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Had some really interesting discussions with senior HR practitioners this week – all touching on the shape, design and delivery of corporate services in the NHS.  Talking about the challenges facing NHS corporate functions, in particular we talked about HR Services and how senior teams should be considering areas for review and redesign using stronger evidence of efficiency and effectiveness.

We agreed NHS organisations needed help to understand their contribution, effectiveness, costs and efficiency. With better information available about those services, CEO’s could talk to their Directors about areas and ways to find better, more effective and affordable solutions to universal and ongoing organisational challenges.

Since the publication of the Smarter Government report in November 2009, which released the results of benchmarking work for the back office functions within central government, interested observers having been waiting for the NHS to complete it’s own review. This work has been completed and with the publication of the QIPP Back Office Efficiency and Management Optimisation Report has been published along with the conclusions on how the NHS should take matters forward.

As well as following on from the Smarter Government review, this work follows themes already established by HM Treasury’s Operational Efficiency Review, published in July 2009 which outlined the potential benefits of efforts to improve back-office efficiency. HM Treasury concluded it would be sensible to deliver improvements through shared back-office functions and larger scale procurement.

The QIPP report reveals the NHS spends £2.8bn on back office functions and suggests it would be possible to make savings of around £616m (around 22% of current spend) by standardising and streamlining services through scaled solutions.

This seems a more credible target than the common over-optimistic claims (30-50%) which fail to take into account the proportions of current work that cannot or will not be effectively shared.

A potential saving of this magnitude is certainly worth exploring in more detail but taking into account £2.8bn represents only 2.6% of NHS operating expenditure, it’s vital to keep a sense of perspective about the scale of benefits. Delivering all the potential savings identified would deliver 0.6% savings overall and only 3.1% of the £20bn savings target established for the NHS by 2013. The financial pressures facing the NHS will not be addressed by streamlining the back office! thie require more substantial work on core clinical services.

Furthermore, establishing shared services will take time, investment and significant effort. Shared services projects starting now would be unlikely to yield savings within the timescale of the current national savings programme. This does not mean they are not worth pursuing …. just that they need approaching with realistic expectations and appropriate objectives. Organisations that enter into such project with unrealistic expectations are most likely to fail.

There are important messages and key issues identified in the report that are worthy of more exploration. What can we learn from it? Read the rest of this entry →

Photo: Darrren Hester, Flickr

An article in Consulting Magazine recently suggested benchmarking was a practice which was destructive because it distracts attention from the need to build upon core competences.

Paul Leinwand and Cesare Mainardi, co-authors of the recent Harvard Business Review article “The Coherence Premium,” suggest companies should be paying attention to their own distinct capabilities.

Organisation become profitable through maximising the benefit they derive from those competences them by matching them to market opportunities.

The authors produce an interesting analysis of the coherence with which organisations decide how to bring together the capabilities they need to “face the market” with the needs of their customers. They say -

“The engine of value creation is a system of three to six capabilities that together allow a company to compete in a differentiated way.”

Booz & Company have, apparently obtained further thoughts from the authors (who don’t refer at all to benchmarking in the report) and summarised their views that benchmarking is often evidence of the absence of strategy, distorts the true nature of competitive advantage, discourages differentiation and ties up valuable resources. That’s pretty damning!

So is benchmarking “destructive”? Read the rest of this entry →

In the past, UK organisation were stereotyped by their slashing of training budgets when finances were tight – and then suffering the skills shortages which followed.

A new stereotype might be organisations looking to make efficiencies and reduce expenditure in their back-office functions so they can protect front line services.

Across the public sector, this “mantra” is being widely and loosely used without being explained in detail.

Real dangers exist where the implications of change are poorly thought through.

In richer times, it is easy to make the case for investment in services which support staff delivering effective front-line services. When times are hard, this is more difficult and its vital then, more than ever, to demonstrate how corporate teams impact on the business.

When organisations are looking to reduce expenditure, it is common to look for reductions in “overheads” – costs which can be reduced with little impact on front line services. Corporate back-office functions look “vulnerable” in this climate.

Organisations should always strive to ensure they are working in the most effective way – the optimum value between expenditure and achieving required outcomes. Back-office functions should be scrutinized as closely as other areas though it’s vital to keep a focus on what will maximise value rather than simply “reduce expenditure”. Read the rest of this entry →

Photo: Darren Hester, Flickr

NHS managers looking at our benchmarking solution have described how they will use it to plan and monitor local actions in response to the challenge of the NHS Quality, Innovation, Productivity and Prevention initiative (QIPP).

A Payroll Manager explained it would enable him to demonstrate how service plans would adjust the profile of the organisation changing high level and detailed performance data.

As well as providing an evidence-base for improvement planning, the tool would enable them to meet the recommendations of the Operational Efficiency Programme, collating relevant information and providing comparison data to inform their decisions.

The solution has been created specifically for NHS organisations (versions for other part of the public sector or on the drawing board). Back-office benchmarking is new for the NHS and, obviously, depends on having significant volumes of data from relevant organisations to provide comparative information.

While still at an early stage in its service lifecycle – only just moving from planning to delivery – the early signs are promising. Already, 60% of the NHS organisations which evaluated the service have subscribed while others are still considering their position. No organisation having reached this point has, yet, decided not to subscribe.

Attractor is now marketing the service widely for the firs time and expects sufficient sign-up from NHS organisations to provide subscribers with authoritative, persuasive and compelling evidence to support local decision-making. Read the rest of this entry →

Photo:Darrren Hester, Flickr

Christine Buss makes raises doubts about how useful HR Scorecards are for most Senior Managers.

Nevertheless, producing such data is commonplace, despite the difficulties in drawing meaningful conclusions from any set of numbers.

Identifying areas for focused attention and improvement action is far simpler when measuring the delivery of HR services.

Yet, working with NHS client organisations, Attractor often finds HR and payroll departments are not routinely measuring their own business performance. The NHS appears to have less of a measurement culture for back office functions than UK local authorities. Read the rest of this entry →

With Attractor’s benchmarking toolkit having gone live, a thorough review of screens and features has generated a short “snagging list”.

Some minor corrective actions (none of which impact data collection) are being addressed by Attractor’s technical partner, KPMD IT solutions.

While corrections are addressed, users will experience few access issues and, once complete, potential consistency, usability and presentational issues will be avoided.

Attractor is now working to load a range of external benchmarking material from published sources in the UK and US covering private sector and public sector organisations in healthcare, local and central government plus other sectors. Read the rest of this entry →

Attractor’s benchmarking solution was made available to our early client group this week.

Selected historic sample data from NHS organisations as well as benchmark information from other employment sectors in the UK and elsewhere will be available for the first time.

Client teams can now start to collate and enter data items on their own productivity and efficiency. This work will contribute to a growing database revealing, for the first time, how NHS organisations fare in relation to back-office productivity.

This new source of reliable business intelligence for NHS corporate teams will support efforts to improve services in relation to quality of outcomes and cost effectiveness. Read the rest of this entry →

The NHS QIPP programme is likely to focus attention on front-line service provision.

This is where quality and innovation have direct impacts on patient care – which makes change high-profile and potentially controversial.

It is also where productivity gain has the biggest potential benefit for improving costs and affordability, protecting service provision and positive health outcomes.

But back-office functions need to play their part! While supporting front-line service change, back-office teams will also be looking to make efficiencies.

Corporate functions are now operating in an environment where it is important to prove value and provide measurable results. In coming years, corporate departments which are unable to provide evidence on their results will face serious challenges to their future existence.

Read the rest of this entry →

Supporting Local Decision-Making

Attractor’s benchmarking toolkit has been designed specifically for the operating environment of the NHS. In many areas, the toolkit addressed questions which are directly relevant to teams working within the NHS – using tools and processes deployed across the NHS.

Collating data in the benchmarking toolkit enables management to compare their organisation’s performance with comparative data from subscribing organisations across the country … but your organisation is not identified to others –

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  • This is an incentive to ensure data accuracy -because wrong information impacts local decisions far more than those of other organisations,
  • Nobody else has access to your performance measures – which means there is no need for, or value in placing any “presentational spin“ on the data,
  • You can identify areas for attention – without fear of embarrassment over organisational weak spots,
  • Independence of the solution means you can trust the data to be unbiased, comparing like with like. Measures and presentation are not skewed to favour a particular solution or provider.

A Single Subscription

The solution will be made available on the basis of an annual subscription charge. There are no usage charges or additional charges for industry-wide analytical reports.

Organisations are not required to make long term commitments to benchmarking work, though Attractor considers there are good reasons to do so (and can offer price incentives for doing so).

An organisation whose subscription lapses will have database access disabled and may have to pay an “administrative charge” to rejoin the service.