Although the shared services market has started to take shape, it is important to stress it is still very much in its infancy. Indeed, the government currently lacks the internal expertise and capacity to deliver on some of the more transformational elements of the shared services agenda. With this in mind, it is our understanding that most government organisations are still at the very early stages of their shared services programmes; most have done no more than start to develop their strategy.

In addition, the vast majority of any shared services activity that is taking place is being undertaken with the support of the S/ITS industry. As a result, the size of the external shared services market is a good reflection of the maturity of the government' s shared services agenda as a whole.

Across the public sector, it is the local government, defence and health sector organisations that havemade the most significant investments with S/ITS suppliers. This investment has spanned transformational consultancy, project services and outsourcing services.

The remaining sectors - central government, education and criminal justice - have, as a rule, yet to begin making significant investments with S/ITS suppliers, other than on initial strategy consulting work.

This report takes our analysis of the UK public sector shared services market one step further by providing Ovum' s estimate of the market opportunity for S/ITS suppliers up to 2010 across all areas of the public sector including local government. We also look back at last year' s market and identify how suppliers benefited from UK government' s drive towards shared services in 2005.

Key messages

Defining shared services

Baseline: the current market

• Current activity by function
• Multifunction shared services
• Human resources
• Finance & accounting
• Revenues and benefits
• IT support

The future for shared services

• Centrally governed organisations
• Locally governed organisations
• Approach to shared services
• Revenues and benefits
• HR and F&A
• IT support

The supplier opportunity

• Market scenarios 2005- 2010
• Optimistic scenarioRealistic scenario
• Pessimistic scenario
• Shared service market growth 2005- 2010
• Market forecasts by service line
• Market size and growth
• Service line by share of market opportunity