Public sector doubts over potential cost savings through shared services

Public sector doubts over potential cost savings through shared services

Despite the 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 independent technology analyst spoke to CIOs in public sector bodies to gauge their attitudes to the sharing of services at a time when many are facing budget cuts. When asked what barriers they faced, almost half of those in Europe (49 per cent) cited concerns that it would not save enough cash to make it beneficial for them.

In North America, 46 per cent cited this reason, and in Asia-Pacific the figure was 29 per cent.

Jessica Hawkins, Ovum analyst and author of a new report** analysing the findings of the survey, commented: “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.”

Ovum’s survey also revealed that many public sector agencies worry about losing control of their key business operations with a move to shared services. In North America, 68 per cent cited this as an issue that would prevent them from making the move. Meanwhile in Europe the figure was 39 per cent and in Asia-Pacific 31 per cent.

Hawkins commented: “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 per cent 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 per cent citing this reason as a barrier.

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 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.”

-ENDS—

NOTES TO EDITORS

*Ovum interviewed local and national government agencies across North America, Western Europe, and Asia-Pacific

**Austerity Measures take first bite from Public Sector

To arrange an interview or for further details regarding this release please contact Kelly Livesey in the Ovum press office on +44 (0)161 238 4081, or email kelly.livesey@ovum.com.

ABOUT OVUM

Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms, and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is part of the Informa Group.