Public Sector, Shared Services, Survey

70 percent of public sector accept shared services says survey

An international research report by the Economist Intelligence Unit (EIU), commissioned by BEA, has found that more than half of public sector respondents (54 percent) indicated that they use a shared services model, while 16 percent expect to introduce shared services within the next three years.

Almost 30 percent of respondents use multiple vendors for front- and back-office applications. Nearly 17 percent have installed multiple vendor offerings for business intelligence software, while 21 percent have done the same for multiple middleware platforms. By using shared services, agencies can replace systems altogether or link disparate systems across the organization. The survey results suggest that rather than tearing down existing IT estates (a ‘rip and replace’ strategy), public sector entities are bridging shared services with cost-effective Service-Oriented Architecture (SOA) models.

“This survey provides clear evidence that our customers are moving away from first generation portals that simply put a thin veneer on top of silos,” says Martin Percival, Senior Technology Evangelist, EMEA, BEA Systems. “Customers are now making a concerted effort to bridge transactions and collections of unstructured data. This allows them to effectively deliver cross-organizational services that are transparent to the end user/citizen. Public sector customers increasingly appreciate that SOA offers the infrastructure flexibility needed to build on legacy environments and adapt swiftly to change.”

The research highlights that building a technology infrastructure is essential for shared services success. Nearly half of respondents (48 percent) believe that a single portal interface is very important to improving the quality of shared services, since such a portal would enable access to all applications and services. Respondents also express significant interest in the ability to share data (40 percent) and applications (30 percent) across organizations via a single software platform.

Up to 67 percent of respondents believe that IT processes would benefit most from shared services. This finding highlights the fact that government transformation can be best enabled by technology. It also points to a flexible IT infrastructure being able to build on legacy environments while accommodating change quickly and easily. The report also found that a shared services model would make its deepest impact on business process improvement (cited by 75 percent of respondents). Shared services also promote efficiency improvement and reduce cost: almost 82 percent cite cost reduction across multiple departments as the most compelling reason to use shared services, while 42 percent perceive shared services as a way to improve citizen/customer satisfaction.

The research reveals caution among public sector organizations though. Lack of top-level support, respondents believe, can derail shared services technology implementation. Survey respondents consider the failure to secure buy-in from senior decision makers a key impediment to installing shared services, because such support is critical to resource allocation. Part of the concern about how to sell the idea of shared services to top-level management stems from worries about the adequacy of in-house skills (49 percent) combined with doubts about end-user inability or desire to leverage these new services (42 percent). These concerns make it difficult for respondents to separate the business case and the technical justifications for investing in shared services.

Business and politics are driving shared services implementation. According to 52 percent of respondents, the decision to apply a shared services model rests with a Central/State Governor or a C-level board member, or, in the case of 12 percent of respondents, the Permanent Secretary or his or her equivalent. It appears that both business and political executive-level support is required to impel the adoption of shared services. Over two-thirds of the respondents believe that an agency director or higher-level authority would make key decisions regarding shared services funding and installation.

“Shared services affect public sector agencies from the grassroots up, and their deployment can bring about a total organizational transformation,” continues Kelly Collins, general manager and vice president, public sector, BEA Systems. “BEA platforms enable government to implement a Service-Oriented Architecture that includes existing platforms, extends to new ones, and that is future-proofed for integration across multiple government organizations. The need to re-architect an IT infrastructure dovetails with the analogy of a city planner, struggling to modernize and connect a city that has evolved over hundreds of years. Here, a ‘rip and replace’ strategy is unrealistic. Instead, a modern architecture needs to be created which preserves critical processes and significant prior investments. By re-engineering the infrastructure and adopting a service-centric approach to the design of the estate, it’s possible to release the value from the legacy applications.”

About the EIU Survey
In August 2006, the Economist Intelligence Unit (EIU) queried 127 public sector executives on the opportunities and challenges entailed by using shared services in government. Respondents included agency/ministry directors and deputies, financial chiefs, treasurers and comptrollers, technology directors, legal department heads, and program managers and officers. The public sector areas surveyed included public administration, social services, health services, enterprise support, resource management and infrastructure.

The scope of response was global, with Western Europe leading the way in the number of responses (42 percent), followed by the Asia-Pacific region (24 percent), North America (16 percent), the Middle East and Africa (8 percent), eastern Europe (5 percent) and Latin America (5 percent). Organizations came from a spread of sizes and organizational levels, with 52 percent reporting annual budgets/expenditures of $500 million or less.or even improving the skill level of staff. The potential savings of up to $116 million annually for a company are simply too compelling to ignore."

Source: Publictechnology.net