHS was not to offshore any voice element to India; however, the contract was subsequently reviewed to offshore the entire Debt Collections work to India. This was the first breakthrough within the NHS to understand the capabilities offered by India.
The original and ongoing objectives of NHS SBS are:
to make savings of £250 million over 10 years through economies of scale, industrialisation, standardisation and improving quality
to give NHS Trusts a shared platform to access state-of-the-art integrated financial systems, including e-Procurement
NHS SBS is the largest Oracle shared platform user in India and the UK, enabling clients to share data across the business. Clients are benefiting from future-proofed systems enhancements with the transformation from Oracle 11i to R12: “We have now got a modern finance system that we wouldn’t have been able to afford on our own,.” Director of Finance, Sussex Partnership NHS Foundation Trust
The governance structure of NHS SBS means that there is joint representation from the NHS and Steria on the Main Board. Data security is of paramount importance to NHS SBS, as an outsourcing organisation within the NHS, and we are currently on target to achieve Level 3 accreditation for IGAF, making us one of the leaders in the NHS in terms of data security and data control procedures. We have also recently obtained the registration authority for issuing Smartcards — the first of its kind to be implemented in India.
The National Audit Office confirmed that NHS SBS is on target to achieve the designated cost savings and, indeed, has already made savings of around £50 million. NHS SBS represents the first Public Private Partnership for Steria in the UK. The success of its partnership is driven by Steria’s proven capability to deliver services to a number of blue chip corporates in the UK.
People Management, Culture, Change Management
The success of the joint venture has involved major cultural change, including the transfer of existing NHS employees into NHS SBS. This was successfully achieved using Steria’s proven transition and transformation approach, including TUPE.
Steria in India follows a very stringent recruitment policy, which involves multiple-level checks for governance.
We have also grown since the initial transition and have developed people into senior management roles within NHS SBS – empowering our people to succeed and supporting their development.
Training and mentoring in LEAN and Six Sigma methodologies has made a significant difference to our success in embedding a culture of Continuous Improvement. A recent transformation initiative designed to move NHS SBS to world-class within the Accounts Payable process made a number of key improvements, including:
Managers and employees being trained, equipped, and empowered to identify and eliminate waste and inefficient process.
Significant collaborative working between onshore and offshore management team with managers in Steria India managing UK teams and vice versa, thereby achieving real operational integration.
Steria makes a substantial ongoing investment in training and developing people in professional qualifications such as:
IIM (Association with Indian Institute of Management for leaders)
City & Guilds (English Language Enhancement Program)
Prince 2 methodology & PMP training
IGAF (Information Governance Assurance Framework) training
LEAN & Six Sigma certifications
EYE — Enhance Your Education (50% of cost born by Steria)
Business Continuity and disaster scenario planning and communications.
Steria India has a wide range of people strategy initiatives, which support its people growth opportunities. This investment in people proves Steria’s commitment to its people, which will in turn support Steria in achieving its objectives.
Innovation and Automation
The following is a real and practical example of our approach to innovation to drive change and improvement within our organisation for the ongoing benefit of NHS SBS clients. The approach meant a review of existing processes and the use of automation to streamline a number of processes.
Five key best practice drivers underpinned improvements in efficiency and effectiveness in Accounts Payable, with effective savings in excess of £1million. The return on investment from IT development was 900%. The project remit was to define the most efficient process and highlight areas and causes of waste, such as rework, unnecessary touch points, and delays. A radical transformation followed – not just in terms of incremental improvements to existing processes, but a dynamic change.
Five key drivers that would enable us to meet the key objectives were identified, with many of the solutions spanning more than one driver:
A state of the art Centre of Excellence for Healthcare has been built in Pune, India so employees/clients can brainstorm and innovate ideas for the betterment of services to NHS. The Steria Continuous Improvement team has played a vital role in improving effeciency by saving more than 100 FTEs equivalent effort, which helps NHS in reinvesting for front-line healthcare. The department of Health in the UK is undergoing a massive structural change to abolish all PCTs to form GP consortia. NHS SBS is well placed to support this transition for PCTs as it has during previous restructurings.
Customer Relationship Management
Client satisfaction is critical to ensuring our clients become positive advocates who are prepared to actively encourage other Trusts to join the NHS SBS club.
In 2007, client satisfaction scores were 39%. Over the past two years, we have seen a tremendous rise in this score – a reflection of Steria’s real focus on continuous improvement, quality and innovation.
Today, 87% of clients “would recommend NHS SBS” and 85% believe that NHS SBS “delivers value to the NHS.” Good reference clients are great advocates for NHS SBS and improved client satisfaction means we are best placed to achieve our target savings of around 30% for NHS trusts.
Customer relationship management excellence is being achieved by sharing best practice, with NHS clients enthusiastically participating in quarterly user forums in order to actively help shape future services delivered by NHS SBS. Clients are able to vote on their priorities for tactical IT developments.
Regular monthly calls between the Indian centre and the clients to improve efficiency, TAT, and to clear disputes with suppliers…are classic example of “value add” to NHS.
The India debt collections team recovers over £12 billion per annum for its clients
130 NHS organisations now partner with NHS SBS and each recently received their share of the £1.06 million that was presented to Earl Howe, Parliamentary Secretary for State of Health, on 17th June 2010. The minister said, “At a time when the NHS is being challenged to drive efficiency, the NHS SBS model is delivering real savings for NHS organisations. It has demonstrated that public private partnerships can not only be successful in achieving savings and improving quality, but can also be commercially successful for the wider benefit of the NHS.”
Steria India had welcomed a number of stakeholders from the UK to view its operations, including Sir. David Nicholson, Chief Executive Officer, NHS who in turn recommended all the Chief Executives within the NHS join Shared Business Services for efficiency improvement.
“The benefits of outsourcing to NHS Shared Business Services are not purely financial. The improvement to our financial control systems has been immense. The migration to NHS SBS has helped to deliver a change in culture and facilitate the alignment of operational and budgetary accountability and responsibility.” This acknowledgement of the improvement to financial controls comes from the Director of Finance at NHS SBS client Bromley Primary Care Trust.
Steria is planning for ISO 270001 and SAS 70 accreditation and strict internal quality measures are in place to protect data on behalf of clients. In particular we are aiming at Level 3 Information Governance Assurance Framework (IGAF) accreditation, which will make us a leader in the field of data protection. The internal compliance team conducts quarterly audits to help check the process control. Our Six Sigma- and LEAN-certified resources continue to promote a continuous improvement culture to position us as thought leaders in the process industry. We currently measure all our processes against a number of benchmarks including Hackett — which currently ranks NHS SBS as “World Class” for efficiency and effectiveness in our Finance & Accounting business.
Future Strategic Direction
NHS Shared Business Services has operated as a 50:50 joint venture since 2005, and has developed into a mature organisation that has faced a number of challenges but has now begun to achieve a critical mass of NHS clients (currently representing around 30% of NHS trusts).
Steria’s ambition is to double the size of its NHS SBS business over the next three years. Having taken the business into profitability at the end of 2009, a key measure of success will be to steadily increase profitability that can be shared with NHS trusts.
NHS SBS has gone through the challenge of sharp growth, has addressed the need to improve service levels and client satisfaction, and continues to drive growth and expansion through innovation and industrialisation. Looking ahead, Steria will continue to demonstrate this strength in BPO industrialisation and use it to develop new ways of working that will benefit the NHS. We will develop the scale of what we are doing through industrialisation and are looking beyond purely processing to use the enormous amounts of data we hold to help clients make real-time business decisions.
The transition business group has migrated over £12m worth of business to India, over a period of four years, delivering savings to the tune of approximately £6m per year. Some of the major business migrations also involved launching new services out of the Indian delivery centre.
As an example, we have already launched Family Health Services across a number of trusts, which has taken us out of generic BPO services such as Finance & Accounting into something very specific to the NHS. Our strategy is not only to deliver real efficiency savings — potentially £500m over the next five years — but to drive innovation, quality and performance improvements, which will truly modernise the NHS.
Steria India was established in 1989 and provides robust technology platform infrastructure through three centres in India. Steria is well-established in supporting blue chip corporates from Europe and the UK, including NHS, and remains strategically supportive of their growth and increasing productivity for their clients.
Barbara Hodge has edited Shared Services News since 2000. She is responsible for all content and format, and develops forward themes with the support of the Advisory Board.
Prior to Shared Services News, Barbara was Editorial Director at Armstrong Information, a London-based specialist publishing firm, with responsibility for the launch and editorial content of a number of management journals including corporate communication, change management and business process reengineering. “Shared services and outsourcing,” says Barbara, “was a natural progression.”
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