The purpose of this project is to investigate how IT SS might need to be adapted to be more consistent with this new, more demanding environment.  Initial internet research and existing LEF EP research already suggest a number of hypotheses which will be confirmed or rejected through the proposed research:

•  IT shared services is alive, but facing important challenges.  If anything, the current downturn has entrenched SS as a structural solution of choice.  We will observe many cases where existing IT SS units have either expanded or captured additional functions, and many CIOs also manage other SS functions such as HR and purchasing.  At the same time, the relentless cost pressure means IT SS is overworked, and users are frustrated by slow and unresponsive service.  Much of higher value IT (that is, in the product/service offering or in marketing) is migrating outside of IT SS.   The new, more tech-savvy user is much more likely to attempt his or her own solutions without waiting for IT SS to respond.  The ‘cloud’, representing a new, very attractive ‘candy store’ of supply options will be very tempting to the most advanced users.
  
  
• IT governance is not giving IT SS organisations the support they need to manage complexity and cost.  To be successful and reduce low value IT cost, IT SS units need to implement standards and aggressively manage complexity.  We expect to find that most firms do not have the muscular IT governance in place to support such aggressive rationalisation.  The pressure to reduce costs is there, but not the stomach to impose standard solutions on the business.  If the CIO is located within IT SS, then he or she is generally poorly positioned to develop and lead a strong governance process.
  
  
• IT SS staffing and skills are not equal to the task.  IT SS was never popular with IT staff who generally prefer to be closer to the business.  We expect to find that, even in the current downturn, IT SS units are having trouble attracting the advanced, Web 2.0 and cloud-savvy skills that they need to capture more of the new IT and maintain their position in the firm.  This issue will become more acute as the large ‘baby boom’ cohorts retire.  In response to user frustration, we already observe that IT SS leaders are investing heavily in training and skills development for their business-facing (BRM) staff. 
  
  
• IT SS either develops a business-like model, or it drifts towards outsourcing.  We expect to find that IT SS units tend to move in one of two directions.  Successful IT SS leaders are often able to make their units into profit centres or at least into cooperatives that are able to retain some margin for internal development, training, and to attract high powered staff.  They are also able to control the choice of suppliers and environments, including the cloud.  The less successful IT SS units, unable to control these events, are likely to see their skills and credibility erode and become candidates for outsourcing.
  
  
• High value IT will either migrate outside of IT SS, or it will be addressed through innovative structural solutions.  Even with superior leadership, we expect to find that few, if any, IT SS units that are able to ‘capture’ the really high value uses of IT, for instance product/service IT and web-based marketing or customer centricity.  The most successful firms will move to more complex structures combining IT SS units for ERP with more specialised development units located in business units or in engineering.  The successful CIO is likely to seek a position encompassing more than just IT SS.