An integrative literature review and empirical validation of motives for introducing shared services in government organizations

Abstract

This paper contributes to the understanding of the meaning of shared services and motives for introducing shared services in government organizations. We review and clarify definitions of shared services and derive a definition applicable for the government context. Based on an extensive literature review, we present an empirically grounded research framework of motives for introducing shared services. We validated this framework in 16 interviews with shared services experts from New Zealand and Dutch government organizations. Achieving back office cost reduction is a major public policy goal in many OECD countries, and shared services models are increasingly promoted as a means for achieving this. However, cost reduction and business management principles derived from the private sector are not the only motivations guiding public sector IT. As organizations realize the difficulties in reducing costs, other motives for using shared services increase in significance: improvement of service delivery, service quality and consistency, exchange of internal capabilities and better access to skilled and external resources. These motives are consistent with a “New Public Service” ethos of greater engagement and collaboration. Our findings suggest that trends in public sector IT management and sourcing frequently reflect wider philosophical motivations in public policy.