17 June 2008 | Published by Ovum

The adoption of shared services programmes among European governments is going to accelerate over the next few years, according to new research by Ovum, a global advisory and consulting firm.

“While the market is still in its early days, certain forward-looking governments in Europe are tackling the issue head on as a means to both cut costs and improve public service delivery to their citizens,” says John O’Brien, senior analyst at Ovum and lead author of the report titled The future of shared services in the European public sector.

According to Ovum, European governments are under real pressure to perform. “For many governments there is a growing need to respond to new socio-economic challenges” says O’Brien. “These include finding solutions to the impact of an ageing population, increased international competition, and now, a more difficult economic environment.”

Opposition is starting to recede among the more forward-looking Western European governments of Germany, France, the Netherlands, and the Nordic markets of Sweden, Norway and Finland. Ovum believes these governments will present greater potential opportunities for suppliers of shared services over the next few years as investments are made in governmental modernisation and transformation programmes.

But considerable barriers remain, which could restrict progress. Some European governments for example still remain resistant to change, and most have yet to develop coherent strategies for shared services adoption. Consequently, there is much to be done to raise awareness over the next few years. This will provide suppliers with an early opportunity to consult, educate and advise government organisations on future shared services investments.

Software and IT suppliers with prior experience in implementing successful programmes will be at an advantage to help shape the opportunity. However the cultural challenges will also present opportunities for consulting suppliers that can offer the softer skills to help shape the right environment for shared services. These include:

• local knowledge and local customer relationships
• knowledge of the target market and its drivers, and
• an understanding of the customer’s specific pain points

O’Brien concludes: “Before shared services can really take off in the European public sector, governments must establish the right environment and remove long-standing organisational blockers. Departments that have traditionally worked in silos will need to change their working practices and begin sharing information and resources.”

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