Despite the potential cost savings a move to shared services can deliver to cash-strapped public sector agencies, many do not believe it would save enough money to make it worthwhile, according to an Ovum survey. The analyst firm spoke to CIOs in public sector bodies worldwide to gauge their attitudes to the sharing of services at a time when many are facing budget cuts. When asked what the barriers to moving to shared services were, almost half of those in Europe (49 percent) cited concerns that it would not save enough cash to make it beneficial for them. This was the reason shared by over a quarter (29 percent) of CIOs in the Asia Pacific, and nearly half (46 percent) in North America.
The move to shared services does involve upheaval and invariably means changing software applications, which in turn can require system and data migration and all the complexity that this entails, says Jessica Hawkins, Ovum analyst and author of the report based on the survey. “Many agencies have the perception there is not enough money to be saved to make this worthwhile.”
Ovum’s survey also revealed many public sector agencies worry about losing control of their key business operations with a move to shared services. In North America, 68 percent cited this as an issue that would prevent them from making the move, and in Europe the figure was 39 percent and in Asia-Pacific, 31 percent.
Hawkins adds, “Changing the dynamics of service delivery is an emotive issue for public sector bodies and can cause them to fear that they are losing control of their key business operations.
“This is compounded by the prospect of job losses and the legal complexity of transferring staff to a shared services model.”
In Europe, 23 percent said loyalty to their current work would prevent them from moving to a shared services delivery model. In North America and Asia-Pacific the figure was higher with 26 percent citing this reason as a barrier.
“These barriers that public sector agencies feel they face mean uptake of shared services has so far been modest in some regions,” Hawkins says. “Europe is slightly ahead of Asia-Pacific and North America, but the difference is not considerable. However, this gap does widen when looking ahead to the next two years, whenmore European bodies will be prepared to make the move.”
Join the CIO New Zealand group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.