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Public sector doubts shared services promise

Veronica C. Silva | June 8, 2011
CIOs say cost savings are not worthwhile given other concerns.

Despite tight budgets, some chief information officers (CIOs) from around the world have expressed doubts that shared services are beneficial to their organisation.

Such was the general sentiment that CIOs in the public sector shared with an Ovum technology analyst who authored the report titled "Austerity Measures take first bite from Public Sector".

Ovum analyst Jessica Hawkins spoke with the public sector CIOs worldwide to gauge their attitude towards shared services, particularly since many are facing budget cuts.

Her research revealed that CIOs doubt the promise of cost cutting by shared services. Forty-nine per cent of the CIOs interviewed in Europe share this view with 46 per cent in North America and 29 per cent in the Asia Pacific region.

Said Hawkins: "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. Many agencies have the perception that there is not enough money to be saved to make this worthwhile."

Losing control

CIOs from local and national government agencies that Hawkins interviewed also cited the issue of control when they expressed apprehension in the shared services model.

In North America, 68 per cent cited losing control of operations as an issue that would prevent them from making the move to shared services. In Europe, the figure was 39 per cent and in the Asia Pacific, 31 per cent.

The concern includes fear of job losses, including losing staff.

Hawkins concluded: "These barriers that public sector agencies feel they face mean uptake of shared services has so far been modest in some regions. Europe is slightly ahead of the Asia Pacific and North America, but the difference is not considerable. However, this gap does widen when looking ahead to the next two years, when more European bodies will be prepared to make the move."

Ovum said the interviews were conducted between late December 2010 and early January 2011.

 

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