What does the future hold for municipal ICT Shared Service Centers?

The future of SSCs

Two trends are important for the future of SSCs.

  1. Municipalities need less and less ICT infrastructure due to the increase in SaaS.
    More and more applications are being purchased as SaaS. The application provider takes care of all the technology to make the application accessible. In a traditional application, the municipality is responsible for making ICT technology accessible to the application. By switching to SaaS, part of the ‘outside’ technology disappears. Research from M & I / Partners supports this trend. From the ICT benchmark municipalities, it is expected that the municipal landscape in 2025 will be at least 60% more SaaSt.
  2. More and more ICT technology is being outsourced to specialized commercial ICT service providers.
    Another trend is that the ‘lower layers’ of ICT are increasingly being outsourced to commercial ICT service providers. This started with the outsourcing of residential services to commercial data centers. Today we see more and more that instead of just homes, ICT hardware is bought as servers and storage systems as a service (so-called Infrastructure as a Service – IaaS). The service provider takes care of both the ICT hardware and its premises. This is offered, for example, on a large scale by public cloud providers such as Microsoft (Azure), Google Cloud Platform and Amazon Web Services.

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The consequence of these two trends is that there is less and less ICT infrastructure (and thus less technical management), for which the municipalities are responsible. This is a good development, because in this way the municipalities can focus more and more on their core activities.

The SSCs are also affected by the two above trends. Thanks to VerSaaSing, they have to host fewer and fewer applications to municipalities. And the SSCs also see that there is no added value in having their own data centers or even owning the server equipment. This is why SSCs themselves are increasingly outsourcing these lower layers of ICT. So also for the SSCs, there is less and less ICT technology to be managed.

Added value

However, this does not mean that the added value of SSCs per definition falls. The SaaS application landscape does not mean that everything will be easier.

  • In the coming years, we will have to deal with a hybrid situation where some of the applications are purchased as SaaS, but another part still consists of traditional applications hosted by the SSCs. All these applications must, of course, be offered to end users in a uniform and simple manner with adequate security.
  • We also deal with various SaaS vendors. All of these SaaS providers need to be managed, making links between SaaS applications always an extra point of attention. First of all, it must be ensured that the links work and continue to work. And this in a SaaS environment, where applications (and possibly also the technical interfaces to other applications) change when applications are updated. This whole must be well managed to ensure that it continues to function properly.
  • There are also non-technical activities that SSCs can perform well for their participants. This includes keeping track of legislative changes and their effects on the application landscape, overseeing joint selection processes / tenders for a specific application, for example, and support for setting up things like data-driven work.

The role of SSCs

The conclusion is that the role of SSCs will change in the coming years. More and more technical activities are being replaced by the management of an increasing number of suppliers. SSCs are increasingly becoming an advisory party for their participants to optimize participants’ primary processes.

* In this context, we mean by an SSC an organization in which different municipalities participate and which (among other things) provide ICT services to the participating municipalities.

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