Governments seek IT scope and scale benefits largely by extending "shared services" to additional government departments -- e.g., consolidated/shared data centers and server farms, consolidated/shared payroll services across multiple departments, consolidated/shared environmental data, etc.

The USPS Moversguide has broadened this concept to gain extra benefits by extending shared services to private partners.

Here's how it works.

The USPS requires a change of address form from the roughly 20% of individuals and firms that move each year. The old way relied on paper forms. It cost more than $50 million per year (rough estimate) to transcribe the often hand-written forms into the database needed to make the system operational. Imagine the data entry errors. 

The USPS saw that a self-service web-based system would eliminate some transcription. Whether to invest would normally be determined by how many people could be enticed to use the new self-service site, and how much it would cost to build it.

In this case, USPS got a vendor to agree to build and operate at a price much less than full cost. My sources suggested the price was effectively zero. The reason was that the information was to be shared with other firms, but only when the parties changing their address approved such sharing. Since moving requires giving many new institutions the new address, movers were usually happy to share their information. In this way, the USPS got a system that was paid for by utility companies, phone companies, newspapers, banks, groceries, etc. Movers got a more convenient moving experience.

The savings to the private firms were enough that the USPS paid much less than it would have had it built a stand-alone system.

To explore this cross-boundary application in more detail: http://www.usps.com/moversguide/

There are important issues about when and how the public sector should negotiate such deals, of course. And there are lots of "life event" activities where public regulation could be bundled with private services. I'd like to hear your views...

Cheers,

Jerry
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Please join us:
April 19-21: "Shared Services" in government: http://www.3ecompass.net/public/shared_services

May 22-24: "Portfolio Management and Communications" for cross-boundary implementations:
http://ksgexecprogram.harvard.edu/ProgramDetail.aspx?programID=220&sessionID=440