Outsourcing and Shared Services in Government IT Management (Review Report)

Publication Date	July 2007
Publisher	Datamonitor
Product Type	Report
Pages	102
ISBN Number	not applicable
Product Code	DAT06007

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Summary

Introduction

Shared services offer clear opportunities to both public bodies and to the technology vendors trying to meet their needs. This report explores the market conditions for shared services in government, the strategies of governments themselves and the technology challenges.

Scope

Shared Services and the Future of Technology Adoption in Government (Market Focus)
Understanding Shared Services Opportunities in Government (Strategy Focus)
Meeting the Technology Challenge of Shared Services in Government (Technology Focus)
Shared Services and Outsourcing in US and European Government (Databook)

Highlights

This report combines all three briefs from the outsourcing and shared services in government IT management theme for 2007.

Reasons to Purchase

The market focus section provides an overview of drivers and trends across the government sector.
The strategy focus briefs consider the strategies that government is using to handle its challenges incorporating shared services.
The technology focus looks at the technology issues in shared services and how vendors can meet them.

Content

Overview
Catalyst
Summary
Executive Summary
- Introduction
- Shared Services and the Future of Technology Adoption in Government (Market Focus)
- Understanding Shared Services Opportunities in Government (Strategy Focus)
- Meeting the Technology Challenge of Shared Services in Government (Technology Focus)
- Shared Services and Outsourcing in US and European Government (Databook)
- Shared Services and the Future of Technology Adoption in Government (Market Focus)
- Summary
- Policy makers are increasingly interested in making use of shared IT services
- Shared services are an approach to business organization
- Shared services can be formed using a variety of different structures
- Shared services has strong benefits as an approach to IT intensive business functions
- Government is under pressure to realize the benefits of IT systems
- IT investment in the public sector is low, but current circumstances present reorganization opportunities
- Investments in eGovernment left the back office untouched, but created another pressure for change
- Shared services have the potential to generate significant demand for IT solutions and services
- Strong political will is vital to the success of shared services in the public sector
- Wait and see culture will hold up the adoption of shared services
- Managers have little incentive to share services without pressure from above
- Shared services projects will form an increasing proportion of IT services revenue
- European public sector IT services spending set to almost equal the US by 2012
- Outsourcing will form an increasing component of shared services projects
- Revenue for IT services vendors from shared services will grow by 26% CAGR in the next five years
Actions
- Understanding government need is vital to taking advantage of shared services
- Vendors need to provide a clear business case and successful case studies
- Understanding Shared Services Opportunities in Government (Strategy Focus)
- Summary
- Most governments are considering the employment of a shared services strategy
- The Canadian experience has both positive and negative lessons for other governments
- The approach, the service in question and the right structure will determine strategy
- Leadership and governance will be crucial to the success
- Clear top down drive is vital to the realization of shared services
- The structure for governing the system is as important as the physical infrastructure
- Agreed technological standards for the common platform are essential
- Most shared services are driven by agency specific changes
- A shared service approach will migrate to higher value functions
- Business functions with wide use and the potential for automation will deliver the greatest savings
- Human resource and financial functions are common shared service targets in the medium term
- Shared services will evolve over time to incorporate higher value functions
Actions
- Governments need to put in place the right leadership and governance for success
- Vendors need to target the right opportunities for the short, medium and longer term
- Meeting the Technology Challenge of Shared Services in Government (Technology Focus)
- Summary
- Shared services will generate demand for a wide range of IT services
- Standardization is the main technology challenge facing governments adopting a shared service
- Shared services will generate demand for a wide range of IT services
- The medium term opportunities from shared services will come from outsourcing
- A wide variety of shared service models will be used to meet different business needs
- Political considerations can be as important as maximizing value in the choice of model
- Financial considerations will not be limited to total cost
- Existing assets will play a key role
- The level and type of government agencies will shape the controls required
- Broad and narrow political interest will be decisive
- Vendors need to carefully examine the consequences of a particular contract structure
- Many government agencies will move slowly up the solutions stack with shared services
- Slow creep experiments with sharing will begin at a pure infrastructure level
- The spread of service orientated architecture (SOA) will drive shared services
- Compatibility and integration are the key prerequisites of successful shared services
Actions
- Adapting to the right shared service model will be crucial to success
- Vendors will need to offer government the scale to cope with their technology needs
- Pursing an SOA technology story will help in wining shared services deals
- Shared Services and Outsourcing in US and European Government (Databook)
- Introduction
- Total IT services revenue in the United States by type of service, 2006 to 2012
- IT services revenue from shared services projects in the United States by type of service, 2006 to 2012
- Total IT services revenue in the United States by sector of government, 2006 to 2012
- IT services revenue from shared services projects in the United States by sector of government, 2006 to 2012
- Total IT services revenue in Europe by region, 2006 to 2012
- IT services revenue from shared services projects in Europe by region, 2006 to 2012
- Total IT services revenue in the United Kingdom by type of service, 2006 to 2012
- IT services revenue from shared services projects in the United Kingdom by type of service, 2006 to 2012
- Total IT services revenue in the United Kingdom by sector of government, 2006 to 2012
- IT services revenue from shared services projects in the United Kingdom by sector of government, 2006 to 2012
- Total IT services revenue in France by type of service, 2006 to 2012
- IT services revenue from shared services projects in France by type of service, 2006 to 2012
- Total IT services revenue in France by sector of government, 2006 to 2012
- IT services revenue from shared services projects in France by sector of government, 2006 to 2012
- Total IT services revenue in Germany by type of service, 2006 to 2012
- IT services revenue from shared services projects in Germany by type of service, 2006 to 2012
- Total IT services revenue in Germany by sector of government, 2006 to 2012
- IT services revenue from shared services projects in Germany by sector of government, 2006 to 2012
- Total IT services revenue in Nordics by type of service, 2006 to 2012
- IT services revenue from shared services projects in Nordics by type of service, 2006 to 2012
- Total IT services revenue in Nordics by sector of government, 2006 to 2012
- IT services revenue from shared services projects in Nordics by sector of government, 2006 to 2012
- Total IT services revenue in Benelux by type of service, 2006 to 2012
- IT services revenue from shared services projects in Benelux by type of service, 2006 to 2012
- Total IT services revenue in Benelux by sector of government, 2006 to 2012
- IT services revenue from shared services projects in Benelux by sector of government, 2006 to 2012
- Total IT services revenue in Italy by type of service, 2006 to 2012
- IT services revenue from shared services projects in Italy by type of service, 2006 to 2012
- Total IT services revenue in Italy by sector of government, 2006 to 2012
- IT services revenue from shared services projects in Italy by sector of government, 2006 to 2012
- Total IT services revenue in Spain by type of service, 2006 to 2012
- IT services revenue from shared services projects in Spain by type of service, 2006 to 2012
- Total IT services revenue in Spain by sector of government, 2006 to 2012
- IT services revenue from shared services projects in Spain by sector of government, 2006 to 2012
- Total IT services revenue in Rest of Western Europe by type of service, 2006 to 2012
- IT services revenue from shared services projects in Rest of Western Europe by type of service, 2006 to 2012
- Total IT services revenue in Rest of Western Europe by sector of government, 2006 to 2012
- IT services revenue from shared services projects in Rest of Western Europe by sector of government, 2006 to 2012
- Total IT services revenue in Eastern Europe by type of service, 2006 to 2012
- IT services revenue from shared services projects in Eastern Europe by type of service, 2006 to 2012
- Total IT services revenue in Eastern Europe by sector of government, 2006 to 2012
- IT services revenue from shared services projects in Eastern Europe by sector of government, 2006 to 2012
Appendix
- Definitions
- Methodology
- Further reading
- Ask the analyst
- Datamonitor consulting
- Disclaimer
List of Tables
- Table 1: Total IT services revenue in the United States by type of service, 2006 to 2012
- Table 2: IT services revenue from shared services projects in the United States by type of service, 2006 to 2012
- Table 3: Total IT services revenue in the United States by sector of government, 2006 to 2012
- Table 4: IT services revenue from shared services projects in the United States by sector of government, 2006 to 2012
- Table 5: Total IT services revenue in Europe by region, 2006 to 2012
- Table 6: IT services revenue from shared services projects in Europe by region, 2006 to 2012
- Table 7: Total IT services revenue in the United Kingdom by type of service, 2006 to 2012
- Table 8: IT services revenue from shared services projects in the United Kingdom by type of service, 2006 to 2012
- Table 9: Total IT services revenue in the United Kingdom by sector of government, 2006 to 2012
- Table 10: IT services revenue from shared services projects in the United States by sector of government, 2006 to 2012
- Table 11: Total IT services revenue in France by type of service, 2006 to 2012
- Table 12: IT services revenue from shared services projects in France by type of service, 2006 to 2012
- Table 13: Total IT services revenue in France by sector of government, 2006 to 2012
- Table 14: IT services revenue from shared services projects in France by sector of government, 2006 to 2012
- Table 15: Total IT services revenue in Germany by type of service, 2006 to 2012
- Table 16: IT services revenue from shared services projects in Germany by type of service, 2006 to 2012
- Table 17: Total IT services revenue in Germany by sector of government, 2006 to 2012
- Table 18: IT services revenue from shared services projects in Germany by sector of government, 2006 to 2012
- Table 19: Total IT services revenue in Nordics by type of service, 2006 to 2012
- Table 20: IT services revenue from shared services projects in Nordics by type of service, 2006 to 2012
- Table 21: Total IT services revenue in Nordics by sector of government, 2006 to 2012
- Table 22: IT services revenue from shared services projects in Nordics by sector of government, 2006 to 2012
- Table 23: Total IT services revenue in Benelux by type of service, 2006 to 2012
- Table 24: IT services revenue from shared services projects in Benelux by type of service, 2006 to 2012
- Table 25: Total IT services revenue in Benelux by sector of government, 2006 to 2012
- Table 26: IT services revenue from shared services projects in Benelux by sector of government, 2006 to 2012
- Table 27: Total IT services revenue in Italy by type of service, 2006 to 2012
- Table 28: IT services revenue from shared services projects in Italy by type of service, 2006 to 2012
- Table 29: Total IT services revenue in Italy by sector of government, 2006 to 2012
- Table 30: IT services revenue from shared services projects in Italy by sector of government, 2006 to 2012
- Table 31: Total IT services revenue in Spain by type of service, 2006 to 2012
- Table 32: IT services revenue from shared services projects in Spain by type of service, 2006 to 2012
- Table 33: Total IT services revenue in Spain by sector of government, 2006 to 2012
- Table 34: IT services revenue from shared services projects in Spain by sector of government, 2006 to 2012
- Table 35: Total IT services revenue in Rest of Western Europe by type of service, 2006 to 2012
- Table 36: IT services revenue from shared services projects in Rest of Western Europe by type of service, 2006 to 2012
- Table 37: Total IT services revenue in Rest of Western Europe by sector of government, 2006 to 2012
- Table 38: IT services revenue from shared services projects in Rest of Western Europe by sector of government, 2006 to 2012
- Table 39: Total IT services revenue in Eastern Europe by type of service, 2006 to 2012
- Table 40: IT services revenue from shared services projects in Eastern Europe by type of service, 2006 to 2012
- Table 41: Total IT services revenue in Eastern Europe by sector of government, 2006 to 2012
- Table 42: IT services revenue from shared services projects in Eastern Europe by sector of government, 2006 to 2012
List of Figures
- Figure 1: Five common structures for shared services
- Figure 2: Pressure to do more with less
- Figure 3: Extent to which institutions currently have or use enterprise applications
- Figure 4: Total spending on IT services by the public sector by geography
- Figure 5: Proportion of IT services revenue from shared services projects in 2012
- Figure 6: IT services revenue from shared services projects, by government sub-sector, 2006-2012
- Figure 7: Overlapping factors for a successful shared service
- Figure 8: Types of function and their correspondence with the criteria for success in shared services
- Figure 9: The evolution of shared services over time
- Figure 10: IT services revenue from shared services projects
- Figure 11: Slow creep up the solution stack
- Figure 12: A service orientated architecture
- Figure 13: Total IT services revenue in the United States by type of service, 2006 to 2012
- Figure 14: IT services revenue from shared services projects in the United States by type of service, 2006 to 2012
- Figure 15: Total IT services revenue in the United States by sector of government, 2006 to 2012
- Figure 16: IT services revenue from shared services projects in the United States by sector of government, 2006 to 2012
- Figure 17: Total IT services revenue in Europe by region, 2006 to 2012
- Figure 18: IT services revenue from shared services projects in Europe by region, 2006 to 2012
- Figure 19: Total IT services revenue in the United Kingdom by type of service, 2006 to 2012
- Figure 20: IT services revenue from shared services projects in the United Kingdom by type of service, 2006 to 2012
- Figure 21: Total IT services revenue in the United States by sector of government, 2006 to 2012
- Figure 22: IT services revenue from shared services projects in the United States by sector of government, 2006 to 2012
- Figure 23: Total IT services revenue in France by type of service, 2006 to 2012
- Figure 24: IT services revenue from shared services projects in France by type of service, 2006 to 2012
- Figure 25: Total IT services revenue in France by sector of government, 2006 to 2012
- Figure 26: IT services revenue from shared services projects in France by sector of government, 2006 to 2012
- Figure 27: Total IT services revenue in Germany by type of service, 2006 to 2012
- Figure 28: IT services revenue from shared services projects in Germany by type of service, 2006 to 2012
- Figure 29: Total IT services revenue in Germany by sector of government, 2006 to 2012
- Figure 30: IT services revenue from shared services projects in Germany by sector of government, 2006 to 2012
- Figure 31: Total IT services revenue in Nordics by type of service, 2006 to 2012
- Figure 32: IT services revenue from shared services projects in Nordics by type of service, 2006 to 2012
- Figure 33: Total IT services revenue in Nordics by sector of government, 2006 to 2012
- Figure 34: IT services revenue from shared services projects in Nordics by sector of government, 2006 to 2012
- Figure 35: Total IT services revenue in Benelux by type of service, 2006 to 2012
- Figure 36: IT services revenue from shared services projects in Benelux by type of service, 2006 to 2012
- Figure 37: Total IT services revenue in Benelux by sector of government, 2006 to 2012
- Figure 38: IT services revenue from shared services projects in Benelux by sector of government, 2006 to 2012
- Figure 39: Total IT services revenue in Italy by type of service, 2006 to 2012
- Figure 40: IT services revenue from shared services projects in Italy by type of service, 2006 to 2012
- Figure 41: Total IT services revenue in Italy by sector of government, 2006 to 2012
- Figure 42: IT services revenue from shared services projects in Italy by sector of government, 2006 to 2012
- Figure 43: Total IT services revenue in Spain by type of service, 2006 to 2012
- Figure 44: IT services revenue from shared services projects in Spain by type of service, 2006 to 2012
- Figure 45: Total IT services revenue in Spain by sector of government, 2006 to 2012
- Figure 46: IT services revenue from shared services projects in Spain by sector of government, 2006 to 2012
- Figure 47: Total IT services revenue in Rest of Western Europe by type of service, 2006 to 2012
- Figure 48: IT services revenue from shared services projects in Rest of Western Europe by type of service, 2006 to 2012
- Figure 49: Total IT services revenue in Rest of Western Europe by sector of government, 2006 to 2012
- Figure 50: IT services revenue from shared services projects in Rest of Western Europe by sector of government, 2006 to 2012
- Figure 51: Total IT services revenue in Eastern Europe by type of service, 2006 to 2012
- Figure 52: IT services revenue from shared services projects in Eastern Europe by type of service, 2006 to 2012
- Figure 53: Total IT services revenue in Eastern Europe by sector of government, 2006 to 2012
- Figure 54: IT services revenue from shared services projects in Eastern Europe by sector of government, 2006 to 2012