Based on a career of 23 years in finance and IT, my conclusion is that there are pros and cons to each option and the best solution depends on the particular characteristics and requirements of on organisation.
The current fad of ASP (Applications Service Providers) and outsourcing is encouraging centralisation to be in favour at the moment.
However, I am painfully aware of one fact. To change from a centralised to a decentralised approach or visa versa is a huge task.
The scale of change management is huge. Redundancy or retraining programs for the local units, recruitment for the shared service centre, learning a new application, changing the way staff inside and outside finance work to adopt the revised procedures etc, etc. These all take management time and effort.
The NHS is embarking on an interesting project in this area. It has recently announced a plan to consolidate the services for finance and e-procurement to 10 to 25 centres.
Currently, the NHS has hundreds of accounting operations in place around the country and it uses a combination of its own systems and smaller, shared service centres.
As the largest employer in Western Europe, this is a very ambitious project and the initial budget is running to several hundred million pounds. The objective of this project is allegedly to save money. It plans to kick off in December 2002.
There are obviously pros and cons to a centralised approach in the NHS but this is not the big issue. In my mind, the question is what is the chance of the NHS delivering a project like this on time or to budget, and what will be the hidden costs of the implementation?
If you take a pragmatic view on this, is there any chance of their being any net benefit?
The government has a dreadful track record with IT projects and the risks of this initiative either completely failing or going hugely over budgets and timescales are huge. Look at the current Inland Revenue and magistrate courts PFI projects as good examples of this.
The NHS is trying at present to implement several other major IT initiatives, including developing electronic patients’ records. It is not difficult to get the distinct impression it has bitten off more than it can chew.
As a taxpayer and a customer of the NHS, I despair. What will it take for people to learn from their mistakes?
- John Tate is chairman of e-business consultancy Tate Bramald.