November 30, 2012Doug Hadden
Doug Hadden, VP of Products
It’s the last day of the Financial Management Institute Focus on Value Professional Development week in Ottawa. This is a government conference – check out the #pdweek hash tag in twitter. The use of shared services in the Government of Canada, especially the Shared Services Canada department, has been the subject of numerous speeches and presentations. And, numerous side conversations.
The concept of achieving economies of scale to improve efficiencies has a lot of merit. I was initially surprised when Gartner Group analyst Andrea di Maio expressed concern about the realism of the shared services objectives by the Government of Canada. That was before the new organization was created. I have to say that I’m beginning to understand the severe challenges that the government is facing.
Here are few:
- Data centre consolidation increases communications latency and system resilience increasing the risk a system-wide failure (there a failures in major public cloud services that have far more redundancy than envisioned by the Government of Canada)
- Centralized data centres can increase the impact of security breaches
- Governance issues such as “streamlining governance” that can result in loss of service quality
- The high costs and low service that was part of voluntary shared services prior to 2012 may not be solved by having mandatory shared services
- Back-office consolidation increases possibility that unique legal requirements needed for individual departments cannot be accommodated
- Loss of IT personal to the shared services organization results in departments requiring to outsource to the private sector for what they once did in house
- Managing standards and exceptions to those standards provides orders of magnitude larger governance burden than the status quo
- The use of inflexible legacy systems – “rust” – such as legacy ERP programs that use proprietary client/server languages add significant costs
- Value-for-money oversight when the shared services organization is the financial, technical and security authority for itself