Shared services and the role of the public sector CIO

As we all absorb the findings of the National Audit Office's research into public sector use of ICT, at K2 Advisory we have just completed our latest research study: Shared service centres in the public sector: the CIO's role in scoping, supporting and managing them.

One finding from the research is clear — the UK public sector is planning a DIY approach to service sharing which we think is entirely justifiable, and which will require a different type of CIO relationship with suppliers.

It is the CIO who is the lynch-pin in moving shared service adoption forward in the public sector because, as our findings show, the IT Department is the top priority for public sector shared service provision — just under a third of public sector organisations expect to move IT services to a shared services model in the next 12 months.

The majority expectation is that this will deliver over 20 per cent in cost saving. For this reason, CIOs are key players in moving to shared service provision.

However, one of the main challenges for the public sector CIO is working out the benefits of quick cost-saving wins versus longer term solutions that may ultimately save more money.

Formal joint ventures with suppliers or traditional outsourcing agreements typically take a year or more to close the contract and put the legal framework in place before savings can be counted.

In other words, the Comprehensive Spending Review is focusing attention on quick wins, which eliminates options such as outsourcing and formal Joint Ventures that take time to set up.

Furthermore, as Geoff Connell, divisional director ICT services London borough of Newham and acting head of business systems London borough of Havering, puts it:

"With outsourcing you share savings with a private sector partner but with Shared Services you keep all the savings yourself." This is a widespread sentiment in the public sector.

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