Govern Shared Services

IT managers have come under increasing pressure to cut costs, and implementing shared services has become a popular demand from the business.
Business unit resistance to a shared services implementation can derail the project.
Shared services rearranges responsibilities within existing IT departments, potentially leaving no one accountable for project success and causing cost overruns and service performance failures.

Our Advice

Critical Insight

Over one-third of shared services implementations increase IT costs, due to implementation failures. Ineffective governance plays a major role in the breakdown of shared services, particularly when it does not overcome stakeholder resistance or define clear areas of responsibility.
Effective governance of a shared services implementation requires the IT leader to find the optimal combination of independence and centralization for the shared service provider.
Three primary models exist for governing shared services: entrepreneurial, mandated, and market-based. Each one occupies a different location in the trade-off of independence and centralization. The optimal model for a specific situation depends on the size of the organization, the number of participants, the existing trend towards centralization, and other factors.

Impact and Result

Find the optimal governance model for your organization by weighing the different likely benefits and costs of each path.
Assign appropriate individual responsibilities to participants, so you can effectively scope your service offering and fund your implementation.
Support the governance effort effectively using published Info-Tech tools and templates.

Govern Shared Services Research & Tools

1. Understand each of the governance models and what each entails

Build a plan for governing an implementation.

2. Choose the optimal approach to shared services governance

Maximize the net benefit conferred by governance.

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Authors

Evan Garmaise

Nai Chen Guo

Contributors

Barry-Wehmiller
CP Partners
Convergent Technology Solutions
County of Orange
Effectus
Government of Alberta
Kingspan
Vale
An additional 9 companies contributed to this research. Due to the sensitivity of the information, their identities will be kept confidential.