Public sector outsourcing is bound to increase regardless of who lives at 1600 Pennsylvania Avenue. According to a September, 2012 survey of public sector finance executives conducting by outsourcing analyst firm HfS Research, lowering costs and improving efficiency are their two most important objectives.

"Governments--whether state, federal or local--need more levers to reduce costs, and guaranteeing government salaries and corresponding increases, combined with the relative difficulty in enacting labor force reductions, are not the answer," says Pace Harmon's Rutchik.

Both shared services and outsourcing can be part of the short- and long-term solution for reducing the costs of back-office functions while maintaining front-line services, says Phil Searle, research fellow for shared services strategies for HfS Research.


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