A couple of years ago, when interest in cloud computing was starting in the public sector, I wrote a note about Shared Services in Government: Obscured by the Cloud? (client access required, any reference to the Pink Floyd’s album is unintentional, although it may reveal some of the author’s musical tastes).
The note stated that
While government agencies and departments are looking at shared services as a way to reduce costs and increase efficiency, some of the potentially shareable services will be supported by cloud-based solutions
While not suggesting that government organizations that are currently engaged in devising a shared-service agreement among themselves are doomed, it is important to understand where the cloud will impact government shared services and where it will not and when.
providing advice about which types of shared services were likely to be challenged (or “obscured”) by cloud-based services, which ones would have a chance to provide sustainable value, and which ones would be an intermediate step toward more centralized services (where the difference between shared and centralized is that in the former clients do have a say by participating in the governance process, while in the latter they are just clients).
This being said, it does not look like governments have been taking much notice. There are quite a few shared service initiatives (or strategies) that focus on IT infrastructure services, which that are presumably seen as a commodity by most prospective clients. Examples include the Canadian initiative to consolidate a whole-of-government infrastructure and run it as a centralized service, or the more recent US federal “Shared First” strategy (a Gartner research note is being prepared), which is looking at commodity IT services as easy wins for shared services, despite some of them being already targeted through an earlier “Cloud First” initiative.
On the other hand, according to NextGov, the US Congress is directing the Department of Defense to use commercial cloud computing services rather than those provided by the Defense Information Systems Agency (DISA).
As stated in the congressional record dated December 12, 2011:
Not later than April 1, 2012, the Chief Information Officer of the Department shall submit to the congressional defense committees a performance plan for a reduction in the resources required for data centers and information systems technologies Department-wide [including] Migration of Defense data and government-provided services from Department owned and operated data centers to cloud computing services generally available within the private sector that provide a better capability at a lower cost with the same or greater degree of security
I assume this will be subject to negotiation and interpretation, but exemplifies quite well the potential – or, better, the actual – conflict between cloud computing and shared services.
Anybody who is familiar with the complexity of government IT (and very much so in the defense environment) knows quite well that migrating to any cloud solution, and even more so when commercially provided, requires much more than turning a key and pulling a plug. But the real question here is whether shared services at an infrastructure, commodiity level have a sufficiently long shelf life to allow the expected returns on the investment to materialize: in fact, also getting the shared service levels and governance mechanisms right is far from trivial.
The race between shared services and cloud will be interesting to watch, as shared service providers move up the value chain (from infrastructure to applications) and commercial cloud-based offerings mature along that same value chain. What is important is not to be obsessed with either, but to create fair conditions for departments and agencies to procure the service they need at the best value for money from the most appropriate service provider.