In most organization, the IT function is almost always a key enabler for an effective and efficient running of the business. With the recent credit crunch and economic downturn, many a times, IT departments find themselves in a dilemma. On one hand, they are faced with the need to refresh EOL technologies, expand capacity to support the business or add new assets for new application services required by the business. But on the other hand, they are often forced to cut budgets, headcount freeze, reduction in force, faced with restraint in funding and capital investment for any refresh or expansion. This dilemma pushes IT leaders to begin taking a closer look at the technology services that they are providing to their business units (i.e. internal customers) and evaluating where it makes sense to convert these as Shared Services with chargeback of the costs to the business units.
IT Shared Services refers to the provision of IT services by an IT organization where that service had previously been found in more than one part of the organization or group. Thus the funding and resourcing of the service is shared and the providing department effectively becomes an internal service provider. The key is the idea of ’sharing’ within an organization or group. Hence, the concept of IT Shared Services is similar to collaboration. IT Shared Services is different from the diametrically opposite model of Outsourcing which is where an external third party is paid to provide a service that was previously internal to the buying organization, typically leading to redundancies and re-organization. One purpose of Shared Services is the convergence and streamlining of an organization’s functions to ensure that they deliver to the organization the services required of them as effectively and efficiently as possible. This concept is applicable not just for the IT services, but can also involve the centralizing of back office functions such as HR, Finance, and middle or front offices.
