U.K. District Councils cut costs by creating a new company

24 July 2012 | David Burrows, Managing Director of Government Industry, Europe, Middle East & Africa

Like many public sector entities in the United Kingdom, East Lindsey and South Holland District Councils are under a mandate to generate cost reductions. In some cases, these reductions have ranged up to 35 percent of operating costs. To address this challenge, the councils created a company called Compass Point Business Services (CPBS) to provide shared back-office and constituent services for local authorities in a highly efficient way, generating substantial savings for the district councils.

Nigel Howells, Chief Executive at the East Lindsey District Council, stated, “The public and the central government expect us to operate as efficiently and economically as possible. We realized that our current operational model would not allow us to generate the results we sought, so we decided to create a new organizational framework for delivering services.”

In creating CPBS, the two district councils made a commitment to an innovative business model that required a robust business infrastructure to enable effective service delivery. Engaging with Hitachi Solutions and Microsoft, the company implemented Microsoft Dynamics AX 2012 and Microsoft Dynamics CRM in integration with specialized business systems. Providing financial, human resources, and benefits management together with constituent services, CPBS uses technology to fulfill the promise of the new business model. The company is on track to deliver savings of an average £3 million (approximately US$4.9 million) per year with new efficiencies. CPBS is also preparing for growth by making its offerings available to other public-sector entities.

“With Microsoft Dynamics AX 2012 and Microsoft Dynamics CRM, we built a powerful, scalable business infrastructure that helps us serve clients and their constituents with optimal quality and meet their savings and efficiency targets. Our employees were quick to become productive with the new software tools, which present intuitive, comfortable interfaces that look and feel much like what they are used to from Microsoft Office,” stated Stephen Bayliffe, Managing Director, Compass Point Business Services.

“We have proven that we can deliver the cost savings the two district councils need to achieve. After reaching our expected savings of £2.1 million (approximately $3.3 million) in the first year, we project average savings per year of approximately £3 million (approximately $4.9 million) for the next 10 years.”

This case study is a great example of local governments joining forces to support a common mission of cutting costs. To learn more about how other organizations are finding innovative ways to become more efficient, I invite you to check out Microsoft’s government case studies.

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David Burrows
Managing Director of Government Industry, Europe, Middle East & Africa