Lately I am coming across more and more cases where public sector clients are thinking about, or being pushed to join or implement shared services supporting some form of cloud service delivery. The case for shared services has been around for many years and is quite solid: what’s the point of duplicating IT assets or services – be they hardware, software licenses, or anything-as-a-service – across different agencies or local authorities? After all, they have a bunch of similar process and application needs, but just tend to manage them in silos because of legacy reasons and because of how the budget process works.
Shared services have been around for quite some time and have their pros and cons. One could rarely argue against the case for a shared services, and the main causes for failure or “suboptimal” performance is in the inadequate governance structures and processes, which don’t properly anticipate and address turfwars and other conflicts.
Today, though, the case for shared services is made more complicated by the increasing availability of cloud offerings from commercial vendors. On the one hand, whomever is thinking about shared services these day assumes that they will deliver a cloud-like experience. On the other hand, with potentially competing offerings from commercial vendors, shared service clients ask themselves why they have to use those as opposed to potentially larger-scale commercial offerings. This is something I have raised recently, but keeps popping up in conversation with government clients, both on the consumer and the provider side.
What is becoming increasingly clear is that the most compelling shared service is a procurement service. What the GSA has done with apps.gov and what the UK Cabinet Office has done with the CloudStore are examples of a procurement shared service: departments, agencies, local authorities can purchase independently through a common procurement vehicle, and the vendor qualification – based on servcie levcel agreements, pricing and accreditation – is centralized.
There is still room for shared service delivery organizations in other areas, such as business processes, applications, and also infrastructure where compliance and financial considerations call for those. But governments really need to take a fresh look at where shared services can add value, challenge the common wisdom that took them to certain sharing and consolidation decisions just a few years ago, and embrace the market trend toward industrialization and commoditization of IT services.