• 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.