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Four Common Pitfalls to Avoid in Shared Services Programs

October 22, 2009 By Michael Claytor,Geoff DePriest

The public sector is seeking ways to maintain its services and programs in today's difficult economic environment. To cope with unanticipated revenue shortfalls, mounting costs and increased service needs from taxpayers, governments are looking to squeeze more benefits from their shrinking budgets by adopting or expanding shared services business models.

Shared services involves streamlining and consolidating key support functions from several agencies or departments into a single, stand-alone entity, with a strong focus on customer service. The idea is to create standardized services -- using common processes, procedures and technology -- that can be delivered faster, and more efficiently and consistently.

In its most recent annual survey of state technology officials, the National Association of State Chief Information Officers found that shared services rank second only to consolidation of services and resources as a priority in 2009.

The shared services approach is attractive because it can reduce overhead and full-time equivalent costs by grouping functions together and operating in a hub-and-spoke model. However, public CIOs face significant challenges to implementing shared services, and they need to evaluate the decision very carefully to avoid four common pitfalls.

1. Misunderstanding Requirements for Federal Funds

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