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Author's profile photo Marlyn Zelkowitz

Shared Services: New Technology + Same Concept = Government Savings

Shared services are top of mind for public sector around the world as tight budgets cause governments to seek operating efficiencies. Public sector agencies in countries around the world see a high variance of costs and levels of service in their current information technology (IT) landscapes. Complexity
and organizational boundaries allow many public sector organizations to develop redundant solutions to achieve their missions and serve citizens. 


Public sector managers also face rising citizen expectations for high quality service. Citizens, businesses, and other community stakeholders want to do business with government via multiple channels: on mobile devices, desktops, and in person. And public sector agencies need to be more agile, simplify their technology stack and take advantage of new technology and deliver solutions faster.

Done right, shared services help public sector agencies to improve service quality, return on investment and effectiveness of information technology (IT) solutions. We generally see public sector organizations sharing two types of services: technology and business or application. Shared technology services such as core commodity IT infrastructure, network, or hosting capabilities allow public sector agencies to benefit from economies of scale and reduce duplication. Shared IT infrastructure have been used for decades by cash-strapped governments that would pool financial resources to make hardware and network investments.

Shared application services also have a long history in public sector, especially at the state and local level. Examples of shared application services are payroll, accounting, procurement, citizen service, and even internal IT help desks. By standardizing on single solutions, shared services help public sector agencies improve customer service through common ways of working and staff synergies. Redundant systems can be de-commissioned resulting in cost savings for taxpayers. The shared systems also are less costly to support, maintain and upgrade compared to unique and custom systems.

Public sector agencies have some spectacular successes – and failures – with shared services. The successful shared services providers all do several things

  • GovernanceInvolve customers in the shared services governance through customer forums and even shareholdings. Governance not only addresses
    current issues, but helps plan the agreed future investments and service roadmap.
  • Performance standardsEstablish service levels for shared processes and regularly benchmark performance. Use agreed-upon metrics and report them to customers regularly.
  • Communication –  Provide regular updates on service delivery and service management, including reporting escalations. Involve customers in planning future services.
  • TransparencyProvide timely, easy-to-understand information on fees and services. Chargebacks need to be clear and understandable to the public sector agency customer.
  • Continuous improvement – Focus on how to improve customer services, by adopting best practices, streamlining processes, and modernizing technology. This continuous improvement encourages and even requires continued staff development, which may offer more rewarding career opportunities to professionals working in the shared service center.

You can read more about how the US Department of Agriculture became a shared service provider in this Federal Times article.

Shared services, done well, help public sector agencies to adopt best practices and best-in-class ideas and  innovations. Citizens enjoy improved service delivery at a lower overall cost. Sounds like a win-win to me. What do you think?

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