As we began 2023, I found myself wondering if the financial pressure faced by NHS organisations has ever been greater in its 75-year history?
With global economic pressures driving inflation above 10%, the strain on pay and the rising cost of consumables, the NHS has to make every penny count in the difficult years ahead. Add to this the government significantly increasing annual efficiency expectations for the NHS and it’s understandable why most health system leaders continue to grapple with large gaps in their financial plans.
So as all NHS organisations focus their attention on delivering the efficiencies that can enable sustainable healthcare, many are considering the transformation of corporate services as a potential area for value, both in terms of providing efficient, quality services- but also to ensure a positive impact on the whole of the organisation and wider system- helping front line staff to offer the best care they can.
To help our organisation offer the best support to customers, Arden & GEM’s Strategic Advisory Forum recently surveyed clients to gain a better understanding of the challenges faced across corporate services. Three common themes emerged from this research:
- Most seemed happy with their current corporate services but they understood the need for change and expressed an appetite to learn more on how they could improve both value and quality.
- Leaders within corporate functions suggested the biggest gains would probably come from embracing technology, with finance, HR, procurement and estates offering the greatest opportunities.
- And finally, many organisations were struggling to identify the improvements in shared services that could deliver the savings required while continuing to meet the needs of their system.
With these challenges in mind, we have been working with a range of partners that operate at the cutting edge of corporate services transformation. Looking both inside healthcare and into the private sector, we are starting to uncover the learning and best practice that can release value by transforming corporate services.
Knowing where to start…
NHS England has long been a champion of the potential efficiency gains available within corporate services. In the wake of the Lord Carter Review, the Corporate Services Transformation Team was established to deliver efficiency by reducing unwarranted variation in back-office systems through collaboration, standardisation, harmonisation and purchasing at scale. The programme has been successfully delivering efficiency gains for over seven years by looking at both functional and system-wide transformation.
This work provides a valuable resource that NHS organisations can use to explore options for improvements across finance, payroll, procurement, HR and digital. There is even a Corporate services productivity toolkit that provides practical tips and case studies of strategic changes that some NHS providers have already implemented, such as consolidating services, increasing automation and shared working.
Understanding your preferred approach and road ahead…
Working with our partner, PA Consulting, we have uncovered many insights from within the NHS, the wider public sector and commercial enterprises. The key message here has been that corporate transformation is not easy and often takes multiple years of challenging programmes of work. Over decades of work in this field, three models of corporate services have emerged with varying levels of ambition, complexity and outcomes:
- Functional shared services – independent functions/directorates that deliver efficiencies through economies of scale and cost reduction
- Multi-functional shared services – retaining independent functions but with common service desks/digital front doors
- Integrated business services – not organised around traditional functions but built on customer needs.
Selecting the most appropriate option requires consideration of the desired depth of integration and the appetite for commercial sector relationships that can realistically deliver the enabling technology. Many NHS organisations have focused at the most basic level of shared service, however, the creation of Integrated Care Systems will surely increase the level of ambition and therefore the potential efficiency gains achievable.
Building the foundations required to deliver success…
One NHS partnership group that has delivered significant gains from corporate services transformation is North Central London hosted by the Royal Free NHS Foundation Trust.
In analysing their success, some key foundations have been highlighted:-
Firstly, it is fundamental to create a clear vision that provides common ground and shared aspirations that transcend organisations, geographies and traditional boundaries to change. This must be inclusive of all staff and reinforce the important role corporate functions play in supporting frontline care.
Secondly, follow tried and tested programme principles that can bring success – for example utilising The Model Hospital as a foundation to discover which areas to target.
Thirdly, set realistic timelines in terms of both delivery and return on investment.
And finally, have appropriate governance in place which ensures decision making, standardisation, and eventually services, are delivered equitably across all stakeholder organisations.
With over £6bn spent by the NHS on corporate services in 2022, it is inevitable that all health systems will continue to seek efficiency gains from this important area of service delivery. We are already working with a range of clients to help them transform corporate services. If you are interested in joining us on this journey (or would just like more information on our learning) please get in touch with me at email@example.com.
If you would like to view our recent webinar on releasing value by transforming corporate services, please use the link below.
If you would like to view the presentation slides from the event, please click here.