Governance and Design Issues of Shared Service Centers

Abstract

In the current economic climate, public administrations are looking for ways to improve their service provision and to increase their efficiency. A great long-term public sector concern is the need for restructuring structures and processes to improve efficiency and effectiveness (Beynon-Davies & Williams, 2003). Shared service centers (SSCs) are gaining importance in public administration as a means to innovate, reduce costs, and increase service levels (Janssen & Joha, 2004b). The SSC is a business model in which selected functions are concentrated into a semi-autonomous business unit with management structures that promote efficiency, value generation, and cost savings in a manner akin to companies competing in an open market (Bergeron, 2002). By unbundling and centralizing activities, the basic premise for a SSC seems to be that services provided by one department or agency can be provided to others with relatively few efforts. Within public agencies there is a debate about which kind of services are suitable to share, how to obtain the expected benefits and how to organize SSCs. Currently, SSC implementations include several, relatively easy-to-standardize, functions like the concentration of administrative processes for handling human resources and procurement for all ministries, and the maintenance and control of information systems of several local agencies in a SSC (e.g., http://www.sharedservicesbijdeoverheid.nl/). Clearly, there is no one-size-fits-all business model that incorporates all benefits and has no negative aspects. The goal of this research is to explore the concept of shared service centers and to present an overview of critical research issues with respect to its governance and design. The structure of the article is as follows. In the following section, we discuss the theoretical background. Thereafter we present the main drivers for shared service centers. Section four provides an overview of the critical research issues and in section five we present future trends. Finally in section six, conclusions are drawn.