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Learning to Share: Agencies Find a New Way to Reduce Costs

Although there are wide variations in the individual missions of public agencies, the back-end systems that support those services are surprisingly similar. Almost everyone needs servers, financial and HR applications, and phone systems to do their jobs. Now agencies are asking, "Can't we just share those resources and their associated costs?” The answer is a resounding "Yes!” for a growing number of national, state/provincial, and local governments.

Impressive Results
Shared services strategies are taking hold in the public sector to keep agencies humming, lower costs, eliminate redundancy, and even contribute to environmental initiatives. "Shared services is one of the most active conversations going on in the public sector today,” says Aldona Valicenti, Oracle's vice president of business development for state and local government.

Sharing can occur within and across departments or agencies at all levels of government. The results can be impressive. According to some industry studies, shared public sector services can reduce costs by 14 percent or more.

But the push to sharing goes beyond just saving money. Shared services can also reduce system complexities, ease maintenance and management burdens, and provide an economical way to refresh decades-old legacy technologies.

Shared services also can promote the "greening” of government through reduced power and cooling requirements resulting from consolidations.

Resources for Any Mission
Traditional target areas include core financial and HR applications common to most organizations, no matter their mission. Also attractive is sharing IT services to consolidate data centers, telecommunications systems, and e-mail applications, and then spread the remaining costs among multiple budgets. "When you use shared services you can consolidate software licenses, hardware, and infrastructure as you also look at making investments to run more efficiently,” Valicenti adds.

Now, agencies are looking to expand their sharing efforts to new areas, such as real estate and vehicle fleets. "Anything that is viewed as a common resource to be used by multiple groups can be included in the shared services environment,” Valicenti says.