Creating outsourced shared services arrangements: Lessons from the public sector

Abstract

Shared services arrangements have been viewed as a strategy for achievingefficiencies and improved service in back-office functions such as finance and accounting,human resource, and procurement. Organisations have been increasingly turning to vendorsto implement and manage outsourced shared services arrangements. Analysing theexperiences of a public sector organisation, this paper provides a detailed understandingof the issues involved in creating outsourced shared services arrangements. The findingshave the highlighted the importance of strong governance to drive standardisation andperformance improvement, and relationship building both internally with the staffaffected by the changes and externally with vendors. Failure to implement a standardisedapproach will hinder an organisation from fully leveraging the specialist capabilities ofexternal vendors.