Finding real cost savings, efficiency in government through shared services

17 May 2012 | Joel Cherkis, General Manager, Worldwide Government

In my conversations with public sector leaders, one thing that I continue to hear about is the pressure they are under to do more with less. The challenge is not new. Citizens are demanding enhanced, consumer-centric services more than ever while, in many regions, government budgets and resources continue to be stretched thin. What is new, however, is how governments are getting creative to meet this challenge. In recent years, a phenomenon that we’ve watched grow is the pooling of government computing resources and services across non-traditional boundaries (e.g., between departments, agencies, and even between varying levels of government).

Also known as “shared services,” the term refers to the approach of provisioning a service, application, or infrastructure owned by one organization and sharing it with multiple parties, either within the same organization or those adjacent to it. In recent years, this approach has been increasingly popularized by cloud computing technology, whose flexible model of computing naturally supports this type of resource sharing.

For government, the use of shared services has tremendous potential for cost savings and greater efficiency. Eliminating duplication, consolidating IT systems, and maximizing the use and pervasiveness of applications and services across government organizations are just some of the advantages of shared services. In addition, particularly for local government leaders who may not have the budget to invest in new technologies, collectively sharing services can afford the opportunity to do so. 

Research firm IDC Government Insights forecasts rapid growth in this area. In a recent report, IDC predicted that regional cloud hubs, or government agencies offering computing services to other government agencies via the cloud, will become more and more prevalent in the future, particularly within local levels of government. But that’s not to say that this trend is limited to local government.

This emerging trend can be seen within large government organizations such as Northern Ireland’s Department of Finance and Personnel (DFP), which established a shared service center to serve its more than 18,000 employees. The DFP is the central department of the Northern Ireland Civil Service (NICS) and manages the financial and personnel matters of the NICS’s 11 divisions. Using a shared service center, the DFP now offers common infrastructure and desktop services across the NICS’s divisions. The initiative is projected to save the DFP roughly $22.5 million over a ten-year period. In addition, the department has improved citizen satisfaction, with one division reporting that its number of dropped calls was reduced by 50 percent over six months.

The trend is gaining momentum in the United States, as well. In a recent announcement, the US Chief Information Officer Steven VanRoekel released the Federal IT Shared Services Strategy, which aims to help government agencies eliminate waste, save money, and drive efficiency through shared services.

Sharing services is one of many ways that governments can realize significant cost savings by leveraging economies of scale. For more information on other cost saving strategies, be sure to check out our dedicated website: A plan for government IT that reflects the times

Have a comment or opinion on this post? Let me know @Microsoft_Gov. Have a question for the author? Please e-mail us at ongovernment@microsoft.com.

Joel Cherkis
General Manager, Worldwide Government

Microsoft on Government Blog

About the Author

Joel Cherkis | General Manager, Worldwide Government

Joel leads a team of business development and technology professionals supporting policy decisions and the delivery of relevant and scalable technology solutions into public sector markets around the world. Read more