A shared services strategy refers to the allocation of responsibility for technology resources among groups or departments within an organization, allowing them to share these resources, rather than having dedicated resources for each business group. When a service is shared, in many cases, each business group that uses a service contributes to its cost and maintenance in a usage-based model.
Because cloud computing is the delivery of shared network resources, software and corporate information as a service over a network -- typically, the Internet -- it is a close relative of shared services. In fact, cloud computing contributed to the idea of sharing services beyond network resources and applications.
This month's CIO Briefing will discuss the role of the CIO in shared services, the different models for delivering these services, the relationship of shared services to virtualization and cloud computing, and the costs associated with a shared services strategy.
This guide is part of SearchCIO.com’s CIO Briefings series, which is designed to give IT leaders strategic management and decision-making advice on timely topics.
Table of contents:
The CIO's role in a shared services strategy
Abdullah Haydar, chief technology officer at Troy, Mich.-based Open Dealer Exchange LLC, decided to refashion his department into a lean, agile group that facilitated and managed the use of external cloud services and internal offerings as a cohesive services organization.
Analysts call this setup hybrid IT or the IT services broker model. An increasing number of CIOs see it as a strategy that just makes sense. Given the competition from business users bypassing IT to buy cloud solutions on their own, as well as their desire to consume IT as a service, IT must step in and become a services facilitator.
Shared services strategy models differ
For Seattle Children's Hospital's Wes Wright, vice president and chief technology officer, and Jake Hughes, chief technical architect, a shared services organization is one that moves the focus from "the server to the service."
Seattle Children's has created a virtualized infrastructure from the server to the desktop. All server, storage and network resources are pooled and moved around as needed depending on business project needs. Applications are virtualized as well, providing physicians with a standard set of services.
Virtualization also figures heavily in consultant Chris Ward's definition of shared services. An organization has to be at least 80% virtualized in the data center; otherwise, shifting and sharing IT resources and services are "a non-starter," said Ward, vice president of consulting and integration at Kittery, Maine-based systems integrator GreenPages Technology Solutions.
Read more in "IT executives putting their own stamp on shared services model."
The place of shared services in virtualized and cloud environments
Minneapolis-based holding company Liberty Diversified International Inc. has virtualized as many of its IT resources as it can, so that as many of its systems as possible can be shared, according to CIO Alla Johnson.
One thing that Johnson doesn't use in her shared services shop is a traditional service catalog. "There was an attempt at a catalog about five years ago. The business didn't buy into it," she said.
Instead, she is developing a strategic plan that lays out the services that will be available over the next three years and when they will be implemented. These services are based on extensive discussions with each of the businesses.
The costs of a shared services strategy
IT budgets will be scaled back in 2012 after rapid rises in 2011, according to a recent study by the CIO Executive Board. It's expected that the new year will see more companies adopt an integrated IT services model. A majority of the CIOs at the 178 organizations in the survey plan to offer some end-to-end IT services by year's end.
It's also expected that the new year will see more companies adopt an integrated IT services model, with a majority of those surveyed planning to offer some end-to-end IT services by year's end. CIO Executive Board Executive Director Shvetank Shah talks about the numbers and the trends behind them.
Cloud computing basics quiz: Have you got what it takes?
You have the cloud computing basics down pat and have been following along with our cloud experts as we've dissected virtualization theory and explored cloud computing strategy. Now it's time to put your money where your mouth is with our cloud computing basics quiz. Find out how well you know your stuff by answering eight questions on cloud computing basics. If you get stuck, you can always refresh your memory by clicking the links within each question and re-reading the story to find the right answer.