Shared services could save governments $3.3 trillion

Using shared services for functions such as IT could save governments worldwide as much as $3.3 trillion (£1.62 trillion) over ten years, according to a report by AT Kearney.

The research, sponsored by Cisco, showed that when government bodies pool their information, finance and human resources technology resources in shared services systems, it improves the flow of information and cuts costs.

"It is clear that technology is both a crucial enabler of and major target for shared services initiatives," said Yvon Le Roux, vice president, public sector for Cisco in Europe.

The potential savings are higher than previously thought, although government organisations will have to work to earn their share of the potential windfall, the study found.

"The business case is much better than previously thought, with benefits being targeted in the 15 to 25 per cent range," said Ian Morton, principal consultant and project leader at AT Kearney.

The study looked at nine countries, seven of which - Australia, Austria, Germany, the Netherlands, New Zealand, the UK and the US - use shared services primarily to cut costs. Canada went above and beyond, using such initiatives to improve services.

"We have now found that although cost reduction remains the most significant factor leading government organisations to combine and share back- and front-office functions, improving services to citizens is becoming increasingly important, with Canada taking a lead in many facets of transformation," said Morton.

But many governments aren't effectively matching technology with what customers want, the study found. "For example, half the organisations surveyed are investing in automated telephone systems even though research shows only six per cent of citizens would use it," said Le Roux.

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