If not the largest shared service initiative in Europe, certainly the boldest

Yesterday I was with my colleague Max Claps at a briefing in Copenhagen, where we had a chance to discuss the two big “shared service” initiatives that are being undertaken by central government there. One concerns the sharing and consolidation of all IT infrastructure under a single organizations that will be hosted by the tax authority. The other one concerns administrative processes such as financial management, HRM and so forth, under the Ministry of Finance.

This move, which is happening very soon (infrastructure shared services should be a reality at the beginning of 2009), is driven my efficiency considerations, as the role of tax and finance authorities clearly shows. Whereas the payoff looks quite remarkable, this is a very challenging undertaking. Denmark is a technology-savvy country and there is – on average – more willingness to cooperate across different agencies than in many other countries, in spite of the very decentralized nature of government as a consequence of the Danish constitution.

Even if migration happens glitchlessly and savings are accrued within the planned timeframe, there is fundamental question: to what extent could this stifle technology and process innovation, something for which Denmark has always been at the leading edge? With technology playing an ever-increasing role in innovation, which degree of freedom should be left to individual agencies to select and manage technologies to support their own individual missions? Interestingly enough, the more successful the shared service initiative, the weaker the case for autonomous technology decisions.

The other interesting observation relates to a previous post on whether some of the infrastructure services that Denmark plans to share won’t be provided earlier (and at a lower cost) by the “cloud”.