Today I've been reading John McClelland's report, "Review of ICT Infrastructure in the Public Sector in Scotland". Published by the Scottish government today, the work was started in 2010 at the request of the Scottish Government Cabinet Secretary for Finance and Sustainable Growth.
There's plenty to comment about in this report but I'll focus very briefly on one important point. But first a quote from the report:
"Shared deployment of ICT will reduce ICT cost and deliver savings in costs within individual public sector bodies. However, it can also, by being shared, provide a platform for additional efficiency and savings across multiple public bodies. The establishment of shared hosted information systems, commonly used across multiple organisations makes it very much easier to also share the resources and skills needed to operate other business processes. In this way shared ICT deployment unlocks the gate to shared services opportunities in other operations and processes." (section 4.2)
It is true that the sharing of flexible and completely industry standard infrastructure can help to reduce costs and reduce duplication.
Beyond that, organisations are not the same. So the sharing of services is not about sharing the same thing it's about making organisations work the same way whether it makes sense at the local level or it does not. The cost of making this massive organisational change may completely outweigh any apparent short term savings in ICT procurement. The long term process inefficiencies of forcing different organisations to work in the same way may introduce costs that also outweigh any ICT maintenance savings moving forward.
In short, there can be no assumption that shared deployment of ICT will reduce ICT cost.
The biggest problem
But the biggest problem with shared services seems to be the least understood:
Sharing services in the ways commonly understood in the public sector, lead to tight process dependencies between already huge government organisations. These dependencies, instead of helping to deliver change, actually act to constrain future change.
To put it simply. If you force two organisations to use the same core processes and the same central ICT system, then any future changes in process must be implemented in both organisations at the same time.