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States and Localities Reap the Benefits of Shared Services

Steve Henderson, CIO of Lincoln, Neb., and Lancaster County,
Steve Henderson, CIO of Lincoln, Neb., and Lancaster County, says a shared services agreement with the state saves money.

December 5, 2013 By

Over the past few years, Public CIO has written frequently about government agencies that have launched shared services offerings. But one thing these pioneering providers have in common is a need for customers — courageous partners from other jurisdictions who are willing to move a significant part of their IT operations into another organization’s data center.

We asked a handful of these IT executives why they decided to take the plunge, the lessons they have learned as shared services customers and whether they would do it all over again. Here is what they told us.

The Key is Communication

Shared Services Provider: Sarasota County, Fla.
Customer: Sarasota County Schools

As IT director of Sarasota County Schools, Joe Binswanger has a close relationship with Glenn Zimmerman, CIO of Sarasota County Government. The county has provided the school district with data center services for the past eight years. Nevertheless, Binswanger regularly evaluates county services to see if he might want to bring them back in-house or provision them some other way.

For instance, the district recently became eligible for the federal e-rate discount for its Internet service. Through an RFP, the district found a telecom provider that could offer more bandwidth at a lower cost. “The county was doing a fine job, but they couldn’t compete on price with this e-rate provider,” Binswanger said.

In such a situation, strong communication between the organizations is key to their ongoing working relationship. “Even before we thought about doing that RFP, I got together with Glenn to tell him what we were thinking about,” Binswanger said.

“In fact,” Zimmerman added, “our staff sat in on the RFP discussions with vendors to ask questions.”

“And even though we were moving away from their service, the county’s network staff and designers helped us with the transition,” Binswanger said. “We could tap their expertise.”

Likewise, the district regularly reviews the cost of data center storage services it gets from the county. “Two years ago we asked our finance department to do an independent analysis comparing our costs with the county versus outside providers,” said Binswanger. “They told us there were significant savings in going with the county versus an outside vendor. And there is no way we could ever recoup the cost of building and managing our own data center.

“But we refresh that analysis on an annual basis,” he added. “Our school board understands the concept of shared services, because we have spent the time educating them over the eight years of this arrangement.”

The need for better communications also extended to Binswanger’s own employees. “When we first tried shared services, there were people on the school board side who were nervous and thought the county was going to take everything over,” he said. “But I put in place a communication plan to explain that we are leaning on a government entity for this niche that they do well and can show value added. For instance, they do an exceptional job on security. I don’t lose a wink of sleep about information security with them handling our data.”

Get It in Writing

Daryl Delabbio has been county administrator/controller of Kent County, Mich., since 1998. In 2013, he co-authored a white paper titled A County Manager’s Guide to Shared Services in Local Government, which identifies three key preconditions of a successful shared service delivery venture: strong leadership, trust and reciprocity; clear goals; and measurable results. Among the first steps the authors recommend are creating a shared services assessment team, identifying strengths in participating governments, and starting with small pilot projects.

”One big thing I’ve learned from 36 years in local government is get it in writing, whether you’re a customer or provider in these shared services settings,” Delabbio said.

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