The demand for software and IT services in the UK public sector
shared services market is rising steadily, and will be worth almost
£4bn between 2007 and 2012, according to analyst firm Ovum.
Ovum said the market will grow at a compound annual growth rate
(CAGR) of 8%, from £489m in 2007 to £729m in 2012.
John O'Brien, author of the report
UK public sector
shared services: a market emerging, said, "We remain convinced
of the opportunities for shared IT services suppliers delivering
shared services to the UK public sector over the long term,
although we believe the market will evolve at a slower pace than
previously expected.
"This plays to the benefit of pragmatic suppliers who have
already engaged the market and are prepared to further shape the
opportunity over the next few years."
Ovum said suppliers are benefiting from
major programmes in central government, such as those at the
Department for Work and Pensions, Home Office, HM Revenue and
Customs and Department for Transport, as well as a growing number
of outsourced programmes among local authorities such as Somerset
and Taunton Deane, Suffolk, Liverpool, Glasgow and Worcestershire
councils.
O'Brien said, "Suppliers that have been lucky enough to be
involved in these programmes have got a headstart. However, the
market is shifting as more innovation is brought in to the
contractual process.
"The growing use of frameworks could drive both further internal
provision and also more outsourcing activity. This means multiple
organisations will be able to club together and share in the
benefits of new technology and lower costs of delivery in areas
such as desktop services, ICT and corporate services."
At the local level, he said, this will help bring in other
locally-governed organisations such as emergency services, NHS
trusts and education institutions.
O'Brien said, "There is a real sense that momentum has been
established, and this will be embedded in project services work
such as systems integration, training and maintenance over the next
few years."